What is Dialogue marketing?

Although dialogue marketing is con­sid­ered an area of direct marketing, this term is beginning to displace ‘direct marketing’ in common speech. While tra­di­tion­al direct marketing methods are primarily dis­tin­guished by their personal approach to ad­dress­ing customers, dialogue marketing focuses on the rec­i­p­ro­cal exchange of in­for­ma­tion between the provider and consumer.

In dialogue marketing, ad­ver­tis­ers and sales spe­cial­ists zone in on the interests and needs of potential customers. Internet users are addressed with an in­di­vid­u­al­ly-tailored selection of ads for goods or services, which work to strength­en customer re­la­tion­ships. To do this, busi­ness­es rely on ad­ver­tis­ing channels that contain a response element, enabling them to measure the customer’s response. A customer response would include, for example, calling a service hotline, clicking on an online ad, or scanning a QR code from their mobile camera.

The range of in­ter­ac­tion options varies con­sid­er­ably depending on the medium used. While ad­ver­tis­ing methods such as coupons and bonus programs only create a dialogue in an abstract sense, the term, ‘dialogue marketing’ can be taken literally when it comes to con­ver­sa­tions on the phone with customers or when having face-to-face con­ver­sa­tions, for example, at trade fairs.

Current dialogue marketing methods include:

• Fully and partially-addressed ad­ver­tise­ments
• E-mail marketing (newslet­ters and mails)
• Telephone marketing (inbound/outbound)
• Customer cards, bonus and loyalty programs
• Customer magazines, brochures and mail order catalogs
• Coupons (online/offline)
• Search Engine Ad­ver­tis­ing (SEA)
• Online Ads (Content/Display Ads)
• Tra­di­tion­al ad­ver­tis­ing with response element
• TV or radio ads with response element
• Social media profiles
• Company and product websites
• Trade fairs
• Product samples

To enter a dialogue with customers, busi­ness­es should try to make re­spond­ing to their ads as easy as possible. Typical response elements include customer helplines or pre-addressed envelopes. A popular dialogue marketing technique is to use financial in­cen­tives to generate customer reactions. Typical sales strate­gies include:

• Discounts when sub­mit­ting coupons
• Money-back guarantee in case of dis­sat­is­fac­tion
• Early bird offers
• Discounts for rec­om­mend­ing to a friend

Response elements enable busi­ness­es to measure the success of their ads through customer feedback and make changes to un­suc­cess­ful campaigns. For example, a money-back guarantee can provide clear signals from the customer as to whether a product is sat­is­fac­to­ry or if it requires improving. And if an existing customer rec­om­mends a product or service, this signals sat­is­fac­tion and trust in the supplier, and can expand the business’s customer base via their sphere of influence.

Dialogue with the customer has now also become a central marketing strategy in e-commerce. The unique op­por­tu­ni­ties presented by web analysis are the central driving force behind this, in addition to highly in­ter­ac­tive online channels. User responses can be captured in detail and evaluated with tracking tools such as Google Analytics, Piwik, and eTracker. Taking e-mail marketing as an example, failed attempts to send messages (i.e. bounces), opening rates, and click-through rates can be recorded to gain insight into users’ reading behavior. Current newslet­ter tools rely on tracking pixels; these are down­loaded from the server when a com­mer­cial e-mail is opened, giving a clear in­di­ca­tion of user in­ter­ac­tion. It is important to note that data on reading behavior must be recorded sep­a­rate­ly from personal data, such as the e-mail address – by using pseu­do­nyms, for example. This applies in all cases unless the recipient has expressly consented to personal tracking. Thanks to web tracking, online ad­ver­tis­ing formats, such as content and display ads, can also provide marketing strate­gists with detailed in­for­ma­tion about the ad­ver­tis­ing campaign’s success. The biggest ad­ver­tis­ing companies bundle different websites into gigantic ad­ver­tis­ing networks, which are recorded by powerful ad servers using adverts. The data collected is then stored in a central location. This data includes in­for­ma­tion about which customers see which adverts, which ads are clicked on, and whether this leads to further in­ter­ac­tions on the landing page. The data is used to create mostly anonymous user profiles and is evaluated in the context of be­hav­ioral targeting. Thanks to web tracking, online business can benefit from a wide range of options for per­for­mance review, which are not available to ad­ver­tis­ers working in offline channels. A/B testing is essential for the op­ti­miza­tion of dialogue marketing tools and response elements. If you want to increase the open rate of your newslet­ter campaign, for example, A/B testing provides different versions of newslet­ters for ad­ver­tis­ers to compare. It should be noted that, unlike mul­ti­vari­ate testing (MVT), only one element is varied for each trial series, such as the e-mail subject, a link title in the main body text, or the ty­po­graph­ic design. In addition, the Internet has produced different com­mu­ni­ca­tion channels that enable busi­ness­es to com­mu­ni­cate with customers in real time on their own level. Many online merchants have now extended their arsenal of customer care platforms to include live chats and manage customer feedback via their social media profiles and moderated support forums, in addition to long-es­tab­lished customer hotlines.

Companies engage with dialogue marketing tech­niques in an attempt to un­der­stand and pos­i­tive­ly influence in­ter­ac­tive re­la­tion­ships with consumers and their attitudes towards brands, goods, and services. Dialogue marketing pursues simple and effective com­mu­ni­ca­tion goals related to the level of brand recog­ni­tion, as well as the brand or business’s image. Dialogue marketing is therefore geared towards in­creas­ing sales and profit. In addition to the ac­qui­si­tion of new customers, customer retention is a central goal.

Es­pe­cial­ly in highly com­pet­i­tive markets, investing time and effort into creating customer loyalty strate­gies is necessary to prevent customer migration to com­peti­tors. However, effective customer re­la­tion­ship man­age­ment can sig­nif­i­cant­ly reduce scat­ter­ing loss in ad­ver­tis­ing measures. The re­ac­ti­va­tion of existing customers is far more cost-effective than the ac­qui­si­tion of new customers. For most companies, however, a sig­nif­i­cant portion of the ad­ver­tis­ing budget still goes towards reaching out to new customers.

Mon­i­tor­ing the success of dialogue marketing ac­tiv­i­ties is easier for economic com­mu­ni­ca­tion purposes than for cognitive or affective com­mu­ni­ca­tion purposes. Companies that provide a per­son­al­ized offer to selected regular customers can then directly evaluate the ef­fec­tive­ness of their marketing measures by comparing costs and return rates.

However, it is difficult to measure the success of an ad­ver­tis­ing campaign when it relates to the customer’s per­cep­tion of products and services, the corporate image, or an emotional reaction to a brand. Many dialogue marketing ac­tiv­i­ties also function as adverts if the customer does not actively return feedback. Even if unan­swered, an e-mail ad­ver­tise­ment can benefit the rep­u­ta­tion and change the per­cep­tion of a business or brand.