Direct mail targeting: best practice guide

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To uncover the potential that direct mail holds in grabbing attention in today’s digital world, B2B Marketing magazine has put together a best practice guide with hints and tips from a group of experts - including our Head of Data Strategy Matt Hanks.

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Direct mail targeting: best practice guide

  1. 1. Best Practice Guide Published November 2013 b2bmarketing.net Direct Mail
  2. 2. b2bmarketing.net Targeting 3 Best Practice: Infographic © B2B Marketing 2013
  3. 3. SECTION 3 Targeting b2bmarketing.net MATT HANKS HEAD OF DATA STRATEGY THE MARKETING PRACTICE S ome people believe printed direct mail has had its day – that it is an expansive luxury compared to the modern communication channels of email, social media and online demand generation. And in some respects you can understand that argument as a relatively small investment reduces the risk, but it fails to recognise a simple truism – digital communications alone can be rather impersonal and thereby ineffective. What they can lack is cut through, and that is the key quality of any communication activity. We live in a digital world where almost constant interaction with the internet is the norm and it’s not uncommon for businesses to receive over 100 emails per day. In those circumstances can we really be sure our messages both reach and engage with our target audiences in the most meaningful way? I think not. That’s why I believe printed direct mail still has a significant role to play in modern marketing. I’m not suggesting it should always be employed in a standalone fashion, my argument is that printed direct mail can be the most impactful tool in an integrated multi-media campaign, where each carefully coordinated touchpoint supports and reinforces the core message. With less direct mail being employed, just think how much more effective and impactful an intelligently conceived direct mail piece can be, particularly if the competition is looking to communicate ‘smarter’ by just using low cost emails. But as with all marketing communications, the most important task is to define the audience for the product/service at the outset, and ensure that the campaign database is targeted very precisely to reach the appropriate decision makers. Best Practice: Direct Mail © B2B Marketing 2013 3.1 Analysis and insight Nobody wants to spend more than they need on a marketing communications project, particularly if printed direct mail is part of the campaign strategy. A lot of money can be wasted printing and mailing collateral to the wrong people. It is better to send out 500 mailers to the right audience than 10,000 to an undefined universe. A sound targeting strategy has to be backed up by evidence that includes research and data analysis. The post-rationalisation and interpretation of previous campaign activity is also important. And in that spirit don’t ever be afraid to test alternative strategies as part of a marketing campaign – communicating with a ‘potential prospect’ database as part of your main activity. No markets remain static, so exploring all the possibilities can be hugely illuminating if you want to learn as much as you can about your audience. Adopting this policy can unearth some extraordinarily important marketing intelligence that can help you and your client be even more effective in future campaigns. Having access to an existing customer and/or prospect database can be a sensible starting point, as you can derive some useful insights as to which messages have had the greatest impact and which market sectors have performed well in the past. Which in turn can help you predict what might happen in the future. That of course assumes all market variables (price, availability, competitor activity, technological developments, etc) remain unchanged, but that’s never the case. All markets tend to be in a constant state of flux. Therefore, anything your planning department can share with you about what is happening now and might happen in the near future in the chosen market can mean the difference between a moderately successful and a killer campaign. 35
  4. 4. b2bmarketing.net “If your data is not up-to-date, accurate and fit for purpose all the effort, hard work and budget is going to be wasted” 36 Best Practice: Direct Mail © B2B Marketing 2013
