Profile: Sir Charlie Mayfield

John Lewis Partnership Chairman

Making DM relevant

Do you want to know an open secret? Marketers who prefer an all-singing, all-dancing creative would do better to focus on making DM relevant to their target audience, according to an annual study seen by Marketing Week.

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Consumers appear to be more open to marketing messages than ever before, according to the annual fast.MAP/IPM Marketing-GAP Tracking Study, which reveals there has been a drop of 24 percentage points in the number of people who throw away unopened direct mail because they object to being sent marketing material.

Last year, 67% of those throwing away mail did so because they objected to marketing materials, but this is now just 43% - a figure that compares well with marketers’ expectations - they believe 54% of consumers ditch materials because they object to receiving marketing.

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The good news doesn’t stop there. Nearly 50% of consumers claim that they open direct mail from companies they already know and an additional 38% say they do so if the post comes from any company.

In this year’s study, which examines the gap between consumer views of marketing and marketers’ expectations, half of those questioned say that if something is personally addressed, they will open it, whereas last year this figure was five percentage points lower.

“A couple of years back, post was viewed as yesterday’s news, but this shows a trend going the other way - it works. It is encouraging that so many people are going to open a mail pack,” says David Cole, managing director of fast.MAP.

Incentive to open

While marketers may not realise that consumers are less cynical about marketing overall than in previous years, they tend to overestimate the success of other incentives. Fifty-five per cent believe that consumers will open direct mail if it might contain a voucher or coupon, while 56% think they will open it if they can see a coupon.

And 34% of brand marketers think that attractive, colourful envelopes and interesting creative will get people to open their post, but this view is shared by just 15% of consumers.

Nationwide head of customer marketing Alex Bannister warns that people are more likely to view colourful envelopes as obvious sales or marketing collateral. “I think people will open things that are useful and helpful even if they arrive in a plain envelope,” he says (see The Frontlight, right).

Consumer receptiveness to direct mail does depend, however, on the business sector it represents. People are happiest to receive post from supermarkets (46%), local services and tradespeople (44%) and restaurants or takeaways (42%).

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Just under a third of consumers surveyed also say they don’t mind email communication from their local shops - an increase of five percentage points on last year.

“Small businesses are embracing different ways of communicating with people and it is starting to work,” claims Cole.

Jill Pringle, marketing director of Thomsonlocal.com, agrees that contact with local businesses is generally well regarded by residents - as long as it is relevant. Her brand helps small and medium-sized companies to communicate with prospects and clients. She says: “We are trying to help businesses understand who to target and when.” (See The Frontline, below)

Thomson sends its directory to 22 million UK homes and although many people now go online for directory information, Cole says that physical copies still serve a purpose.

“In the past couple of years, even small local fast food shops have geared up to provide internet ordering and home delivery. Previously they relied on telephone orders or people visiting the shop to order,” he explains.

However he is sceptical about the broader popularity of brands using newer forms of communication, saying that direct mail still has a big role to play. “New media isn’t the panacea,” he says. “In the right place at the right time, local services using email and the internet to communicate will fly. But they are not there yet.”

While just 1% of consumers say they are happy to receive texts about events or entertainment from companies, 16% of brand marketers think they will respond to this tactic. Similarly, 13% of marketers think people like being contacted by health and beauty brands via Twitter, but only 1% of consumers agree.

Duncan Hilleary, chief executive of auction site Auctionair, agrees: “Very occasionally we will send a text if there is something relevant to someone who has expressed a particular interest, but otherwise we find they tend to annoy people.” (See The Frontline, below)

Cole adds: “You can’t relentlessly plough a furrow that isn’t received well by consumers, just because you are getting away with it at the moment.” With consumers more open to receiving offline and mail messages than previously, it seems that brands should spend this year getting back to the marketing basics.

