“Our research into the effectiveness of direct mail suggests that people who are dead, or who don’t live there anymore, don’t tend to respond very well to mailings.” A tongue in cheek comment, perhaps: but also one that Mark Roy, managing director of the REaD Group, believes highlights a major problem for the UK’s direct marketers.
According to his calculations, the average British marketer wastes up to 200,000 a year sending direct mail to people who are never going to respond because they won’t ever get the mailing. The reason? Simple: in the average year in this country, 671,000 people die and 2,609,000 move house. Yet most companies are failing to properly spring-clean their lists.
Of course, Roy has a commercial interest in waking people up to the problem of “gone-aways” – his company sells one of the biggest and most comprehensive gone-away suppression files around, compiled from the electoral rolls and other sources (and called, imaginatively, the Gone Away Suppression (GAS) File). But even though he may be trying to sell his services to client companies, there is also an element of the preacher about him as he lays into clients who fail to maintain their lists properly.
As he says, most major users of direct marketing have understood the idea of using suppression files to winnow out, for example, those who are unlikely to respond to a mailing because of a lack of interest or lack of cash, or those who have a bad credit record. So why are so many British companies still failing to check their databases regularly against one of the number of gone-away suppression files on the market?
“We’ve had clients say to us that their list maintenance methods are up to scratch: but when we’ve run a test, matching samples with the GAS file, we’ve found ten per cent, 20 per cent or more of their database is made up of people who don’t live there any more. People don’t know how much of a problem gone-aways really are. The bottom line is, there are 9,000 people a day moving – that’s 6.5 per cent of the population a year. If you’ve got a file with six million names on it, that’s 400,000 who will have changed address.”
Roy’s calculations suggest that a client with a 500,000-strong prospect file could expect a level of gone-aways of around 5.5 per cent. At a pack price of 50p mailed four times a year, that would represent a wastage of 55,000. With a three million mailing twice a year, pack prices would come down to around 40p, and the wastage would be 132,000.
The worst case Roy has ever come across was a recent project for a major insurance company, which has files containing data up to 14 years old. Roy says: “On their current data, people who have signed policies within the last year or so, they’ve got about ten per cent gone-aways. But if you include all their oldest data, it’s up to 36 per cent.”
The REaD Group’s GAS file began, ironically, in the late 1980s as a project for then client British Gas, trying to identify households which were not connected to the mains supply. The agency then added move-out and move-in data (co-operating with a number of local authorities around the country), and the GAS file is now taken by 24 of the country’s biggest database bureaux on an agency basis, and used by more than 120 major clients.
The GAS File is not the only suppression file on the market to include information on gone-aways and the deceased. Shane Baylis is client services director of The Database Group, which offers a rival suppression file to ReAD Group’s GAS called – with equal originality – The Suppression File. Baylis says: “Not only is effective suppression critical to the industry’s reputation (ensuring that direct mail doesn’t annoy, offend or upset inappropriate recipients), it can also save the direct marketer considerable sums.”
Direct marketers could also make use of either the Royal Mail’s National Change of Address File, compiled from the list of those people who have paid to have their mail redirected, or the Electoral Roll. But both options have some drawbacks.
For a start, the NCOA only comprises those individuals who are prepared to pay to have their post sent on to them (Roy adds: “In the US, redirection is free, so it’s a brilliant service because almost everyone uses it”): on average, 1.2 million UK households sign up for the Royal Mail’s redirection service each year – but 42 per cent of them opt out of the NCOA.
The NCOA also tends to be biased towards certain sectors of the community, particularly the rental market. The kind of people who have owned and lived in the same house for 15 years before moving, say, can usually rely on the new occupants to redirect their mail for them. On the other hand, other groups, such as students, tend not to bother signing up for redirection, while the recession and the introduction of the poll tax created a new underclass which deliberately sought to remove itself from any records.
A similar problem hit the electoral roll at the beginning of the 1990s, with some estimates putting the number of younger voters who had effectively disappeared from the register at a million or more. Roy says: “I believe that there are around 2.8 million people living in the UK who aren’t registered on the Electoral Roll.”