  5. 5. SECTION 3 Targeting Digging deeper to find out how your offer/ proposition might resonate with your ‘assumed’ audience and understanding the operating model of your target organisations will add further depth to your planning. You also need a firm understanding of the psyche of the individuals you are targeting: what is their day like? What pressures are they under? What’s on their agenda? What is likely to grab their attention? Are they looking for inspiration, likeminded experts or an ally? Conducting some preliminary development work will prove extremely beneficial in the long run. My usual list of questions is as follows: • Understanding the marketplace – what are the realistic business objectives, products, propositions, how does the competition behave and what are the marketing requirements? • arket sizing and opportunity mapping – M what is the true size of the potential market? Where have the successes been to date? Using external statistics provided by Forrester or the Office of National Statistics, can help you find any gaps that need to be plugged. • Current data analysis – how can we exploit your current data asset to maximise its potential? Reviewing elements such as age, quality, depth, coverage and content is always useful. • Exisiting contact analysis – as well as analysing your data population at account level, we should review the types of contacts we already hold. Finding out where you have had traction in the past, and what a good client/lead looks like can help guide us towards contacts and accounts that have the greatest potential for conversion. • Profiling – having an in-depth view of a specific account or contact can help build a more personal, comprehensive picture of the audience, allowing for a more personalised approach tailored to individuals’ interests, achievements, roles and past affiliations. Best Practice: Direct Mail © B2B Marketing 2013 b2bmarketing.net • Target audience – what job roles and functions do we really need to target? Who are the decision-makers, advocates and influencers? • Legality – do you have the right data to use for direct mail and do you have the permissions to use this data for marketing purposes? 3.2 Data planning Having built my career around marketing data and analysis I am unashamedly biased but, for me, data management plays the critical role in any direct marketing programme. You can have the best offer and the most exciting creative work, but if you don’t send it to the right people it’s going to be a disaster for all concerned. But clients sometimes misunderstand the value of data, especially in terms of time resources and budget allocation. If your data is not up-to-date, accurate and fit for purpose all the effort, hard work and budget is going to be wasted. Consider the following when developing your data approach: 3.2.1 Business landscape Targeting small office or home office (SoHo) SMB or enterprise business sectors can be very different and each present their own peculiar data planning and building challenges. There are over 1.5 million SoHo businesses in the UK, so approaching this audience needs very careful segmentation to focus budget in the right areas. You will only need to find one, maybe two, key contacts, and due to the size of the universe should expect a higher percentage of wastage and returns. B2B data decays at an average of three per cent per month, so if you target 100,000 contacts in any month you can easily expect 3000 returns (more often than not it can be higher, but it depends on the quality of the data you are using). Unless you have a bottomless pit of money, using direct mail to target the entire SoHo base is normally 37
  6. 6. b2bmarketing.net “Contacting 10 contacts in some direct mail campaigns isn’t lazy, it’s smart” 38 Best Practice: Direct Mail © B2B Marketing 2013
  7. 7. b2bmarketing.net SECTION 3 Targeting out of the question. So making sure you have done your research and focus on only those segments with the biggest opportunity is key. When targeting larger businesses with direct mail the emphasis should shift to getting to the right contacts. Don’t limit your targeting opportunities to a single decision-maker. Think big and explore the decision-making unit – the influencers, the coach, the gatekeeper. We have targeted over 10 contacts in some direct mail campaigns. That’s not being lazy, that’s being smart. We have also adopted techniques where we send PAs an initial direct mail piece that ‘pre-empts’ the main communication to the executive they are look after. Of course, in the B2B world we are all familiar with the term high-value direct marketing (HVDM), particularly in ABM campaigns. The temptation is to be as creative as possible to deliver higher impact (and often higher budget) collateral, to let the audience know we care. But making sure the data is 100 per cent bang on for this type of campaign is more than critical; at £100 per contact we can’t afford to be sending HVDM collateral to the incorrect contact. Personally, I’m a firm believer in doing everything possible to make sure the HVDM hits the intended recipient. Sometimes you only have one chance to impress. 3.2.2 Personalisation It is very rare to see B2B direct marketing collateral without any form of personalisation these days. Where once it was exciting and new it has now become the norm. A level of expectation has been set among direct mail recipients. And the steady increase in the use of QR codes to link through to online media is also supporting/reinforcing integrated campaigns. • the data formatted in a way to allow as Is close to 100 per cent delivery as possible? • the names and addresses of the contacts Are you are targeting formatted to a level that will achieve a high delivery rate, and not get thrown in the bin if a job title or name is incorrectly presented? • Balance brand reputation with quality of data – bad personalisation will certainly have a negative impact on your campaign performance. 