Direct marketing has earned the reputation of being at the down-and-dirty end of marketing. It’s a world of fliers, junk mail, personalised letters with lots of underlining, envelopes with photographs or tokens inside to stimulate the ‘giving muscle’ and a world of call centres in India bothering you on Sunday afternoon about some alleged problem you might have with your heating bill. That’s the bad news.
The good news is we are trading direct more and more and the skills in this business are improving.
How direct marketing works
Direct marketing is about directly marketing to people on a one-to-one basis. It depends on creating and being able to process data so you can personalise your messaging to your audience in the most effective and economic way. At its simplest, direct marketing involves sending people coupons with offers (as Direct Line do), sending letters, doing telesales, and at its most sophisticated managing e-commerce programmes through web sites (as do Tesco or Amazon). Direct marketing first became highly favoured by clients in the 1980s because it is so clearly measurable – you spend ‘x’ and get sales of ‘y’, so your return on investment is easy to work out.
QED. Marketing is maths.
What has changed?
The Godfather of direct marketing is Stan Rapp, founder of Rapp and Collins (where he was CEO for 23 years) and now of Engauge, an ‘iDirect’ agency. Stan was the writer of the seminal book on direct marketing – Maxi-Marketing – published in the later ’80s. At the ADMA Conference in Sydney, Australia in August 2010, aged 85, he was still giving it some about where direct marketing is today.
‘It’s interactive, integrated, informed, insightful, individualised and innovative.’
You’re incredible, Stan, incredible.
This is what I love about the Americans – they never stop. So the pioneering force in 1980s marketing (direct marketing) joins up with the new kid on the block in 2008 (digital marketing) and now, in 2011, ‘iDirect Marketing’ is at the core of the marketing revolution. Or is it? Not quite, but Stan as ever is on the button about using and not being used by technology. He says this:
‘Marketing is the total process for efficiently and effectively moving goods and services from producer to consumer. Digital marketing is as nonsensical as calling what happened in the 20th century ‘analogue marketing’. Technology alone is not the best descriptive for any marketing approach.’
When he was young (a mere 61-year-old), Stan observed in his book, Maxi-Marketing, the disintegration of homogeneous consumer groups and the remorseless progress from mass marketing to segmented marketing to niche marketing to one-to-one marketing. And the cheap tools to reach small groups or individuals. Today, accessing that information is virtually free.
He also said
‘The fascination with “creative” advertising is giving way to a concern for accountability and responsiveness.’
I couldn’t disagree more.
A brilliant idea well communicated just once will always beat a deluge of junk mail.
The reason direct marketing hasn’t been a bigger hit is its apparent determination to produce horrid and insensitive marketing pieces. Its fixation on the numbers has made it very left-brained and poor at reading the human psyche. Neither maths, nor drip-drip persistence, nor formulae will ever outdo a brilliant creative idea. And the good news in the 21st century is that the creatively discerning consumer and customer is king and that isn’t going to change.
The customer is king
We are in a new phase of marketing that is virtually ‘customised’. So when you order your new Audi or BMW it is customised to your order and then made. You can actually design your own Nike shoe online.
Direct marketing has a new opportunity. The ultimate consequence is interesting. It means if you have one million different customers you could (in theory) have one million different products, but you won’t keep them in stock, you’ll only make them to order.
Modern business can be what business in the 20th century could only dream about. This is beyond à la carte. We’ve gone from ‘Any customer can have a car painted any colour that he wants so long as it is black’ (Henry Ford about the Model T in 1909) to ‘You name it, you’ve got it’ (100 years later). And one of the key drivers to customisation has been direct marketing, because it allows one-to-one conversations.
Brilliant direct marketing means doing it better
Imagine a world where direct marketing was always witty, fresh and exciting. Imagine briefing your direct marketing people to produce material that was riveting, not just efficient. Remember, this is no longer megaphone country; this is quite an intimate one-to-one conversation. Imagine having a drink with a friend: telling jokes; telling stories; not talking too loudly; not showing off and selling stuff but giving the person you are talking to the chance to talk back to you.
Treat the consumer as a person you like, would like to know better and want to talk with (‘with’, not ‘to’ or ‘at’).
So is this soft sell? Softer – yes – and more in tune with what we know people want. Be persistent, of course, but sensitive in talking with your customers. The new way forward is in talking to about them new things. And not boringly telling them the same thing.
Brilliant direct marketing means being a data hound
I’m hugely impressed by direct marketer logistics and disappointed by the apparent lack of use of the data they must have. It’s strange, but that seems to suggest they aren’t terribly interested in their customers.
It was Duncan Watts of Yahoo Research who said in the second McKinsey Quarterly of 2011: ‘Marketing is going to become a much more science-driven activity.’
That might be true at Yahoo but direct marketing stars such as Tesco don’t engage me with intelligent conversation, although I’m a fairly regular shopper. Virgin can vary between brilliant and treating me like a stranger they pass in the street and fail to recognise. Others deal with complaints fantastically – too many to mention – so you’d be prepared to buy old socks from them but then they ignore you.
Don’t just acquire data; analyse what you have and act on it.
I think the trouble with science is it needs hard work, great process and intelligent users. So Duncan Watts is right in principle. In practice I suspect there are vaults of unexamined data files and missed opportunities and that direct marketing has not fully grown up to deal with this.
