The DMA Releases First-Ever Customer Prospecting and Retention Report

NEW YORK, June 29, 2005 – A new landmark study from the Direct Marketing Association (The DMA) offers insights on how marketers are reaching, converting and retaining customers in today’s multichannel environment.

The DMA’s 2005 Customer Prospecting and Retention Report is a benchmark study that breaks out industry segments by type and size of firm to give an up-to-date snapshot of how companies engaged in direct marketing are managing key tasks such as customer acquisition, promotion and retention, media channels and operations, and budgeting.

The survey includes responses from 255 DMA members identified as "end-use" direct marketers. The questions were designed to elicit insight on customer and prospecting contact strategies as they are practiced today, and as they are likely to evolve over the next few years.

"From looking at the mass of data collected, we know that there are not only significant differences between consumer and B-to-B companies, but there are also important differences within each major segment," said DMA senior economist Peter Johnson.

Key findings from the report include:

• Approximately 25% to 35% of the survey responders believe that they have figured out how to integrate direct mail activities with print, e-mail, and web capabilities. However, results vary greatly by industry segments. Both B-to-B and consumer companies appear to concentrate their integration efforts on relating direct mail and e-mail campaigns to their Web sites. Among consumer catalogers, 58% describe their direct mail and Web site efforts as being "very" integrated. Among B-to-B firms, the greatest amount of media integration between direct mail and the Web site is found within the business products category, where 50% are "very" integrated.

• Nearly half of the respondents have developed proprietary prospecting databases, saying goodbye to the old practice of renting names for one-time use and the usual (and repetitive) merge-purge routine.

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• Most survey responders report sizeable planned increases in all areas of promotion over the next 12 months. On average, consumer companies expect to increase budgets for direct mail by 45%, e-mail by 59%, and telemarketing by 18%. B-to-B marketers expect, on average, a 53% spending increase for direct mail, a 59% increase for e-mail, and a 60% increase for telemarketing.

"It does appear that the industry can be divided into three segments of about equal size," said David Shepard, president of David Shepard Associates, which developed the survey in collaboration with The DMA. "A third of the companies surveyed are at the leading edge in terms of using the most sophisticated analytical, technical, and marketing practices; another third have moved ahead in some areas but not in others; and finally there’s a third of the industry that’s still doing business today the way it was done ten or twenty years ago."

Industry experts have already weighed in on the report’s value:

• "A necessary addition to every marketer's library. Dave Shepard has captured a snapshot of the industry as it really is — practical and insightful reading."
  — Rob Stagno, General Manager, Relationship Marketing, Microsoft Corporation
  

"This report will let companies compare their marketing practices against their peers. It was eye-opening to see the disparity in practices among companies of similar size and industry focus — the findings regarding tracking, testing, and database expenditures were particularly interesting — clearly not everyone is on the same direct marketing page..."
— Markus Wilhelm, CEO, Bookspan

The report is being released this week in conjunction with the DM Days New York Conference & Expo. The complete report is available for purchase online at www.the-dma.org/bookstore (DMA Research). For the first time, The DMA is providing a bonus CD that includes all answers to the questions broken down by industry segment and size, so that marketers can "drill down" to get at the information that is relevant to a particular type of business or market segment.

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