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Road to direct mail marketing presentation (8.6.16)
- 1. ©2014 Epsilon. Private & Confidential The Road to Direct Mail Marketing 2 More London Wednesday 8th June 2016
- 2. 2 10.00am - 10.10am: Introductions & objectives for the morning 10.10am – 10.20am: Economic overview 10.20am - 10.40am: The direct mail roadmap 10.40am – 10.55am: Targeting households using transaction data 10.55am - 11.25am: How do you create a fit for purpose B2C catalogue? (John Ellis, Citipost) 11.25am – 11.35am: Measuring campaign performance 11.35am - 12.00pm: Q&A 12.00pm - 1.00pm: Lunch & Networking Morning Agenda
- 3. 3 Introductions and objectives for the morning 10am-10.10am
- 4. 4 Today’s economy & what it means for retailers 10.10am-10.20am
- 5. ©2014EpsilonDataManagement,LLC.Private&Confidential 5 • British economic recovery “largely on track” • 2.2% expansion in 2015 (second of all the G7) • Households’ real disposable income up 3.5% on average in 2015 (low fuel, energy and food prices) • Unemployment decline from 5.6% to 5.1% • Real household earnings up 2.4% • House prices up 4.5% YOY and 33% since 2009 low • 5.6% increase in non-property consumer borrowing • Projected 2.2% growth in 2016 despite likely hike in interest rates • Risks associated with Brexit look minimal The UK Economy in 2015 https://issuu.com/ epsilonabacus/doc s/wr_abacus_tren d_report (pages 42-47)
- 6. ©2014EpsilonDataManagement,LLC.Private&Confidential 6 • 2015 under-delivered in comparison to 2014 • Price deflation of 2.3%, volume increase of 2.2% • Strong growth in the direct channel (mainly internet) at the expense of store visits (declined for 8th year in a row) • Non-store sales grew 15.7% YOY and share of total sales grew from 7.9% to 8.4% • The non-store channel is predicted to grow in 2016 The UK Retail Sector in 2015 https://issuu.com/ epsilonabacus/doc s/wr_abacus_tren d_report (pages 42-47)
- 7. 7 Overall home shopping sector trends • 11.9% growth in 2015 (10.4% in 2014) • Growth across all 12 months • AOV stable • Direct mail a significant contributor 82 75 89 84 81 92 83 84 97 109 146 11192 85 96 98 93 104 92 89 115 123 161 121 - 20 40 60 80 100 120 140 160 180 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Revenue and mailing volumes, 2014-2015 Revenue 2014 Revenue 2015 Index
- 8. 8 The direct mail roadmap 10.20am-10.40am
- 9. 9 Top 10 reasons to send direct mail marketing 1. It’s proactive 2. You can directly target lookalikes of your best customers 3. It drives sales to all channels 4. You’ll recruit brand buyers, not product buyers 5. Customers will buy at higher price points… 6. …and spend more frequently… 7. …meaning greater customer loyalty 8. You can test, measure and scale up with confidence… 9. …allowing you to accurately forecast for growth & stock levels 10. Campaigns can be refined based on previous learnings
- 10. 10 Some statistics c. 75% of people that buy having received a catalogue do so online (Royal Mail, 2014) 44% of direct mail recipients will visit your website (DMA, 2014) vs email - 63% take direct mail more seriously, 57% feel more valued and 55% have a better perception of the company (Royal Mail, 2015) 54% open a catalogue from a new brand and 71% from a brand they’ve bought from (Royal Mail, 2015)
- 11. 11 Interview: Dara O’Malley (Head of Marketing, JD Williams) “Whilst the digital channel was strong for us (in 2015) and it is becoming increasingly more important, we are conscious not to take our eye off the more traditional channels such as direct mail and press which have been the bedrock of our marketing… …We have more to compete against and need to respond by adding variety to our product and making our brand something that our customers really connect with… …If you can get the right mix of traditional higher cost paper led marketing activities with lower cost digital activity, you have more chance of communicating with customers in the right way for them and giving them a personalised experience of your brand.”
