BSkyB, the COI or Tesco: who are direct marketing's most powerful clients?

They work for household brand names, have power of life and death over agencies and suppliers but they themselves have had a torrid year. Or have they?

Here Marketing Direct profiles and ranks the key buyers of traditional and digital direct services, all of whom have survived the worst of the recession with a little help from direct response channels.

Pinpointing the power buyers of direct channels in 2009 is a fascinating, though challenging exercise. This is because today's client direct marketer is just as likely to be in charge of acquisition via paid search and affiliate marketing, as they are for customer retention through direct mail.

Looking back on a tumultuous 12 months, the marketers in this listing have had to grapple with the pressures of declining budgets, the unstoppable shift online and the need to maintain sales. But the best leaders turn a crisis into an opportunity, as demonstrated by power players such  as Nectar's John Sheekey, Ruth Spencer of Boots and More Than's Pete Markey.

The criteria for inclusion are the wider measures of innovation, influence and, yes - a large overall budget for direct and digital response marketing.

Marc Michaels: measurement of marketing ROI a key focus

1  Marc Michaels
Director of direct and relationship marketing, COI

Michaels may be celebrating two decades at the COI, but the past year has seen him up the ante, as befits the UK's single biggest buyer of direct marketing. His internal client base - which includes the Department of Health, the Army, the Navy, the RAF, the Home Office and BIS (formerly DTI) - is enough to make the head of any client services director spin.
Michaels continues to grow the direct and relationship marketing division within COI. The appointment of two deputies, Robert Irons and Daniel Pallett, has freed Michaels up to become more strategic.

On the campaign front, Change4Life and communications around Swine Flu were the priority. Evaluation of marketing performance and spend remains a key preoccupation, especially as Michaels' budget rose from £33.5m in 2007/08 to £45.6m in 2008/09, and the Labour government looks set to cut budgets in the future. One big challenge looms on the horizon: a potential integration of COI agency rosters to remove the silos between digital, direct and advertising.

=2 Mark Anderson
Customer marketing director, BSkyB

=2 John Orriss
Director of acquisition, BSkyB

When it comes to the art of customer acquisition and retention, few markets are as competitive as TV and broadband. In attempting to reel in customers and retain them, BSkyB has become one of the UK's biggest spenders on direct marketing, and signing the cheques are Anderson and Orriss.

BSkyB's big push these past months has been HD television, via a large integrated campaign using TV, posters, direct mail, inserts and door drops, as well as digital. Orriss, who joined BSkyB from Telewest five years ago, makes the brand work across all direct response channels, while the task of former Centrica man Anderson is to retain and upsell customers.

‘They do incredibly different jobs at BSkyB but work closely together,' says Matt Atkinson, chief executive at BSkyB agency EHS Brann. ‘They've evolved the brand and imported it into direct channels in a way that feels more relevant.' On the face of it, Orriss has succeeded, signing up 124,000 new subscribers in the three months to the end of July, while customer churn remained broadly level at 9.9%. Observers question the cost of that acquisition, but in the dog-fight that is TV/broadband, the numbers remain impressive.

3  Janet Smith
Clubcard director, Tesco

In the past two years, Smith has made the role vacated by predecessor Andrew Mann her own, hailing from Tesco's US operation where she was international space, range and display director. A former Olympic runner who ran for Britain in Seoul 1988, Smith is used to intense competition. Just as well, given that she had a pivotal role in the biggest thing to happen to Clubcard in its 14-year history - a relaunch in May in the face of pressure from rivals such as Morrisons, Aldi and Lidl.

So far, so good: more than half a million extra members have signed up, partly because of a double-points offer. A key element of Smith's role is moving these cardholders online, and grappling with the granular avalanche of data from cardholder transactions.

With Clubcard such an important weapon to Tesco, Smith's role is high-profile, and a possible springboard to more senior jobs within the grocery giant. ‘Janet is very strategic, determined and effective,' says one associate. ‘She has a nice balance of understanding the detail combined with a vision of what she wants to change, with the power to do so.'

4 Chris Jansen
Group commercial director, British Gas

British Gas has one of the largest customer databases in the country - it claims a presence in 12m households - and is a prolific user of direct marketing. Overseeing all this is Chris Jansen, who hails from the P&G and British Airways schools of marketing. Jansen is arguably the most multifaceted marketer in our listing, being responsible for not just direct marketing at British Gas but online, marketing, sales, pricing, strategy, hedging, corporate responsibility and customer insight. He chairs BG's plumbing business Dinorod and is MD of Premier Energy.

‘Chris has got an enormous job and an amazing bandwidth to stay on top of it all,' says Annette King, CEO of the brand's direct agency OgilvyOne. ‘Chris is a fan of DM and appreciates what it can do for the business'. Jansen says Nielsen under-estimates British Gas's direct mail spend and stresses it was closer to £20m for acquisition mail in 2008/2009.

