Another New One: Transactional Response Marketing
Doc really does learn something new every day, even when I have to make it up. But today I learned a new term courtesy of Elizabeth Gooding over at Digital Nirvana. There you’ll find a fine article about Transactional Response Marketing (TRM), the art of using customer statements (bills, invoices, receipts, etc.) as a marketing vehicle.
Cost-savings score big, but the game-winner is that Transactional Response Marketing (TRM) can achieve significantly better results than more costly traditional forms of marketing such as direct mail or print/TV/radio advertising. TRM can achieve these powerful results for two reasons. First, research shows that transactional communications are important to customers so they pay more attention to them – and therefore to the messages you integrate with these communications. The average person will give a statement nine times more attention than a piece of direct mail. (Less than half of direct mail is even opened.) Again, according to J D Powers, transaction documents are a key driver of customer satisfaction, comprising 41% of the consumer finance satisfaction score and 17% of the credit card industry satisfaction score. Second, the data that drives transactional communications enables you to integrate specific, personalized, highly relevant messages and offers that are more likely to please customers and/or to get them to take action.
Transactional Response Marketing is powering winning marketing teams today. A March 2008 study by Aberdeen Group showed that among companies meeting best in class standards, those utilizing closed loop marketing exceeded other best in class peers. The closed loop group achieved on average 6% greater ROMI and 7% more lead conversions. Revenues per account were 3% greater and average return on marketing campaigns was 14% greater. Transactional Response Marketing is closed loop marketing applied to transaction documents. Company success stories include Avis Australia which saw response rates rise from 2.5% to 10% when invoices were utilized to extend offers vs. other approaches such as direct mail or advertising.
Doc’s not terribly surprised to find all of this out, but it does worry me a little. Are we going to start seeing advertising on our tax returns and parking tickets? Say it ain’t so, Elizabeth!