Tag Archives: DDL Group

The Five Essentials for Quality Direct Mail

There is a resurgence in Direct Mail at present and it is increasingly becoming a key part of many successful marketing campaigns today driven in part by the overabundance of digital communications that swamp us each day and in part by the increasing costs of digital advertising. The return on your investment in direct mail can pay dividends when compared with other direct forms of marketing if you get the basics of mailing right.

To me a good direct mail campaign is one to one print that positively promotes your product or service in an appealing manner to someone who may be interested in purchasing at a time they may want to buy. This may sound obvious but what I see in practice are many examples where the approach to mailing emulates the dumbed down digital approach used in emailing campaigns of let’s email everybody we know with everything we want to tell them as often as we can until we wear the customer down and they purchase. And the outcome of this is the increasing use by the recipient of the delete key and the assignment to the spam bin. Over half of emails sent are deleted within 2 seconds of being received.

So if you are contemplating undertaking direct mail there are five essentials you need to consider to get the best return on your investment and generate the sales you desire. They are:-

  • Product – what is it that you wish to sell or promote? What are its key features and strengths? Who are the competition and what puts your product apart from them? What is it that triggers your customers to purchase? What role does your brand play in triggering purchases? Are your prices competitive and are there offers you wish to make to encourage the purchase? Understanding why your product sells is the most important of the five essentials. As this information is key to your business, it should be knowledge you already know backwards, though writing the answers down can sometimes be more difficult than it may seem.
  • Creativity – how do you best describe your product to the potential customer? The mailing piece is your shop window. You may wish to highlight something unique, you may wish to make a special offer. It needs to accentuate the positive. It’s all about drawing the customer’s eyes to the mailing piece when it arrives through the letterbox. It’s also an opportunity to introduce or enhance the brand to the prospective customer. Mailing pieces can vary from the simple postcard that drives the customer online through to the full catalogue. Design can be simple or creative but needs to be eye-catching. It needs to stand out and attract the recipient to pay attention on receipt.
  • Data – who are the target audience that might buy your product? Too often I see mailings where the approach is to mail everyone or to choose recipients randomly. As a minimum ensure your data is audited and that duplicates, deceased and goneaways are removed from the data. This is a no-brainer as the costs of cleaning the data is usually outweighed by the savings in mailing costs. There are a whole range of data techniques that can then be used by looking at your existing customer base to work out what sort of person is likely to buy your products, or conversely who not to mail as they are unlikely to respond. These techniques include demographic profiling, data segmentation, RFM analysis of your existing customer data and more advanced techniques such as Chaid and basket analysis. A blanket approach to mailing data will not never maximise the return on or investment.
  • Personalisation – print works but what really works is personalised print and, in today’s world of digital printing, every mailing item in your mailing has the potential to be different, personalised to the recipient. Direct mail is a form of communication with the potential customer and communication is a two-way process. We need to show why we think the recipient might want the product. The mailing piece needs to connect the product being promoted with the potential customer in some way, and as we are all different. This may involve personalising the mailing through words or imagery that show we know who you are and why you might want our product.
  • Timing – for many mailings this can be difficult to achieve, however consider what the ideal time is for the mailing to land. It might be related to where we are in the year or a specific event, for example you don’t sell Christmas trees in February. It may be the day of the week, for example family holiday decisions tend to be made at weekends so why not time the mailing to land on a Friday. It may be related to when a previous purchase is likely to expire. However, unlike digital forms of marketing, mailings stick around the house or business far longer on average. They get filed for future reference, they get pinned to the notice board or stuck to the fridge or left on the mantelpiece or coffee table.

There is no simple answer to what response you will get to your mailing before the mailing takes place. At the end of the day, key to all of this is whether you have a product or service that people want. However if you address the five essentials above you will move towards maximising the response you can get from the direct marketing activity. What we do know about response levels are that if you can find that sweet spot of who to mail, what to mail, how to connect to the potential customer and when to mail you will be able to repeat the process time and time and achieve similar returns. Keep refining the essential steps and you will see these response levels continually rise.

