Empowerment age arrives at personal level
Brands that use the data at their disposal to tailor direct marketing material to the individual consumer will encourage customer loyalty, according to research by Experian.
Everyone’s different. Cadbury’s Crème Egg marketing asks “How do you eat yours?” And Burger King famously claims you can “Have it your way”. These brands may be onto something; new research from Experian has found that one size no longer fits all when it comes to direct marketing. Consumers are now demanding a more personalised approach in return for brand loyalty.
According to Experian’s study examining consumer attitudes to various direct marketing methods, 83% of respondents want organisations to treat them as individuals and understand their needs. This was from a sample of 1,526 people.
With almost half of consumers surveyed saying they pay less attention to marketing than they used to, it has become more important than ever for marketers to get to know their customers. They must tailor and target their communications effectively to increase their return on investment.
Jim Hodgkins, managing director of Experian Marketing Services, explains: “Given that many consumers feel they are inundated by marketing, only the most targeted and creative advertising is going to have any cut-through.”
Indeed, 62% of consumers agree that they are more receptive towards marketing that is tailored to their needs and circumstances. Hodgkins adds: “With a digital trail, there is so much available data to analyse, creating countless opportunities for marketers to treat consumers differently. People get disillusioned with companies that don’t use all the data at their disposal, don’t tailor the offer well or use data in a way that alienates them.”
The 65-plus age group is particularly demanding in this respect, with 66% agreeing or strongly agreeing with the need for a more customised approach. “The older generation feels that brands don’t target them – they want relevance,” says Hodgkins. “If brands want to optimise their marketing success, they’re going to have to target groups differently.
Given that many consumers feel they are inundated by marketing, only the most targeted advertising is going to have any cut-through.
Jim Hodgkins, Experian Marketing Services
“Household composition has changed enormously, with more single person households as well as an increasing elderly population.”
Although tired of an identikit approach when it comes to direct marketing, consumers do welcome consistency within companies. Seventy-six per cent say they get frustrated when a company isn’t able to link their information across different contact points.
Brands need to ensure they are integrating their data to build up a complete picture of each customer and their relationship with the company. This also ensures that any cross-selling or up-selling opportunities are not missed.
Inconsistency is especially abhorred among the more affluent sectors of society, with 82% of those in the most wealthy and influential categories of consumers citing this as a particular problem. Eighty-four per cent of those classed by Experian as the “professional rewards” category, who have worked in executive and managerial positions to build up significant financial assets, think this is an issue.
“The wealthier people are, the more they expect to be paying for a higher level of service,” says Hodgkins. “When they take their BMW for a service or go to an upmarket hotel, they’re getting a good experience. So they expect to get that experience when they have a transaction with their energy company. People compare each interaction to their average experience.”
Consumers have not only become more demanding about the calibre of a brand’s marketing message, but the channels through which they receive that message. Eighty-one per cent of consumers express clear preferences for marketing contact methods, with email as their first preference at 52%, ahead of 37% for direct mail. Only 8% prefer to be contacted by telephone, with that figure dropping to just 2% for text message or door-to-door representatives.
“A greater range of attractive categories – retail, travel and technology – use email marketing extensively rather than direct mail, which has more of a bias towards financial services offers,” suggests Hodgkins. “There’s also the interactivity of email. If there’s a good offer, you click and you’ve got it. The impact on the consumer is less.”
The most influential factor in consumers’ selection of a business or service provider remains price (74%), while word of mouth is favoured by 53%. As a result of the rise of social media, reliance on word of mouth is greater than ever before, warns Hodgkins, adding: “Brands can get trashed by an individual’s word of mouth in a way that they never could before.”
The power of word of mouth is now so great that some brands have full-time employees actively searching social media sites such as Twitter and Facebook. They pick up anyone that is criticising them or their offers and try to present them with a good deal to turn the bad buzz into something more positive.
“People’s voices count for more in a networked age. There’s a lot of consumer empowerment these days,” says Hodgkins.
Supermarkets come out top for personalisation, with 52% of people saying they are good or very good at maintaining individual, tailored relationships with consumers. On the other hand, utilities companies are considered the worst, with just 17% of people saying they are good or very good at maintaining individual relationships with consumers.
Hodgkins adds: “Utilities are intangible and have gone up in price a lot. People also don’t get any choice whether they buy them or not, so there’s not much opportunity for these companies to excel.”
Whatever the challenges, the explosion of digital media has created a wealth of opportunities for brands, not only by providing them with additional data to assist well-targeted, customer-centric campaigns, but by providing new channels through which customers can spread the word.
Marketers need to remember that customers are happy for them to use their data when this is done intelligently and in an integrated fashion. By employing a tailored approach more effectively, marketers can ensure they give their customers the personal touch that they already expect.
WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ’TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND
James Hamlin, director of online marketing, Seatwave
As a marketing channel, email has always performed extremely well for us. It allows us to target our messaging and merchandise our products in a simple and effective way. We also use text messages to communicate with our customers around the status of their order.
We collect data on our users, so when we send out our weekly email newsletters about upcoming events, we know that it’s a very targeted audience. As we know our customers, we tend to send out more general communications based around events that are suited to the user, rather than detailed one-to-one marketing.
On a Friday, for example, we’ll send an email with upcoming events for the week – a mix of concerts, sport and theatre. You may not have indicated that you specifically want to know about a certain band, but you’ve bought tickets to see a similar group, so we’re going to advertise it to you.
We do try to vary our communications. We email our customers a few times over the space of a week, but tend to adopt slightly different approaches each time, so the content remains fresh and relevant. We’re likely to talk more about upcoming events on a Friday, whereas midweek we’ll focus on cheaper tickets and special offers.
Adam Margolin, head of marketing support, Spar UK
This research doesn’t surprise me hugely on the basis that supermarkets as a general collective offer people broadly what they want. You’re offering sustenance, clothing and electrical goods – things that people need on a constant basis, at a price that is saving them money during a recession.
I think supermarkets are at the forefront of customer care because they have to be. There’s so much choice there that you need to offer people a range of available products, a friendly service, good prices and decent promotions. It’s a very competitive market.
The majority of our convenience stores or mini supermarkets are independently owned and in local communities, so there are relationships between the store owners and managers and the shoppers; we get things played back to us directly. We also have the ability to change goods at a local level. If somebody asks: “The local farmer sells brilliant meat, can you stock it?” The answer is yes.
We’ve launched a website that is building a database of customers, so we’re starting to learn a bit more about a wider group. We sent our first ever Spar email about a week ago. It’s opt-in for emails, so when you enter competitions or you choose to rate or review recipes online, you can ask to be added to the database and we will continue to communicate with you every few months.
Over time, we plan to gather more information about them and cut the database, so people will get the information most relevant to their interests.
Xavier Louyot, global marketing and PR director, Dolce Hotels & Resorts
We have two email databases. One is a central business-to-business database of meeting planners, who make up 70% of our business; the second is a leisure database, which is new for us. We primarily target the meetings industry but have the opportunity to improve our occupancy rates during periods when companies tend to meet less, such as weekends and holidays.
We use emails widely in our marketing campaigns because we have six properties across Europe and operate across four markets. With limited budgets, we cannot afford to operate by post. Our ability to track the performance of the campaign is also improved using the email platform.
Our average opening rate for an email (taken from recent email campaigns) is more than 20% and clickthrough, either to book or to search for further information on the website is at 50.5%.
We make use of word of mouth because we believe in tribal marketing. We all belong to a tribe and it’s an opportunity to use this dimension of our customers’ lives to boost word of mouth about our brand.