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DCA UPDATE CUSTOMER ACQUISITION Sharing our Secrets: Part 2


New Customer Recruitment Rent? Swap? or Hitch a Ride? By Nigel Swabey, President Emeritus, DCA; CEO Scotts & Co


In part 1 of this series, I identified personalised mailings as ‘Top of the chart’ for New Customer Recruitment. In our experience, direct mail is by far the most cost- effective of all advertising channels for practically all direct retailers, not just catalogue retailers. When orders are


correctly attributed to the advertising source which triggered the response and when lifetime value is taken into account, direct mail wins hands down every time. Customers acquired through direct mail register higher order values and are more loyal. Their lifetime value is often twice as high as a new customer acquired online.


T


he next question for any direct retailer is should I rent prospect


data, should I swap buyer data with other direct retailers, or should I hitch a ride by inserting in a third-party’s customer mailing?


List rental of prospect data – The traditional route Before the arrival of the data co-ops in the UK (Abacus, Transactis and Experian’s Club Canvasse), list rental via any one of 20 or so list brokers was the default option for a direct mail campaign. But with rental costs running at between £120 per ‘000 and £150 per ‘000, it didn’t take long for most catalogue mailers to realise that the co- ops offered a more attractive solution, with multi-buyers available at £70 per ‘000 or even less.


With access to these co-ops restricted to catalogue retailers, those in financial services, charities and other verticals still had few options other than to rent prospect data. Charities continued to rent prospect data heavily, but most were then completely unnerved by the introduction of the EU GDPR directive. Only now are the charities rediscovering


50


the value of direct mail, with a major uptick in list rental by charities in the last six months. By contrast, most financial service operators have simply migrated their spend to online channels or have forged ‘white-label’ alliances with large owners of customer data.


Data swaps – The original raison d’être of the Direct Commerce Association (DCA) Why pay list rental charges when you can swap buyer data with your industry colleagues at practically no cost at all? That was the question posed in a closed session of senior client-side executives at an ECMOD conference at the Wembley conference centre in 2003. Six months later, at a grand luncheon at the Berkeley Hotel in Knightsbridge, 12 catalogue industry CEOs, owners and senior directors met to sanction the launch of The Catalogue Exchange and agree the guiding principles that would govern its operation.


With the Direct Marketing Association acting against the interests of the catalogue industry at that time, the Catalogue Exchange was established as a new trade association to fully represent


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