15 Seconds To Make A Connection

Back in May last year my blog, The Resurrection of Direct Mail? looked at the growing evidence direct mail is resurging and on its way back as the most effective channel for direct marketing. In the last year the UK economy has finally emerged from recession, business confidence has been restored and marketing budgets increased. This trend to direct mail has clearly accelerated.

If you are a small or medium sized Company (which collectively are known as SMEs) then the decision to take up direct mail, often for the first time, is not quite as clear cut as it should be. We see growing evidence that the return of investment (ROI) is often far greater than the equivalent emailing. However, when it comes to making the decision to proceed with that first direct mail campaign, there is no doubt the costs of undertaking campaign (postage, print, fulfilment) can use up a significant chunk of what are often limited annual marketing budgets. And when compared with the significantly lower cost of emailing combined with no firm guarantee that the eventual ROI will justify this significant investment, it is easy to see why Clients can baulk at this decision.

Clients new to direct mail without fail ask me as part of this decision “what percentage response will we get?”. There is no simple answer. At the end of the day response is affected by:-

  • The product or service being marketed. If you have a product nobody wants then it won’t sell however you market it. And of course the converse is true.
  • Who will receive the mailing. You should be mailing to recipients who may well have an interest in your product. Getting the data right is fundamental to a successful mailing and too often overlooked.
  • The mailing piece. When it lands in the customer’s letterbox or on their desk does it do enough to attract attention of the recipient.
  • Timing. The mailing should ideally arrive at a time when the recipient may be considering your product or service. This is the hardest aspect of getting a mailing right and often little can be done. Some products are seasonal or tied to known events (Christmas, Valentines Day). However your existing customer data may hold the key to other timing information you can use.

So what do you do to reduce the risk that the mailing will not provide an ROI that justifies the cost?

  1. Before you start get the data correct. If you are using your own data whether customer or prospect, make sure the data is cleaned and free of duplicates, gone-aways and mortalities (see Data Cleaning – An Integral Part of Direct Marketing? ). Have your customer data profiled to understand who your best customers are. It always surprises me how often the view of the Client as to who are the best customers varies from the evidence held within their customer data. This customer knowledge held within the data can also be utilised to identify and select data for customer acquisition.
  2. Think carefully about the design and appearance of your mailing piece. This relates to a key reason why mailing works better than emailing. Today, if emails actually get through to your inbox, rather than being filtered off as spam, most of us get to see one line of the email and press delete. We can spot the marketing email and we dispose of it accordingly. If we take the same somewhat cynical view about mailing, the key difference is that it takes time to take the mailing from the letterbox to the bin but the whole of the mailing piece is visible to the recipient. Hence the title of this blog, 15 seconds to make a connection. The mailing piece needs to do enough to get it looked at in more detail Increasingly personalisation is the key this. Not just personalisation of the name and address but something more that relates to the recipient. Imagery works well, be creative. Direct mail is not about giving out a message, it is about starting or continuing a communication process that will eventually lead to conversion and hopefully a long term relationship.
  3. Importantly direct mail gives you the ability to test. You don’t have to put all your eggs in one basket. You can test a smaller quantity, you can test a few different mailing pieces and monitor which works the best. What we do know about direct mail response rates is that if you repeat a mailing then the response rates are likely to be similar. In this way you can test if mailing is for you without risking spending all that chunk of marketing budget that is causing you to think twice. And you can learn from the test mailing, always looking to improve the next time around. Once you have that initial response benchmark then it should only improve and turn into what will be a long term relationship with mailing.

Mailing does work. Use the knowledge held within your customer data to target the right recipients with the right message. Be creative to ensure you capture the recipients attention in the “15 second window”, test ideas and target audiences, And if all of this is managed properly it will become a valued part of your marketing mix.

The Ins and Outs of Obtaining Data

Wordle: Data Rental

Underlying all direct marketing activity is data, the details of the Clients, donors and prospects to be contacted as part of the campaign, whether by mail, phone , email or SMS. This data may well be data you already “own”, such as your Client or Prospect data. However you will often want to reach for a new unknown potential market. This is usually achieved through obtaining data from third party data suppliers.