But the main problem with the Electoral Roll is that since it is compiled only once a year and published six months later, it will at best be six months out of date and at worst 18 months out of date: and remember, 6.5 per cent of the UK population changes residence every year, either to a new home or to the cemetery.
But while many of the country’s biggest users of direct marketing are aware of the gone-away problem, there are still far too many companies which are not doing anything about it.
Database company ICD sent out a mailing last winter to 20 million households (as it does every six months). In addition to collecting information on 5.4 million UK households, it also compiled a list of 500,000 people who had moved or died since the previous Electoral Roll was completed. ICD offered this list free to any client, mailing house, bureau or research company which had the computing power to hold and manage it with the proviso that if they then used it to run against a client file, they would pay ICD a fee. Although the offer got a lot of publicity, and a large number of bureaux took the file, hardly any of them were able to convince client marketers to use it.
Patrice Bendon, project director at ICD says: “The bureaux were happy to take the file, but the client uptake wasn’t that great. I think it’s an educational process. It’s up to the bureaux and the direct marketing agencies to teach clients about the value of gone-away suppression.”
Granted, there will always be some level of gone-aways in even the best managed and most up to date files. As Bill Portlock, planning director of WWAV Rapp Collins, observes: “With large cold mailings, there will always be a percentage of gone-aways because with the best will in the world you cannot clear all of them – people are constantly moving and changing circumstances. But with smaller databases where © there is a regular dialogue open with the consumer, it should be far easier to keep the list updated.”
Other database and direct marketing consultancies are also hard at work trying to educate clients to deal with gone-aways in a more constructive manner. Jim Hamilton, senior data development consultant at Acxiom UK, says: “With more and more gone-away data becoming available, we believe that both service providers and customers must invest time and energy to testing and assuring the quality of the data. The key to increasing customer data quality is balancing the delivery of high quality database management systems with the use of a wide platform of available gone away, deceased and change of address data.”
There is even a call for the Direct Marketing Association to set up a centralised gone-away suppression file. While the DMA is still considering that issue, it is taking action on the rather more contentious and potentially painful issue of registering deaths. The DMA is sponsoring a private members bill in Parliament to give it legal access to the register of births marriages and deaths. It would then be able to set up a proper deceased file, under the supervision of a trusted third party, which it would require all its members to consult on a regular basis to minimise the emotional suffering caused to relatives by continued mailings arriving for someone who has died.
A centralised file of gone-aways is a slightly different matter, however, and could potentially have a significant impact on those direct marketing specialists who offer a commercial gone-away file. But even companies which market such a file would welcome DMA action on the issue, it seems, because it would reinforce the need for clients to do something about the problem.
Brian Gormley, managing director of Crawfords Computing (which sells the Crawfords Gone-Aways File) says: “I have a passion for anything which will improve the quality of direct marketing and a DMA National Suppression File would certainly do that.
“It would be a master file of gone-aways gathered from many different companies – and the more files that are consolidated, the more times each gone-away is confirmed and the more confidence a direct marketer can have that person really has moved.”
And Baylis observes: “I think the DMA will put one together eventually – they’ve been talking about what to do for three years. It would be a good thing for the industry.”
You would expect companies which sell a particular service to want to drum up business, and certainly there is an element of salesmanship in the attempts by the creators of gone-away files to get more of their clients to use them. But there is also considerable frustration at what they see as unnecessary wastage, and at what can only be called inertia among client companies.
The assumption with many users of direct marketing seems to be that people who have moved will let them know, whereas the truth is that frequently, they don’t. And all too often companies have no systems in place to update a database with information collected from returned mail (as anyone who has ever sent back a mailing addressed to the previous occupants, only to have another from the same company land on the mat a month later will know from bitter experience).
Many companies don’t even try to establish why a mailing has been returned. Is the intended recipient dead? Have they moved? Are they just not interested in direct mail? Or has there been a delivery problem?
As even the most fervent proselytisers for gone-away suppression accept, there is a certain level – around five per cent – which is inevitable. It is the owners of lists where gone-away levels are beginning to creep up to ten per cent and beyond that they are trying to reach.
As Roy says: “You shouldn’t feel guilty about having gone-aways in your file: but you should feel guilty about not doing anything about them.”