Marketers Shift Focus In Response To Economic Concerns
The Direct Marketing Association (DMA) reports that while confidence in the growth of direct marketing remains strong, most marketers recognize the possibility of an economic downturn. Its fourth quarter 2015 survey found that only 52.1 percent of data-driven marketing (DDM) practitioners were entering 2016 confident in the U.S. economy, with most respondents (45.2 percent) saying they were “somewhat confident.”
However, concerns over the economy haven’t hampered interest in marketing practices, with 72.9 percent of respondents remaining confident in DDM and its prospects for growth, compared to 72.8 percent in the previous quarter. Due to their concerns over the economy, fewer marketers and service providers said they will focus on new customer acquisition in the coming months (62.7 percent) than the previous quarter (72.2 percent).
“Preparing for a negative economic outlook, we are seeing marketers shift from customer acquisition but maintaining customer retention efforts,” says Neil O’Keefe, DMA’s senior vice president, CRM and member engagement. “However, economic insecurity has not caused marketers to sour on the technologies and strategies propelling the growth of their businesses today, and they’re relying on marketing efforts fueled by data to hedge against a downturn.”
The survey found that 33 percent of respondents increased their DDM spending in fourth quarter 2015 and 43.5 percent predicted an increase in spend in the first quarter of 2016.
“This quarter’s research shows that marketers continue to invest in data-driven technologies, consistent with DMA’s recent 2015 Value of Data report, but the anxieties of a potential economic downturn threaten to cloud the rosy outlook,” added O’Keefe. “The shift from customer acquisition to customer retention is traditional marketing behavior during grim economic times, as lower consumer spending generates fewer quality prospects for new customers.”
Jonathan Margulies, managing director at Winterberry Group, which partnered with the DMA in the study, says, “Our QBR research confirms two contrasting dynamics that we’ve seen take hold in the market for several years: Marketers are bullish about the prospects for growth of their own businesses, while feeling real concern about whether the economy will provide the conditions necessary to support that growth. As always, that’s an important reminder that no industry—and no marketing practice—exists in a vacuum.”