If you believe marketers, the only people who buy their products are in the ABC1 social classes. Yet for some companies, the C2D segment can be critical to sales volume, especially in low-price retailing.
Even within the upper classes there are huge variations in buying behaviour. The drivers of a BMW and a Volvo may both be ABs, but they are clearly pursuing different lifestyles. And when it comes to driving to the shops, relying on socio-demographics alone will run into problems. One of the drivers may have to cross a major motorway junction – and therefore enter a completely different drivetime area – in order to reach the nearest outlet.
Geography remains one of the most defining elements in marketing, especially in retail and packaged goods. In media terms, door-to-door also remains the most geography-dependent distribution method. That is why 90 per cent of the material dropped through letterboxes is produced by retailers or packaged-goods companies looking to drive sales, according to Andrew Burgess, media director at Tri-Direct. “Door-to-door is flexible and quick. You can get a leaflet out in reaction to last week’s offer or a short-term sales promotion,” he says.
Not surprisingly, geographical information systems (GIS) are playing an increasing role in the planning and targeting of door- drops. By taking the postal geography, which marketers now rely on, into a mapping system it is possible to make better judgments about how to reach target markets.
“People now want to put a geographical dimension into their existing databases,” agrees Chris Green- wood, director of Kingswood Consultancy. His company markets GeoConcept, a PC-based GIS which is rivalling MapInfo as the industry standard (and has just overtaken it in sales in France).
The software attaches to external databases and allows users to interrogate their information. This can be particularly useful when trying to refine the media schedule for a leaflet distribution around a retail chain. “With catchment area analysis, if you can express the relationships between customer characteristics, we can model them. That can be highly predictive for site analysis,” he says.
GIS is making its way onto the individual marketer’s desktop alongside the marketing database and analysis system. It can be a major advantage to work with the same tools and in the same format as other departments in the same company. Property, distribution and sales people have long been working primarily with geographical, rather than customer data. If marketers can bring the two together, communications become more efficient and easier to justify.
That is why the major distribution companies have invested in targeting systems and GIS. In particular, there has been a lot of emphasis on taking the level of coverage which can be bought in the door-to-door medium down below postcode sector level. On average, a sector contains 2,500 households. At Circular Distributors (CD) the MicroTargeting system can build distribution plans at levels of about 700 households.
“A number of clients were saying if we could get down to smaller units, they would be quite interested. On the back of that research, we decided to throw away our current postcode sector solution and rethink the distribution process,” says CD managing director Nick Wells. By examining the geography and geodemographics of each delivery person’s round, CD has been able to bring detailed analysis into play when defining door-drops.
Cross tabulations to Target Group Index’s, Mosaic’s, Acorn’s or AGB Superpanel’s data can be run and then translated into a media schedule with less wastage. In a test distribution by Black & Decker, which ran three control groups at different geographical levels, micro-sectors proved the most cost-effective despite the premium charged. Wells notes that financial services have shown a lot of interest, but adds: “It is not the panacea for everybody’s targeting needs.”
At the Mediaforce Group, which has recently taken over MRM Distribution and merged it with The Leaflet Company, CACI’s InSite system – a staple of retail site location – is in use. Mark Young, managing director of The Leaflet Company, says it’s vital to be able to examine the geographical issues of the medium. “People look at the demographics, but they don’t think about where people go to buy the products,” he says.
Young says most targeting is done at postcode sector level, which is accurate enough to reveal how door-drops should be bought around different outlets. “Take SupaSnaps, for example. Each outlet may have a completely different offer, with one shop in the high street and another in the suburbs. Door-to-door is the only medium where you could cost-effectively deliver different messages for both to 20,000 homes,” he says.
But do clients really need to target door-drops with this level of accuracy? Is there in fact a contradiction between the inherent nature of the medium and the move to lower levels of geography through GIS? According to Tri-Direct’s Burgess: “It comes to a point where the unit cost of delivering below postcode sector level can make it less effective to use door-to-door. Compared with the response rates you would achieve through direct mail, it is not as good.”
Efficient targeting is an honourable goal, he says, especially to remove sectors in which few potential customers live. But by reducing total volumes through using smaller target units, the cost per item increases as a result of the delivery premium and the loss of economies of scale in printing. Since door-drops are inherently less effective than direct mail, the return on investment might not make sense.
“It is a simple equation that is geography-led. If you want to target households, you can buy them at lower cost as names on the Electoral Register,” he says. Young agrees: “I believe what is happening is that people are trying to convert door-to-door into direct mail. Is door-to-door built for this? No.”
However, he does accept that some door-dropped items may be worth using tighter targeting on. Samples which can cost 25p or more each, for example, could be more cost-effectively distributed with less wastage. On leaflets printed at a penny each, however, the return is unlikely to be sufficient.
What may become more relevant, and may give GIS its “killer application” in the medium, is measuring the efficiency of distribution within each postcode sector. It is a fact of life that none of the distributors achieves 100 per cent delivery, but some are worse than others.
The companies themselves, and the planners and buyers who specialise in them, have been slowly building up data on which sectors have the best and worst record. Improving effectiveness by maximising reach within the most efficiently-delivered sectors may be the way forward. At Royal Mail, the debate about geography has a slightly different flavour. Although it only sells distribution at sector level, it has two advantages over the other national distributors. Firstly, it can offer every home in the UK, because leaflets are delivered by regular postal workers. And secondly, the geography which underlies all marketing data is the one invented by the Post Office. That means there is no slippage between a schedule defined on the basis of geodemographics and the on-the-ground areas corresponding to the delivery list.
It has chosen a targeting system that gives more flexibility without taking the geography down to household level. “We use Cenario, which Royal Mail jointly developed with Capscan,” says Andrew Kershaw, marketing manager of unaddressed mail. “With most of the other systems, data is clustered and you are given the housing type. With Cenario, you have the raw data. You can select against sex, age, household type, or any of the 50 questions asked on the Census.”
He believes that what is important is providing efficient delivery combined with a system that allows clients to import any characteristics which matter to them. “For example, the issue in mail order is propensity to purchase by mail. Unless you have got something that allows that to be looked at, it could be a problem.”
So should door-to-door be trying to embrace GIS, or is it a step too far? For Burgess, who plans and buys about 250 million items annually, using geographical systems at postcode sector level is sensible. But taking them below that level runs against the inherent value of door-to-door. “The media itself can not deliver the level of targeting that is expected of it. That is where it falls down,” he says.
At Kingswood, Greenwood has seen many different industry sectors struggling to define what is the appropriate level of geography to work at. He recalls an oil company worrying about five minutes’ difference in drivetimes for an oil depot in Spain, when its economic forecasts for the next ten years were accurate to plus or minus ten per cent.
“The trick is to get the geographical scale to match the potential business benefit,” he says. “In my experience, people try to buy better geography than the underlying business issues require. That is because if you can produce a map it gives the whole thing credibility,” he says. Clients using door-to-door may want to consider whether they really do need to count target letterboxes in tens, rather than thousands.