Assessment of direct mail remains one of its biggest problems.
Clients in fmcg companies have yet to be convinced that direct mail can
be used strategically to build their brands.
Research carried out by the Direct Mail Information Service across ten
fmcg companies confirms that many clients think direct mail is too
expensive to be used in the low-priced consumer goods area.
The report concludes: ‘Many fmcg companies need to take a quantum leap
from current direct mail activity if it is to be of long-term value.’
Nigel Dugdale, the sales and marketing manager at Barr Soft Drinks,
concurs exactly with the report’s findings. He says: ‘Direct mail is an
excellent way of introducing products and gaining trial, but it is no
way to build an image.’
Dugdale uses direct mail to promote a new squash brand, called St
Clements, but steers clear of it for Irn-Bru. He explains: ‘The cost is
prohibitive. In the soft drinks market, where the consumer has a big
repertoire to choose from, the key to success is the ubiquity of the
brand.’
This is exactly the attitude that Jo Howard-Brown, a partner of the HBH
Partnership, which runs the DMIS, is campaigning to eradicate.
She says: ‘The major problem is evaluating the long-term effect of
direct mail. Fmcg clients are novices in the area, and there is not yet
enough research available to convince them that direct mail can produce
long-term results.’
But Jeremy Woods, who, as marketing manager of instant hot snacks at CPC
foods is in charge of the Golden Wonder Pot Noodle brand, is more
optimistic.
CPC has developed extensive databases which are frequently used for
mail-outs. Woods believes: ‘They are useful as a long-term loyalty
mechanism, and as a way of keeping in touch with our core customers.’
Dugdale, however, is sceptical about the databases themselves, and
questions whether they can be trusted to come up with genuinely relevant
names and addresses.
Howard-Brown believes that attitudes will change as evidence is being
amassed by the direct mail industry. She insists: ‘Own-label is
constantly threatening fmcg products, and an ongoing dialogue with
consumers is a good way to create affinity with a brand.’
The lack of research to back up direct mail’s case means that marketers
still think the cost of each mailing, which Dugdale estimates at pounds
2 to pounds 5 per piece, coupled with its perceived short-term benefits,
limit its usefulness.
The report found that companies were willing to invest in direct mail
for product launches, but thought of its use as largely experimental,
and were unclear what they should expect in terms of response.
Another concern that was uncovered by the research was doubt about the
ability of databases to identify and reach the right customers, rather
than simply those with a predisposition to respond to promotions.
Heinz is experimenting with direct mail in parallel with image
advertising, and is still waiting for the results of research to find
out how effective it was in maintaining, and even building, the brand.
Many companies are increasing their spend below the line, and making a
lot of noise about using direct mail. But until they are convinced that
it can be used strategically as well as just tactically, its place in
the marketing mix will be limited, and the ‘quantum leap’ will never get
off the ground.
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