Whether your target market is businesses (business to business marketing or B2B) or consumers (business to consumer marketing or B2C) there is an endless supply of data available to meet your requirements. Understanding your potential customer is key to successful data purchase and more importantly to achieving a real return on investment for your direct marketing campaign.

So how do you go about getting hold of the data? Whilst you can purchase data that you then own, the majority of data is only available to rent. In these days of privacy and data protection, it is important that data is sourced and used legally and conforms to the Data Protection Act. By renting data, responsibility for the use of the data primarily lies with the data supplier (or “data owner”). The supplier will have made sure that use of the data is legally compliant. Choosing a reputable supplier is important, there are organisations such as the Direct Marketing Association (DMA) who can provide guidance and direct marketing service companies, such as DDL Group, that have expertise in understanding the extensive data rental market and can source data on your behalf.

Quality of the data rented is important, and as a general rule is the more the data costs to rent, the better the quality. Factors that affect quality will include where the data was originally sourced from, how recently the contact details have been checked and confirmed (data will go out of date as people and businesses move on or cease to exist) and whether the business or individual has been contacted directly to confirm their details or whether this is through a third party. Ignoring very niche data, data can cost anything from £100 to £500 to rent per 1000 records. You would expect the higher priced data to perform better.

In order to get a count of numbers of available records and the cost to rent the data, the supplier will ask a number of questions:-

  • Will you be using the data once or more often? Once means either one mailing, or one email or one telephone call. Normally data is rented either for a one-off use or for multi-use over a one year period. In order to check you are using the data correctly, the list supplier will add “seeds” to the data supplied. These are records that look like all the other records but when you use them the marketing activity  will go to the supplier so they can track your usage. Remember, however, when you contact someone from your rented data and they respond to you giving you permission to speak to them further the ownership of then the data record becomes yours.
  • Do you want name and mailing address only or do you telephone numbers and/or email addresses? The more contact details you request the higher the rental cost. And again importantly, data suppliers may not hold all contact details for all data records and so the number of available records may change depending on the contact details you require.
  • For business data do you require a named person at the Company or are you happy to contact a generic job title (such as “the Managing Director”). Do you want one contact at a Company or several? Named contacts will add to the cost, the data will go out of date quicker (people tend to change jobs) but contacting named individuals tends to bring about higher response. Seeking named contacts will tend to reduce the number of records available, particularly if you specify a specific job role rather than any “senior decision maker” at the Company.
  • What selections do you wish to make to better target the data? You may wish to select by geographical area which could be specified by region (e.g. North West), postcode area or district (e.g. CH and WA postcodes), towns (e.g. Chester and Crewe) or even by distance or drive time from a certain location (e.g. 10 miles radius of your office). For businesses you may wish to select by business types, or annual turnover or number of employees? You may only want business head office locations only or may require all branches and depots? For consumers you may wish to select by demographic profile, age group. gender or income?

There are many techniques, too numerous to detail here, in how to understand your ideal target market to enable you to best select the right third party data for you. However the starting point is often is understanding your business and the type of customers you have attracted to date. The experience and instinct of the business owners and managers in invaluable in defining this. Assuming you already have a significant number of customers, the clever way is to analyse your exiting customer base and determine what factors these customers have in common. There are formal profiling systems that can assist here, producing such a profile that can be used to select data from the third party supplier. It is surprising how often the profile of a Company’s prospects and those that have actually become Clients differ which clearly highlights the need to understand the customer as a focus to guide all sales and marketing activity . And while profiling can occasionally draw a blank (any consumer or business is likely to purchase) and in general terms it may tell you what the the experienced managers already know or assume, the detailed profile will help you narrow down and focus on who should be contacted, which in turn will reduce marketing costs and improve the return on investment.

