DIRECT MARKETING: BELOW-THE-LINE CHAMPIONS - They may work for a range of different companies and even be close rivals but they have one thing in common: their firm belief in direct marketing. Lisa Campbell reports

JANET SOMERVILLE MARKETING DIRECTOR, CABLE & WIRELESS COMMUNICATIONS

JANET SOMERVILLE MARKETING DIRECTOR, CABLE & WIRELESS

COMMUNICATIONS



Janet Somerville considers herself a pioneer in her determination to use

direct marketing and response campaigns not only to produce sales but to

build a brand. She began her marketing career at BT, where she

established her DM credentials, becoming director of the database

division.



She then moved to O&M Data Consult before joining Mercury

Communications, which merged into C&WC.



Relationship marketing was at the centre of C&WC’s pounds 50 million

launch in 1997. The challenge was to establish the brand, born as a

result of the merger of four companies, and to stress the fact that it

was the only company in the UK to offer voice, data and video services

on a national basis.



The campaign sought to avoid ’selling’. Instead it wanted views on how

the company should develop, so it sent a questionnaire to its 1.3

million customers. This achieved remarkable response rates. Twenty-three

per cent of surveys were returned, representing 75,000 hours of customer

involvement.



Response to the business survey was 5.5 per cent. From zero base, the

brand achieved awareness of 50 per cent (Millward Brown).



Somerville says one of the highlights of her career was the phase of the

C&WC campaign that saw two million rubber duck-shaped door drops.



The idea resulted in 2,000 calls a day flooding the response lines.



She firmly believes that direct marketing through television is the way

forward: ’Cable has moved away from its traditional reliance on door to

door salespeople into an environment where 80 per cent of sales are

generated by DRTV.



’As consumers we don’t want to watch an ad passively; we expect to be

able to have a dialogue, and advertisers are having to react to that

with more one-to-one marketing initiatives. Interactive TV will

therefore be a key area in the future and there will be slightly less

emphasis on direct activity via the traditional postal route.’



ADAM NOVAK MANAGING DIRECTOR, MEDIA MARKETS, ROYAL MAIL



Adam Novak has spearheaded Royal Mail’s global expansion strategy, which

has direct marketing at its core.



The Post Office is currently undergoing one of the most far-reaching

restructures in its history. This has seen the creation of a specialist

DM division, Media Markets.



Novak has recently been appointed managing director in charge of a

200-strong team. His task is to develop increased specialist knowledge

and to champion the use of DM among clients and agencies in the face of

technological change. He is now accountable for pounds 1 billion of

turnover.



Novak joined Royal Mail International in 1991 as marketing and sales

director. In 1995 he was promoted to director and general manager, Royal

Mail National. He has a blue-chip marketing CV, starting as a graduate

with Rowntree Mackintosh in 1973, then working at Crown Paints and

Johnson Wax in marketing and business development.



In his position at Royal Mail he couldn’t function without a

wholehearted belief in DM and a view of how to adapt to the new

technologies: ’A critical task for the unit is ensuring the continued

growth of direct mail during a time of rapid technological change.

However, e-commerce doesn’t frighten me. It’s a complementary medium to

DM and it presents us with more opportunities to target and segment

consumers.’



Like BT, the Post Office has to defend its position against competitors,

not just against FedEx and DHL but also new communications channels such

as e-mail. Recent campaigns include ’I saw this and thought of you’ - a

heavyweight push by OgilvyOne covering TV, press, posters and DM and

aimed at consumers. Meanwhile, Joshua promoted DM to the business

community as a means to retain its customers.



In 1996, under Novak’s direction, the Royal Mail established the Direct

Mail Centre of Excellence to improve the quality and impact of its own

DM campaigns. Comprising agency personnel and external DM consultants,

the centre assesses campaigns across a number of attributes prior to

launch.



A ’threshold score’ must be achieved before mailings take place. Results

are evaluated post-launch. The company claims that since its inception,

the cost of its DM has fallen and its effectiveness has increased.



’Relationships with our DM agencies have also improved as both agency

and client have agreed criteria for the success of the work that they

jointly carry out and a well-defined process to support it,’ adds

Novak.



He’s now looking to use the information to drive the industry

forward.



’We are building measurement tools from the results which could help

marketing directors and agencies. We would love to hear from them.’



TIM LEWIS MARKETING DIRECTOR, ROYAL BANK OF SCOTLAND, CARD DIVISION



Financial services companies are the biggest spenders in the DM field

and last year most credit card companies doubled their direct marketing

spend in the UK as a host of US competitors entered the fray. Tim Lewis

now heads marketing at one of the biggest spenders, RBS Advanta, with

additional responsibility for the Royal Bank of Scotland’s credit

cards.



His background is steeped in DM, perhaps most significantly as head of

DM at First Direct. He is a purist, eschewing fashionable notions of

’relationship’ marketing.



Lewis has a wealth of experience in financial services which began with

four years at Amex where he worked on card acquisition. He then moved to

Chase Manhattan bank where he launched its first credit card before

joining First Direct in 1991 and landing the job at RBS Advanta in

1995.



