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The Future of Direct Mail & How to Optimise It Keith Wiser Managing Director – 5 th Dimension.

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Presentation on theme: "The Future of Direct Mail & How to Optimise It Keith Wiser Managing Director – 5 th Dimension."— Presentation transcript:

1 The Future of Direct Mail & How to Optimise It Keith Wiser Managing Director – 5 th Dimension

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8 Part 1 A Critical Review... The Future of Direct Marketing

9 Let me make my position clear... I believe in mail

10 From a recent edition of “Advantage” The World of Web 3.0 Meta Tagging Mi Money (Mobile Wallet) The Grid (Local Social Network) USSD (Unstructured Secondary Supplementary Messaging) The Sacred Space of Social Media Let Your Fingers Do the WWWalking NOT A SINGLE WORD ABOUT DIRECT MAIL

11 From the same issue of “Advantage” THE 7 TH MASS MEDIUM – THE CELL PHONE SA population = 48 million 10 million people in SA currently access the internet via cell phone Expected to increase to 17 million by 2013 SA has 114% SIM card penetration 57 million active SIM cards 37 million unique cell phone users Mobile Adspend projected to be over R2 billion by 2013

12 A few other interesting facts (UK) (2008) Online Advertising overtook TV as the largest advertising medium (23.5%) (2008) Online accounted for 17% of US Adspend ($23,4 billion) There are now more cell phones than radios in the world Vodacom in SA sends 14 million "Please Call Me" messages per month

13 A few more interesting facts Victoria’s Secret has 2,7 million fans on Facebook Starbucks collected 7 million fans in 2 weeks\Earth Day Promotion

14 You must be barking mad...

15 Mail in the USA (Est) Source : USPS – Billions of pieces mailed Down by 9 billion Down by 28 billion

16 Global Mail

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19 You must be TOTALLY barking mad...

20 The question has to be asked... Does direct mail have a future ?

21 “I come not to bury Caesar but to praise him” Mark Anthony – “Julius Caesar” (William Shakespeare)

22 Let’s not write mail off Europe (2007) – 92 billion pieces USA (2009) – 170 billion pieces UK (2009) – Direct mail probably still around 10% of Adspend SA (2010) – Mail actually grew by +- 4%

23 Some other interesting facts about mail The Print Council\Pitney Bowes Survey (2008) 85% claimed that they open and read selected pieces of mail every day 55% reported that greater enjoyment from reading regular mail vs 75% claimed they closely examine their mail for coupons and special offers 40% said they had tried a new product after receiving direct mail 70% stated that they had renewed a business relationship after receiving direct mail

24 “For every action there is an equal and opposite reaction” Isaac Newton

25 In summary, mail is declining BUT it is still an important medium It has specific roles to play

26 Mail will continue to be viable when... Your focus is acquisition You know who you want to talk to You can personalise your content You have a lot to say The value proposition is reasonably high You need a considered decision You want to cut through the clutter & noise You use it in conjunction with other media

27 Part 2 Optimising Direct Mail

28 Optimising response... the essence of direct marketing

29 Inertia kills response....

30 Time is not on your side Jim Rosenfield (1986) According to Any Owen (2009) this is now 5,5 seconds The outer envelope receives between 1,5 & 4,0 seconds

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32 “Scientific Advertising” Claude Hopkins (1923)

33 “Ads are not written to entertain.” “Do nothing to merely interest, amuse or attract.” “The reason for the non-success in advertising is trying to sell people what they don’t want.”

34 “The purpose of the headline (or Johnson Box or whatever) is to isolate the people you can interest” “The entire return from an ad depends on attracting the right sort of readers”

35 “The More You Tell the More You Sell” “Long copy does sell, as long as you are talking to the right person” “People don’t quit habits without good reasons”

36 “We do not admire salesmen who talk in loud voices. People read all they care to read in 8 point type.”

37 The 3 Core Elements in Direct Marketing

38 Who you talk to What you say How you say it THE TARGET AUDIENCE CONTENT THE OFFER THE PROPOSITION CREATIVE COPY LAYOUT\DESIGN

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41 Who you talk to... segmentation Demographic Psychographic Life stage Lifestyle Transactional Geo Demographic Sexual Orientation

42 Betting styles – horse racing CLUSTER HIGH MEDIUM LOW MODIFIER COMPLEXITY COMPLEXITY COMPLEXITY BETS Complex Hedgers 88% - 96% 2% - 8% 1% - 4% 70% - 96% Big Spenders 74% - 85% 4% - 12% 10% - 15% 67% - 83% Prudent Punters 25% - 31% 10% - 16% 53% - 66% 54% - 63% Middle Roaders 16% - 25% 51% - 65% 19% - 28% 72% - 80% Simple Winners 4% - 10% 1% - 6% 84% - 95% 3% - 13%

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45 Database Overview Value /Share of Wallet Analysis VALUEVALUE SHARE OF WALLET HVHL Retain HVLL Increase value HVNL Convert MVLL Cross sell MVHL Up-sell LVHL Upsell MVNL Convert LVLL Ignore LVNL Ignore No LoyaltyLow Loyalty High Loyalty High Value Medium Value Low Value