Does renting third party data work and if so what will be the response rate? Nearly every Client asks this question and there is no simple answer. As with any direct marketing activity there are a range of factors that will determine response levels. Most importantly is the product or service you are selling or promoting. The method of the marketing approach, the quality of any design, timing as well as the data quality and relevance are all factors that will determine whether your campaign is successful or otherwise. What direct marketing does give you however, in all its forms, is the ability to test. There is no need to utilise the whole of your marketing budget in one go. Generally, however well the test works, will roll out as you repeat, assuming all the factors that affect response stay the same. And of course the testing allows you to refine, improve and retest.

Big Data or Smart Data?

The hot topic at any marketing, insight and data analytics conferences at the present time is Big Data. In our increasingly technological driven world we are generating enormous volumes of data, some estimates suggest the world is adding several quintillion (1018) bytes of data each day. And as marketeers and analysts we see this as a goldmine of information and we are instinctively driven to find ways of making use of it.

In terms of marketing activity, “Big Data” relates to the ever growing data sets created by our customers and prospects, not just through the traditional marketing database or CRM, but also from retail and eCommerce activity, from social media sites such as Facebook, Twitter, LinkedIn, Flickr and Foursquare. We can also access data from sources such as Google Analytics where we can see how visitors find our websites and what they then do once there, and media can include the full range of digital formats such as pictures, video,audio, CCTV.

For example a financial lender may wish to  look at an applicants Facebook site as part of the credit checking processes to see if they have pictures of holidays every other month and parties every night – would they be a safe bet to lend to?  We have all heard stories of employees checking out social media sites of potential employees as to their suitability.

IMG_0986

Would you give a pay-day loan to someone boasting this shoe wardrobe on Facebook?

The immediate consequence of wanting big data is that you need big servers and big software to process it and at this point the IT Team takes over, rub their hands with glee and an obsession develops on gathering all the data that can be found. Little consideration is given as to why the data is being collected, other than “it will help our marketing to be more effective” and planning what is going to be done with it once its gathered is often non existent. And with this data hunter gatherer approach, it seems that the sound statistical and analytical approach to extracting knowledge and insight disappears and in consequence it becomes easy to produce results from looking at the data that at best can be skewed an,d even worse, can be totally unsound. And there is also an implication that big data with its big servers and big software will cost big bucks so making it an exclusive tool for the large multinational Company, leaving us small and medium enterprises behind.

I would argue however that what is really needed to make best use of the data available is not Big Data but Smart Data. Concentrate on looking carefully at what data is available, extracting only data that is potential directly relevant and then using sound statistical sampling techniques to analyse and unlock the insight and knowledge within the data.

In a sense the term “Big Data” is a strange term as it is used to imply that size is in some way a measure of quality and value and I believe in a few years time we will find it odd to talk about big data. Size in itself doesn’t matter – what matters is having relevant data that helps us solve a problem or address the questions we have and so I prefer the term “Smart Data”. Smart data is available to all organisations small and large. It can use existing tools and techniques to evaluate and gain insight.  And when we want to bring in the additional data sets that the likes of social media and Google Analytics offer us then the way to do this is through creating and integrating small data sets using the techniques and systems we already have in place and not through building big data monoliths and creating massive centralized data warehouses.

Data, Intelligence & Knowledge Part 1 – Data Management.

At the heart of any direct or digital marketing communication is data. And all companies or organisations, large or small, who wish to communicate directly with customers or prospects collect and store data. But my experience of dealing with hundreds of businesses over the past 25 years is this core activity is usually undertaken with little planning or forethought, is executed in a haphazard manner and very rarely is the potential that the data offers the business unlocked to the full benefit of the business.

The first fundamental error too frequently made is deciding where responsibility for data management resides within an organisation. Too often it is seen to be an IT function because the initial challenge facing an organisation is how to hold the data. One of two approaches is taken:-

  • The Organisation is already collecting customer and prospect data in its accounting system, order system or other back office facility and so there is no immediate need to consider the marketing function. The organisation is “sure” it can extract the data in a usable form when it’s needed by marketing.
  • The Organisation decides to buy in or build a data repository for marketing activity. Whether it’s an excel spreadsheet, a marketing database, a data warehouse, a CRM system or a Big Data model, IT will thrive on creating the container to fit the data and spend significant budget building something that too often will constrain what data can be stored and how it is held. It’s an approach similar to the food manufacturer designing the packaging and then deciding how to cram the product into its container.