Methodology

Since 2005, the fast.MAP/IPM Marketing-GAP Tracking Study has been monitoring consumer attitudes to the DM industry and how marketers are keeping in touch with changes in consumer motivation and tastes. It achieves this via an online questionnaire to 1000 consumers on the fast.MAP panel (which echoes the UK’s demographic profile) and a panel of more than 350 marketers (made up of IPM members and the fast.MAP Marketer Panel), who answer the same questions each year. Questions cover media including direct mail, email, SMS, phone and social media. Sectors include banking, automotive, education, leisure, health and beauty, supermarkets and insurance.

The frontline

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Jill Pringle, marketing director Thomsonlocal.com

It is nice to see that local marketing is still important. What stands out for me is that direct mail is still a very effective medium to reach people.

We know from the work we do to help local businesses reach customers that a blanket approach is not necessarily going to work; the key to a campaign is relevance. We are trying to get them to understand who to target and when. It’s just as important in something like search marketing as in DM.

We still send out directories to 22 million homes, which is about 85% of the UK, but we do find that more and more people are searching online and on mobiles.

I wouldn’t necessarily see our directory as a piece of direct mail where we are targeting people with a call to action. It is about giving people a resource in their home that they can use any time through the year. When we changed the size of the directory to A5, research told us that people thought it would be more useful and accessible.

We also try to give people options in terms of whether they receive the directory or not. We quite often find that people say they don’t want a directory through their door. But later in the year, when they’ve had a washing machine emergency, they will tell us they do want one.

If texting or social media was done smartly by brands, consumers might have a better perception of it and I think it is where location can come in. Mobile in particular has a strong role to play, provided it is integrated with other media.

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Alex Bannister, head of customer marketing Nationwide

A lot of this research makes complete sense. People don’t like direct mail out of the blue, so the key word here is relevance. That shows loud and clear in what we have found. We have a strategy to focus on existing customers so some of the findings don’t affect us as much as with other industries.

We’ve found people are more receptive to something that appears to make it easier for them to do business with us. So when we send them an update that helps them understand how they are using their account, they are much more receptive than they are to something that is a sales-led message.

We are currently writing to nearly 8 million of our savings customers to tell them the details of the products they hold with us. Generally, financial services providers are very cagey about telling people where their money is with them, in case they shop around to find better rates. But we want to be open with our customers - in our research, they say they want to know more, not less.

The relevance and targeting of direct mail probably far outweighs the creative execution. But there is a perception that if you make the envelope stand out, it will be opened. Actually I think people will open things that are useful and helpful - which arrive in the plainest, more boring envelopes. You can have the nicest creative execution you’ve ever seen but people might see it as being obviously marketing.

This research also talks about phoning and SMS. The distinction between what marketers think and what consumers say implies that the balance should be about helping consumers make the most of what they have got with you. We realise that it is not about the medium used or the amount of contact, it is what is relevant and helpful for customers.

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Duncan Hilleary, founder and chief executive Auctionair

Our customers control how much communication they receive from us. Our marketing is more about pull than push and it’s about having good manners. If you treat people with respect, they seem to respond.

Auctionair provides an online auction process using sealed bids. People pay £5 to enter an auction but can’t see the price anyone else is offering. If they win, they don’t have to buy the product. We can also accept multiple winners without the market being able to see the price a supplier is going down to. We sell holidays, weekends away, technology products and fashion.

That can be used to promote a supplier or as an inventory disposal mechanism. From the customer’s point of view, it offers a safe and secure environment to experiment with a new retail system.

Normally we use email, for example, to give someone the opportunity to buy an item they just missed out on. We have a frequency grid on our database that measures the last time someone transacted with us and how much they have spent. That is broken into 30 different sections and each of those will dictate how many emails customers get, but that is also over-ridden by whatever they put as preferences on their account page.

Our most active customers will get about 15 emails a month and our least active will get two or three. Very occasionally we will do something by text, if there is something very relevant to someone who has expressed a particular interest, but apart from that we find text tends to annoy people as this study suggests. We only mail brochures to our most active customers.

We’ve got about 85,000 customers who’ve made about 700,000 bids and have offered £230m for items with a retail value of about £800m. So they make up our database and we can connect suppliers and customers in a discreet way

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