Brands place trust in return to tradition

The latest annual DMA GAP tracking study, seen exclusively by Marketing Week, reveals physical direct mail is making a comeback but DM specialists will achieve more cut-through if they pay greater attention to consumers’opinions.

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New media is seducing marketers, with many believing that the likes of Twitter and Facebook are the best ways to engage consumers.

owever, there is a big disparity between what marketers think of these new ways of communicating and how consumers want to be talked to, according to the sixth GAP tracking study, shown exclusively to Marketing Week by the Direct Marketing Association and fast.MAP.

The research, which measures what consumers think in comparison to what marketers believe consumers think, shows that direct mail and email are consumers’ preferred methods of contact above phone calls and being sent a text or messages on Twitter.

However, marketers in sectors from banking to home improvement and from charities to customer magazines think that sending texts or messages via Twitter is a more preferable way to get in touch than consumers indicate. For example, a quarter of marketers think people are happy to receive texts from financial services companies, but only 1% of consumers agree.

Similarly, only 2% of consumers want to hear about DVD releases via social media but marketers are more optimistic, with 22% thinking people want to be contacted in this way.

Fast.MAP managing director David Cole says that marketers might be getting over-excited by new methods of communication. “The difference between the willingness of people to receive messages through new routes [such as social media] and the perception of marketers is a cavern, not a gap,” he says.

Cole adds that while brands are trying out social media and text messages in an attempt to engage directly with people, sending consumers information in the post still appeals to marketers. And consumers are also rediscovering the benefits of paper mail, according to this year’s report. In 16 out of 26 categories assessed in this study – including banking, DIY and supermarkets – mail is the preferred communication method, with email relegated to second spot. This contrasts with the previous two years of the study when consumers said they preferred communications via email when they were asked about individual sectors.

This is partly because of the passive nature of receiving post, Cole says. “The performance and unobtrusiveness of direct mail have contributed to its comeback.”

Letters are also more likely to be opened if they come from a brand that a consumer recognises. The figures show that 55% of consumers who open mail say they do so if it comes from a brand they know, and 47% open direct mail if the product or service interests them.

Cole explains: “People are nervous and anxious and are looking for companies to trust. This might reflect the structural change we have seen in the marketing economy over the past two years – it is no longer about the right product, it has to be from a company they trust. Brand messages should be reinforced with direct messages.”

The proportion of people who do not open direct mail because they object to being sent marketing this way has decreased slightly, with 67% citing this reason this year compared with 70% last year. But not all marketers get this right, with only 39% saying they think not liking direct mail is the reason consumers put it in the bin.

While consumers say they object to direct communication, it does work, claims Cole. But marketers need to make sure they target a receptive audience. “Most people say they don’t like marketing but they do respond to it. Brands should focus a little on suppression rather than broadening out the base they mail to,” he says.

Removing people from a database, and therefore not sending them unwanted messages, will help improve brand perception, Cole claims. “In a time when we are all looking for a good return on investment, it is as important to get to the people who want your message. Marketers can mprove ROI and brand [perception] if they focus on removing these people,” he says.

He adds: “Improved technology has made personalisation more affordable and prolific, which has led consumers to regard it as the norm rather than the exception.”

This is reflected in the figures that show a five percentage point reduction in people throwing away unopened mail packs because they are not addressed directly to them.

For marketers, working out what will encourage consumers to open direct mail is key to getting consumers to accept and respond to messages, says Cole. The design of a piece of mail is cited by 35% of marketers as important in affecting whether people open it, but only 7% of consumers agree with this view.

Cole says: “Consumers want trust, value, a good deal and [relevant] targeting. If marketers can get those things right then the creative side is less important.”

Similarly, communicating the basics is best done using traditional methods, he claims. “Brands should use new types of media carefully,” he says. “Email and direct mail are tried and tested methods [of communicating]. Marketers need to understand new media properly and invest resources [in testing] before they jump on the latest fad.”

Brands that don’t have a relationship with a consumer should be especially wary of using text messages, Twitter or other social media to contact them direct, according to Cole. Only 1% of consumers cite any of these forms of communication as preferable, whereas 10% of marketers think people would be happy to receive text messages, for example.

Cole says: “Some marketers think the proliferation of social media will happen eventually. But [this attitude] is distorting the reality of what consumers want.”

