Verizon is one of the nation's largest telecom providers, with more than 31 million wireline households, nearly 31 million wireless customers, and close to 4 million business customers. Their direct mail campaign is aggressive, sending more than 75 million pieces annually to wireline households alone.

According to Joanne Schindelheim, director of consumer marketing communications, direct mail serves three purposes in Verizon's overall CRM program: acquisition and growth; retention; and win-backs. And each segment is targeted in very different ways.

"We put customers we want to retain into buckets according to current and potential buying habits and billed revenue," explains Schindelheim. "There are some customers we want to keep based on revenue, and there are others for whom we see potential growth. For the latter group, we take into consideration lifestyle changes. We offer products that complement a certain lifestyle."

The right value-add is crucial when sending an offer that will resonate. "Customers who purchase all of our basic services are considered the most sophisticated of the retention group," Schindelheim notes. "So we don't approach them the same way we would, say, our long-distance customers. We have to offer something very different or special — such as one-stop shopping."

Another segment Verizon watches are Generation Xers. "This group might not be worth a lot of revenue now, but their needs will grow, and we want them to think of us," Schindelheim says. "We often target them with new products or services, realizing that they appreciate the latest gizmos."

Verizon: Retention and Loyalty

A key element of Verizon's retention program is "Surprise and Delight." Replacing its traditional loyalty program, Surprise and Delight is targeted at small geographic regions. In the Boston area, customers received a Red Sox videotape. In New York, customers received a Zagat's restaurant guide. "Surprise and Delight has worked extremely well," Schindelheim reports.

Verizon: Winning Customers Back

To regain inactive or cancelled customers, Verizon uses a multistep program. The first mailing is a letter that verifies that the customer changed service. "We get a lot of win-backs from this letter because people don't realize they've changed, or feel we were not paying attention to them," says Schindelheim. "If the letter doesn't work, we follow up with a direct-marketing piece with an offer such as fee waivers or free minutes."

Verizon: Pinpointing the Audience and Its Needs

Verizon varies its creative and offers based on geography, too. With information about where and why customers are leaving, the company can target an area with personalized offers. "Sometimes customers leave us because we don't have a product in their geographic area," continues Schindelheim. "In that case, we'll go back to two-year-old lists, clean them up and send a piece that highlights the offering they were looking for. We get a fabulous response rate."

Integrating direct mail with print and TV advertising, Web site, and call center is paramount to the success of an offer. "We tie campaigns to what customers see in other media," Schindelheim says. "Our TV ads often will enhance our direct mail piece, giving it credibility and keeping it top of mind."

When compared with other media, Schindelheim says that direct mail often comes out on top. "Its greatest strength is personalization and tangibility. Direct mail talks to an individual. It allows you to tell your product's story and go into depth. And it's very measurable."

Conclusion

As a customer relationship management tool, direct mail offers a degree of flexibility not available from other media. The ability to segment, personalize, and track every promotion can lead to improved results and stronger relationships throughout the customer lifecycle. Regardless of your specific objective — retention, activation, loyalty, or win-back — direct mail should be a key component of your CRM efforts.