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Retailers swing marketing budgets to existing customers

A new report from Pitney Bowes reveals that – for the first time – retailers are now devoting more marketing budget to existing customers than to prospecting activity.

GENERAL MERCHANDISE

Retailers swing marketing budgets to existing customers

A new report from Pitney Bowes reveals that – for the first time – retailers are now devoting more marketing budget to existing customers than to prospecting activity.

The Pitney Bowes report identifies UK budgetary allocation amongst a broad range of UK industries to establish the customer / prospect marketing divide. Crucially, the report is able to compare and contrast
2005 findings with those from 2003 - the first time this survey was conducted.

The retail industry devotes more budget to existing customers than any other industry and currently spends 57% of its marketing budget communicating to existing customers. This figure has risen from 42% in 2003.

This implies that the retail sector will continue to focus on data capture and 1-to-1 marketing at the expense of above the line techniques (at least at a national level). The sector recognises the need to compile data on individuals, their purchasing patterns and buying preferences in order to inform store stocking, in-store marketing and promotions, new product development and general store management.

Increasingly, stores are becoming more recreational - for example the trend for coffee bars in bookshops. Here, customer footfall remains the main objective. Appropriate offers, tailored to the individual's personal range of needs or interests, are most effective at attracting regular footfall. In-store promotions then serve to maximise impulse spend.

Key Findings:

The retail industry devotes 57% of marketing budget to existing customers. This figure has risen significantly since 2003 - up 15 percentage points from 42%.

On average, marketing to existing customers currently accounts for 53% of the budget of UK marketers. This figure has risen significantly since 2003 - up 10 percentage points from 43.5%.

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