Poor Strategic Decision from the DMA
There seemed to be a lot of long faces at the recent DMA Annual Conference & Exhibition in San
Francisco mostly among service providers in the international section.
Business was down across the board. In fact the “old hands” amongst us agreed that if anyone spoke
about business being down by “around 20% or so” (as some of them did) - they were most certainly
lying!
The DMA, in their wisdom, have since decided because there were fewer exhibitors in the
international section than in previous years, they would not have an international section at all in 2003.
For an organization which has for long aspired to become more active internationally, so they can
encourage best practice around the world and promote more contact between U.S. direct marketers and
overseas service providers, this is a real climbdown.
Instead of facilitating a specific area where direct marketers can meet international exhibitors more
easily, DMA is saying they don't care anymore “and may the devil take the hindmost”!
I simply can't understand the rationale for this. But I can say that MLA and others amongst the
international contingent have decided to book stands close together at next year's event anyway to create a
de facto international section - albeit without the DMA's signs and notice boards.
The mailers with whom we spoke at the DMA this year (not in all sectors, but in many sectors) were
more optimistic. Many were looking at entering new markets on a local basis, translating their materials
and using local language. Japan, Korea, Taiwan and Indonesia were all markets of interest. We received
many questions about China. In other words, interest is swinging towards larger markets in the developing
world which mailers have not yet penetrated and which collectively offer a far larger universe than can be
reached through multinational lists.
* * * * *
A Swing Towards Local Lists in Asia
There also seemed to be a swing in interest towards local lists in Asia. Traditionally local lists have
not performed well in this region unlike Europe where there are strong, healthy, accurate and well-maintained
local list universes. Even for marketers who mail across borders, DM campaigns can be
executed successfully on a country-by-country basis in Europe.
Over the years I’ve been unable to say the same about Asia. For instance, regional and multinational
periodical publisher lists have worked because of their need to maintain ABC audited circulations.
Publishers may fudge their figures by 10% or so, but basically circulation lists are clean and well-maintained
and they have always produced quite consistent results despite the deleterious effects of junk
mail.
In contrast with local lists in Europe, and the relative reliability of multinational lists, I believe the
general standard of local lists in Asia has been appalling. Few publications have audited circulations, and
many owners cheat and lie. I know one business magazine owner who claims a circulation of 23,000 but
he prints only enough copies to sprinkle around trade outlets for exposure. The remaining 150 or so copies
printed are sent to current and potential advertisers. In all, I don't believe they have more than a dozen
subscribers.
Some listowners in Asia are not even actively mailing their house files, let alone acquiring fresh
names.
Perhaps what is more sinister are the lists with specious names and no indication of how or where
they've been sourced. Invariably these are lists which are euphemistically called “grey”. In franker
language they would be described as “stolen”. Such lists also have a short life because they are not being
actively maintained or updated.
This is the list environment we've been living with in Asia for many years. This is why most mailers
rely on multinational lists because they're at least real and active and not “padded” with false, compiled,
old or stolen names.
* * * * *
Large, New, Unspoilt Lists Coming into the Market
Above is the bad news as it were. The good news is there is a range of large, absolutely current and
active new unspoilt lists gradually being introduced on to the Asia market. These are lists which are fresh
and have never been mailed by third parties. The owners are responsible organizations who would never
allow “junk” mailers to access their lists. So the files have not been contaminated, and never will be. Some
of these listowners will actually endorse worthwhile offers to their house files.
* * * * *
Judicious List Rental to Good Offers
from Reputable Companies Improves the Responsiveness
of Your House File to Your Own Offers
There's one more thing I'd like to say and this is addressed to the owners of large, bona-fide lists in
Asia and elsewhere:
By renting your list to worthwhile offers from reputable companies you allow your customers and
subscribers to have a good experience when they respond, and in this way you'll improve the
responsiveness of your house file to your own offers. If you rent your list to “garbage” offers from
disreputable companies you will damage the responsiveness of your file to your own offers since you'll be
exposing them to bad experiences. Good offers enhance the value of your customer file, and lousy offers
damage it.
This fact has been confirmed many times in tests by listowners who split their file A/B and rent A
names for 12 months but do not rent B names. At the end of this period the A names they rent pull an
average 30% - 35% better to their house offers than the B names they did not rent at all. Amazing isn't it?
(However, the condition is they rent only to worthwhile offers from reputable companies).
I discussed this a few weeks ago in Amsterdam with Geoff Peters, the well-known and very
experienced DM fundraising consultant. He confirmed my story totally within his own experience, and
mentioned several fundraisers in the U.S. who have tested A/B splits on the rental of their house files and
generated similar results (including a Cancer Research Charity, a Heart Research Charity, an American
Lung Charity and a Disabled American Veteran's Charity).