- 12. 12 Interview: Rob McMahon (UK Director of Marketing & Sales, Madeleine) “2015 saw the continued shift towards people buying online, we’re not alone in saying that online is becoming the order channel of choice. However, we understand the importance of the catalogue in getting people onsite and because of this the catalogue remains an integral part of our marketing strategy, enabling us to convey the quality of our brand effectively and it is a strong motivator to purchase. By making our catalogue a high end printed item with coffee table appeal, it stays in the home much longer and serves as a continuing reminder of our brand.”
- 13. 13 Interview: Arun Mundle (MD, Easylife) “We saw a growth in online trade, however, our proportionate organic traffic remained static; ultimately our offline activity is still the driving force behind the sales. The website is simply being used more as the channel of preference to make the purchase. With consumer spending on the increase, we altered our customer direct mail strategy by putting more emphasis on contacting customers with recent purchases rather than focusing on how much they spent. We assumed the general increase in consumer confidence and increased spending power would naturally increase the average order value anyway and this worked with a fairly high degree of success. This success, as well as new customer recruitment mailings using Abacus Alliance data, grew our customer file exponentially and we saw a clean profit on our campaigns as a result.”
- 15. 15 ©2014EpsilonDataManagement,LLC.Private&Confidential New direct mail customers… …have higher spend than new customers from other channels… …and on average they spend $24 more per transaction. 18% …make 11% more repeat purchases than other channels… …and spend $10 more per transaction. Repeat direct mail customers…
- 16. 16 The direct mail roadmap 1 Planning 2 Content 3 Production 4 Data selections 5 ROI Analysis • Budgeting • Forecasting • Objectives • Mail dates • Printer scheduling • Data selections • Merchandise • Photography • Layout & design • Square inch analysis • Printing • Catalogue size • Prospects • Existing customers • Permissions • Testing • Rollout • Metrics? • What is acceptable? • How scalable? • How valuable is direct mail to your business growth? 12 weeks before mail date Mail date
- 17. 17 Targeting households using transaction data 10.40am-10.55am
- 18. ©2014EpsilonDataManagement,LLC.Private&Confidential 18 The Abacus Alliance insight into market modelled customer files responsive prospects Member B Member C Member A Abacus Alliance Database
- 19. 19 ©2014EpsilonDataManagement,LLC.Private&Confidential The Abacus Alliance in numbers 4800 transaction, demographic & lifestyle variables £20bn spend 540m total transactions (30+ per household in the last 5 years) customer browsing data 26m individuals 508 contributing multi-channel retailers & publishers 18m households 59 pureplays new to direct mail have joined the Alliance since 2014
- 20. 20 ©2014EpsilonDataManagement,LLC.Private&Confidential How well do you know your customers? What you know about your customer What Epsilon Abacus knows about your customer Only bought once Spent £169 2 months ago Male Spent £305 on Gifts 4 months ago Spent £183 on Clothing 2 months ago Aged 41-45 Browsed gardening websites 11 times in the last two months Postal address Browsed food & wine websites 6 times this month Household income of £100k+ Subscribes to a home interiors magazineBought 12 times from Food & Wine in the last 12 months Male Bought 6 times from High End Clothing in the last 24 months Postal address
- 21. 21 ©2014EpsilonDataManagement,LLC.Private&Confidential How does it work? Analyse consumer transactions and browsing behaviour across the Alliance to target lookalikes of your best customers with the right message at the right time. Your best customer Shared attributes Buys online Bought 6 times from High End Clothing in the last 24 months Household income of £100k+ Spent £183 on Clothing 2 months ago Bought 12 times from Food & Wine in the last 12 months Spent £305 on Gifts 4 months ago Prospects most likely to buy
- 22. ©2014EpsilonDataManagement,LLC.Private&Confidential 22 Stage 1: Identifying best buyers & modelling universe Best Buyers • Most recent buyers • Seasonal buyers • Multi buyers etc. Alliance Universe Modelling Universe Best buyers Modelling Universe • Min. 0-18mth purchase • Model type • Recency, Frequency, Value • Gender • Category etc.
