While the vast majority of businesses were forced to slash their marketing budget in 2020, U.S. digital ad revenue still managed to increase more than 12% (IAB/PWC) and there has also been a massive upswing of email marketing volume. The pandemic-driven acceleration of online shopping has created a saturated digital marketing space, presenting both a challenge and an opportunity for small businesses: standing out in the crowd.

As digital costs to acquire and retain customers continue to rise, diversifying and integrating the right mix of channels that produce optimal ROI are key to maximizing direct marketing budgets this year.

Here are three areas small businesses can focus on to maximize their direct marketing budgets this year:

1. Understand your audience and target accordingly. Don’t waste your time, resources, postage or material costs on reaching individuals that won’t be interested in what you have to offer. The more you understand about your ideal customers, the more targeted your lists become, therefore resulting in higher response rates. Developing customer journey maps is a highly beneficial strategy to see the customer’s experience across relevant channels through the customer’s eyes. By visually illustrating the customers’ processes, needs, wants, and emotions as they navigate the buying journey from initial interest to purchase, small businesses can better understand “who, where and when” to spend marketing dollars most effectively.
2. Personalization is key to forming a connection with your brand. It can’t be said enough. One of the most impactful tools in your toolbox is personalization. That is, dynamically-targeted messaging to ensure the right targets are receiving engaging, timely messages through the appropriate channels for them. In fact, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. It’s no surprise that on the horizon lies more focus on personalization and an increase in triggered direct mail campaigns, which is an individualized piece of mail “triggered” based on a specific action by the consumer.
3. Integrate data for real-time adjustments. To get the best results from all channels, marketers should continually focus on refining, updating and integrating data. By leveraging these meaningful insights, you can understand how, when and which channels are working best together and then adjust accordingly.

For example, often when expenses rise, marketers tend to stop testing direct mail. However, continued testing is the best way to lower the cost to acquire customers. Let the data guide you to a full understanding of which elements of your campaign drive the greatest responses. This will increase ROI by helping you strike the right balance between short-term expenses and customer lifetime value.

Ever-changing consumer trends and preferences that were accelerated because of the pandemic are keeping marketers and small business owners alike on their toes. With the uncertainty from 2020 starting to fade, we can start to look ahead and prepare for new trends on the horizon. Whether it be traditional marketers continuing to test newer digital channels, or digital-first companies dipping their toes in the water with more traditional channels – we can all rest assured that a holistic marketing strategy encompassing various integrated channels and tactics will generate the most ROI this year and beyond.