Another Opportunity For Mailers to Exchange Ideas
International DM events are always good places to get together with clients and colleagues to share
ideas, experiences and gossip even if it's only once or twice a year.
In the last issue I described how Al Goodloe in New York had decided to change his annual
“Publisher's Multinational Direct” conference into a “by invitation only” all day meeting for mailers
(without service providers) at the Harvard Club on April 8, 2003.
I have to congratulate Paul Jackson of Triangle Management for following Al's example. He is
about to invite around 20 top mailers in Asia to a free seminar for the day prior to his planned World Mail
& Express Asia Conference & Exhibition in Singapore on February 27 - 28, 2003 (followed, I'm told, by a
sumptuous dinner for his guests).
Mailers pay nothing at all but they will be invited to discuss any views they may have on the postal
service regionally and internationally, and concerns they may have for the delivery of their mail or the
fulfillment of their products in the future. These concerns will be presented to the conference on the
following day. Luminaries in the audience will include Carlos Silva, Chairman, Postal Operation Council
of the Universal Postal Union, Tom Leavey, Director General of the UPU, a number of Postmaster
Generals from around Asia together with many others from the postal industry.
If you're mailing decent quantities, and you have something you want to say, or see changed in the
postal industry, here's your opportunity to make a difference. So if you haven't been invited yet, your man
to contact is: Paul Jackson, CEO, Triangle Management Services email: PaulJ@triangle.eu.com
* * * * *
More Postal Delivery Problems in the U.K.?
We hear not all bulk mail has been fully delivered this year into the U.K. market especially from
some countries such as Australia and the USA - and response rates have been decimated. This may have
something to do with the closure of 3,000 post offices this year by Royal Mail and the dismissal of 55,000
employees. I'm told your mail has a better chance of delivery now as long as you mail through the
international postal system and not through direct injection.
I only hope the poor delivery has nothing to do with the little story I saw recently in the U.K. Sunday
Times. This described how a U.K. mailing company had been dumping “millions of letters” and hundreds
of sacks of mail into rubbish tips and landfills. This was mail “such as magazines and direct mail” which
they believed “nobody would miss”. Said a Royal Mail spokesman: “We have not come across anything
like this before on such a large scale” (in other words it happens a lot, but not on this scale)! At least
they're honest...
* * * * *
India Continues to Open Up
India continues to open up and become more interesting as a market. Early in November the Reserve
Bank of India announced it is allowing ordinary resident Indians to open domestic foreign currency bank
accounts for the first time. This is on top of the decision earlier this year to allow Indians to use their local
credit card to purchase foreign currency priced products from overseas through the mail without
restriction.
Currently there are around 6 million credit cardholders in India growing 25% annually. This is a fraction of the 100 million Indians estimated to be earning the same wage as the average Australian. But at least things are going in the right direction...
* * * * *
How to Acquire Very Marginal Subscribers Indeed
I was told a hair-raising story the other day by an ex-employee of a regional periodical publisher in
Asia who will remain nameless (for obvious reasons).
Apparently the publication is losing 95% of new subscribers they obtain from their subscriber
acquisition mailings. Their conversion rate from new subscriber to first renewal is running (in some
countries) at only 5%. One can only surmise this may have something to do with the electronic gadgets
they were offering as a premium.
It seems subscribers have been so captivated by the premium they've been charging their employers
with the subscription cost and taking the premium for their own personal use.
There's nothing new in this, but what an exercise in futility! The publisher has been bringing in very
marginal subscribers who probably didn't even open the copies they ordered let alone read them.
Advertisers would be getting less than full value for their money, and the publisher was losing nearly all
new subscribers they had acquired at such a high cost.
I published an international periodical for many years, and in all my years working with publishers
since, have always found the best premiums are editorial premiums which can be used to reinforce the
fundamental editorial benefits offered by the publication. They produce higher quality subscribers, who
convert better into first-time renewals and stay with the publication over a longer term.
* * * * *
One Man's Loss is Another Man's Gain…
Who gets anything at all out of the 80% - 95% of new names which periodical and newsletter
publishers acquire, then lose, then have to replace with more new names? Other mailers, of course!
Periodical publishers are a great, continuing source of fresh names to the direct marketing industry. Bless
them!
* * * * *
The “Secrets” of Direct Marketing in China
On November 4, MLA hosted a lunch at the Foreign Correspondents’ Club for members of a U.S.
Direct Marketing Trade Mission traveling to Hong Kong, Shanghai and Tokyo organized by the
ubiquitous Bill McNutt (his 46th trade mission!).
Two of the speakers at the lunch were old hands at direct marketing in China and had discussed
beforehand whether to give away some of their “secrets” or not! I'll report on what they actually did say in
the next DM Diary. I decided to join the mission on their visit to Shanghai (my third visit this year), and
have a few "secrets" of my own – if anyone's interested...
