IDM Business Performance Awards

JUDGES

Trevor HilliardManaging director, ARG Financial Services

John HoyleHead of marketing, AXA Sun Life Direct

Nick HuttonManaging director, Morley’s of Bicester

Nigel LudlowManaging director, The Economist Intelligence Unit

Simon RushtonExecutive director, Statumen

George SmithFormer chairman of IDM and founder of Smith Bundy

Annie SwiftPublishing director, Marketing Week

David TyersHead of marketing, Automobile Association

GOLD AWARD WINNER

CLIENT: M&G InvestmentsAGENCY: Harrison Troughton WundermanCAMPAIGN: The Truth About Investing

SILVER AWARD WINNER

CLIENT: GarnierAGENCY: WWAV Rapp CollinsCAMPAIGN: The Beauty Bank

BRONZE AWARD WINNER

CLIENT: TescoAGENCY: EHS BrannCAMPAIGN: Tesco.com

COMMENDED

CLIENT: OcadoAGENCY: HeresyCAMPAIGN: Ocado launch

A partnership with Waitrose, Ocado launched in London and Hertfordshire last year. Using a central fulfilment operation and customer-centric service promises, it met tough business targets in its first year. Targeted direct marketing, which evolved as the service rolled out, has created a business that is “showing every promise”, according to the judges.

Ocado needed to change shoppers’ behaviour, luring them away from leading high street and internet grocery retailers. It believed that a superior service proposition would succeed: Waitrose groceries delivered directly to the door, one-hour delivery slots, free delivery on orders over £75, lower levels of substitution and good order accuracy. Sophisticated software and central warehousing were the key to meeting this promise.

Managing growth required targeted marketing to specific customer groups and locations in London. As an incentive, customers were offered a £10 discount on each of their first five orders.

In the areas where the service was available, a series of mailshots were distributed: a teaser mailing with a coffee sample; a mailpack with an apron or oven glove; the £50 discount offer; and a follow-up to non-responders. As the service expanded, radio, underground and poster executions were used carrying the strapline “Be more demanding”.

A “launch and learn” approach to marketing helped Ocado meet targets in the first year, with average order values 17 per cent above target and customer retention significantly higher than the industry average . Cost per acquisition has fallen by 28 per cent and return on investment has risen by 30 per cent.

CLIENT: SMG PublishingAGENCY: Strategic Business SolutionsCAMPAIGN: The Herald/Sunday Herald Home-delivery

Home delivery of newspapers is a declining market, but critical to publishers. In December 2001 The Herald approached SBS, an Edinburgh-based marketing agency, to devise and execute a three-year home delivery acquisition-and-retention campaign.

This carefully managed database and call centre operation ensured that all stakeholders in the process were satisfied, and 3,100 new regular customers were recruited in the first year. Careful training, coaching and scripting of telemarketing agents helped orders achieved “per agent hour” to rise by 46 per cent in the first year, while the average cost per order fell by 50 per cent. The judges praised “an example that demonstrates the effectiveness of direct marketing when the budget is limited.”

A three-year strategy of developing direct sales of The Herald and Sunday Herald was adopted to build a base of new readers. Delivery had to be achieved through newsagents, who were suspicious of attempts to poach their customers – this meant that marketing had to be tightly targeted.

Outbound telemarketing and door-to-door canvassing were key. Through testing and call-scripting, offers were evolved to produce a sustainable, effective campaign. Data sources were developed to ensure the programme could be rolled out over three years, targeting areas within newsagents’ territories.

A money-back guarantee was offered to readers to encourage sales and a 12-week loyalty reward of Marks & Spencer vouchers was introduced.

Retention calling ensured that cancellation rates were reduced; this has been extended to the group’s evening newspaper. Live campaign information is available to the client through a secure extranet and the database and systems will form the basis for additional recruitment and lead generation activity in the second and third years.

FINALISTS

CLIENT: Cats ProtectionAGENCY: tdaCAMPAIGN: Donor Recruitment and Retention

Cats Protection has transformed its use of direct marketing from bare profitability to an income stream generating £800,000 in three years. Over that period it has recruited 45,000 new donors. The direct marketing programme has shifted the charity’s income base away from legacies, towards committed giving and cash donations.

“Cold” direct mail has been tested and refined to improve response rates and to achieve lower costs per donor. Door-drops have also been successfully tested. This marketing activity has helped to build the database, which is regularly mailed with appeals. The charity now has predictable income of £2m a year.

CLIENT: O2AGENCY: Tullo Marshall WarrenCAMPAIGN: O2 Loyalty Programme

Churn in the mobile telecommunications market is a significant problem. To tackle the issue, O2 introduced a highly personalised loyalty programme. Every quarter, its 1.8 million customers receive a communication that tells them the most appropriate tariff for their level of phone usage, rewards them if they have been a customer for more than a year and includes targeted promotions.

Massive data analysis of call patterns is applied, and the results are overlaid with customer value and propensity models. These determine the tariff, reward and appropriate channel to use. Up to 4,000 copy variations are used in every mailing. The programme has reduced churn by up to 50 per cent among registered members compared with O2 customers as a whole. Response rates range from 20 to 25 per cent. And for every one per cent improvement in retention, O2 makes £5m more profit.

CLIENT: Hewlett-PackardAGENCY: Tequila LondonCAMPAIGN: HP e-CRM Programme

Hewlett-Packard has evolved its customer relationship management programme online to cover 11 countries and using seven languages, with more than 1 million customers subscribed. The click-through rate for regular e-mail communications has doubled to 12.15 per cent.

Data was captured and assembled on customer preferences to allow e-mail communications to be tailored to clients personally. A segmentation based on value and technology use was developed and drives the content of individual newsletters. Tracking is used to identify loyalty and trigger additional communications.

Significant cost savings have been made through reduced inbound customer service calls and through more efficient marketing research . In addition, the programme has added $10m (£6m) in sales and revenues.

CLIENT: Aegon Individual ProtectionAGENCY: Navigator Responsive AdvertisingCAMPAIGN: Scottish Equitable Individual Protection

Operating in the UK under the Scottish Equitable brand, Aegon UK decided to enter the crowded individual protection market. By developing a simple, menu-based product range, and focusing on independent financial advisers (IFAs), the company acquired 30,000 customers in the first year, putting it in the top six providers.

A business unit was created to provide support for the Scottish Equitable Protect brand. Research among IFAs revealed a demand for clear, flexible policies. The proposition was communicated via financial trade press ads and direct mail, using twins to highlight the fact that no two individuals’ needs are exactly the same and that Aegon’s product can be tailored accordingly. Premium income in the first year was double the target and a six per cent market share was gained.

CLIENT: Sainsbury’sAGENCY: Proximity LondonCAMPAIGN: Sainsbury’s Reward Card

Under pressure in the grocery market, Sainsbury’s leveraged data from its loyalty card programme to encourage sales among key customers. Tailored mailings were developed to stretch spending by offering money-off coupons against total spend, rather than individual products. As the programme developed, these were tailored to individual spending habits and potential.

Data analysis was used to refine targeting and incentives. In the first year, the programme delivered £61m in incremental business, rising to £230m in the second year. Experience from the campaign has been applied to allow revenue and profits from each mailing to be forecast accurately. The return on investment continues to rise.

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