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<title>Turning Market Research Information Into Successful Direct Marketing Strategy</title>
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<td width="75%" valign="top"><p ALIGN="left"><font face="Arial" size="6"><b><strong>TURNING
MARKET RESEARCH INFORMATION INTO SUCCESSFUL DIRECT MARKETING STRATEGY</strong></b></font></p>
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<td width="100%"><strong><font face="Arial" size="4">BY <a href="#Rapin">DEBORAH M. RAPIN</a><br>
</font><font face="Arial" size="3">PRESIDENT<br>
MARKETING SPECIAL TEAMS, INC.</font></strong></td>
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</center></div><p><font face="Arial" size="2">(<em>originally published by PMA OnLine
Magazine: 99/02</em>)</font><font SIZE="2"> </font></p>
<p><font face="Arial"> </p>
<p>With margins small and budgets tight, it is important maximize the effectiveness of
every marketing dollar spent. Good Market Research information can be useful in that
effort if the interpretation leads to sound Marketing Strategy. There are three main
components of successful Direct Marketing programs- <b>targeting (lists), offer
(promotion) and creative (communication). </b>Some research information will give us
behavioral indicators of how our most likely customers act and think (driving possible <u>promotional</u>
and <u>creative</u> focus) and demographic/geographic indicators provide value in
targeting the delivery of our communication. </font></p>
<b><p><font face="Arial">1) Behavioral Focus- Recent</b> Market Research information
showed that consumers had definite opinions and perceptions concerning energy deregulation
that need to be addressed in creative communication from any Power Marketer. The results
were: </font></p>
<p align="center"><img src="../images/rapin01.gif" width="319" height="315" alt="rapin01.gif (48259 bytes)"></p>
<blockquote>
<ol>
<li><font face="Arial"><b>Geographic Targeting-</b> information in this research also
pointed to geographic considerations as they relate to the particular market area you are
competing in and with which <em>delivery</em> Utilities. An example of some of that
information:<b> </b></font></li>
</ol>
<p align="center"><img src="../images/rapin02.gif" width="320" height="241" alt="rapin02.gif (25984 bytes)"></p>
</blockquote>
<blockquote>
<blockquote>
<blockquote>
<p><font face="Arial">Competing in an area where there is a strong provider of Natural Gas
<u><b>and </b></u>electricity would probably have more market resistance than in an area
where the <em>host</em> or <em>distribution</em> utility only provided electric energy
especially at medium to high rates. This and other information in the research also showed
that consumers who use natural gas were much more likely to switch energy providers if
they could purchase both gas and electric from the same source.</font></p>
<blockquote>
<i><p></i><strong><font face="Arial">Geographic Targeting Summary</font></strong><i></p>
</i>
</blockquote>
<i><blockquote>
</i><ul>
<li><font face="Arial">Target geographic locations with high cost providers<br>
</font></li>
<li><font face="Arial">Target geographic locations with recent or historically frequent
price increases </font></li>
</ul>
</blockquote>
<p><font face="Arial">List selections can be made down to the carrier route level for
targeting locations where these indicators are present. When defining your overall
marketing strategy and which markets to participate in first, second, etc., you will want
to look at this aspect first.</font></p>
</blockquote>
</blockquote>
</blockquote>
<blockquote>
<ol start="2">
<li><font face="Arial"><b>Demographic Targeting-</b> While there may be a plenitude of
demographic information available through research efforts, it is important to analyze
which indicators show at least a 10% lift potential and which are replicable through list
segmentation efforts. Recent research findings identified five segments that show lift
potential based upon demographic segmentation. They are: </font></li>
</ol>
<p><font face="Arial"> </font></p>
<p><font face="Arial"> </font></p>
</blockquote>
<p><font face="Arial">The segments showing the strongest are age and income related. Those
two elements combined with some testing of home and heat source segmentation should be
included in a test grid. </font></p>
<blockquote>
<ol start="3">
<li><font face="Arial"><b>Promotional Offer Development- </b>according<b> </b>to recent<b> </b>research,
there were three main reasons why consumers would consider switching energy providers-</font></li>
</ol>
<blockquote>
<blockquote>
<ul>
<li><font face="Arial"><u><i>Lower Prices/Better Value </i></u>(83%)- with minimum savings
of 10%<br>
</font></li>
<li><font face="Arial"><u><i>Better Service </i></u>(14%)- including improved customer
service and/or other services such as energy audits, etc.<br>
</font></li>
<li><font face="Arial"><i><u>Price and Service Guarantee</u>- </i>addresses <em>fear of poor
service-36%</em> and <em>fear of higher prices</em> -19%<br>
</font></li>
<li><font face="Arial"><u><i>Confidence in Provider</i></u>- solid information about the
company with an emphasis on dependability<br>
</font></li>
<li><font face="Arial"><u><i>Value Added Offer</i></u>- could make special offer on related
products to new customers, or as part of acquisition stimulus</font></li>
</ul>
</blockquote>
</blockquote>
<ol start="4">
<li><font face="Arial"><b>Test Grid Development-</b>the most important aspect of any
successful marketing plan is accurate and well managed testing. Testing will show over
time exactly where to invest each marketing dollar based on the greatest return on
investment potential. Applying predictive modeling to a fairly mature direct marketing
program will enable you to go into new markets with increased competitive advantage. The
following is an example of what a beginning Direct Mail Test Grid might look like:</font></li>
</ol>
</blockquote>
<b><p><font face="Arial">Conclusions-</b> this research also showed that overwhelmingly,
customers want to be communicated to through mail (75%). This information combined with
that presented previously gives solid direction to marketing strategy. Therefore, the
strategy should include an aggressive, well managed direct mail effort that includes solid
testing methodology.</p>
<i><u><b><hr>
<p ALIGN="CENTER">ABOUT THE AUTHOR</b></u></font><font face="Arial" size="3"></p>
<p></font></i><font face="Arial"><font SIZE="2"><a name="Rapin" href="#top">Debbie Rapin</a>
is President of Marketing Special Teams; a full service integrated Database/Direct
Marketing Company. Her 20 years of direct marketing experience include working with a
variety of industries including Utilities. She as worked with clients like Dow Brands,
RCA, Media One and Western Resources. Ms. Rapin can be reached at Marketing Special Teams,
6923</font><small> </small><font SIZE="2">Bretton Wood Drive, Indianapolis, IN 46268. Tel:
317-329-1262 | Fax: 317-329-2816 or e-mail: <a href="mailto:[email protected]">[email protected]</a></font></font></td>
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