What digital marketers can learn from DM

In an age of information overload, digital marketers could learn a lot from the personalisation and value pursued by direct mailers, writes Kim Benjamin .

Hardly a month goes by without some development in digital being hailed as the next big thing in marketing innovation. It is easy to see why - digital can engage consumers more quickly and effectively than other marketing techniques, as well as provide instant and detailed data on financial returns.

In an era of information overload, however, digital channels - and in particular mass email marketing - are in danger of alienating, rather than attracting, consumers. For example, email open and click-through rates are declining year on year, according to a survey last year by MailerMailer.

With a renewed emphasis on better targeting and deeper personalisation, direct mail is once again in the spotlight. In the past, brands have all too often been accused of looking at direct mail in terms of volume, rather than value, in their pursuit of response rates.

Mail volumes, however, have been falling year on year, and developments in the medium, from behavioural targeting to improved personalisation, suggest that direct mail is now at the forefront of customer relationship management (CRM).

Personalised mailing

Boots, for example, used data to create a personalised mailing to encourage customers to buy its products in Christmas 2009, the bleakest festive period for retailers in two decades. More than 400,000 versions of the mailing were created, and they have been credited with helping Boots increase its seasonal profits.

'Brands face a challenge in ensuring their customer insight is fed through all communications, whatever they may be,' says Mel Cruickshank, chief executive of direct marketing agency LIDA. 'Some clients appreciate and see this value and have tied up this thinking with their overall customer database; others are trying to bring them together, but of course there can be large infrastructure costs involved in doing this.'

Michael Cutbill, marketing director at The AA, says most pieces of direct mail are more personalised and briefer than they were five years ago. He believes that the twin pressures of cheaper digital forms of contact, and customers' growing preference to do more online, means that direct mail must innovate or die.

'Companies are spending less time emphasising how great they are and more time saying something relevant,' he adds. 'They use more data about the customer and smaller lists. They also make it easy to move from paper to online if the customer wishes.'

Standing out

Neil Warburton, CRM manager at clothing retailer Boden, agrees that standing out on the doormat is becoming ever-more difficult, and achieving it requires creativity. In one recent campaign, Boden sent a unique, digitally printed catalogue to every customer. The campaign used information about customers' shopping history with the company to create personalised marketing presented in the style of a story. The physical catalogue within the mailing encouraged recipients to engage with the brand via social media and its website.

'The impact of the physical catalogue landing on the doormat was an essential first contact point, the like of which could not be replicated using digital media,' says Warburton.

So what can digital marketers learn from the direct discipline? The pitfalls of email are clearly one area they can address.

'Like conventional direct mail, email should only be used wisely, discriminately and with respect to the consumer and the brand,' says Matt Morley-Brown, creative director at Archibald Ingall Stretton.

'Cut-through is becoming more and more difficult due to spam filters and consumers' patience wearing thin.'

Poor targeting

Email campaigns all too often suffer from poor targeting and low optimisation, contends Brendan Tansey, chief executive UK of Wunderman. He attributes this to the low cost of email, which reduces the financial impact of getting things wrong; in contrast, the higher cost of direct mail makes testing an economic necessity.

Ruaraidh Thomas, managing director of Data Lateral and Shift Click, part of Lateral Group, agrees that email marketers can learn the value of testing from the direct discipline. 'Messages, data segmentation and profiling, subject lines, offers, creative, timing; all should be continually tested and measured to help improve response and understanding of consumer wants and needs,' he says.

Mail can also be an effective driver of engagement and dialogue between brands and consumers. The innovations detailed in this piece, from data cleaning to behavioural targeting, demonstrate how the medium is a force to be reckoned with, despite the exponential growth of digital communications. Direct mail is not so much fighting back as finding its niche in an industry that recognises consumers differ in the way they want to receive information and promotional offers.

Green and 'clean'

The rising cost of direct mail, combined with environmental concerns and innovation in customer segmentation, are prompting brands to develop leaner, more targeted strategies for postal marketing.

In March last year, insurance provider Sun Life Direct was the first financial-services brand to achieve PAS2020, the industry standard for demonstrating a commitment to reducing the environmental impact of direct marketing. Colin McDougall, head of distribution at Sun Life Direct, says improved practices in data management, understanding where the paper used for direct mail is sourced from and encouraging consumers to recycle were instrumental in gaining the accreditation.

In a recent pilot mailing to see how the above techniques worked, the brand reduced customer complaints by 40% (as a percentage of mailings), 'goneaways' (misaddressed mailings) by 50% and 'do not mails' (people who have opted out) by 10%.

'The key to success lies in reducing waste and maximising response,' adds McDougall. 'Our preferred approach is to talk to customers through multiple media and let them choose how they want to respond. We do have an increasing number of customers who opt to reply by web, but we still get a significant number of customers and enquirers who choose to cut out and return coupons by post.'

Joel Curry, managing director of data consultancy Experian QAS UK, claims direct mail is more advanced than email in its use of 'cleaning software', which removes obsolete entries from databases. He adds, however, that it is essential for brands to measure the quality of the data they have captured over time to lessen the need for such fine-tuning.