3.2.3 Segmentation I could write for hours on different segmentation approaches and the vast array of segmentation strategies I have come across, but that would be painful for us both. Your analysis, research and insight should have already helped you with your messaging, and in turn helped you decide how to segment your data. The B2B world will more than likely contain the following: • Customer or prospect • Big or small customers – up-sell and cross-sell? • Drive repeat purchases and/or increase customer value. • Hot or cold prospects? • Sector/vertical • Opportunities in specialist areas? • Growth sector? • Looking to grow in to new markets? • Turnover • Size • Growth/decline account So, asking the following questions about how you want to personalise your direct mail will help shape your strategy: • What level of personalisation are you hoping to deliver through your direct mail? • Special attributes • Contract end dates for specific products. • Geo-demographics • Location (e.g. where is the contact based and will they travel far to an event?) • Does your data support this? Best Practice: Direct Mail © B2B Marketing 2013 39
  8. 8. b2bmarketing.net “If a contact receives the same item multiple times it will demonstrate a lack of intelligence, damaging brand perception” 40 Best Practice: Direct Mail © B2B Marketing 2013
  9. 9. SECTION 3 Targeting 3.3 Data management Direct mail production and distribution relies heavily on data management. If I think back to the start of my career at Brann; we were the biggest mailing house in the UK at the time with some huge clients that sent millions of items through the post each year. During my time there, the business grew from a simple print and production process to offer data bureau, analytics, planning and creative services – the combination of all those disciplines under one roof was a relatively new thing back then. Large volumes of direct mail needed large volumes of data, and in turn huge amounts of data processing power and programming skills just to ensure the letters went out the door on schedule. But technology has changed everything. I would now hazard a guess that all print/mailing houses also offer some form of data management service. However, volumes are much smaller and more targeted and the level of sophistication has increased, so a more intelligent of way of producing and managing direct mail and data is required. Here is a list of direct mail data considerations: • De-duplication – direct mail is expensive so make sure your data is clean. Over and above the costs, if a contact received the same item multiple times it will demonstrate a lack of intelligence and can be damaging to brand perception. • Suppression screening – there are a whole host of suppression files available to B2B marketers to ensure you are not wasting time and money on sending direct mail to incorrect contacts. These include: • Corporate mail prefernce service. • Business suppression file. • Business changes file. • Euro suppression file. • Verification – do you need to verify your current data set and/or acquire build contacts? Best Practice: Direct Mail © B2B Marketing 2013 b2bmarketing.net • Technical considerations – how will you maintain the quality and accuracy of your database? Could direct mail be integrated into your marketing automation programme? What is the customer journey and how does the direct mail support this? And importantly, how will you measure and report ROI from your direct mail activity? • Formatting your data correctly – including name and address shuffling, do all addresses fit on the label/in the window, casing of address elements (town and postcode upper case as best practice). 3.4 Data legislation Legislation is always a hot topic, thanks to the ever increasing amount of data held about us all. The law may be more focused on the world of B2C marketing, but B2B marketers need to be increasingly aware of the rules and regulations around the use of contact data for marketing purposes. When sitting in meetings with client teams I often find myself raising the data security and legislation questions. I guess it is my bag being the data expert, but it does surprise me that marketing plans are often put in place with only a cursory nod to this important consideration. A successful marketing programme is usually a secure and law abiding one – one that takes into account the applicable rules and regulations correctly. There are some hefty fines if you fail to store, secure and manage your data correctly, so it’s important you get it right. Therefore, your direct mail data strategy should include a large section on how to adhere to the rules. In fact, part of the analysis and up-front data planning work should focus on the current data assets, looking at how the data has previously been used, when and how was it collected, and whether it was collected with the relevant optin permissions. If you are acquiring new data then always use a reputable data provider. If you are planning a degree of data capture in 41
