Watch out for the flaws in direct marketing’s design

A new DMA report paints a picture of happy, responsive consumers, but the data suggests otherwise.

Stung by a Brassed Off Britain television audience poll that put direct mail at the top of consumers’ hate list, the Direct Marketing Association has conducted its first comprehensive survey of consumer attitudes and experiences. The results, highlighted in its report – The Consumer Experience of Direct Marketing – are surprising, to say the least.

Consumer attitudes to direct marketing (DM) are “remarkably positive”, the DMA tells us. For instance, “half of all diary correspondents treated at least one communication positively on the day in question”; “a quarter of all communications were treated positively by purchasing or responding or filing for future use”; and “the popular misconception that the UK public is being bombarded with direct marketing is completely refuted by these data.”

In sum, the research “provides evidence, across the full range of media and methods employed in direct marketing, that consumers demonstrate high levels of involvement and, importantly, respond to communications”.

So that’s that, then. Negative consumer opinions are a myth invented by the media (except for cold-call telemarketing, which the research shows consumers positively hate). While there’s always room for improvement, there certainly isn’t a crisis.

Here’s the surprise, though: it’s very hard to draw these conclusions from the data in the report.

Take response rates. We’re told that half of all diary correspondents treated at least one communication positively on the day in question. But what does this mean? It means that if I got five messages but ignored four, I’m still classed as a positive responder.

And “positive response” is given the broadest possible meaning. The actual figures were two per cent buying something, nine per cent asking for further information and 19 per cent keeping or filing the information for later use, with 74 per cent ignoring (23 per cent simply recycled material received and the rest threw it away).

What’s more, the 19 per cent “filed for future use” and the nine per cent “asked for further information” figures are subject to interpretation. By far the greatest number of requests for further information were in response to telemarketing calls. In our household at least, that is simply the politest way of saying “Get out of my hair! Now!” Likewise, some filing for future use is obviously real (the case of high levels for customer magazines, for instance). But in other cases it could be an artefact of the methodology (a consumer diary across 24 hours). If it is not thrown away immediately, then it is counted as “filed”.

Either way, the picture is one of enormous waste. Two per cent response rates, 74 per cent immediate rejection, with an equivocal bit in the middle.

So what about consumer attitudes? The research reveals that 50 per cent of consumers actually underestimate the amount of direct marketing they receive. Evidence, says the DMA, that they don’t feel bombarded. Perhaps. But there’s a “glass half-empty” response to this too. Perhaps consumers are so inured to the messages companies try to send that they’ve stopped noticing them. How can you respond to a message you don’t even notice?

Finally, the DMA claims that over 60 per cent of consumers have a “positive attitude” to direct mail. But how was this figure arrived at? By adding together the positive answers to the following statements: “I have bought a product or made a response”; “I am happy with receiving this kind of communication as long as it is relevant to me”; “I am only happy receiving this kind of communication from companies I have given permission to”; “I sometimes look and respond to these”; and “I like these if they are entertaining or interesting.”

Read those again: “as long as it is relevant…”; “…given permission to…”; “if they are entertaining or interesting”. This is asking consumers about the ideal, not the reality. And that’s where the industry’s problem lies.

DM is based upon a powerful insight: that a combination of rich personal data and personalised, unmediated communication can lead to better connections between companies and customers at far less cost.

Yet, though practitioners have been chasing this dream for decades, it remains elusive. Even if we accept the positive gloss on those two per cent purchasing, 74 per cent chucking figures, we are talking about criminal amounts of wasted time, effort and money. Surely, after decades of intensive data-gathering, massive investment in fancy new technologies, databases and software, the development of sophisticated analysis tools, predictive models and so on, we should be achieving better results than this?

So why aren’t we? Because, even though we deny it and cover it up, everything the industry does is based on guesswork. The only thing all this data-gathering and analysis can do is reduce the waste and error generated by this guesswork. Even so, most DM communications are not relevant (in terms of content or timing), not permission-based, and not interesting or entertaining.

And here’s the rub. Ultimately, the only way to make direct communications relevant and interesting is to let consumers specify what they are interested in, and when.

This begs a knock-on question. Why should consumers bother volunteering such information? What’s in it for them? Currently, the answer is “not much”. That’s because the timing, content and purpose of most campaigns are entirely internally generated – focused on monthly or quarterly sales targets, for instance, not current consumer needs or priorities.

As a consequence, the industry is forever working with second-hand and out-of-date information that does not connect with consumer priorities or purposes. It’s becoming what economic historian David Landes once called a “magnificent dead-end”.

Landes used this term to describe water clocks, which were the main way of telling the time before mechanical clocks were invented. Water clocks are ingenious mechanisms, requiring enormous skill and investment to design, construct and use. They are awe-inspiring in their complexity and craftsmanship. And, in their day, they were the best solution to the time-telling problem.

Yet, ultimately they were also a dead-end because, at their very heart, their core mechanism – the regular drip, drip, drip of water – limited the extent to which their operation could be improved. Compared to water clocks, mechanical clocks opened up endless possibilities for improved design, accuracy, cost and new applications. (No matter how much you improve a water clock, for instance, you could never carry one around on your wrist.)

Likewise, DM as we know it is magnificent in terms of ingenuity applied, investment, technology, and so on. Yet, because everything it does revolves around an attempt to compensate for the lack of information volunteered by consumers – rather than an attempt to unleash and make the most of such volunteered data – its opportunities for improvement are inherently limited.

Direct marketing today is dogged by a fundamental lack of consumer relevance. Research reports that seem more interested in spin than analysis don’t help us address this problem.

Alan Mitchell, asmitchell@aol.com

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