John griffithsmktgindirect

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Starting with my first experience of direct marketing managing my own band (of brothers!) and explaining why direct marketing may be expensive but almost always makes you money with reference to award winning DM campaigns from round the world. Given at the inaugural Romania in Direct event - called My kingdom for a horse - that explains the predominance of horse imagery!

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  • Ad planner working with my head spending other peoples money
    My first introduction to Direct Mail
    Had to spend my own working with my gut – advertising uncertain PR was fun Direct marketing I made money and knew exactly how much money I made for what I spent.
    Explain mechanic of cassette boxes – how annoying – voucher for redemption. Orders from the first mailing covered the entire cost of recording the album
    And a third party ‘rented’ the list in effect paying for the mailing
  • Within a year got a job in a DM agency – wouldn’t have gone there otherwise – smartest job move I ever made. At this time only advertising agencies featured in Campaign magazine – moving to a DM agency from advertising was considered a career grave!
    I moved from a business where the gross margin was around 18% and falling to a business which was double that.
    Agencies USP was that it understood brand building as well as being a DM agency – clients queued up to give work to the agency
  • John griffithsmktgindirect

    1. 1. Back to basics – Direct Marketing that drives business John Griffiths Oct 21st
    2. 2. Direct Marketing that drives business
    3. 3. DM (because it makes me money!!)
    4. 4. How I discovered Direct Marketing
    5. 5. Advertising strategist by day..
    6. 6. and then I had to manage a band
    7. 7. At first the fans made all the merchandise – tapes, posters even T shirts
    8. 8. But then we started to produce our own
    9. 9. Advertising worried me (because I never knew if it had worked and it was so expensive!)
    10. 10. I loved PR because it was fun, it was free and journalists love something unusual
    11. 11. I loved Direct Mail because I always knew what it cost me – and it always made me money the fan mailing list was our most valuable asset
    12. 12. Once I started measuring I noticed that at gigs 10% of the audience bought albums
    13. 13. Doing business from the gut
    14. 14. Satisfied Mailing Is there anything as annoying as a spare cover with no music or case?
    15. 15. Results of the Satisfied Mailing     16% response Revenue paid for the all production and duplication costs of the new album Postage costs covered by 3rd party who wanted access to our mailing list! Every sale afterwards was pure profit
    16. 16. What I learned      The power of targeting – everyone on the mailing list was a potential buyer The power of measuring – I knew how much to spend and risk I wasn’t just communicating I was selling Leveraging existing low cost assets – the mailing list, lots of spare tape covers – I started with a budget of zero! Clear branding helps – couldn’t have come from any one else
    17. 17. Don’t do this!      NO targeting – I don’t buy wheels! Clearly didn’t profile by company type No personalisation No offer No brand distinctive
    18. 18. 1 year later I was offered a job in a direct marketing agency Which combined direct marketing with brand building We couldn’t get clients quick enough
    19. 19. Direct Marketing is NOT an Ad in an envelope!
    20. 20. Direct Marketing ≠ Advertising    In my role as a planner I have to add value to the agency’s product Advertising: value = the power of the creative idea Direct Marketing: value = targeting + the ability to generate response
    21. 21. Which gives you better response?  Send great creative to the wrong target group OR  Send terrible creative to the right target group
    22. 22. Contribution to response Tact ical 15% Target ing 40% Creat ive 20% Of f er 25% Source: Direct Marketing Association
    23. 23. Correct Targeting before everything else      Which is why we don’t mail just anybody Need to know how the list was recruited and how often it is mailed Lists must be clean and cleaned regularly If there is an offer, then it too must be relevant Creative is only worth investing in if the targeting is right
    24. 24. The right audience and the right offer! Condoms for horses!!
    25. 25. from the Society for the Protection of Equine Morality SPEM
    26. 26. The client: Haunui Stud Farm    SPEM: Mails 200 horse breeders warning them of the ‘extreme fertility’ of Haunui’s ‘hot blooded young males’ includes 2 free horse condoms Followup mailing from Haunui apologises, admitting the stallions are indeed very fertile – free service offered with a booking! 112 bookings – 1056% ROI return on investment and lots of word of mouth about stallions, fertility and LARGE condoms! Agency: AIM Proximity New Zealand
    27. 27. What makes Direct Marketing different? 1. 2. 3. 4. 5. DM costs more DM is more complicated DM is more controllable DM and the internet InDirect Marketing
    28. 28. Direct Marketing costs more     Direct Marketing consistently costs more per head than any other communications medium Henry Winterman needed to recruit cigar smokers before advertising and prospecting activity was banned so it could do loyalty activity with mailing list and local retailers Ran a test to find the most efficient channel for recruiting names, using money off vouchers in DM and 3rd party mailings. Also using press ads offering free pack of cigars if you sent your name and address! Trying only to give 1 pack of cigars away per name – direct mail the only way to control multiple redemptions