- Buying books in the small hours. It’s midnight or beyond. Everyone’s asleep. I’m sitting at my PC clearing up emails. I suddenly remember the name of a book recommended to me – Alpha Dogs by James Harding – I must have it. On to Amazon. Ho, ho … £7 off. And … £100 and a pile of books later I press ‘place order’ and two days later the books I ordered arrive.
This is the best thing ever. They even gift-wrap the Christmas presents I send without my having to touch them myself. Amazon is a customer-service triumph and very impressive in every respect. - Bose make the best hi-fi I know, with a great marketing presence. They constantly mail me and do it properly. They have their top-of-the-range gear in the best shops. They have a trophy outlet in Regent’s Street. Bose are the business.
- The best material and attitude of all is the Italian organic food company Fattoria La Vialli. Their brochures are yummy and I feel guilty if I don’t buy stuff. ‘A presto’ (see you soon), they write, and I feel part of their family. They are wonderful.
- Charles Tyrwhitt sell great shirts and excitingly bright ties. They send out new catalogues all the time. It’s a bit like having a well-dressed lodger in the house. Their tone of voice is relaxed and casual. Most of all I love Charles Tyrwhitt Wheeler’s philosophy: ‘I want to be the best shirt-maker in the world.’
- The new world of the middle class. The women I know all shop online and widely:
- The scale of their shopping has widened in the last five years from about five suppliers to around 20.
- The top of the list are the White Company, Pure and Woolovers, but the efficiency and quality of service are generally good.
- The same trend has happened with charities – the number of charities given to has risen from three to 10. But many are marred by poor, old-fashioned copy and ghastly enclosures such as 12p stuck to a piece of sellotape or a pair of baby’s socks.
- The persistence and insolence of call-centre staff are terrible. My own experiences have led me to role reverse:
Q: ‘Is Mr Hall there?’
Me: ‘Hallo, this is Action Surveys – thanks for calling so promptly: how many seats are there in your contact centre?’
Q: ‘What? Who? Er … 350.’
Me: ‘Good, thanks, and your location and the gender mix of your staff?’
This goes on until I ask:
Me: ‘And do you like your job?’ … to be greeted with …
Q: Sobbing … ‘No, I bloody hate it’ … (and out comes a life story).
That (as they say) will teach me.
Be generous. Be kinder to your converts and to your existing consumers than to those you are trying to convert.
Why direct marketing can work
Direct marketing rightly finds favour because you can actually ‘gauge’ how it is working. This is marketing that accountants like.
You can target consumers very specifically. Modern technology allows us to slice and dice data so we can build hugely complex but useful consumer profiles and models. This enables us, in theory, to spend our money much more effectively, only talking to the people we want to talk to and saying to each of them the sort of things they want to hear.
Direct marketing, as we can see in the alliance of direct and digital (iDirect), can be a key component in integrated marketing. But the real key is getting closer and closer to your customer.
Creativity sells. The trouble is the people who do direct marketing tend not to be focused on the quality of the creativity in their messaging, which is often dull because they are more into the maths of the subject than the fun of seduction. Put wit, freshness and vitality into the communication and something special could emerge.
Just because what you do can be measured doesn’t mean you have to be dull. As Einstein said, ‘Not everything that can be counted counts and not everything that counts can be counted.’
The key rules of direct marketing
- Your database is your power base. It defines everything you need to know about your customer (their purchasing behaviour, their frequency of purchase, how much they spend and so on).
- Do the maths and you’ll understand the general arithmetic of direct marketing: 93 per cent of letters get no response and 40 per cent of all letters don’t even get looked at, let alone read, and go straight in the bin. So you have to create a lot of activity to make a few sales: 1000 letters might get 70 responses, which might convert to 7 sales in the very end. The name of the game is to improve the maths by a mix of better material, better targeting, better offers, better follow-up, etc.
- This is a long game. Marketing today is about building relationships. The term ‘lifetime customer’ is about someone who spends £20 a month with you and who could/should, therefore, spend nearly £10,000 over 40 years. The intimacy of the narrowcast direct-marketing relationship enables you to achieve what a broadcast medium can’t.
- Become a flexible measuring machine. Measure the effect of every ad, of every activity, study the effect of everything you do. Discard what doesn’t work. Retain what does.
- It’s only called ‘junk mail’ because the content usually is junk. As ever, be true to your brand. The materials produced by Johnny Boden, Charles Tyrwhitt, the Wine Society and the White Company are fabulous.
- Getting started means you need to talk to experts. Always talk to experts, otherwise you’ll end up creating a square wheel. Contact the Direct Marketing Association (http://www.dma.org.uk/) or the Institute of Direct Marketing (www.idm.com).
- Listening to experts is always smart. Read Sales Letters that Sell by Drayton Bird, New Maxi-Marketing by Stan Rapp, Secrets of Successful Direct Mail by Richard Benson, Profitable Direct Marketing by Jim Kobs and, from the land down under where even violets don’t shrink, Direct Marketing Made Easy by Malcolm Auld.
- Decide on your tone of voice. This is you, not your agency, talking, whether in print or via a call centre to your customers and prospects. This is your brand, not their brand. Be you. Be in love with what you are marketing. Insist this tone of voice is consistent.
- We all do direct marketing all the time. In the emails we send. In the letters we write. In the phone calls we make. It’s time to reflect on how we can all make a more telling impression. For instance, have you thought of measuring how effective you are? What makes people stop, look and smile is where you can make a difference and stand out from the rest.