Defining Direct Mail

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Analysis of the media market. Defines the attributes of 'direct' channels. Critques Postcomm's recent report on the Direct Mail market and argues the case for Direct Mail playing an important role in …

Analysis of the media market. Defines the attributes of 'direct' channels. Critques Postcomm's recent report on the Direct Mail market and argues the case for Direct Mail playing an important role in the channel mix.(Please excuse the formatting on slides 4 and 5 - Slideshare added lines to the diagram for some reason)

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  • 1. Defining Direct Mail By Warren Paull 01.07.11
  • 2.
    • Direct Mail competes in the ‘decision’ market within the ‘advertising’ sector.
    • This can be described as including all ‘personalised marketing communications’, where ‘personalisation’ is defined by the ability to target (and in turn customise) via (but not limited to) non-modelled data (namely behavioural and/or consumer-volunteered data).
    • This is a growing market and although the channel suffers from weaknesses in some areas, it has a unique role to play in persuading the consumer.
    • This unique role is derived from its ability to simultaneously leverage the rational and emotional decision drivers in the recipient, which in turns makes for an efficient persuasion mechanism.
    Summary
  • 3. The Market
  • 4. Business Communications Cost (Transactional) Investment (Marketing Communications) Need: Primarily Awareness Need: Primarily Decision Press Inserts Television Radio Outdoor Door Drop Cinema Experiential In-Game Internet Search Direct Mail Telemarketing SMS/MMS Mobile Apps (future) Field Marketing Digital Publishing (future) Email Social Media Internet Display (future)
  • 5. Business Communications Cost (Transactional) Investment (Marketing Communications) Need: Primarily Awareness Need: Primarily Decision Press Inserts Television Radio Outdoor Door Drop Cinema Experiential In-Game Internet Search Direct Mail Telemarketing SMS/MMS Mobile Apps (future) Field Marketing Digital Publishing (future) Email Social Media Internet Display (future)
  • 6. Product Attributes
  • 7. Decision Channels Product Performance Product Features Targeting Measurability Bandwidth Interactivity Cost Customer Support Image Access Data Speed of Comms Deployment Speed of Response Ease of Response Bandwidth of Response Granularity Time Taken to Generate Ease of Collection Speed of Collection Ease of Interpretation Speed of Interpretation Return on Investment Risk of Investment Marcomms Ease of Purchase Speed of Purchase Access to Order Mechanism Knowledge Needed to Order Reliability of Order Mechanism Payment Methods Accepted Time to Complete Order Process Time for Order to be Confirmed Minimum Order Minimum Outlay per Order Set-up Cost Behavioural Consumer-Disclosed Product Positioning Modelled Recent Granular Recent Granular Recent Monetary Cost of Responding Ability to ‘Mass Customise’ Comms Contact Channels Expertise Speed of Solution PR & WOM Content Channel Frequency Product Price Place Promotion Number Available Speed of Use Ease of Use Knowledge of Product Knowledge of Customer Time Period Operational Monetary Cost Where & Who Content Frequency Communicative Leverage Emotional Leverage Visual Information Audible Information Aromatic Information Taste Information Tactile Information Consumer Channel Preference Channel Environment Granular Visual Information Audible Information Aromatic Information Taste Information Tactile Information
  • 8. The Detail
  • 9. In defining the market for Direct Mail, Postcomm first segments the business communications market, isolating the advertising sector [1] . I agree. We first isolate the business communications market. We then divide this into ‘cost’ and ‘investment’; where ‘cost’ is transactional communications and ‘investment’ is marketing communications. I have presumed that it is these ‘marketing communications’ which Postcomm has termed ‘advertising’. Postcomm then segments ‘advertising’ into ‘brand’ and ‘direct response’ activity [2] . It is my view that this is an unhelpful definition, based on somewhat outdated notions of ‘brand’ and ‘direct’ channels, which were developed when the ‘advertising’ sector was very different from today (i.e., there has since been proliferation/fragmentation of media, along with technological developments which blur the aforementioned notions of ‘brand’ and ‘direct’, leading to the convergence of tactics). I prefer instead to segment on the basis of customer need. I submit that the ‘advertising’ market can in fact be segmented on the basis of whether the advertiser’s objective/metric is primarily ‘awareness’ (i.e., ‘know me, like me’ - includes attitudinal objectives, as one cannot be aware of something without also ‘feeling’ something about it (even if this is ‘indifference’)) or ‘persuasion’ ( i.e., persuading the consumer to make a decision – to perform an action, or to not perform an action (e.g., loyalty – do not buy someone else’s product)). Indeed, my view is supported by Postcomm later in their report, where they talk of the convergence of brand and response [3] [4] . Postcomm then characterise the market for Direct Mail as being defined by the ability to contact a named individual (with media capable of this acting as potential competitors to Direct Mail) [5] . My view is that the only useful way to segment a market is based upon customer need. I do not accept that the fundamental customer need is to ‘contact a named individual’. I contend that this is in fact a mere ‘by-product’ of the fundamental customer need that is being pursued. The customer need is in fact ‘to induce a decision’ . The mechanism employed to achieve this is persuasion, and persuasion is of course best achieved via customising the communication/persuasion as much as possible to its recipient (which is in turn fed by targeting). An individual’s name may or may not be deemed an important part of this personalisation but, in any case, is only ever one element – the fundamental driver is customising the persuasion to the individual in order to most efficiently induce a decision . [1] The building blocks for a sustainable postal service, Analysis of Markets (March 2011) – 2.63 [2] Ibid. – 2.64 [3] Ibid. – 2.81 [4] This analysis is further supported by ‘Regulatory and economic challenges in the postal and delivery sector’ By Michael A. Crew, Paul R. Kleindorfer – Chapter 17 [5] Ibid. – 2.115