The second fundamental error is the belief that once the data repository has been built then the hard work has been done. In practice the effort and resource required to manage the data far outweighs the effort to build the repository in the first place.  I see far too many databases or CRM systems that fail to reach anywhere near their potential or on occasions don’t get past day one because no resource has been allocated to manage the data collection and on-going maintenance. 

The starting point for any organisation that wishes to undertake direct or digital marketing is to formulate a data strategy that clearly identifies what data is available to the organisation, what data needs to be held and how this data will be used going forwards. From this it becomes easier to define how the data will be held and gathered, and the resource and effort needed to undertake this function. And as with any business strategy, it needs to be reviewed and enhanced at regular intervals going forwards.

So what are the key components of a data strategy?

  • What customer or prospect data is available? You obviously need contact details, a fundamental for communications but what other data is known or could be available. It could be transactional/purchase data,  a history of communications from and to the customer or prospect, lifestyle data (B2C) or Company data such as turnover, employee numbers (B2B).
  • What data should we store and retain? The temptation is to keep all data but this can create a significant resource requirement in terms of storage and maintenance, particularly when social media data is involved. The Data Protection Act also requires us to only hold personal data that is relevant. Smart data”is better than big data.
  • How much data are we likely to gather? This is key to determining the data storage vehicle and the resource needed to maintain the data going forwards.
  • How will we store the data?  The choice here is endless and much depends on the answers to the above questions. And there are also decisions to be made as to whether off the shelf software is available that will match the data requirements (low up front cost, possible compromise as to what data is held and how), whether to produce a tailored in-house system (high up front cost, but system matches the data requirements) or whether to put the data management out with a third-party specialist (low up front cost but possible higher running costs).
  • How will we collect the data, input into the system and then maintain it? Included in this is the question of data quality. For example data trawled from the web or social media that is input by the user is often of poor quality, badly typed, abbreviated and difficult to utilise without significant data cleansing.
  • How do we keep the data up to date? People die, they move, they get married, they ask not to be contacted. Again the Data Protection Act requires us to keep personal data current.
  • What are we going to do with the data and will it serve this purpose?
  • How long will it take to build enough data to make it viable for the applications required of the data? Good data is like good wine, it comes into its own over time and with the right care will mature. Often databases will take several years to really start performing at their full potential.

But this structured approach to data planning is not what I see with the majority of UK Companies today. Running a Company that provides a full range of data strategy, management and analysis services, DDL Group spends more time with Clients sorting out bad data to make it accessible and usable for marketing campaigns than it does helping Companies with good data understand and unlock the power of the knowledge within the data to bring better ROI from its campaigns.

Only when your data model is correct will you be able to start unlocking the full potential of the intelligence held with the data which in turn will generate knowledge as to who your customers and potential customers are and more importantly how and why they buy from you. The ultimate aim of any marketeer is to have actionable intelligence about their customers that will help improve the customer relationship, increase retention and ultimately improve the return on marketing investment.

Is the “Net Promoter Score” a good measure of Customer Satisfaction?

We are all incessantly being asked, at every turn, to undertake surveys or rate an experience, with the stated objective that as a valued customer we can provide feedback to help improve the experience for us and others in the future. Part of this need for a “pat on the back” from our customers is the fear that our competitors will be receiving more frequent and higher ratings, something I call the Trip Advisor Syndrome. And more often than not the comments that accompany this rating are ignored for the most part as the advice for improvement is not practical or possible, given a combination financial restrictions and entrenched methods of service delivery. Further the number and mix of questions beings asked of the customer make sound results from the customer feedback difficult to evaluate at best which in turn can lead to flawed knowledge being derived from the data.

