Remember direct marketing? Until as recently as 2002, it was a £2 billion industry spanning mail, catalogues, inserts, direct response TV and radio. The eruption of dot.coms and adoption of email might appear to have put paid to DM - certainly, it is now very rare to find anybody with that in their job title still practising.
Yet under the radar, there is still a lot of DM going on and there are some very good reasons why any marketer should take another look at this discipline. It has burst back into the headlines with the £1 purchase of Reader’s Digest by the entrepreneur Mike Luckwell (who presumably also takes on responsibility for its debts).
Luckwell sees a valuable asset in the business through its 1.5 million-strong database. While the Reader’s Digest magazine may be the face of the brand - and a staple of dentist’s waiting rooms - behind the scenes lay a powerful mail order engine that sold books, recordings and other products to its customer base using some highly-scientific DM techniques.
“There is significant potential to further develop and utilise those large databases,” said Luckwell, noting that just 9 per cent of the base had bought a Reader’s Digest product recently. That is a significant opportunity for re-activation, especially given the profile of customers - typically over 50, but relatively affluent. To its new owner, the brand looks like an opportunity for repositioning towards the silver pound, given the active lifestyle of many in that group and the heritage of trust and credibility which it brings.
If successful, the move will return to market what used to be one of the prime exponents of DM. Historically, the company was one of the “universities” of the industry, schooling practitioners who went on to transfer their skills to a wide range of other businesses. Without Reader’s Digest, there might not have been a Land Rover, Land’s End, Lovefilm or any of the other brands that used DM to build their core customer base.
So what does Luckwell know that other marketers have forgotten, but could do well to revise?
1 - It’s all about the ROI
Direct marketers would not dream of undertaking any activity without knowing what it’s payback will be. That means setting a clear target for each campaign, having a benchmark or control cell to measure against and making sure that every response is measured and all expenditure accounted before. If you don’t apply that rigour, you are not doing DM.
2 - Test and learn
This may seem to have been absorbed by digital marketers, but it is not just about running A/B (or even multivariate) tests. Proper testing involves keeping each variable under test discrete so there is no confusion over what creates an impact. In other words, if you change the targeting parameters, you can’t also change the offer or it becomes impossible to tell which produces any uplift. DMers often created extensive matrices in which multiple elements were under test, but each of them only to one cell at a time.
3 - Track your response
If anything undermined the success of DM, it was the explosion of channels available and the difficulty of allocating a response. If somebody gets a piece of direct mail and phones in to place an order, they can be asked for a media code (unless this is built in by using a unique number or offer), even though most call centres refused to do this. Once the internet changed behaviour, response could pour in via search, which effectively anonymises it. There are techniques to restore tracking even in this channel, but they require thought and effort.
And here’s one reason why DM fell out of favour:
4 - It’s too hard
Like a PE teacher making your do sports in your vest and pants, true DM is a very hard task master that does not allow for slacking. This does not resonate well with marketers in a hurry or a brand that just needs to create some noise. If you’ve ever heard somebody say, “we’re doing it for the halo effect,” it means they were not willing or able to measure their marketing properly.