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.’