- 23. ©2014EpsilonDataManagement,LLC.Private&Confidential 23 Stage 2: Scoring and Segmenting modelling universe • Modelling universe scored and segmented • From best to worst look-alikes • Segment size set according to future plans • Testing random sample • Rolling out Modelling Universe Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6 Segment 7 Segment 8 Segment 9 Segment 10 Best Worst
- 24. 24 ©2014EpsilonDataManagement,LLC.Private&Confidential Case study – Collectible coin brand March 2015 – “we want to grow our business” Met with Abacus to discuss targeting prospects in the mail Ran 3 campaigns in 2015 – proved out performance and scale Dec 2015 - Identified direct mail as their best recruitment channel Mailed each month of 2016 to date £140k profit after year 1 across 9 mailings and 33% database growth
- 25. 25 Optimising print & postage 10.55am-11.25am
- 26. The Road to Catalogue Marketing
- 27. Data - Driven from IT team and marketing heads “the dark art” Design - Use standard template or copy from another format Mailing - Our printer knows all about mail “doesn’t he?”. Print - Use the same printer for everything “they will do” The typical approach to mailing projects Postage - “There are no alternatives we will just send it with Royal Mail”.
- 28. Typically 55%-60% of your overall project costs Why is postage so important?
- 30. Step 1 Understand postage costs - Select the most efficient format for you and maximise in size and weight Step 2 Drive your data - Maximise your data requirement ensuring that the correct criteria are used. Step 4 Print - Ensure that your print partner is the right “fit” on size, quantity, quality and price Step 3 Design - Design your pack around the most efficient costs for postage and for print production A more considered mailing approach Step 5 Mailing - Consider the best options available to you on speed of turnaround, expertise and formats
- 31. Type of mailing Newsletter Postcard Catalogue/Brochure Letter/Invoice/Statement Volume per mailing per annum Reason for mailing New product launch Acquisition Monthly Mailing Of ers/Sale mailing Customer remail Research/Questionnaire Other – give reason Pack Format Size x x mm Weight gms Poly - Polywrapped/poly bagged Paper - Envelope Naked - unwrapped Current service level Premium - 2 day delivery Economy - 5 day delivery Other Mail Classification Advertising Mail Business Mail Publishing Mail Sustainable Mail - Entry Level - Intermediate level Mailing Specification The format of your mailing campaign is the most important factor when analysing your postal costs. In order to gain the very best rates and help advise of any improvements the more complete this information is the better or more complete your results will be . The supply of a sample file of your data is also critical so that a complete 360 degrees analysis can be made and our experts can provide the very best advice , ensuring that your mailing costs are ef cient as they can be. 240 165 3 80 128,000 7,536,000 this is my usual monthly catalogue, i send thesameto all of my exisiting customer s and pr ospects alike. 55x System Simple questions Early Stage Understand your business Give you the right advice
- 32. Trays Mailing Options Our experts opinion Which means that you could save per annum £ MailMark Sustainable Entry Level Intermediate Level Bags AdvertisingMail LowSort Total Not Sustainable Barcode (Customer barcode / CBC) Sustainable Entry Level Intermediate Level Not Sustainable Sustainable Intermediate Level Not Sustainable HighSort Directs Residue Entry Level Directs Residue 16.24p 16.44p £20,787.20 16.74p 16.94p £21,427.20 17.24p 17.44p £22,067.20 16.24p 16.44p £20,787.20 16.74p 16.94p £21,427.20 17.24p 17.44p £22,067.20 18.511p 18.711p 20.42p 20.62p £23,816.26 19.011p 19.211p 20.92p 21.12p £24,456.26 19.511p 19.711p £25,096.26 Directs Residue 21.42p 21.62p 44,028.72 This is a good for mat, but changing to polywr apor an envelopewould allow access to Low Sor t, and moving upto Inter mediatelevel of sustainablewould pay for itself in no timeat all.