    29. 29. Which channel should Henry Wintermans use? Third Party mailing £18,000 Direct mail Total cost Off the page Advertising £13,000 Acquisitions 940 2,800 3,150 £3.17 £3.02 £6.81 Net cost per Acq Less orig £26,000 DM test: Grey Integrated
    30. 30. Direct Mail the most expensive and the most efficient Third Party stuffer £81,000 Direct mail Total cost Off the page Advertising £81,000 Acquisitions 26,000 27,000 12,000 £3.17 £3.02 £6.81 25.5 million 26.7 million 119,000 Net cost per Acq Less orig Total Audience Required £81,000
    31. 31. Direct Marketing is more complicated    Takes more time More people needed to manage Because you aren’t renting someone else’s medium or communication channel. You are creating a channel, using it, disassembling it and measuring how it performed – that’s why it costs so much more per person reached great Direct Marketing manages the complexity and makes it look simple
    32. 32. How to get drinkers to take taxis home instead of driving?    7 Leisures Group largest chain of nightclubs and pubs in Bahrein wants to reduce drunk driving Bluejack drinkers’ mobiles as they are leaving to get them to think twice Result: measurable increase in callout of Radio Taxis within 2 weeks Agency: JWT Bahrein
    33. 33. Direct Response posters to make the Government take action    NGO Women against violence creating public awareness by getting public to do something – sign a petition to the Malaysian government Low budget high impact posters put up in shopping malls- take back the abusive words by removing them and signing them as a petition to promote better government support 58% completion of the yellow notes – massive publicity Agency: ARC Malaysia
    34. 34. Take back your words – petition on sticky Postit notes
    35. 35. Direct Marketing is more controllable        The additional cost gives you control The ability to test small quantities – YOU CAN’T DO THIS WITH ADVERTISING Tone of voice can change between communications You can test variant offers, you can test different lists you can test different copy You can send different offers to loyal customers and lapsed customers, or people who live further away from the store You can send a sequence of communications to lift response – can save you money! Use direct marketing in conjunction with advertising to get additional response Direct marketing gives you CONTROL
    36. 36. Case study IBM mailing -different sizes of business self-select    IBM simultaneously trying to recruit large medium and small businesses to a Solutions Day Wanted to challenge perception that IBM only interested in big business Target was 600 registrations – they got 900 and 60% of those who came were from small and medium sized businesses Agency: Ogilvy One Malaysia
    37. 37. Direct marketing and the internet?        The Internet brings out the best and worst in Direct Marketing Generate response   Controllable Shorter development process than direct mail Lower cost medium than sending direct mail BUT Internet has lower response levels cf to those door to door flyers 0.1%-0.3% so the effiency does not necessarily mean a) more sales and b) comparable noting/opening It is so easy to spam that overuse of email threatens long term viability
    38. 38. Build an ECRM database online cheaply      Calloway Golf wanted to build a pan European list of golfers – the use of mailing lists would have cost €10 per response to contact! All the client had was a shoebox with 5000 names of amateurs who had entered competitions in the last 5 years. Email campaign with a viral mechanism Gave them the chance win golfing accessories if they became the Captain of a fourball – bring 3 friends. Collected a database of 39,000 active golfers: 780% response at a cost of €50,000 less than €2 each! Agency: Stephen Francis Whitson
    39. 39. Indirect Marketing (Direct Marketing’s hidden asset)
    40. 40. Direct marketing pays for itself by direct response BUT..      we need to consider the effect of a personal communication placed in the hand on the other 9597% of those who do not respond Studies shows a much stronger branded effect than you get from advertising So direct mail does indeed build brands ( but is a very expensive way to do it if you don’t generate response as well) A very expensive way of talking to a lot of people! But unless you do follow up research you will never measure the branded effect
    41. 41. C & W Mercury ask questions to educate      The questionnaire is easy to do Mercury will learn a lot about the TV and telephone services cable customers want from responders BUT more important – those who read the questionnaire are being educated about the services the company offers. It isn’t actually research – its an education and brand building campaign when cable companies had a big image problem US political parties use surveys to tip respondents into voting in marginal areas
    42. 42. In summary – direct marketing is a key tool for driving sales     If you use it only to communicate (ad in an envelope) it will be very expensive for you If you don’t work at improving targeting then it will be very expensive for you One of the strengths of direct marketing is the relatively high cost! Makes you use it carefully – with a proper strategy and test matrix
    43. 43. Thank you for your attention!
    44. 44. Any questions ?

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