Data has always been the driving force behind successful direct marketing, but the ability to put real-time information about where someone is in a purchasing journey with their individual preferences is dramatically changing the targeting goalposts for marketers. As Anthony Tidy, data-driven marketing manager at More Than’s parent company RSA Group, says/ “The right timing boosts our response rates. Too early and customers are not yet in the market, too late and they might have already renewed.”
Insurance company More Than has transformed its direct communications from mass mailings with fixed messages to targeted and personal marketing through its analysis of each person’s likelihood to respond at a particular time.
As Tidy explained to the audience at Marketing Week’s 1-2-1 Data-driven Marketing Summit in November, at its simplest this means being able to send a message when a customer is most likely to renew a policy – something that varies according to their personal habits.
The ‘propensity modelling’ data used to calculate this window of opportunity is based on demographics and personal lifestyle information.
This ability to predict whether someone will respond to a message or renew a policy means that More Than can estimate the cost per sale in advance of the marketing activity, Tidy says.
More Than has developed an automated tool – called the Campaign Agile Tool – that uses this analysis to determine the level and type of direct marketing it carries out each month. Tidy says it is an “optimiser that cherry-picks 300 distinct audiences per month”, selecting recipients of direct marketing by assessing the cost per sale and matching this against the marketing objectives for a particular month.
Even when the data it holds is incomplete, More Than can make use of it for direct marketing purposes. Even if, say, it does not have enough details to give a consumer an insurance quote, the company instead uses what individuals have provided – for example name, address and car model – to send personalised messages with a call to action, reminding consumers that they can contact More Than if they are still in need of a quote. And if someone has expressed an interest in pet insurance, the brand can send a link to a personalised web page with information on insuring their animal.
Combining the use of its Campaign Agile Tool with this enhanced marketing to ‘cold’ prospects resulted in an improvement of 26% in response rates to More Than’s direct marketing last year, Tidy says, while cost per sale remained the same.
Better understanding the customer journey enables marketers in product-focused sectors to design direct marketing around the needs of individual customers, rather than around sales objectives.
Nissan, for example, uses time-sensitive messaging sent at various stages in a customer’s relationship with the brand and segments prospective buyers according to those same factors (see Case Study, below).
Financial company Standard Life has moved in a similar direction, although it required significant enhancement of its customer relationship management (CRM). According to Standard Life head of customer analytics Louise Miller: “The amount of data available to us is quite thin: customers do not transact with us very often. We are not like the Tescos of the world that have a myriad of data on products and purchases.”
Standard Life, therefore, looks to third parties to enhance its customer data and has used Experian’s Financial Strategy Segments database to get a view of what customers are doing outside its brand in the wider market.
According to Miller, this has enabled the brand to identify prospective customer groups that would not previously have been considered.
The additional data helps Standard Life to understand what stage individual consumers have reached in their professional and family lives and therefore which investment products they might be interested in.
Using DM to target consumers at a particular point in their customer journey even extends to personalised catalogues. For example, fashion retailer Boden sends out personalised next season catalogues to people who haven’t bought from the current one, using technology from Printer HP.
Boden head of graphic design and production Claire Gibbon says: “We have also used product recommendations generated by software from Autonomy. Based on the type of customer and their type of purchase behaviour, we can say which products will be more relevant to them, and we’ve put those on the back cover.”
For most of its personalised campaigns, Boden produces a generic version as well if it is unsure about the quality of the data or the likelihood of a response, or indeed if a customer’s value is not worth paying the extra for personalisation.
Gibbon says personalised campaigns routinely outperform the generic ones, and that its personalised catalogues immediately generate social media buzz. Customer review brand Which? also uses personalisation to appeal to more readers (see Viewpoint, right).
Furthermore, as with any data-driven marketing strategy, the quality of the data used for direct marketing is paramount. As More Than’s Tidy notes, consumers are becoming more aware of their privacy rights and the regulations in place for marketers, and are demanding more control over their data. He adds that it is crucial to keep databases current, as relying on old data risks alienating existing or potential customers with irrelevant, inaccurate or inappropriate messages.
