The direct marketing industry would love to lose its reputation for “junk mail”, but a two per cent response rate is a powerful incentive for brand owners to continue showering people’s doormats with mailouts.
Many DM executives believe “junk mail” is a fitting description for most of what passes for targeted communications. They say there are few examples of well-crafted, carefully targeted mailouts, though, of course, they always claim their own efforts fit this description.
It is difficult for brands to match the mass mailout as a profitable method of shifting products, so perhaps the industry will just have to live with criticisms from the 98 per cent of people who receive mailings and throw them in the bin.
Even so, most direct mailers are optimistic that advances in data technology will lead to more accurate targeting. They believe the growing sophistication of creative work and strict data protection rules mean that mailouts will be able to move beyond being simply “junk” and become a precision tool, linking producer and consumer for their mutual benefit.
DM gets rough treatment in the media. There is the familiar litany of accusations: the fact personal information is sold to mailers; the millions of letters sent to the wrong addresses every year; the targeting of vulnerable people by con artists; families’ distress when letters are sent to deceased relatives; and the fact that some companies persist in sending mail even after they have been asked to stop.
Even so, most in the industry see this as a highly partial list of negatives that ignores the benefits that can land on our doormats. Gavin Wheeler, managing director of direct response agency WDMP, says that greater clarity is needed in defining what people object to with DM. “People aren’t tolerant of poorly targeted mail – with sophisticated modern software, there is no excuse for mis-targeting. This is what gives the industry a bad name – not the targeted and appreciated mail.”
There’s much to offer
He says people love the offers attached to DM and claims that recent research by his company shows that those who complain the most about junk mail – the over-50s – are also the ones who respond to it the most. While a lot of DM has a clear price message, with credit card providers screaming about their rates on envelopes, Wheeler believes packaged goods gives the DM sector an opportunity for greater creativity.
“With packaged goods, you need something that will first catch the eye, then the imagination and finally the custom. Our Imodium suitcase-shaped mailer is a good example. You have to pick it up and then, because it’s a case, you feel you have to open it. The eye is caught, the imagination is caught and now you’re reading on. This piece got a response of more than two per cent for Johnson & Johnson. Not bad for a mailer about diarrhoea,” he says.
The DM industry is searching for ways to move on to another level, rather than just churning out mailings and hoping for the best. Competing for people’s attention among the dozens of mailouts they receive demands radical measures. Instead of concentrating on the handful of people out of every hundred who respond to a mailout, more attention needs to be paid to those who do not. The way that mailouts affect consumer relationships with brands is also important. If it antagonises or alienates them, it might be better to avoid the scattergun approach.
According to Clive Humby, chairman of dunnhumby, which runs Tesco’s Clubcard scheme, the problems with DM illustrate the flawed nature of modern marketing. While mass campaigns are still the main way of talking to customers, they can dilute brand messages. Customers are becoming “disenfranchised”, he says, and marketing has less resonance today.
He wants customers to be seen as “assets” rather than objects to be sold to, though he believes this requires a change in mindset for marketers. “Today, organisations are still segmenting customers tactically rather than strategically. In effect, the only reason customers are labelled is to facilitate DM campaigns: customers are not so much segmented as scored,” he says. Humby believes this tactical segmentation is driven by the desire to see consumers as either “responders” or “non-responders”.
“Without comprehensive analysis and understanding of a customer’s responses to all marketing stimuli, an organisation cannot possibly maximise the net asset value of that customer,” he adds.
A common criticism is that customers do not want “relationships” with brands: they want good value products with no fuss. Many people have a Tesco Clubcard not because they want to deepen their relationship with the chain, but because they feel they will miss out on discounts if they do not participate.
Yet, incentives, such as samples and discounts, are one way to ensure that people do not object too strongly to mailouts. Most people will be happy enough to receive a free sample of shampoo, but it may try their patience to be sent samples of laxatives or diarrhoea treatments, unless of course they are afflicted by these ailments.
Julian Dodds chief executive of agency Geronimo believes that giving something tangible is a good way of minimising dissatisfaction. He says samples are less likely to irritate and gives the example of the agency’s recent campaign for Tilda rice. About one-third of the people mailed bought the product for the first time, he says. He adds that there is no evidence about the proportion of the remaining two-thirds who considered it junk.
“The dynamics of packaged goods DM campaigns are that you usually require a strong positive response if it is going to work. I would guess that a ten per cent response rate would be the minimum that any packaged goods campaign would require to have a chance of being cost-effective. Consequently we can assume that fewer households will consider it junk,” he says.
The strength of DM – its cheapness – has become its downfall. Because it is such a cost-effective marketing tool, it has become over-used and associated with down-market techniques. There is a feeling that some brands are actually damaging their good name by indulging in DM. Much of it is poorly planned and executed, while not enough care is put into selecting the target market and considering what they really want.
Terry Hunt, chairman of EHS Brann, says: “More and more money is diverted into this medium because it works better than others. But the strength of direct mail is testing small messages.” His most damning criticism is that DM is wholly misused and misunderstood: “There is too much mass-scale communication in a medium that works best in a more individual way.”