Appliance of science

Proximity London has been using a process it calls 'behaviour by design' to optimise its clients' brand assets and sales responses. The process involves semiotic (sign) and discourse (word) analysis, behavioural economics and neuroscience. 'When combined, these tools can allow brands to deconstruct and rebuild specific communication assets to improve response rates and influence brand perception,' says Mark Iremonger, head of digital and planning at the agency. 'This is particularly effective when looking at high-volume, offand online communication where tiny shifts in key performance indicators can make a significant difference to a bottom line.'

Neuromarketing is set to become an area of increasing importance for the marketing industry. Said Business School in Oxford is carrying out a three-year research project on neuromarketing that involves measuring consumers' brain responses to products and services.

Its advocates claim that neuromarketing will provide detailed knowledge of customer preferences and which marketing activities will stimulate purchasing behaviour. This helps to maximise the effectiveness of promotional campaigns by informing the placing - and pricing - of advertisements, and reduce the chance of failure for nascent products.

Getting personal

Steve Aldridge, creative partner and chairman at Partners Andrews Aldridge, says it is difficult not to make personalisation seem 'cheesy' or pushy, so a keen awareness of a brand's relationship with individual recipients is vital.

Brands need to consider the following before getting personal with consumers: their likely warmth to the brand; their position in the purchase cycle; their number of previous contacts with the company; and whether these communications have been 'conversational' or one-directional.

Chris Bibby, direct marketing director at Virgin Media, argues that direct response is vital for the business when it comes to acquiring customers, and the brand invests heavily in direct mail. Personalisation is key to ensuring that the right customers are contacted at the right time and with relevant offers, he adds.

In February, Virgin Media launched a direct mail campaign supported by digital activity to promote its TV service. One part of the campaign targeted 1000 customers selected by the brand as its most important. They were sent a mail pack offering them a free, personalised remote control (with their name printed on the side) and a unique number to enter on a personalised web page. This page featured a video showing a woman holding the same remote, an installation sign-up form and a link to a forum for users of the TV service.

By the end of April, Virgin Media had recorded 65,000 pre-registrations for the TiVo service.

Iremonger says brands are increasingly relying on content as part of the marketing mix. This can be content that the agency creates based on its insight into consumers' lives, or content created in participation with consumers in the pursuit of relevancy and engagement. Indeed, Proximity London recently appointed Tim Bax as head of content to help clients offer branded content that has been personalised to customers' individual tastes.

The agency worked on a 'co-creation' campaign for Royal Mail, entitled 'LOLx', that aimed to remind people of the joy of receiving mail through the post and rediscover its relevance and value. By contacting selected video-bloggers with personalised physical content, the agency ensured that the campaign was noticed - it claims that 250,000 young people have taken up letter-writing as a result of the work.

The campaign started with direct mail and ended with a 12-hour live broadcast across the web, using content inspired and created by young people discovering the pleasure of letter composition. ÿLOLx' relied on the successful engagement of a small group of influential people - the videobloggers - but it was direct mail that got the ball rolling; because of the subject matter, the medium also had added relevance.

The content of direct marketing can also bring a level of tangibility to a campaign that is difficult to replicate online.

Asking questions

'In order to start a conversation, you need to have good data and insight, which will allow for higher relevancy and better personalisation,' says Richard Marshall, founding partner of agency TMW.

From a creative perspective, he adds, any campaign that asks a question is effectively starting a conversation. One of the main challenges of using direct mail in this way, however, is ensuring that the data is kept up to date. The main benefit of this is that personalised mailings, based on the recognition of the consumer as an individual, enable a more relevant and meaningful dialogue to ensue. The more targeted the communication, the more effective it will be.

Mindshare recently worked with internet banking provider First Direct to create 'First Direct live', a campaign using data visualisation techniques to express customers' views on the company's service. Forums, blogs, comment threads and social networks were mined for real-time data on what consumers were saying about the bank. This data was then transformed into a visual representation of customer perception.

A range of data-visualisation widgets was created, showing real-time, unedited and unmoderated feedback from consumers, all of which was hosted on the campaign microsite. The widgets were also shareable across social networking sites such as Facebook as well as iGoogle. The visualisations were converted into live digital advertising, which ran online and on digital posters on the Tube, in railway stations and in shopping centres. Response rates increased by 240% on previous campaigns, and current account consideration by 7%.

With such a range of innovations in direct marketing, the print versus digital debate is clearly outdated.

Better targeting: The Boots approach

To learn more about its customers and serve them better, high-street retailer Boots launched its Advantage loyalty card in 1997. Direct mail has always been central to the company's marketing, starting with acquisition through to maintaining regular contact with customers.

In 2009, with the UK in the midst of the worst recession for two decades, Boots set itself the challenge of encouraging consumers to buy gifts from the store in the run-up to Christmas.

The Advantage card statement always includes a coupon redeemable against specific products in-store, but research revealed that awareness of Boots' gift range was low. The retailer wanted to show customers that they could buy presents for every family member and friend from Boots, and collect points to treat themselves at the same time. An individual communication was created for each recipient of the subsequent direct-mail campaign, ensuring it would stand out at a busy time of the year.

Previous testing had shown Boots that coupon-led campaigns worked best when delivered via direct mail; it therefore sent a mailing to 6m customers that encouraged them to hit the shops. This was supported by press and TV activity, as well as in-store promotions aligned to the festive coupon offer.

The personalisation of the mailouts - achieved by the intelligent use of data - was essential; working with agency LIDA, Boots mailed more than 400,000 different versions of the Advantage card statement to its customers. Incremental profit increased by 60% for the period compared with the previous year.

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