46 N1M1M2

47 Distribution of potential opportunities

48 Value Segmentation 48 We have identified 7 value segments for Edgars according to visit frequency and spend… Average Transaction Value Average Visits per Account R0 – R250R251 – R435R436 – R734R One-off: Accounts: 29% Turnover: 10% Spend per account: R512 Groups: 2 Visits: 1 Basket size: R512 2 – 3 Infrequent: Accounts: 28% Turnover: 15% Spend per account: R800 Groups: 3 Visits: 2 Basket size: R330 Occasional Large: Accounts 12% Turnover: 23% Spend per account: R2,784 4 – 8 Occasional Small: Accounts: 19% Turnover: 18% Spend per account: R1,378 Groups: 5 Visits: 5 Basket size: R253 Groups: 5 Visits: 4 Basket size: R694 Loyal Large: Accounts: 4% Turnover: 16% Spend per account: R5, Loyal Small: Accounts: 7% Turnover: 15% Spend per account: R3,141 Groups: 8 Visits: 13 Basket size: R237 Groups: 7 Visits: 8 Basket size: R727 VIP: Accounts: 0.4% (9,036) Turnover: 3% Spend per account: R11,143 Groups: 9 Visits: 12 Basket size: R961 One-off Infrequent Occasional Small Occasional Large Loyal Small Loyal Large VIP

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50 What you say

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52 Carnegie Mellon University Part 1 Group A Factual based appeal : - 3 million starving - 42% drop in maize crop in Malawi - 4 million Angolans forced to flee their homes Average Donation : $1.14 Group B Emotion based appeal - 7 year old girl called Rokia - Orphaned - Forced to leave her home in Mali Average Donation : $2.38

53 Carnegie Mellon University Part 2 Group A Emotion based appeal - 7 year old girl called Rokia - Orphaned - Forced to leave her home in Mali Asked to solve a maths problem Average Donation : $1.26 Group B Emotion based appeal - 7 year old girl called Rokia - Orphaned - Forced to leave her home in Mali Think about the word baby Average Donation : $2.34

54 Little used by direct marketers... research

55 Kids Come First... Shopping Shopping for kids = Spoiling my kids Shopping for myself = Purpose/Focused I love my kids and want to give them the best My children are brand-conscious I shop mostly on credit for my children I am an emotional and functional shopper when I shop for my kids I really only buy when I need things I am not worried about the brands I wear, my style is smart-casual I shop mostly on cash for myself – price is an important consideration for me I am a functional shopper = comfort and fit is important “I just want my kids to look good all the time.” (JHB) “You go to the shop especially for you, to buy you something today and you end up buying for my daughter.” (CT) “I buy one item of clothing like if I want a pair of trousers, then that is what I am going to buy and if I need shirts, I will go and buy shirts.” (JHB) “I don’t really go into brands. They are too expensive. I just want to buy something, it doesn’t matter what brand it is.” (CT)

56 All About Him... Shopping Shopping = Image enhancement (emotional) I am an emotional shopper – I have to have the right look My image and the clothes/brands I wear say a lot about me I express my identity through style My appearance needs to impress On credit I can afford brands, on cash I pay for forfeited brands I love active wear and wear it as casual clothes – “it makes me look good” Note: CT group was more functional and value-driven shoppers (comfort, size and fit is more important) “I bought this Apple t-shirt from Edgars that is sort of yellow. I bought that in late 2009 and still to this day it is still there at Edgars and everyone is wearing it in my street. It is more like a uniform now.” (JHB) “I have stopped buying from Edgars since I got that tekkie I was talking about because after I got that tekkie it was strong and lasting long but now everyone else has it.” (JHB)

57 How you say it

58 Creative Channel

59 FREE download...

60 A few hints... copy Make the most of the envelope Never forget the Johnson Box Create a follow on headline Use personalisation Ensure convection Write for standard 8 Benefits not features YOU not I Keep sentences short Make the required action\s crystal clear Create a sense of urgency Always include a PS

61 A few hints... layout Use serif typefaces Use wide margins Don’t be a afraid of white space Try Drop Caps Consider sub-heads Use ticks rather than bullets Be careful with the use of full stops Indent paragraphs Right hand ragged right Use underlines, bold & italics... BUT sparingly

62 Some other stuff

63 Eye tracking

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70 Eye Tracking ELIPSES are more attracting than SQUARES\OBLONGS PORTRAIT is more attracting the LANDSCAPE GROUPS are more attracting than INDIVIDUALS COLOUR is more attracting than BLACK & WHITE CLOSE UPS are more attracting than LONG SHOTS BIG PICTURES are more attracting than SMALL PICTURES EYE CONTACT is more attracting than NO EYE CONTACT

71 Other lessons from Prof Siegfried Vogele People read the envelope first Spend less than 4 seconds The back of the envelope receives longer attention than the front Many readers go from the address to the end of the letter to see who signed it 9 out of 10 readers go from there they go the PS. (The PS is in fact the start of the letter) In between they will skip over any highlighted points From the PS they will go back to the highlighted sections

72 Other lessons from Prof Siegfried Vogele Difficult to read signatures result in negative body language Before any words are read the eyes will be attracted to illustrations\photographs Put a large picture at the top of the letter If using more than one picture, put the largest at the top Use separate response devices. They are 3 times more effective Preprint the name & address on the response device

73 My final thought... be brave

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75 Client : Womans Aid Organisation (Malaysia)

76 Client : Fuji Xerox (Australia)

77 Client : Evangelical Church (Germany)

78 Client : Society of Hesse for the Blind (Germany)

79 Client : NSPCC (UK)

80 Client : Virgin Holidays (UK)

81 Client : Tesco (UK)

82 Client : First Direct (UK)

83 Thank you for listening


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