It took just 30 minutes of rain at Heathrow Airport to cause 7,000 items of baggage to go astray. With every aircraft-stand full, staff resorted to dumping baggage from incoming planes onto the tarmac. To avoid further delays, British Airways (BA) concentrated on getting flights away, with or without luggage.
Most fulfilment houses do not face that degree of time-sensitivity. Yet their performance standards appear, if anything, to be worse than those of BA baggage-handlers. For all the effort put in at the front end to generate a response, things are clearly going wrong at the back end.
A survey by Response Direct Publishing (RDP) recently revealed the scale of the problem. It systematically responded to two-stage ads to track how many advertisers sent out the information requested. Astonishingly, nearly 50 per cent did not respond at all within ten weeks of the request. Only 25 per cent responded with a prompt, personalised and high-quality reply.
“The results weren’t what you’d anticipate,” says Peter Webb, executive creative director and marketing director at RDP. “It’s a curious thing, because companies tell you their systems and processes and training are good. So it’s odd when fulfilment doesn’t happen.”
RDP has more than 300 active clients for its response catalogues and card decks, all of which it assessed using seed names. Webb is surprised clients do not use this same process themselves. “The only answer is to track response for yourself,” he says.
Some responses to these channels come directly to RDP for processing before the leads are passed on to clients. It sends out its own rapid-response letter to tell consumers their request is being processed.
When the trail goes cold
“If they don’t get something back quickly, it slips their mind. Or if they want something quickly, they get irritated if it doesn’t arrive soon. When they’ve ticked a box against a list of companies, you’ve got to get the organisation to respond rapidly, or it becomes a cold mailing again,” says Webb.
RDP’s findings are not an isolated case. Research carried out by the Institute of Trading Standards found that 80 per cent of distance-selling orders arrive late and 17 per cent never arrive at all.
Direct Excellence operates a benchmarking scheme for financial services companies involving 5,000 mystery shopper calls every month. Each one of these should generate a fulfilment pack, since it can cost a brand about &£100 to generate every call it receives.
First in, first out
“Our data shows that one in four fulfilment packs never arrive,” says Direct Excellence director Andrew Stracey. “The average time for a pack to arrive is almost three days, with many taking up to eight days. So the early birds will be catching their worms with successful sales; a potential buyer won’t necessarily wait.”
He believes that the blame for failures should not be placed at the feet of IT systems. “This is all basic process management: people doing their job properly with sound management who make things happen,” says Stracey.
So why do things fall down so often? And what steps can clients take to ensure their responses are the ones that get turned around rapidly? According to many in the fulfilment industry, the problem can lie on the client side.
“There are challenges we face that let us down without meaning to,” says Prolog sales director Ian Dignum. One of the hardest issues to deal with is missing stock. The response handling operation relies on its clients to deliver fulfilment materials and products in time to meet requests from consumers.
“It’s important to see stock levels in the call centre. Agents at the front end have to have the ability to see stock information,” says Dignum. His company uses the industry standard mail-order application Mailbrain to manage data on the availability of lines and expected delivery dates. That gives agents the ability to tell callers when to expect their order.
Out-of-stock situations are not always easy to resolve as many companies now rely on just-in-time delivery systems. Re-ordering may involve delivery from overseas, meaning that shipping times have to be taken into consideration.
Prolog handles order-taking for a charity that sells fair-trade products from the developing world. “It can be frustrating if stock isn’t available, but the lead times are considerable,” points out Dignum. “The charity may have to place orders one year out, so forecasting is important.”
Being able to tell customers that a product is no longer available is a better approach than taking an order and then not delivering. Even where no money is changing hands, such as with information requests, consumers are more likely to keep an open mind towards a brand if it acknowledges their response, even if it cannot fulfil it immediately.
Not all of the blame can be placed on clients, however. Fulfilment supplies vary widely in quality and there is no consistent standard by which to judge them. The Direct Marketing Association and the Institute of Sales Promotion are working together to create a credible, independent and valuable accreditation scheme for response-handling houses which would help to resolve this problem.
Question of standards?
“It frustrates me that other suppliers don’t work to the same standards as we do. That’s why we’re working towards an accreditation scheme to help clients choose suppliers of the right standard,” says Stephen Bentley, chief executive of Granby Marketing Services, which is one of the prime movers behind the scheme. “We pride ourselves on working to recognised quality standards.”
He concedes that some problems do not reflect poor operating practices. “If a client is using an on-pack call to action, pull-through from consumers for the product can vary from the draw-down date, meaning responses come in earlier than you expect. Last year, on one high-volume campaign, it came in three weeks early,” says Bentley.
Fast-moving consumer goods, by definition, face such situations all the time. The only way to cope is to have flexible systems in place. Increasingly, clients are looking to ensure that fulfilment houses are ready by signing them up to service level agreements (SLAs).
Goldfish has been using Carlson Marketing for its systems and fulfilment since 2002. “A partnership approach is all-important to Goldfish,” says Carol Lane, programme manager at Goldfish. “It’s only through an open and honest relationship that superior customer service can be achieved. SLAs are therefore a key aspect of our working relationships.” The SLA Goldfish has with Carlson requires that a minimum of 90 per cent of redemptions are turned around on day one. All letters are personalised and carry the serial number of the vouchers that are included in the fulfilment pack. “Being able to track voucher fulfilment at customer level enables us to provide exemplary customer service,” says Lane.
This kind of link between a promotional offer and its fulfilment is all too often absent from marketing campaigns. The result is to undermine the original purpose of the programme.
Many happy returns
“In this sector, fulfilment items are offered with some credit cards and insurance products,” explains Paul Sage, sales and marketing RM solutions at Carlson. “But it can take weeks to fulfil. The customer may not know why they have received the item and, for this reason, returns happen frequently and defeat the very purpose of offering incentive items,”
All of this is creating intense pressure on turnaround times. Consumers are more demanding than ever, while digital channels have made rapid response to requests essential.
“We should all be aware that we live in a society that values immediacy,” notes Rebecca Braithwaite, managing director of Golley Slater Direct. “Many of our customers are time-pressured individuals who are unlikely to chase and follow up.”
The onus is on advertisers to ensure flawless and timely service. Many SLAs now stipulate turnaround times in hours, rather than days. Fulfilment houses have a culture that sees every day’s responses pushed through before the working day is over.
Yet this challenges many suppliers’ business models, which allowed them to offer low-cost services. “Response acknowledgement and fulfilment is often batched to save time and money, and then despatched only on achieving trigger targets,” says David Laybourne, technical director of DPS Direct Mail.
To keep costs down, a supplier may be told to wait until it has several hundred or thousand responses, or even to process only at weekly intervals. “Economies of scale are typically key to the process. But in these times of instant gratification, some marketers risk giving new customers a disappointing first experience,” says Laybourne.
As BA recently learned, the perils of under-performing can be to damage the brand. In highly competitive markets, customers will defect, never to return. The realisation is growing among brand owners that the back end deserves as much attention as the front end of marketing. Otherwise the danger is that fulfilment will rain on the parade.
The DM Show
Running from October 26 to 28 at London’s Earls Court 1, the DM Show highlights the latest initiatives to help those planning direct marketing campaigns. The event brings together all aspects of direct marketing, and offers expert knowledge as well as showcasing new products and services, with case studies to illustrate their effectiveness. More than 150 companies are on hand to offer advice covering all specialist DM areas, from customer management to telemarketing. This year’s show features:
For more information, visit www.dmshow.co.uk.