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WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ’TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND

james_frost

James Frost
Marketing director
Nectar

It doesn’t surprise me that marketers are more optimistic [about the number of people opening mail] because they are generally more bullish about what they are doing.

We use direct mail to tell collectors what their points balance is, give news about the scheme and send targeted offers from partners. We send upwards of 18 million points statements annually.

The fact that paper mail has overtaken email as the method that people prefer to be communicated with could be because email might be where direct mail was two years ago, when it reached saturation point. Of course that led to a massive attrition in responses. The DM industry then got much smarter about killing people with contact, and really pulled its finger out about the impact of the creative, getting response rates up and getting targeting right.

We have email addresses for about a third of our active collectors and we send smaller bits of news on a more timely basis. We launched the Nectar app in August and have had more than 300,000 downloads. It has a slightly younger and more male audience, which is exciting because they are usually a group that is harder to engage.

Social media is working for us, as is mobile. People will engage with brands that are able to offer deals on the go via mobile, but if it becomes a channel for a multinational car brand to advertise to me [via an app], then no thanks. Consumers will only accept that form of communication if it has relevance.

Simon Morris
Chief marketing officer
Lovefilm

I agree that more people respond to a letter – we get four times the response from letters than from emails. Letters somehow are generally more trusted than emails and you can get more information on them.

If you make them attractive enough they hang around for longer. Of course people say they are not affected by creative but for us that is not true. We test in many ways and the creative does make a difference.

It doesn’t surprise me that marketers are optimistic in terms of whether people will open direct mail. I am more in favour of letters rather than email; DM might not be the sexiest form of marketing but it works for us.

I’m not a huge fan of SMS because it is limited, but we use it when customers opt in to the service. It’s better for CRM than as an acquisition tool, but if we send a text saying what films are available at the weekend then we get a huge response.

liz_allen

Liz Allen
Head of direct marketing
Yell UK

Consumers’ expectations in terms of clarity and personalised messages have increased in recent years. Brands being forced to work harder could be the reason why more consumers are happy to receive direct mail.

We are working towards integrating our messages. Each channel should be tried and tested. Email has been a stronger performer on some campaigns, direct mail is the winner on others. The key is making sure messages are aligned, whichever channel is used.

The main challenge with email, and what can skew results, is the maintenance of the correct address, which has proved challenging. There was a time in the direct marketing industry when email was seen as likely to drive direct mail out.

The fact that consumers are more likely to open a mail pack with a brand they recognise is interesting. We think that a plain envelope can encourage a stronger open rate, hence leading to a higher response rate.

We’ve tested branded and non-branded envelopes against each other, using response rates and eventual sales as measures of success. On occasions, we have found that a plain pack has performed better than a branded envelope.

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paul

Paul Marshall
General manager
Marketing and strategy
Lexus

Lexus is a big user of digital channels, but this year we’ve been reminded of the power of traditional paper-based direct response channels, so it’s interesting the study shows that letters are becoming more popular. Our biggest marketing investment was developing a prospect base for our CT 200h model, which goes on sale early next year. Alongside digital channels, we are using press inserts again. We also used mail and email on a range of warm and cold prospects for our GS hybrid saloon, talking about its benefits without getting bogged down in engineering detail. The email outperformed the mail in terms of cost per response, but the mailed prospects bought the car in greater numbers. Physical mail lets us communicate in three dimensions, not just the two dimensions of a flat computer screen.

anthony

Anthony Halas
Chief executive
Seafolly

Customers are so bombarded by emails that when information about anything that impacts them financially, such as to do with a house, car or retirement, they actually need to take a moment and read a hard copy. We want every consumer touchpoint to work towards the key message. If there is a creative agency involved, it would certainly be looking to have the envelope with the most impact to get cutthrough, and we care about the 7% of people who say design is important in DM.

method

More than 1,400 consumers were asked their opinions of direct marketing and 200 marketers were asked to predict how consumers would answer. New questions were asked about Twitter and social media this year, in addition to the other questions, which have remained the same since the survey started in 2005.

1% of customers prefer to be contacted by Twitter or SMS when they have no relationship with a brand, but 5% and 10% of marketers think these are their preferred methods.

65% of consumers would prefer no contact at all from brands they don’t know, but only 15% of marketers think this is the case.

35% The design of a piece of mail is cited by 35% of marketers as important in affecting whether people open it, but only 7% of consumers agree with this view.

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