Worth its weight in gold

Used properly, direct mail can become the backbone of a valuable marketing mix. By Maeve Hosea

The daytime TV ad for gold-buying service Cash4Gold shows an attractive blonde employee smiling smugly as she holds a clutch of direct response marketing between her red painted finger nails. The brash branding spells its message out loud and clear/ there is money available for unwanted gold, whether it is in the form of a gaudy bracelet, dental crown or half of a pair of earrings.

This advertising, currently splashed across print media and our television screens, is soon to be followed with direct mail and radio campaigns with the aim of making it a memorable brand and part of the “UK pop lexicon”.

This direct response format, mixing media channels, indicates how far direct mail has come – from its rather staid image of “begging letters” from worthy charities to its current status as a tool for a new breed of marketer.

Since Cash4Gold launched two years ago in the US, 800,000 people have used the pioneering gold buying service. Now that it is setting up shop in the UK, it is engaged in delivering what it claims will be one of the biggest direct response advertising campaigns in the UK’s history.
Once a customer has agreed a valuation, they receive a postage-paid envelope inviting them to send in their gold by special delivery, in return for which they will receive the cash in their bank account.

Cash4Gold founder and chief executive Jeff Aronson says: “Our brand values are ease of use and being trustworthy and secure. So when we do a transaction, we handle the customer with kid gloves, we want to be sensitive and make it a wonderful experience for them.”
Cash4Gold is an example of a brand looking to reach out to people who may not have previously understood what is on offer to them. Direct mail, which it will use in phase two of its UK launch campaign, is integral to this strategy.

“Direct mail is a great option for me because there is only so much TV I can buy or so much affiliate marketing I can do,” Aronson explains. “It allows me to touch people directly and to give them more information than a 60-second broadcast advertising campaign can.”

Jane Asscher, managing partner and chairman of brand communications agency 23red, says that direct marketing works for Aronson because Cash4Gold does what it says on the tin.

“Its proposition doesn’t need explaining and its values don’t need imbuing. Its target market is the consumer in the daytime response-driving ad slots,” she says. “Brand response advertising for this type of product is therefore quite capable of building awareness fast among the core target audience.”

Asscher cites loans company Ocean Finance as another brand with a similar strategy of using the brand and attract response in a highly targeted way. Direct mail has its place in this context, says Asscher, but she says it has to be used with care.

“The direct mail channel is expensive unless highly targeted,” she warns. “The financial services brands, who are big users of the channel, will continue to use direct mail but other direct drivers, such as TV and internet TV, do this cost effectively.”

Starting with a direct mail campaign in conjunction with above-the-line marketing and enclosing a gift is a tactic that beer brand Foster’s has recently used to encourage sampling of its new innovation – the in-can “scuba” technology.

Brand owner Scottish & Newcastle used direct mail to communicate the idea that the new product is something more than an average can of lager and as such is worthy of giving as a gift to someone else.

To do this, direct marketing agency EHS Brann used the above-the-line positioning for a direct mail campaign underlining the tongue-in cheek nature of the message. The mailing pack included a sheet of specially commissioned Scuba wrapping paper and a voucher for 50p off a four-pack.

In contrast, military charity St Dunstan’s is sticking to its core focus of traditional direct mail marketing. Direct mail is crucial to St Dunstan’s brand building and acquisition because it is traditionally the way supporters have been recruited, with reply-paid envelopes the way they feel happiest to give. A recent campaign for the charity focused on Henry Allingham, one of the last soldiers of the First World War, who died aged 113 in July this year.

The mailing both celebrated the values of the brand and appealed for funds generating a return on investment of £4 for every £1 spent. This aims to rapidly achieve cut-through with target audiences and build a brand image while generating response. Letters through the door here serve to trigger emotions and memories and elicit a response that makes people feel good.

It may seem a mile away from Cash4Gold’s bold statements, but Robert Keith, chief of membership and brand at the Direct Marketing Association, believes that the newcomers are not indicative of a direct marketing landscape that is changing, but rather one that is staying true to a history of being accountable and action-oriented.