Customer Service Survey

Over recent months however, DDL Insight, the analysis arm of DDL Group, has seen a rise in the use of the net promoter score,  a methodology quite widely used in the USA, as a measure of rating customer experience. It’s very simple to implement, in fact it consists of asking one simple question and the manner in which this question is asked cannot vary as the would invalidate the outcome of the measure. 

The question asked to obtain the net promoter score is:-

How likely is it that you would recommend our Company to a friend or colleague?

The answer is in the form of scoring from 0 to 10 where 0 means not at all likely and 10 means extremely likely.

The answers to this question are the grouped into three categories:-

  • Promoters. These are customers who scored either 9 or 10
  • Passives. These are customer who scored either 7 or 8
  • Detractors. These are customers who scored between 0 and 6.

To calculate your Net Promoter Score, you take the percentage of customers who are Promoters and subtract the percentage who are Detractors. Simple! You end up with a score between -100% and +100%. A score greater than 0% indicates more customers are wowed by your service than alienated and vice versa. The higher the score the better the overall service.

So what are the advantages of this approach?

  • It is simple, no need for lengthy surveys, no need to ensure leading questions are not asked, no need to worry how quantitative measures will be generated from the combination of questions asked. And its simple to come up with the score.
  • It should improve response levels. It’s quick for the customer to complete and its a question we all understand.
  • It ignores the passives. When we really don’t have strong views, good or bad, in relation to our experience we are likely to score a 7 or 8. We don’t want to upset the supplier by sounding negative but equally we were not vowed by the experience and so would not score a 9 or 10.
  • Over time you can monitor how the score changes. If its going upwards your service is getting better overall, it its going down, your service is deteriorating.
  • You can compare your score with other similar Companies, such as competitors. In the USA it is common for the score to be published, this is a trend that is also growing in the UK. And because the question and method of scoring are identical then comparison against similar Companies with similar customer bases is possible.

It is not a perfect method of measuring satisfaction and indeed this method of measurement does have its critics. It does not measure all aspects of the customer interaction, for example the propensity for loyalty, and the figure is less reliable with small numbers of responses, as with any statistical gathering. However I do believe that the increasing desire for customer feedback will eventually alienate customers and so anything that can keep this simple from the customer perspective will prolong the time frame over which valued information can be derived.

The Resurrection of Direct Mail?

Digital PrintingHaving spent much of the last 15 years forecasting the rise of the email and social media as the primary method of communicating with customers along with the slow death of direct mail, the last few years have seen not just the slowing down of this “inevitable” transition away from paper  but there are also signs of the rise of direct mail once more as a medium of choice for marketing communication. We have seen a number of Clients considering the use of direct mail, replacing campaigns that were previously undertaken electronically. There are a variety of reasons for this, however underlying them all are the difficult economic trading conditions in the UK and the need for direct marketing expenditure to work. Whilst the cost of sending an item through the post can be ten times the cost of sending an email,  it’s the return on investment that is driving this return to paper:-

  • Targeting is the key to successful direct marketing. The quality and penetration of available named email data both for B2B and B2C  activity is substantially poorer than the equivalent mailing address data.
  • It is becoming increasingly difficult for the email to reach the desktop of the desired recipient and not to be deleted without viewing, as spam filters improve and the recipients become wiser to what they want to read from the ever-increasing bombardment of unwanted emails. And with new data protection legislation on the horizon, this situation is only going to get worse.
  • For B2C in particular, emails are slowly being overtaken by the rise of social media, as the method of receiving information electronically. However from a marketing perspective this approach is more suited to the information broadcast rather than the personalised message.
  • Even if the communication is destined to be binned, whether the waste bin or the recycle bin, the paper communication is far more likely to be opened and examined before discarding whereas the email  disappears instantaneously with the delete button. And in those few seconds lies the opportunity for the paper communication to catch the eye and receive more than a cursory glance. Further, the direct mail item is more likely to stay around longer on the recipient’s desk or sideboard than in the email inbox.

So maybe when considering which way to go with your next campaign, you need to look not at the upfront cost of the campaign but at the overall return on your investment. Increasingly, it would appear, direct mail is the preferred choice.