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4 direct marketing trends positioned to boost ROI in 2023

by | Jan 3, 2023 | Marketing, Public Relations

In 2023, companies have the opportunity to gain a larger slice of market share as the newest generation of spenders, Gen Z, has an estimated $360 billion in buying power. With this in mind, marketers will be focusing on retaining their current customer base while refining their tactics to reach these new audiences.

The key is to understand which channels influence both audiences into becoming loyal consumers. Sophisticated data and programmatic marketing help predict the susceptibility to purchase, allowing marketers to be more selective with their audiences.

While challenges may arise, savvy marketers will adopt innovative tactics and optimize their spend to enhance 2023 marketing strategies. Here are four trends showing promise for the upcoming year:

1. Defending the budget

Many companies might start to feel the impact of a potential recession, creating pressure to cut marketing budgets next year. Some sectors could pull back until the economy stabilizes, however, those that stand firm or even increase their marketing investment may be in the best position to come out of a recession stronger. Take for example the recession of 2008, when we observed 54 percent of brands that either maintained or increased their marketing budgets saw an improvement in ROI. In fact, an economic downturn serves as a strategic opportunity for brands to defend their marketing investments and gain market share.

2. Catching the big fish

Although Gen Z has a growing share of purchasing power, they are not as frivolous with spending as generations before. Underscoring the growing importance of this generation, RRD’s Macro Marketing Report found 9 out of 10 marketers feel the need to adjust marketing strategies as purchasing power shifts into the hands of Gen Z. This group prioritizes personal interactions and alignment on values when considering brand patronage. Intentional messaging with a strong focus on diversity and inclusion, as well as promoting social responsibility practices and initiatives attract customers that see more value in their purchases when it also makes a difference in society. This demographic values transparent messaging and influencer-based marketing, as it also builds trust, brand awareness, and long-term loyalty towards a brand. Reaching this group through personalized interactions like direct mail increases the likelihood of consumer engagement. In fact, according to the Macro Marketing Report, 63 percent of Gen Z are more excited about direct mail now than they were a year ago.

3. Focusing on programmatic direct marketing

With recent inflationary and supply chain expense drivers, precise audience identification is becoming crucial to marketing strategies as a means to increase customer acquisition, retention, and efficiency. An effective way to reach these target audiences is through a programmatic direct marketing approach. For example, by drilling down behavioral data, brands can retarget prospects via direct mail that have already shown interest in a product or service online, making them more likely to make a purchase. A programmatic approach to direct marketing creates a highly personalized customer experience that encourages increased ROI. According to the Macro Marketing Report, consumers prefer direct mail over email when receiving localized messages and offers. This tactic lends itself to managing, executing, and measuring the campaign efforts to calculate an accurate ROI.

4. Re-engaging and retaining existing customers

When considering acquisition strategies, marketers should focus on propensity-to-purchase data modeling to be even more selective and accurate with their target audiences. Marketers who understand the importance of a customer’s lifetime value and take advantage of their tendency to purchase can proactively combat common issues and improve retention rates. There is always room to improve current systems such as utilizing better interactive tools online and creating personalized website content for return visitors. Proven results from these implementations through a gap analysis can help measure the predictive performance against the actual results, confirming success or failure.

In 2023, marketers should focus on implementing these tactics and trends to improve overall performance. By zeroing in on intended audiences, marketers are able to maximize potential ROI while fortifying their budgets in the upcoming year. It is important for marketers to exude courage during these times and engage new demographics while retaining existing customers through predictive data-based marketing across channels.

Stefanie Cortes
Stefanie Cortes is Director, Strategic Analysis, Direct Marketing at RRD.

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