  10. 10. b2bmarketing.net “Intricate company structures and constantly changing contacts makes getting to the right decision maker tricky” 42 Best Practice: Direct Mail © B2B Marketing 2013
  11. 11. SECTION 3 Targeting your campaign, or the call to action requires the contact to submit some information, then you will need to consider how this is collected and stored, how you communicate this, and how the marketing permissions should be built into the data-capture processes. However, if applied well, the rules and regulations can help refine and enhance your direct mail campaign. For example, if you are asking the recipient to respond to some kind of form, be that online or offline, then, pre-populating it with some of the contacts information you already have is always appreciated. Not only does it demonstrate a level of sophistication and personalisation on your part, but it allows the recipient to focus on providing the data you actually want to collect. There is also a lot of talk about the introduction of the new EU Cookie law and the impact it might have on direct marketing – particularly for marketing automation (MA) vendors, some of whom rely on cookie-based techniques to collect valuable online behavioural data. I have seen a number of techniques applied, ranging from overt pop-ups asking for permission to apply a cookie, to the issue being covered in the small print of the terms and conditions. As a new piece of legislation, it is still open to interpretation, and until the dust has settled we will struggle to know the best application of it. My gut feel is that it will be somewhere between these two extremes, and certainly MA vendors don’t seem too worried. I read an article recently that stated only 20 per cent of site visitors will opt-in to allowing cookies – and this was seen as a negative point. However, 20 per cent are showing a high level of engagement and it is therefore extremely valuable. 3.5 Tools and techniques When building a data asset it is important to ensure you get it right from the start and then invest time and energy into maintenance to ensure it is kept up-to-date. Apart from the unnecessary cost of marketing to contacts that have left the company (albeit there’s an Best Practice: Direct Mail © B2B Marketing 2013 b2bmarketing.net argument that someone will have replaced them, so it may not be wasted – but I can’t remember ever opening a DM or taking a call meant for someone else) it can also damage your branding. Getting the data right from the get-go will obviously improve your chances of campaign success. Data quality can decay at the rate of three per cent per month, so building a process to a) get your data asset in the best place possible before you get into live campaigning, and b) ensure you have a process to continually refresh and maintain your data, is crucial. The B2B world moves at an incredible pace, so you need a regular process of updating your contacts and applying the appropriate suppressions (CTPS, MPS, contact permissions etc.) to adhere to data protection laws. Having worked with consumer data in the past, the tools and techniques applied are sometimes seen as being more advanced than in the B2B space. While I would agree the sheer volume of data in the B2C world means you need to be clever with your data strategy, it doesn’t really mean it’s more advanced. In the B2B environment we face different challenges and managing data can be more complex. Intricate company structures and constantly changing contacts makes getting to the right decision-maker or influencer very tricky. Techniques such as the single customer or prospect view (which the consumer market do very well) can create group, company, department and influencer views that can all be linked to deliver a valuable data set that can help educate and influence. But this is often difficult, with numerous data sets being held disparately. For example, marketing, finance, and sales all have their own data, which causes fragmentation – a big problem if you want to develop a truly integrated data and marketing strategy that has the best chance of generating leads. To support any direct marketing activity, you need a solid platform on which to store your data. You might use legacy tools, an off the shelf CRM system, something you’ve built internally 43
  12. 12. b2bmarketing.net “Often the person you really want to engage with trusts the PA’s judgement, so will take your content seriously if it’s been allowed through” 44 Best Practice: Direct Mail © B2B Marketing 2013
