Consumer trust in DM
Things have been going well since Christmas. After spending far too much money on gifts, and even more on refreshments, it seems that cash isn't going to be so tight this month after all. Last Thursday I received a letter from Reader's Digest promising a cheque for £300,000 and a few days later Which? Magazine also contacted me by mail to inform me that I was also very close to picking up another nice little cheque, this time for just £150,000, but beggars can't be choosers. All I had to do to get my hands on this money was stick some adhesive stickers on a form and return them in the enclosed envelope.
So, what did I, and no doubt thousands of people in the same situation, do? I filed all the paperwork in the exterior filing cabinet marked 'No Hot Ashes'.
Every year hundreds of thousands of pieces of direct mail make the journey from doormat to dustbin without ever undergoing an internal examination because they are badly targeted. And often when they are torn open they still merit only a quick glance before heading binward accompanied by mutters of "it'll only be a load of rubbish", or "it's a con whatever it is."
Speaking to DM experts, badly targeted direct marketing, and mail in particular, can affect consumer confidence. In this, the age of the media-savvy consumer, building trust and consumer confidence is a battle direct marketing experts are faced with every day of their lives, both strategically and creatively. How do they get consumers to believe, to trust and buy into the marketing messages they are trying to communicate? Particularly after the rise in the amount of direct mail being sent by companies looking for a more accountable return on their marketing investment over the last five years and the introduction of viral marketing campaigns which sneak into your inbox unannounced and mostly uninvited.
This issue of consumer trust in direct marketing is a problem currently being addressed by the Direct Marketing Association. This month the DMA launches a consumer campaign, called "It's Your Choice", which continues its ongoing campaign aimed at developing consumer trust and confidence in not only direct marketing, but also buying direct and buying online.
Lara Shannon, PR and marketing manager at the DMA, believes that consumers are buying into direct marketing more so now than ever before, making this the perfect time to give them added reassurance. She says: "Direct marketing has been growing over the last five years, which shows that consumers are buying into it. The people's barriers to DM are dropping and direct marketing activity is increasing, so one can only assume people have got more confidence and that they are using it and buying into the marketing messages which they receive direct.
"We're launching the "It's Your Choice" campaign in the second week of February and it will run in the national and consumer press, on radio and television. We want to make as many people aware of the facts as possible and we are hoping to get as much support from our members as possible.
"This is really the first time that we have aggressively pursued this strategy. We simply felt that now was the perfect time to get out there and not only promote the benefits of direct marketing, but also promote using direct methods to buy goods."
That's the professional body's stance, but what do practitioners feel? Are they fighting a losing battle against indignant and sceptical consumers?
Marketing Advantage DDB handles some of the UK's biggest financial clients so gaining the trust and confidence of the consumer is vital. Stewart Robertson, MD of Marketing Advantage DDB, says that that trust and confidence can only be achieved en masse by the industry through accurate targeting.
He says: "Direct mailings have to be appropriate and well targeted. For instance, when I turned 49 I received a mailing saying 'Now you are 50 you can apply for such and such a pension' and I was livid. Companies have to be careful how they do it or they will affect consumer confidence in direct marketing. Inserts are effective, but I have many friends who when they get a magazine or newspaper will shake it to get all the inserts out. That is not good news for us. But as long as the pieces are professionally targeted with the right message then there should not be a problem.
"I think that the consumers, confidence in direct marketing can only get better in the future. If you take Scotland there are lots of good agencies. Our targeting is spot-on. There are no longer the mass mailings going out like there once was. The data is much more sophisticated now which has an enormous bearing on the appropriate creative messages. Direct marketing is growing a lot. When I started out, around 25 per cent of clients had direct marketing as part of the mix. Now that is up to around 75 per cent."
According to the latest research by DMIS, UK consumers purchase over £23.4 billion-worth of goods through direct mail every year. Figures also show that 42 per cent of consumers had made a purchase as a result of direct mail in the last year and the average Briton spent over £514 in the last year as a result of being mailed. Those in the 35-54 age bracket are the most likely to respond positively to direct mail.
So, the figures look healthy, but with regard to the DMA's latest push to further boost consumer confidence Robertson believes the body has more work to do.
"I think the DMA has some work to do to get consumers to fully understand what its role is," he says. "The association is well recognised in the industry, but it is early days yet amongst consumers. Most people are aware of direct marketing and that they are being targeted, but they don't like being given the wrong thing. People get miffed if they receive five or six things and none are aimed specifically at them."
Shannon, however, is already pleased with recognition rates from consumers towards the DMA. She says: "The research we have had done shows that 19 per cent of consumers are aware of the DMA and that it is there to protect them. That is not bad for an industry body, but our aim is to build on that and further boost consumer confidence and trust in direct marketing."
But, with DM messages reaching us whether we are at work, home, on holiday, even in transit via the mail, press, TV, radio and now computers and mobiles, are consumers getting inundated with messages which could turn them off?
"It's a fair point," says Robertson. "There are a lot more direct messages going out now, but the confidence a consumer has in a mailing or press ad has a lot to do with the strength of the brand that you are working with. Tesco Personal Finance for instance gets fantastic response rates, because people trust and have confidence in the Tesco brand."
Gary Smith, MD of Draftworldwide, believes that while actions are being taken to boost the consumers' confidence in the mail which drops through their door, recent actions could in fact serve to worsen the situation. He says: "In terms of whether consumers have confidence or not, people are much more direct-mail-critical and are much more cynical about it," he says. "There have been some court cases lately where people have been objecting to the council giving the electoral roll away to DM companies. These complaints have been upheld so there is a real danger for direct marketers of not being able to use the electoral roll. If we cannot use the electoral roll then the amount of badly targeted direct mail will actually become worse because we will not have access to as much up-to-date information in our campaigns."
Smith also makes another salient point when he asks the question, "Where does the definition of direct mail begin and end?" He says: "When we do research and focus groups we ask people to bring in all the direct mail they receive over the course of a week. People categorise anything which falls through their mailbox as direct mail, be it a freesheet, a leaflet from the corner shop, anything in fact."
That said, Smith is convinced that improving response rates proves that consumer confidence in direct mail is as high as ever despite the rise in the frequency of DM campaigns.
He says: The response rates are still there. Some of the work we have done for VisitScotland has been getting response rates of 50 per cent. 45 per cent of those we know have been converted. People are getting more understanding of what we want to do, but that said there will always be dodgy practitioners who take lists and mail everybody on it.
"The amount of mailings going out has got better, they are much smaller then they used to be. It was not uncommon for a mailing of between 500,000 and one million to go out, but more lately they are smaller around 20,000. That is because we are much clever at gathering data and targeting people better."
So, consumer confidence is relatively high, but only through accurate targeting, giving people the right message, ensuring relevant data is available and used can that confidence be further improved. That said I might just go and fish those letters out of the bin - you never know, you've got to be in it to win it.