Return on investment and accountability, ever of importance in the business world, has become the Holy Grail of marketing over the last two years. As marketing directors have been forced to slash spend across all of their marketing disciplines the need to track exactly where each and every penny is going has become paramount.
It’s fairly common knowledge that, as this has happened, direct marketing has risen in favour amongst marketing departments. Now, with the tensions in the Gulf boiling up to full-blown war, the business pages are once again full of dark and gloomy financial forecasts. In this latest hammer-blow to the ad industry, budgets will no doubt be heading firmly back below the line to the warm reassurance of accountability.
The average British household reportedly receives, on average, 13 mail adverts every month. Add to that a potentially massive number of e-mails, the occasional text message and any number of telesales calls (“Hi, I’m Laura from Wendy’s Windows. I’m not selling anything, but ...”) and a picture forms of exactly how much direct marketing the average consumer is open to.
But is this a good thing?
With recent developments in direct marketing (SMS and e-mail being the front-runners – see the ‘Silver Screen’ feature in the February issue of The Marketeer) opening more channels for marketeers, is the marketplace becoming flooded? How much is too much? And how do marketeers avoid alienating their prospective customers with an endless barrage of special offers and free prizes? Perhaps most important of all: how does a marketer ensure that his or her DM becomes more than just a drop in the proverbial ocean?
Healthshield, the national healthcare organisation, has long been a strong user of direct marketing when informing members of new developments and offers. The registered friendly society has also recently decided to experiment with an e-marketing campaign to potential new customers. Marketing officer Julie Draper explains: “E-marketing is something we haven’t tried before and with it developing so quickly we want to be in there. E-mail is a lot easier for the customers as well. Instead of filling something out and posting it they can just e-mail us back. The e-mails also carry links to our website, so potential customers can go online and find a bit more out about the company.
“With the direct mail we do to our customers we know it won’t be considered junk, but in terms of the e-mail campaign we are trying to grab their attention by saying that we can reduce employee absenteeism. It's just like advertising, really – trying to grab your customer’s attention.”
Emma Jones, marketing manager at corporate clothing company Simon Jersey, agrees that eye-catching creativity is key in setting your DM apart from the competition. She says: “I think, in terms of getting communication across, your campaign needs to be very eye-catching, to the point and direct.”
Unfortunately, not all direct marketing actually achieves this. Every year thousands of households receive some form of direct marketing (be it e-mail, direct mail or telesales calls) that are completely irrelevant to them. This kind of blanket marketing may ensure a larger number of potential customers are reached, but it can also do more harm than good.
Freedom Finance, the financial services giant, is a major user of direct marketing. Marketing director Paul Coulter explains: “All the advertising we do is direct marketing. All the TV ads we do are direct response, all our press ads are direct. All the advertising we do is done to generate response. If it doesn’t, we don’t do it. Targeting irrelevant people definitely seems to be less of a problem for the bigger companies and more for the smaller SMEs – companies who don’t have a marketing manager or, alternatively, one that doesn’t have experience in direct marketing. So they buy a list in and do a campaign and then try to measure the response. The whole idea of direct marketing is to target people effectively, not just send out millions and zillions of mailers.”
“I think from a consumer point of view, too much communication can be very off-putting,” says Jones at Simon Jersey. “If there’s too much it gets considered junk mail and it’s just swept aside. It’s that constant communication through the letterbox. I think when a company sends too much information to people it can be damaging, but I think with the MPS (Mail Preference Service) and TPS (Telephone Preference Service) it’s easier for people to opt out now.”
“Opting out” has provided a haven for consumers who can’t stand being bombarded with “junk” mail and harassed by sales calls from companies they have no interest in. There are a number of government lists that consumers can register with to avoid receiving marketing material directly from businesses. Once on one of these lists, it is then illegal for the consumer’s details to be passed on for direct marketing purposes.
Tessa Kelly, director of compliance operations at the Direct Marketing Association, explains the guidelines that direct marketing must abide by: “As far as avoiding intrusive contact goes, companies must screen against the industry suppression lists: the Mailing Preference Service, the Telephone Preference Service and the Fax Preference Service. The MPS is a self-regulatory mechanism, its use is a condition of the Direct Marketing Association’s code of practice and a condition of the code of advertising, sales promotion and direct marketing. Use of TPS and FPS are a statutory requirement under the Telecommunications Regulations Act 1999.
“Suppression files are also available, whereby companies can make sure that they don’t mail deceased people, as well as a niche service called Baby MPS – which allows parents to stop baby-related mailings, should they have suffered a miscarriage or death of a baby. The DMA code of practice also covers areas such as telephone marketing. Amongst its requirements is that the company making calls has to volunteer the name of the advertiser at the beginning of the call, state what the purpose of the call is, phone within reasonable hours and conduct the call in a courteous manner.”
There is also a new directive on privacy and electronic communications about to be officially passed, designed to dramatically reduce the amount of “spam” e-mail that is generated and distributed within the UK.
In addition, under the Data Protection Act a consumer has the right to control what information about him or her is passed on to third parties.
All this legislation can deliver an added challenge to marketeers: some of the people you want to target will be out of bounds, others will be so drowned in direct mail that yours won’t even get a glance.
And apparently, despite the introduction of legislation, the volume of direct marketing out there is on the increase.
“I think DM dropped off a few years ago, but I think it’s picked up again,” remarks Jones. “I think a lot of people have tried different methods but now have gone back to their original route of DM. I think as a result direct marketing might lose some of its creativity and lose some of the brand recognition, especially in the mail-order market. A lot of direct mail had been becoming very brand-focused, but it’s now returning to the basic response-driven focus.”
“I think the ‘junk mail’ problem is becoming worse,” states Draper. “And it does dilute the direct marketing that you might actually be interested in. I think because of all the junk the sector is being taken less seriously.”
So, with the increased flood of direct marketing making it harder to target your desired consumers, is intrusive DM more trouble than it’s worth?
Coulter, at Freedom Finance, thinks not. He says: “If you think about the Internet, most of the responsive channels on there are very intrusive. That’s perhaps not very good if you’re a consumer, but from the marketeer’s point of view it’s what you want. You want it to be intrusive. If you think about radio ads – they’re all intrusive. Internet ads are much like radio in that they have to be intrusive. As long as it is intrusive to the benefit of the consumer it’s OK. If it’s relevant and carries information about something they might want to buy, then fine. If it’s not, then it can be annoying for the consumer, and that’s damaging.”
The key in direct marketing is clearly to target the right people with the right message and at the right time, as opposed to the blanket tactic of DM still employed by a huge number of companies.
“When it comes to preventing irrelevant direct marketing I guess that’s going to go down the line of permission marketing. I think they’ve just done that with e-commerce, where you have to specifically give your permission for your address to be used for marketing. Something like that could be implemented for direct mail as well but it would be harder because obviously it’s difficult to stop people sticking something through your door.”
Whether it’s by permission-based marketing or by more precision targeting, it would seem the direct marketing industry is at a crossroads. With more budgets turning to DM it’s becoming even more crucial that marketers know for sure the consumer/customer they contact will actually want to hear what they have to tell them.
For info on suppression lists visit www.mpsonline.org.uk, www.tpsonline.org.uk and www.fpsonline.org.uk.