Blackberry’s direct marketing strategy should focus on its existing customers. There are a few reasons for this. Naseri and Elliott (2011) have showed that social connectedness is one of the most important variables for success in direct marketing. Blackberry’s existing customers interact with one another easily through the proprietary messaging platform. It is easy, therefore, not only for Blackberry to interact with its customers directly through multiple platforms, but for direct marketing programs to be disseminated through the company’s audience by the audience members themselves through their existing social networks. Blackberry can increase internal sales to existing customers by encouraging them to purchase additional services, but also to become evangelists for the company through their social networks. This creates a spinoff effect when targeting one customer could result in many customers receiving the message, if the promotional campaign is effective.
The direct marketing program, because it is focused on existing customers, should have two components. The first is that Blackberry should attempt to generate additional sales for the company’s products and services through this program. The audience is already captive, and Blackberry should extract value from this group. The company can also foster greater brand loyalty by unlocking more value for its customers — the more they get out of owning a Blackberry the more likely they are to purchase another Blackberry in the future.
The second component of the direct marketing campaign is that Blackberry should have programs that provide incentives for existing customers to bring in their friends and family to the Blackberry family. If existing customers are incentivized to become evangelists for Blackberry, this could increase sales of Blackberry devices, both to customers who are purchasing their first smartphone and to customers of other devices.
This aspect of direct marketing is therefore aimed at reaching non-customers via the existing customer based, by focusing on the features and the ways that Blackberry can help the existing customers connect with people, as long as those other people are also Blackberry customers.
Blackberry has a healthy balance sheet, is liquid and has a lot of cash at its disposal (MSN Moneycentral, 2012). Nevertheless, RIM is nowhere near as well-capitalized as major competitors like Apple and Google, so it must spend its marketing dollars carefully. The direct marketing program, therefore, needs to deliver strong results without costing the company much. The cost of sending out SMS or e-mails to existing customers is relatively low, so the real cost lies with whatever incentives are part of this program. The direct mail incentives, therefore, should be relatively minor, and be less than the marginal revenue generated by a single new customer. This will keep this aspect of the program profitable. Given that the budget for direct marketing is going to be relatively small, it should be a self-sustaining program.
Lastly, the direct marketing program should support the broader program objectives, and tie in with the messages that are being sent in the other elements of the marketing program. The direct marketing unit should therefore send its plans to central marketing command in order to ensure that there is consistency in the messages being sent to the market.
MSN Moneycentral. (2012). Research in Motion. Retrieved March 21, 2012 from http://investing.money.msn.com/investments/stock-balance-sheet/?stmtView=Qtr&symbol=rimm
Naseri, M. & Elliott, G. (2011). Role of demographics, social connectedness and prior Internet experience in adoption on online shopping: Applications for direct marketing. Journal of Targeting, Measurement and Analysis for Marketing. Vol. 19 (2011) 69-84.
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