  13. 13. b2bmarketing.net SECTION 3 Targeting or additional tools that can be integrated to enhance what you already have. Products such as Salesforce and Microsoft Dynamics provide platforms at a reasonable price, giving users the ability to update, maintain and access data in real-time and also provide extensive reporting and integration options. However, you need pretty strict rules and regulations on data input using these types of systems. Experience tells me that if you plan on using your data for direct mail, CRM systems provide challenges and more often that not, a good deal of work is required to format the data for direct mail once the data has been extracted from any system. CRM solutions have been adapted in order to implement a single customer view (SCV) from within, using increasingly intelligent datagathering and integration techniques. Software such as Salesforce is widely used and is continually evolving to integrate with new data collection channels and digital data (Radian6 and Eloqua are now fairly simple to integrate technically). We know that getting to a true SCV is and always will be challenging, but these tools are extremely useful in getting as close as possible to the perfect data set. Employing the right technology and proper planning can significantly reduce the risks involved in improving customer and prospect views. Furthermore, with these CRM database tools being cloud-based, they allow real-time response and interaction with the target audience. Over and above the general data management there are some great tools that allow you to engineer, segment and analyse your data. Products like SAS, SPSS, SmartFocus (now part of Emailvision), and Faststats are a few examples. As for managing data for direct mail in particular, there are products and services from the likes of The Software Bureau that specialises in data processing for mailing and also applying the necessary suppression screening elements. Best Practice: Direct Mail © B2B Marketing 2013 3.6 Getting past the gatekeeper This isn’t much of an issue when targeting the small office/home office, or even SMB audience, but for larger enterprise level organisations getting hold of the most appropriate senior level decision-maker is one of the biggest challenges of all. The contact/targeting strategy is just as important as reaching the individual themselves, as is making sure the data is correct. The C-level strategy (and some D-level) is about befriending the PA, which I touched on earlier. If budget allows, a great way to address this task is to conduct some pre-calling to obtain the relevant PA’s name and then adapting your targeting approach to recognise their gatekeeping role. The PA often acts as the filter, so ‘warming them up’ can certainly help the process. Often the person you really want to engage with trusts the PA’s judgement, so will take your content seriously if it has been allowed through the net. 3.7 Summary • successful targeting strategy uses A a collective/collaborative approach. The insight, data, relevance of the message and stand out creative need to come together to create an experience for the recipient of DM – you want them to pass it on to colleagues to say ‘what a smart bit of marketing’. • is expensive. However, you will get a DM better ROI if you research a defined target audience, source and build the right data to align to this, understand the audiences’ needs and get their attention through compelling, thought-provoking messaging, offers and appropriate creative. • The call-to-action is critical and often where the ROI is won or lost. The call-toaction should offer the recipient something of value they think they will benefit from e.g. a ‘free hour’ of consultancy, which plays to their need to be better informed, go online to download a paper, etc. 45
  14. 14. b2bmarketing.net “Enterprise targeting equals low volume of accounts but is more about the breath of contacts and the clever way of engaging with influencers” 46 Best Practice: Direct Mail © B2B Marketing 2013
  15. 15. SECTION 3 Targeting • Accurate, quality data is crucial. You need to know the DM is going to get to the intended recipient to minimise wastage and to ensure the budget works as hard as possible. Also, if you have created a fantastic DM that will blow the recipient away, but the letter or package is delivered with incorrect name, job titles etc. the immediate reaction can be negative and you run the risk of the DM being discarded. The quality of your data is more than likely to be the first thing a recipient will see, so if this is not right all your targeting, creative and messaging work could be for nothing. b2bmarketing.net • Getting past the gatekeeper. For a C-level strategy it’s often all about befriending the PA. The contact strategy is equally important as reaching the individual themselves, and precalling can often be the brightest thing to do. • Segmentation. Depending on your audience the level of analysis and segmentation required to support your targeting approach varies: SME audience equals lots of volume, so an in-depth understanding of your customers and prospects will shape the segmentation and testing strategy (marketing automation can play a big role here). Enterprise targeting equals low volume of accounts but is more about the breadth of contacts and the clever way of engaging with all of the decision makers and influencers, it’s a more complex approach. Best Practice: Direct Mail © B2B Marketing 2013 47
  16. 16. B2B Marketing Colonial Buildings 59/61 Hatton Garden London EC1N 8LS Tel. +44 (0) 20 7438 1370 Fax +44 (0) 20 7438 1377 info@b2bmarketing.net b2bmarketing.net

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