RBS Advanta is in the top ten of DM spenders, according to MMS Market

Movements, with a total DM spend of pounds 9.22 million last year.

’Direct marketing is vital to our business, so much so, that we do not

do any marketing above the line on RBS Advanta,’ says Lewis.



RBS makes sure each of its mailings is carefully crafted, often using

beautiful photography, high-quality paper and an emotional appeal. Like

other credit card companies, it is also keen to see the creative use of

data from its agency. Tequila Payne Stracey is charged with overseeing

strategy, planning and the database to ensure that product offers are

properly targeted.



The company’s emphasis is on customer acquisition, which explains the

large volumes and big spend. However, communication to existing

customers is becoming increasingly important as companies try to

encourage consumers to use peripheral products.



’We have invested heavily in analysis and data warehousing to learn more

about our customers,’ Lewis explains. ’We can also tell a lot about them

through spending on their credit card.



’There is a lot of talk about new DM techniques at conferences but I

believe a lack of basic discipline is where people go wrong. This

includes use of control groups, testing and measurement.



’I also disagree with companies who argue that DM can be used to build

relationships with consumers. Relationship marketing is a spurious term

- you only have relationships with friends and family. DM is a purely

commercial medium to encourage people to buy your products.’



NIGEL GRIMES HEAD OF CONSUMER AND BUSINESS DIRECT MARKETING, BT



Nigel Grimes first entered DM as a marketing assistant at Royal Mail in

the heart of the DM industry. From there he moved over to work in

agencies, including MHA Direct Advertising and Citigate Direct, before

switching back to the client side as senior communications manager at BT

in 1994.



With telecoms going through an era of unprecedented change and BT under

siege from tough competition, his job was to encourage business to adopt

freecall, or 0800, numbers. Then, from 1996 to 1998, he was charged with

segmenting and profiling consumer data, leading a counter-attack against

BT’s rivals.



’With the increasing competition, our customer information is our

greatest asset after the brand. In fact, it’s the lifeblood of the

organisation.



Having realised that we are using DM information much more smartly,’

says Grimes.



BT is one of the biggest spenders in the DM industry with a budget equal

in size to its advertising budget - around pounds 70 million. The

telecoms giant cites three major uses of DM: as a direct response tool

to generate leads; as a relationship-building vehicle and as a means to

support other sales channels such as telemarketing.



BT’s recent DM activity has concentrated on winning back straying

customers.



Until last year, it used fairly unsophisticated quarterly mailouts, but

in January last year it upped the ante with a TV campaign and more

aggressive DM push. This centred on data showing that ’thousands are

coming back to BT’.



It increased the volume of mailouts and used simple messages about

prices and services rather than products. According to the company, the

more tailored activity has resulted in 130 per cent more people

returning to BT during the past year.



Grimes is clear that DM is now held in high esteem at BT. ’We can assess

the value of a customer and their propensity to stay or leave BT.



’We can also ascertain the level of relationship they want and via which

channel they want us to communicate - mail, phone or web. This is

because we’ve developed strong measurement systems.



’It’s important that we can appeal to both a broad audience and niche

markets which is also why we use several different agencies, including

Tequila Payne Stracey, CFW, JDA and Miller Bainbridge.



’In future, I expect DM will increase but will be spread across more

channels such as e-mail and the internet.’



ANDREW MARSDEN MARKETING DIRECTOR, BRITVIC



Marsden began his career as a Unilever trainee in 1978 and it was there,

at the home of one of the great brand marketers, that he had his first

unlikely taste of direct marketing: Marsden was charged with finding

ways of making it more relevant to the FMCG sector.



It’s a medium which he has championed throughout his marketing

career.



Ten years down the line at Unilever and he was made marketing manager of

Brooke Bond Foods, followed by a move to become marketing director at

Vileda in 1992. One year on he was appointed joint managing director of

Vileda, at the same time showing his below-the-line colours as chairman

of the Institute of Sales Promotion. He joined Britvic in 1997.



Pepsi’s first major DM push was in the summer of the year he joined.



Consumers had to collect ring-pulls to receive an exclusive Spice Girls

CD. Around 600,000 CDs were mailed to consumers which provided a

valuable database and equated to sales of 12 million cans. Subsequent

activity had a music theme and focused on gaining consumer insight via a

questionnaire.



The one million-strong database, created by Claydon Heeley, was then

used for one of the most innovative relationship marketing programmes to

date - a mailing offering consumers a branded pager. Via text messages,

Pepsi is able to talk to consumers directly, on a one-to-one and, if it

chooses, daily basis.



’DM has been difficult for FMCG clients to use as many of the skills and

techniques were developed by and for the finance and service

industries,’ says Marsden. ’These sectors also find the medium

relatively affordable as they have high unit margins. By contrast, FMCG

clients have high volumes but low margins so cannot justify investing in

relationship marketing to the same extent. This is why you have to be

innovative. We have focused on the youth market, which is typically

difficult to reach and, as a result of highly innovative campaigns, we

are able to maintain a dialogue with them. The ultimate benefit of DM is

that it’s a narrowcast medium, allowing precise targeting.’



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