Nissan CRM manager Yasmin Al Jeboury says: “Using data to personalise messaging is one of the oldest practices in the direct marketing toolbook. However, in these days of data proliferation, the need to ensure data ‘hygiene’ has never been greater.
“The challenge of bringing multiple data sources together into one coherent single customer view is also something many brands are still struggling with. Accomplished brands are working with agency partners to sift through the plethora of data to find the information that will really resonate with consumers, without appearing to be Big Brother.”
In a sector that is traditionally product-oriented, Nissan is trying to shift the focus of its direct marketing onto the customer. But given the automotive sector’s historical reliance on above-the-line advertising, this is a capability that Nissan has had to build into its customer relationship management (CRM) databases.
An important part of this is combining traditional segmentation with a more detailed understanding of each customer’s progress on the journey towards buying a vehicle.
Nissan CRM manager Yasmin Al Jeboury says/ “We are building a fuller customer picture: knowing their motivations to buy a car, how they feel about our brand and our cars, and where they are within their ownership and purchase journey.
“This will enable us to become much more customer-centric, delivering more meaningful communications, offers and products.”
For the recent launch of its Micra DIG-S model, for example, Nissan used customer journey data to identify two groups of Micra customers already on its database – traditional Micra drivers and DIG-S prospects. The traditional drivers were considered to be practical people whose purchases are value-led, although they are financially comfortable. The prospects were identified as being more wealthy and driven by emotion and desire.
Nissan used these insights to select and target recipients for direct marketing around the Micra DIG-S launch, and also to construct a brief for the creative work provided by TMW.
The agency created two different mail pieces for the two audiences – for the traditional Micra drivers it focused on value across the full Micra range, and for the prospects it focused on new features and optional extras on the DIG-S in particular. A similar approach has since been taken with the launch of the Qashqai AVM model.
Nissan also sends tailored communications based on that customer’s journey, beginning with a welcome message when they first purchase a car, through to a repurchase message when the customer is likely to be back in the market for a new vehicle.
The company aims to extend its use of customer journey data to direct how it communicates with people, when and through which media channels.
Al Jeboury says: “We are working to define how individuals prefer to receive, and are more likely to respond to, various forms of direct marketing, initially via profiling and further down the line via channel modelling.
“Channel modelling will analyse how a consumer interacts not only with Nissan but also other brands, giving an overall picture of their behaviour.”
The brand is also sharing data with dealerships to ensure this approach carries through to sales and after-sales services. However, while response rates have seen a “significant uplift” overall from improved targeting, according to Al Jeboury, this will not be true of all its direct marketing.
“Our communications do not always, nor should they, lead to an uplift in return on investment. CRM is essentially about loyalty.”
Head of customer relationship management
We have been looking at how to provide personalisation for a couple of years. We run a service where our members recommend a local service they have used. We then vet them to make sure they are not a trader pretending to be a customer.
Given that it is all about locality and the person, when someone first subscribes to Which? we print their street name on an over-sized postcard and send it to them. We then use that same creative in an email, which gives them a copy of their street sign and three recommendations in their specific area. That is purely location-based, and that is where we started.
We then ask members what they are interested in and use that to serve them content within our email programmes. On top of that we then build click behaviour from the web. We have gone from doing one core weekly newsletter to doing about 64 variants a week, reaching the same headcount.
We are using what they have read, what they have said to us, their profile based on what we know about them, and what we know most other people would be interested in. We can deliver a level of personalisation that matches the product with the customer’s need.
Personalisation is what market traders have been doing for centuries. Think about someone going to a market stall in the town or village where they might have lived 100 years ago. Successful traders would know their name, remember what they bought last week, know something about their family and forge an ongoing relationship with them that they valued.
People would go back to them because they were nicer than the people next door who were selling similar things. This is the logical progression into the 21st century, but instead of talking to 100 or 200 people, you are talking to 1 million or 2 million.
People want content they can relate to, and it is about nurturing an audience rather than building an audience. To nurture them, you have to treat them as individuals. It is central to successful business. Otherwise it would be like being a teacher and not knowing the names of the children in your class.
But if you think about your own situation and your next big purchase, you might not actually know that you will need a washing machine next week. Therefore, you cannot always predict future purchasing when the customers don’t even know their needs.