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Firms' budgets swing towards DM activity says survey

LONDON - Businesses are spending more of their marketing budgets targeting existing customers compared with two years ago, according to a new survey.

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Postal services firm Pitney Bowes asked 1,000 UK firms to compare their marketing spend on existing customers from 2003 to 2005. It found that across the financial services, hotel, telecoms, retail, charity and publishing sectors spend on this area had jumped considerably.

Of those that are spending more, publishing saw the biggest jump from 32% in 2003 to 50% this year. Only the mail order and travel sectors now spend less on existing customers than they did two years ago.

David Jeffries, Pitney Bowes marketing director, said the findings will be welcome news to the direct marketing sector.

"Despite analysts pointing to a general downturn in overall marketing spend, direct marketing budgets, a key method of reaching existing customers continue to be revised upwards, indicating a move away from media advertising spend and sales promotion activity," he said.

He added that businesses are realising that marketing to existing customers can have a profound impact on customer retention and customer growth.

"High volume prospecting activity has given way to intelligent, targeted communications to existing customers, the first line of attack in the battle to stem customer churn rates," he said.

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