“The recession has brought a much closer eye on the need for effectiveness and brands are investing in a wider selection of channels than they have done previously,” he says.

Whether the biggest direct mail clients at the end of the year will be those newer brands such as Cash4Gold or the familiar faces such as the financial services brands and charities remains to see which can best integrate DM into the media mix.

A memorable mix

Angus Morrison, director of Royal Mail’s MMC (Mail Media Centre), says memory plays an important part in successfully integrating DM into the media mix

We may all want to look back over our careers and be responsible for the campaign that everyone remembers, however this search for ‘memorability’ can lead us astray. Many brands have tried to create memorable campaigns by relying on often nauseating repetition, I’m sure we can all think of examples of irritating radio jingles, incessant TV ads and, yes, unwanted mailings.

Rather than drumming it into the consumer’s head, by far one of the most successful methods is to create positive memories that consumers associate with your brand. When marketing is memorable and persuasive there is a discernible increase in the probability of a boost in sales.
Research by Bangor University conducted in 2008 showed that to effectively engage consumers, you need to enter their “mental workspace”. The brain’s mental workspace is fundamental to our ability to think, accumulate information and make decisions. However, it has a limited capacity. The mental workspace is central to decision making, long-term memory, and linking things together.

To ensure your marketing message is relevant and remains in the minds of your target audience, marketers need to understand the way consumers process and store information. The key to making your campaign memorable is to ensure it gets through the brain’s powerful filters and is stored in the long-term memory bank, according to independent brand and marketing expert Amanda Philips. Words, images and interaction all help form long-lasting memories in the brain.

It seems there is something special about the inclusion of direct mail in the media mix. In a highly controlled experiment, commissioned by Royal Mail in autumn 2008, which stripped out the effects of content and purely sensory stimulation, clear differences emerged in the way the brain processes marketing messages in physical compared with virtual formats.

Direct mail is tangible and makes the content more real to the brain. It appears that all other effects being equal, direct mail-based materials:

  • are more concrete and “real” for the brain
  • are internalised more
  • facilitate emotional processing
  • result in more fluent decision making

This means direct mail-based materials are more likely to be retained and acted upon.

Case Study: Domino’s

Robin Auld, sales and marketing director at Domino’s, talks about how the brand uses direct mail to keep itself top of mind for pizza lovers.

Marketing Week: How does direct mail fit with the entire marketing picture for Domino’s?

Robin Auld: Direct mail and door drop menus are still the bedrock of our activity at Domino’s. While our marketing strategy includes sponsorship of TV programmes such as Britain’s Got Talent, TV advertising and search engine marketing, direct marketing remains one of the key tools we use to communicate regularly with our customers.

MW: Do you believe a brand has to be already established in consumers’ minds (via above-the-line) for direct mail to have a significant impact?

RA: That’s true to a certain extent as consumers are likely to react much more favourably to a brand they recognise and already trust than a company that is unknown to them. The impact of a direct mail piece will also depend significantly on its creative and also the offer or message. Any mailing needs to be tailored to its recipient.

MW: Domino’s is doing a lot of direct mail to keep itself uppermost in consumer memories; what is key to a successful direct mail campaign?

RA: The direct mail pieces that work well are those that are highly targeted. The nature of how people order Domino’s means we can use customer information to look at the type of pizzas people have ordered and tailor the offer so that the uptake is higher. We use our behavioural data from customer orders and overlay that with social demographic data to make sure the direct mail piece is highly relevant to the recipient. It’s about marrying the creative with the data insights to produce something that people are happy to get.

MW: How might direct mail be a good strategy to be working with for a brand such as yours during the recession?

RA: Direct mail can be very cost effective and generate a good return on investment if it is highly targeted. It’s essential to make sure you are communicating the right message at the right time. For example, we typically send out our DM pieces towards the end of the week when we know people are thinking about pizza.

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