Highlights for Jansen in 2009 include winning European Call Centre of the Year, and the Marketing Society's Best Direct Mail campaign for the ‘Generation Green' schools programme. But perhaps the biggest accolade for Jansen is that for the first time in 10 years, British Gas is set to grow its customer base in 2009.

5  Matthew Dearden 
Director of retail consumer marketing, BT

Dearden may not have a direct marketing provenance - his background is brand management at Procter & Gamble - but his BT role embraces not just brand building, but acquisition and retention, too. As such, Dearden has come to appreciate direct response for its power to generate sales of BT's voice, broadband and content services.

Direct mail spend is up for BT, but Dearden is also pushing usage of digital channels for direct response, including tests on music download site Spotify. Churn being the big issue in telecoms, Dearden believes in acquisition and retention teams working together, and has introduced a common measure known as ‘early-life churn'.

 

Chris Bibby: 'encyclopedic knowledge of marketing effectiveness'

6 Chris Bibby
Head of customer marketing, Virgin Media

While BSkyB's most recent customer acquisition numbers are up, arch rival Virgin Media's customer base fell. In the thick of it is former TeleWest man Bibby, who earlier this year absorbed the acquisition function on the departure of Lisa McCormack. Paper communications such as mail and door drops remain vital, with Virgin Media number nine in Nielsen Media Research's mail spenders league.

‘Under Chris, Virgin Media is using direct marketing as an information medium to win over Sky customers,' says John Townshend, creative partner at Virgin Media's direct agency, Rapier. Bibby, known for having a keen fashion sense, has ‘an encyclopedic knowledge of numbers and marketing effectiveness, and a good gut feel about creativity,' Townshend says. 

7 John Hinchcliffe
Marketing director, N Brown Group  (JD Williams)

There are DM clients who maintain a high industry profile and then there are those who quietly get on with the job. Hinchcliffe is in the latter camp, running the marketing for the £600m-turnover goliath of home shopping, N Brown. The group owns more than 20 catalogues, including JD Williams and Fifty Plus.

A home-shopping veteran with more than 25 years at businesses such as Grattan and Freemans, Hinchcliffe has performed a delicate balancing act in steering N Brown, whose core profile is 45- to 65-year-old customers sized 18-plus. He's helped by a large in-house team of digital developers running more than 40 websites, part of a 200-strong team covering catalogue production, direct marketing, design and database marketing. JD Williams spend on mail was £20.6m in 2008/09, according to Nielsen.

8 John Sheekey
Marketing director, Nectar

As marketing commander of loyalty programme giant Nectar, which gives him access to customer data on more
than half the country's 22m households, Sheekey is the envy of data-driven marketing. He's also one of the few marketing directors to have an increased budget this year.

But Sheekey has a dilemma or two: how to keep Nectar relevant to cardholders while migrating them online. There's also the issue of replenishing Nectar's partner brands in the wake of Debenhams' departure.

Sheekey's gentle demeanour belies the scale of his achievement so far: the programme signed up half a million new points collectors in the first half of 2009, with Nectar registering 21 card swipes every second of every day, compared with 19 a year ago. While encouraging cardholders online, Sheekey has maintained Nectar's bi-monthly trigger-based direct mail, which gets a 30% response rate. At the same time, the number of online retailers contributing to Nectar has risen, with 380 now on board, up from 220 a year ago.

There are still gaps in Nectar's repertoire in the fashion, pharma­ceutical and general merchandising sectors, but Sheekey is sure to be on top of that challenge, too.

9 Pete Markey
Marketing director, More Than

Markey scales the heights of power DM buyers after a tumultuous 12 months for financial services, and for Markey himself. He became The Marketing Society's Marketer of the Year earlier this year, in an annus horribilis for the industry. Markey was the first financial services marketer to win the award, for helping to breathe ‘new life' into direct insurance brand More Than. Markey has invested heavily in direct and digital marketing to take that brand forward.

For Markey, every channel is potentially a direct response medium - TV, radio, telephone, mail and online - all tracked and measured by the robust analysis programme he has set up. The brand's use of direct mail has risen ‘because it works,' ¬ he says. Another Markey highlight was the launch of More Than's Personal Claims Handler service in July - a first for an industry not generally known for its personal service.

 

Katie Vanneck: 'target market philosophy'

10 Katie Vanneck
Managing director, customer direct, News International

Vanneck may spend her working days in the upper reaches of the News International empire - she reports to James Murdoch, chairman and chief executive of News Corp Europe & Asia - but she would have no problem with being described as a direct marketer. In fact, she is the media world's most high-profile advocate of the discipline.