  • 10. I wonder whether that because an individual’s name was in the past primarily/the only way in which to customise a marketing communication to a targeted individual, Postcomm has overlooked the fundamental customer need that was driving this, concentrating instead on what was previously the only visible evidence of this need. The need is ‘decision’ which is achieved via customisation/personalisation – the consumer’s name may or may not be part of this customisation/persuasion. When we look at all the channels available in ‘advertising’ and map their attributes in relation to the advertisers’ need, we see that there is in fact only one unique capability common which separates some channels from others. This is the ability to target via non-modelled data . To clarify; this is the ability to target using an individual’s behavioural data and/or the individual’s consumer-volunteered data (modelled data may also be employed of course in addition to these elements). Of course, there will be examples of campaigns that have, for example, employed only modelled data for a Direct Mail campaign. However, there are always examples of bad practice (e.g., this is akin to the one or two factories that probably have carpet put down on the shop floor instead of concrete flooring – they’re just pursuing the fulfilment of their need/objective badly, either because of lack of knowledge or lack of capability – it is not an accurate reflection of the need itself ). When we examine the customer need – to induce decision – and in turn the elements which feed this (customisation/personalisation fed by targeting) and then in turn the common characteristics of channels offering this to customers; we then see the ability to target using non-modelled data defines the market for decision . Therefore, it is my view that Direct Mail operates in the ‘decision’ market, competing against other ‘personalised marketing communications’ channels, where ‘personalised’ is defined as the ability to target the consumer via non-modelled data.
  • 11.
    • Postcomm goes on to list what they see Direct Mail’s competitors as being (in order of closest substitute), based on the premise that the market is defined by the ability to contact a named individual [1] :
    • Direct Mail
    • Internet
    • Email
    • Telemarketing
    • SMS
    • Door Drop
    • Following my view that the market is in fact defined by the ability to target via non-modelled data, I conclude Direct Mail’s competitors to be:
    • Paid Search
    • Direct Mail
    • Email
    • Telemarketing
    • SMS/MMS
    • Field marketing
    • Social Networks (emerging competitor)
    • Internet Display (emerging competitor)
    • Digital Publishing (emerging competitor)
    • Mobile applications (emerging competitor)
    • Postcomm uses the following to score the substitutability of other channels [2] :
    • Tangible
    • Visual
    • Personal
    • Targeted
    • Ease of response via channel
    • I however, based on the premise that decision is the key objective and that this is driven by personalisation, which is in turn fed by behavioural and consumer-disclosed data, believe the following are more appropriate:
    • Targeting
    • Complex messaging (‘degree of persuasion possible’)
    • Interactivity
    • Measurability
    [1] The building blocks for a sustainable postal service, Analysis of Markets (March 2011) – 2.117 [2] Ibid. [3] The building blocks for a sustainable postal service, Analysis of Markets (March 2011) – 2.294
  • 12.
    • Postcomm concludes that Direct Mail’s key differentiators are therefore [3] ;
    • Physical delivery
    • Targeting of named individuals
    • I disagree with Postcomm strongly on this point. My view is that physical delivery is not a customer need per se, therefore is not an acceptable characteristic to use in differentiating Direct Mail from other channels. Additionally, as previously set out, the targeting of named individuals is not a customer need either, so is also an invalid characteristic to use for this purpose.
    • However, I do conclude that Direct Mail does have key differentiating factors as compared to other ‘decision’ channels.
    • The differentiating characteristic of Direct Mail is its ability to combine complex messaging with emotional stimulation. Or to put it another way – it leverages both the rational and the emotional decision drivers.
    • To explain, in common with many competitor channels, Direct Mail is very capable of complex messaging (as supported by Postcomm’s report). Also, like some competitor channels, it also has the ability to connect with the customer on an emotional level (via its tangibility/physical delivery), in much the same way as many traditionally perceived ‘brand’ (‘awareness’) channels do. However, by combining complex messaging with the emotional, or the ‘non-rational’ element of the decision process, Direct Mail offers a very powerful ‘decision’ mechanism.
    • It achieves rational leverage via its capability for long-form copywriting, images and permanent nature of its physicality (i.e., it can be retained by the consumer for consideration, as opposed to the transient nature of many other media). It achieves emotional leverage by virtue of the consumer’s channel associations (the consumer’s emotional connection with the physical mailbox, which persists despite (or perhaps because of) a switch to digital communication) and its bandwidth (i.e., in addition to the common capacity to communicate via visual and audible information, it is also capable of communicating tactile, audible, aromatic and taste information).
    • Conclusion
    • Direct Mail competes in the ‘decision’ market within the ‘advertising’ sector. This can be described as including all ‘personalised marketing communications’, where ‘personalisation’ is defined by the ability to target (and in turn customise) via (but not limited to) non-modelled data (namely behavioural and/or consumer-disclosed data). This is a growing market and although the channel suffers from weaknesses in some areas, it has a unique role to play in persuading the consumer. This unique role is derived from its ability to simultaneously leverage the rational and emotional decision drivers in the recipient, which in turns makes for an efficient persuasion mechanism.