It is five years since Robin Mitchell moved on from his job as finance director at direct marketing agency Craik Jones Watson Mitchell Voelkel. He is now head of market development at the company, but every week he still receives ten or 11 pieces of direct mail addressed to him as finance director. Even the Institute of Direct Marketing regularly sends mail to him at his old job, despite the fact that he has e-mailed twice to tell the IDM about the change.
Mitchell believes this experience sums up everything that is wrong with business-to-business (B2B) direct mail. He says that many of those involved in the sector are salespeople, who try to send out as much mail as possible, rather than marketers who care about the perceptions created by their mailings. “It’s a law of diminishing returns. If you mail 1,000 people but only get a two per cent response rate, that’s still 20 replies and you continue doing it,” he says.
‘A man and his dog’
It is cheap and easy to set up a B2B direct mailing house, and many of those involved tend not to be too fussy about the letters they send out, he claims. Not only are many of them wrongly addressed, they are also unappealing, in their plain brown envelopes.
“If you are trying to produce stuff for TV or websites, you need to have a critical mass,” says Mitchell, whereas B2B direct mail is open to “a man and his dog working from a shed.”
His views come as the latest report from the Direct Marketing Information Service shows that 56 per cent of B2B mailings are thrown away by the managers who receive them. The response rate to such mailings stands at three per cent in the survey – the survey was conducted during 2000 – up from two per cent on 1991. While so much of the mail received is binned, the good mailings tend to be swamped by the bad, making it an uphill struggle to get noticed. The DMIS report shows that the proportion of companies where a secretary or PA acts as a filter for direct mail has fallen dramatically in the past ten years. While in 1991, almost a third of companies had “filterers” to open and vet mail for their managers, this has fallen to just 11 per cent. It’s come about because of the restructuring over the past ten years, which has involved laying off support staff and getting managers to play a greater role in administering their own affairs.
The most worrying finding for the industry is the level of errors in mailings. Almost two-thirds of items are incorrect in some way, which is a record level. “The biggest category of errors is out-of-date information, such as name, title or address. One in seven items carry this type of error, which is likely to reflect the high churn of business managers – a typical marketing manager is now in a post for just 12 months,” says the DMIS report.
The question the industry faces is whether B2B direct mail can throw off its reputation as the ugly duckling of marketing services. But while it may cost £50 to visit potential clients, and £5 to phone them, it only costs 50p to send out a mailing. There is nothing quite as cheap as mail-outs, but their effectiveness as a new business tool is considered to be minimal and most observers believe they only work well when undertaken in conjunction with other forms of communications, such as follow-up calls or Internet communications.
From letterbox to litter bin
According to the DMIS survey, the balance of opinion on how useful direct mail is compared with other forms of advertising has “tipped significantly towards the negative.” Some 46 per cent of respondents say it is not very useful or not useful at all, and 43 per cent say it is very or quite useful.
But Mitchell says there are ways to tackle rampant inaccuracy. At Craik Jones, for example, an audit of B2B targets is conducted every quarter, to catch up on details about people who have moved jobs. But he warns against using this approach as a Trojan Horse, taking the opportunity presented by the check to sell to clients, as they may be annoyed by such tactics.
The DMIS survey gets short shrift from some in the direct marketing industry, who see its findings as being so general as to be meaningless and irrelevant. OgilvyOne consultant Kathy Connor questions the findings, and asks how sure DMIS is that 50 per cent of consumer mailings are not thrown away. “We find that business mail tends to be filed, stored and used again more frequently than consumer mail” she says.
Connor says the challenge facing B2B mailings is that there are fewer address lists in this area, so most clients use their own databases. “Targeting needs to be tighter, yet it is more complex than consumer mailing as so many people influence purchasing decisions. You often need to do multiple targeting,” she says.
More of the same
But this raises the sensitive topic of duplicate mailings – something bound to irritate recipients and those who filter the mail alike. The DMIS survey says 59 per cent of respondents agreed with the statement that “getting duplicate mail annoys me intensely”.
Connor believes the solution is to improve targeting and the relevance of the mailing for each business market – this can be done with careful planning and creative development of a campaign to fit the market. “The right creative work will stand out if it is relevant to the individual mailed. E-mail marketing complements direct mail activity in this sector.”
Mick Costella, strategist at Digitaltmw says: “Businesses today are under increasing pressure to deliver more for less and this could spell a reduction in the use of direct mail. This is not purely down to the throwaway nature of paper-based communications but more to the growing use of other channels which are proving more cost-effective.”
But others believe that e-mail marketing is still in its infancy in the B2B field. As few as one per cent of e-mail addresses are recorded on contact lists within the direct mail industry, and there are few signs of growth in this figure, as many people are wary of giving out their e-mail addresses. This low number means that those e-mail addresses that do find their way onto lists are swamped with unwanted e-mail, and again the useful mails are often lost within the multitude of irrelevant and obscure messages. One agency boss recounts how he took a three-week holiday and returned to find 1,100 e-mails waiting for him on his computer.
But the Web is destined to become a much more important tool for conducting relationships with existing clients. There has been a growth in “co-operative” Web businesses, such as those dedicated to using group buying mechanisms to supply equipment to smallto medium-sized companies.
Let’s get together
While this model may not have achieved much success in the consumer market, the approach is seen as ideal for small businesses. Such websites can provide an ideal communications platform, as managers using the sites will be receptive to business marketing.
According to Carlson Marketing managing director Steve Grout, targeting has to be honed to ensure that mail reaches the right people at the right time. But it is also necessary to understand the dynamics of the decision-making process for each business and category, and to find out who is involved in purchasing decisions and when. He calls this “Understanding the moments of truth in the buying cycle”.
He says messages need to be relevant, of course, but they should also be presented in a straightforward way as the managers being targeted do not have time to wade through reams of information. But he emphasises that overall, direct marketing works best when it plays a part in a wider campaign, whether it’s e-mail, interactive or telemarketing.
The DMIS survey must make depressing reading for many in the B2B mailings field, as it is the mistakes and poor creativity of mediocre outfits that queer the pitch for other, higher-quality operators. But most practitioners are still optimistic that with the right sort of creativity, and more time spent researching companies – how they work and who takes the decisions – business mailings can still be effective.