Magazine article Marketing

Small but Perfectly Formed

Magazine article Marketing

Small but Perfectly Formed

Article excerpt

Easier access to data is allowing small businesses to produce mailings at lower costs

Database marketing was supposed to herald a return to the days of the village shop, where every shopkeeper knew everything about every customer and sold products accordingly. However, new research from Barclays shows that direct mail is not at the top of the marketing agenda of the small business.

Barclays' survey of 400 businesses with a turnover of less than [pounds]1m, produced in conjunction with the Chartered Institute of Marketing, shows just 11% use direct mail.

According to the report, 60% of small businesses' marketing is by word of mouth.

For many companies there are practical barriers to adopting database marketing. They can go to a list bureau and buy names and addresses, but often only by the thousand. These are profiled against existing customers and geodemographic data. The names likely to elicit the best response are selected. This process is too costly for the average small business. Most list bureaus tend to have minimum entry levels which require businesses to spend around [pounds]500 on 5000 names before print and postage costs - a considerable sum when the average small business spends [pounds]1500 on marketing per year (source: Barclays survey).

David Robottom, director of the Direct Marketing Association, says: "We often refer to small businesses as the orphans of direct marketing. Volumes are low and the agencies and bureaus won't touch them."

The data process

And it is not just a case of whipping the names from a desktop database and printing them on envelopes. A bureau can take well over a week to deliver the names.

Ivan Southall, director of ICD, says that it doesn't process data costing less than [pounds]500. "It is quite a labour-intensive process, with our salespeople helping the client in making the selections."

However, this scenario is changing. Desktop CD-ROMs containing data from the electoral register, cross referenced with geodemographic data, are becoming available. These allow the small business to target prospects through its own PC and pay for 1000 rather than for 5000 names.

One such product is Prospect Locator from Experian, formerly CCN. It costs [pounds]295 and 3000 names come free. Quarterly updates cost [pounds]25 and subsequent names cost [pounds]70 per thousand.

David Brosse, head of new media products at Experian, says: "We are keen to ensure quality of data is maintained. The deceased and people on the Mailing Preference Service file have been screened out. …

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