Effective targeting is the Holy Grail for direct marketers. We've certainly been talking about it for years and sometimes actually achieving it, but in truth it's only recently that we've made significant steps towards using targeting as a matter of course.
We all know why effective targeting is vital. As well as improving response rates and ROI, good targeting means communication with customers is seen as being far less intrusive and far more welcomed.
As for targeting practices now, it would be great to say that marketers have realised the error of their ways and the damage inflicted on their brand by blanket mailing but unfortunately the truth is more mundane.
It comes down to one thing - the introduction of the opt-out clause for customers and prospects on the Electoral Roll two years ago.
The new legislation proved a real headache for blanket mailers but, more importantly and more positively, it caused a lot of people to reassess their campaigns and consider using a more targeted approach. Mailers were forced to find an alternative source of data. And of course that alternative was more expensive.
Naturally, paying more for data meant that clients want more value from it. Mailers had to use this data more effectively and more carefully.
Which in turn meant better research when it came to prospect mailing with an increase in the use of model- based targeting.
The huge range of data sources now available exists as a direct result of the ER opt-out clause. Any direct marketer would be foolish to not use these resources as the basis of more targeted campaigns which have certainly paid dividends in terms of ROI for Green Flag.
I'm not denying that blanket mailing still exists. I simply believe that circumstances have forced marketers into making their data work harder for them and, as a consequence, direct mail has become more targeted.
But there is no excuse for complacency. Customers still lump everything from door drops to inserts to addressed direct mail under the 'junk' tag. The DM industry needs to keep improving targeting if this is to be reversed.
- ER opt-out forced change
- Clients demand better ROI
- Improvements still needed
NO - GRAHAME LAKE, MANAGING DIRECTOR, JUST
When I hear the DM industry claim that targeting is even more refined than before, it always brings to mind the serial womaniser asking for a last chance after his latest dalliance. It's not that the industry figures don't add up, after all you can make statistics say whatever you want, it's just that my experience of receiving poorly marketed, irrelevant DM is as bad as it ever was. After all, Brassed off Britain voted DM as the number one thing that most people find irritating.
Day after day my doormat is covered with offers from companies I don't want to hear from, with products and services I don't want to buy. If the DM market is targeting so well, how is it that, according to Experian, the opt-out rate on the Electoral Roll has now risen from 27 to 32 per cent? This is substantiated by the numbers making use of the Mailing Preference Service, up from 614,000 in 1999, to 1.7 million in 2004. Even when the individual has opted out using MPS, unscrupulous operators are still mailing these individuals as there is no legal obligation to screen the data.
The end result is that even though the industry claims to be improving its targeting, huge numbers are opting out because they do not want to receive unwanted and unwarranted mail.
If the industry is improving targeting, the response figures should be showing significant improvement. Looking at average response rates from the DMIS letterbox factfile between 2001 and 2003 highlights that the average response to all campaigns has only improved by just over one per cent, and if you remove the statistically unreliable campaigns with response levels over 50 and 30 per cent the improvement is only 0.3 per cent.
The fact is, DM is the paper version of the old foot in the door salesman, occasionally worth buying from but largely unwanted, irrelevant and time consuming. The DM industry claims that it's getting its targeting act together and legal enforcement of MPS to list buyers would be a good start. But there is still too much evidence to the contrary to believe this serial womaniser has changed his ways.
- DM voted most irritating
- Opt-out rates climbing
- Response rate unchanging