In March this year Vanneck was promoted to her current role, tasked with building direct relationships with customers of News International brands.

Her philosophy is pure target marketing: Vanneck believes customer database marketing (in a world where readers are ‘customers'), and not advertising, is the secret to the future commercial success of NI's newspaper brands. She picked up this thinking at The Daily Telegraph, where she became marketing director in 2005. At NI it means partnering with the right third-party suppliers to develop travel, wine, culture and fitness products.

11 Ruth Spencer
Loyalty director, Boots

Spencer has an eclectic but heavyweight CV that marks her out among this power troupe. A former direct marketing manager at NatWest Bank, Spencer went on to become a CRM expert at management consultancy Accenture and then director of strategy and CRM at The Co-op.

Boots then beckoned, requiring someone to inject life into its Advantage Card, one of the UK's three biggest loyalty schemes, but arguably the most under-exploited. The stakes are very high - her job is to make Advantage the most generous and appealing loyalty card in terms of CRM.

Her first task was to hire Lida as direct agency last year, replacing the defunct Craik Jones, the second was to introduce a new CRM system to make communications more nimble and personalised. The agenda at Boots is to integrate all marketing, which is starting to show through on Advantage Card statements.

12 Catherine Kehoe
Group brand and communications director, Lloyds TSB

In a year of financial meltdowns, Lloyds TSB was in the eye of the storm. But the show must go on when you're a bank the size of Lloyds TSB, and Kehoe helped keep the banking behemoth on its direct marketing track, even as it merged with HBOS last September. Having held senior marketing roles at Yell and BT, Kehoe is two years into her current position.

A restructure this year saw DM, advertising and online responsibility shift from separate product areas to consolidate under Kehoe. The agency roster was streamlined from TMW and Partners Andrews Aldridge into Rapier in late 2007, and since then the focus has been less on chasing volume - nearly 90% of Lloyds TSB's direct mail in the past year has been to customers, not prospects, according to Nielsen - and more about retention. ‘Catherine doesn't have a one-dimensional view that all customer communications should be digital,' says one who knows her. ‘It's now about the right message, through the right channel and at the right time.'

13 Jeremy Morris
Head of direct marketing, Orange

Morris is included in this listing for several compelling reasons. First, for the fact that telecoms as a sector has grown its use of direct marketing, as former bedrock financial services has diminished in importance. Morris' power credentials are also enhanced by Orange's planned merger with T-Mobile, a move that will make it the largest player in the telecoms sector.

And finally, on a personal level, Morris epitomises the new breed of digital-savvy direct marketer. Being responsible for Orange's B2C and B2B acquisition and retention, Morris undoubtedly has a big job on his hands. CRM using digital channels has been a vital tool, use of which is set to grow in the next 12 months. This year he has overseen the launch of a monthly CRM e-newsletter, with acquisition increasingly driven through direct response digital display ads, search and affiliate marketing.

Observers believe that Morris can emulate his boss, former direct marketer Spencer McHugh, who is now brand director. ‘Marketing can be accused of being divorced from commercial realities, especially in telecoms companies,' says Jason Foo, deputy managing director at Orange's direct agency, Chemistry. ‘Telecoms is a complex business in terms of how revenue is earned through intermed­iaries, and for products such as data, voice and so on. Jeremey understands how to translate this into something meaningful for customers, while understanding the commercial requirements.'

14 Mike Tildesley
Marketing director, own brands, RBS Insurance

Cut Tildesley in two and the words ‘insurance' and ‘direct marketing' will be found running through him. Tildesley has long been a senior marketing advocate of direct channels, since he helped to launch direct insurer More Than for RS&A. The genial and popular Tildesley - he remains an active participant in the Institute of Direct Marketing's educational pro­gramme - joined Direct Line as marketing director in 2006, and in June this year widened his remit to include Churchill, Privilege and Green Flag. ‘Mike is a direct marketing fanatic,' says Jon Ingall, managing partner at AIS, who knows Tildesley from the latter's Prudential days.

=15 Michael Cutbill
Marketing director, AA

=15 Amanda Hoskins
Marketing director, Saga

Road and finance organisation the AA and Saga, the over-50s holidays and financial services group, are resolutely direct marketing organisations, both having large in-house teams to produce paper-based communications. When the two brands merged in 2007, they were put into a single holding company, but marketing of the brands remains separate.

Both Cutbill and Hoskins are publicity-shy, but Cutbill is the more high profile of the two. Last year Cutbill led the AA's marketing shift from brand-building to direct response, handing its big-budget account to MBA, a little known integrated agency.  MBA introduced a brand response approach to campaigns that generate ‘brand action' - blending a big brand idea with a call to action. The AA reportedly saw a 66% increase in response when it introduced the ‘for the road ahead' campaign in March.

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