- 33. Step 1 – The basics of mail Business Publishing Advertising 3 Types of mail
- 34. Pack Sizes
- 35. Mechanical & None Mechanical Why do costs differ so much? Mailmark OCR CBC Low Sort High Sort
- 36. This is why…
- 37. Client A mails 20k per week Approximately 1 Million per packs per year Was paying 19.69p per pack I helped move them to Low Sort Sustainable (Intermediate) Now pays 16.992p per pack A saving of 2.698p per pack or £26.98 per k Annualised saving of £26,980 Some Quick Figures…
- 38. Outer Envelopes £9.79 per k 0.033% Printed Brochure £71.02 per k 24.1% Mailing Costs £16.25 per k 5.52% Old Postage £196.9p per k 66.9% Total Pack cost £293.96 per k In Context New Total Pack cost £266.98 per k New postage £169.92 per k Saving just under 10% off the entire pack cost.
- 39. Already spoke about size of packs Format choice: Postcard One piece mailer Envelope Naked Polythene Ok where do I start? Postage costs increase
- 40. First time User Discount Incentive for Growth Tailor Made Incentives Sustainable Mail Advertising Mail What initiatives are available to me? 20% saving for first 3 mailings 2.5p to 10.5p discount Designed around you .5p or 1p per pack 4.7p saving against Business mail
- 41. Maximise your budgets Lower your pack cost Increase your ROI Breakeven position lower Cheaper to win new prospects Can fish deeper into the data pond Sustainable mail ready data Step 2 - Data
- 42. Citipost provide software for free Sort your data by Royal Mail Depots Sort into geographic areas by depots Directs and Residues Produce Mailsort reports Mailsorting your data
- 43. What should I mail? Postcard, Existing brochure, New Brochure? Use your best sellers to draw in the prospects Nurture your brand Continue it through from your digital platform Use the best advantages of each format Understand the response that you are after and maximise that drive Design your packs / contents to meet the need Step 3 - Design
- 44. The use of the format e.g. up to 100gms or 101-250gms Elaborate on the pack format e.g. large letter 240mm x 165mm doesn’t have to be A5 What incentive is in the pack how and when is that actioned? Anything quirky you can do to stand out? Levels of personalisation. Maximise your format
- 45. Stamped Mail
- 46. Choose your printer wisely Could be first tactile communication of your brand High quality paper Cheap / expensive brand Select on Quantity, Quality, Format sizes Price – based upon total price Consider your AOV What image do you want to convey based upon this Constantly benchmark (especially as you scale up your campaigns) Step 4 - Printing Can you get your own paper deals??
- 47. Choosing your Mailing house Speed of turnaround Saving money on deliveries Expertise Mailmark Polywrapping Someone who understands your business Get references off people who know Go to the site and see for yourself Step 5 - Mailing
- 48. Usually sorts the data Personalises the packs Laser printing Letter Inkjetting name and address onto outside of pack Encloses or wraps the packs Bundles and bags or puts into trays Hands over the work to mail carrier What does a mailing house do? CITIPOS T
- 49. Day of the week best to land Peak seasons Periods to avoid Relevant to the prospect i.e. Swimsuits in winter Garden equipment when they live in a flat When should I Mail?
- 50. Went live in March 2014 Tracking & control 2d Barcode Cheapest possible postage Mailmark
- 51. Lookbook Not direct sales tool Mail existing collateral Brand orientated Ultimate goal is to drive sales through your chosen channel: Web Instore Call centre Common Mailing Mistakes
- 52. A. Use your own skills in house B. Get someone like me to help you C. Put your head between your knees and hope and pray! But please get some assistance. Next Steps
- 53. John Ellis Strategic Sales Consultant Tel: 07896 029 512 Email: jellis@citipost.co.uk Thank You
- 55. 55 Campaign Costs • Cost per catalogue (print and postage) • Data cost Campaign Sales • Total sales • Net sales (total sales minus returns/refunds) • Margin • Response Rate • Average Order Value Performance Metrics • £ per catalogue mailed • Cost/contribution per new customer What to consider?
- 58. 58 Abacus Insights Event Thursday 6th October, 2016 30 Euston Square, London