Mailshots wide of the target

Direct mail companies are becoming increasingly wasteful, and need to improve their targeting if they are to avoid alienating potential customers

To consumers, poorly targeted mailshots are one of the greatest irritations, according to research by direct mail specialist the REaD Group.

Mail addressed to the wrong person is, at best, annoying. It can also be upsetting if, for example, it is addressed to someone who died recently.

According to the study, marketers waste &£46m a year sending wrongly addressed mailshots. What is usually dismissed on the database as a few “gone-aways” – that is, people who no longer live at the address – soon adds up to money wasted and a damaged reputation.

REaD’s annual research on direct marketing (DM) found the number of items sent out rose from 2.4 billion last year to 3.1 billion in 1999 (July to July). Of this year’s mailings, 84 million were sent to people who no longer lived at the address. Wrongly addressed and targeted mailings rose by 31 per cent.

REaD calculates the amount of money wasted by identifying how much mail each sector sends, the average number of “gone-aways” and the average pack price.

This year, the UK direct marketing industry has wasted &£46m, up from &£35m in 1998.

The worst offenders are mail-order companies, which mail 527 million items a year, of which 20.6 million are to “gone-aways”. They waste &£9.3m a year.

Among the most prolific direct mailers, financial services companies are the second worst offenders. Financial organisations mail 621 million items a year. Of these, 15.2 million are sent to “gone-aways”. REaD calculates they waste &£8.3m.

Surprisingly, in the past year the greatest increase in wastage came from retailers and charities.

Compared with last year, the number of direct mail pieces sent by charities to “gone-aways” has increased from 5 million to 9.7 million. With charities, where the onus is on devoting as much money as possible to the cause, it is easier for them to damage their credibility if they are seen to be wasting resources.

“Looking at the research, it is hardly surprising consumers are becoming fed up,” says REaD group managing director Mark Roy. “They now receive enough direct mail to be selective. The fact is that until a company accepts it has a data decay problem, it will continue to make the same mistake time and time again. Mailing to ‘gone-aways’ is a sure-fire way of making your brand or company look incompetent.”

Roy says the companies co-ordinating mailings may be blind to the problem, although errors are highly visible to consumers, who are less likely to take the company seriously if basic name and address details are incorrect.

Consumer anger may be fuelled by charities which are seen to be wasting money on wrongly targeted mail. “While it is clear the brand, product and creative work are crucial parts of any campaign’s success, if you don’t get your data right in the first place, you may as well flush the rest of it,” Roy says.

One reason for the growth in poorly targeted direct mail is the surge in new businesses that see direct mail as a cost-effective, and measurable, way to reach their audience, without a clear-cut strategy.

Companies may get hold of a database, unaware of the rate at which it becomes out of date. REaD says 9,000 people move home every day. Marketers need to become aware of the fact that data “decays” almost from the minute it is captured. Regularly updated databases are a powerful tool in refining DM campaigns.

In recognition of the need to educate direct mailers, the Direct Marketing Association is to launch the national suppression file – containing data which identifies people who have either moved, died or returned direct mail.

By taking steps to ensure mail is correctly targeted, marketers will be able to prevent further damage to the reputation of the industry. They will also be in a better position to convince consumers, particularly donors to charities and financial services companies, that the organisation is a prudent guardian of their cash.

Factfile is edited by Lucy Killgren

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