Cultivating entrepreneurship during economic recovery
case study
All start-ups depend on marketing of their services of products to be successful. But what if it is no longer legal to market to people who have not categorically stated they want to receive your information? Take the hypothetical example of a small garden supplies business in Ireland.

Having been made redundant during Ireland’s recession, Ann retrained in horticulture and decided to set up her own garden supplies shop in an underserved area. Her local “start-your-own-business” course recommended the benefits of direct marketing so Ann uses a big part of her limited marketing budget to rent an emailing list of people who have gardens, and who have expressed their consent to receive emails related to gardening.

On Ann’s opening weekend, 60% of her customers bought products using the discount voucher included in the email she sent out. She plans to continue using email marketing in the future. However, under the proposed EU Data Protection Regulation, personal data processing may only be allowed with the explicit consent of each individual on the list. In other words, each person will have to explicitly consent to receiving information from Ann’s garden supplies shop.

Given the hassle involved for individuals to explicitly sign up for each and every usage of their data, few are likely to bother. This means that Ann’s marketing tactics, having been successful to date, will be rendered much less effective. She will have to use other more expensive options such as mass advertising, or resign herself to fewer sales.
Our take
Direct marketing uses a variety of marketing channels, such as traditional mail, email, telephone, and online advertising, to communicate about customized products and services for people like you and me. This makes the communication we receive more relevant to our needs.

In this example, email marketing allows new companies, like Ann’s, to enter a market by making their brand, products, and services known to the most relevant prospective customers. And these prospects have agreed to receive emails related to gardening. With the proposed legislation, Ann would need an explicit consent from each individual she would like to send a voucher to. Considering this, it would be difficult for her to reach out to individuals who are not already her clients. Consequently, prospection of new customers would become very difficult.

Targeted advertising allows companies to put their budget where it is most effective, freeing time and money to invest in their core business. Direct Marketing is particularly important for niche or innovative products and services as well as for small businesses since it is the most cost-effective way to target the right group of individuals.
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