Renewed Interest in International Markets from the US DMA
John Greco, the new President and CEO of the US Direct Marketing Association, already seems to be
making his mark.
A new strategic plan for the DMA was presented at the 2005 Director's Meeting in January. During
this a commitment was also made for the DMA to become “more constructively involved in international
markets”. Exactly what this means in practical terms – we still don't know…
What we do know, however, and it's good news, is that new management have been appointed to run
the DMA's conference and exhibition division. This should have a positive impact on both the
“Global Weekend” and the conference program during the DMA's Annual Conference & Exhibition in
Atlanta later this year. For instance, the organizers have decided to give preference in future
to “users” rather than “service providers” as speakers in sessions covering international topics
and issues.
This is a healthy decision which could even attract other users into attending and lessen the
event's dependence on the futile exercise of international service providers expounding on
international direct marketing strategies to other nternational service providers. (Users –
especially the larger players – invariably stay away).
Every direct marketer values sharing knowledge and ideas with other direct marketers as long
as it's a two-way trade. It seems to me the DMA could fulfill a useful role by bringing together
international DM players in similar sectors to facilitate such exchanges. So often one has sat
in sessions where fundraisers sit next to mail-order companies who try to share useful ideas
with insurance and financial service marketers, periodical publishers, “opportunity” marketers
et al. This doesn't often work unless the common focus is one international market (such as
China, India, Germany, Russia, etc). Anyway we wish John Greco good luck in his new role, and
appreciate any extra attention and resources the DMA may allocate to the international arena.
The US DMA is the largest in the world and their example in this respect could help to galvanize
other DMA's elsewhere.
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Teleconferencing With Your “Competitors” Can Pay
I attended the International Direct Marketing Fair (IDMF) in London last month and heard talk
there of two separate groups of international mailers beginning to hold regular teleconferences
to discuss issues of common interest with their “competitors”. This was a proposal I aired in
these columns a couple of years ago and I'm told these sessions are proving “hugely valuable”.
Perhaps market leaders in the periodical and newsletter publishing, cataloger, mail order and
other sectors should follow this initiative by bringing together four or five active colleagues
in the same sector into a regular informal tele-discussion, setting an agenda and seeing what
comes out of it.
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Extra Cost of Premium First-Class Mail Can be More than Covered
by the Higher Response Rate Generated
There was plenty of action at the IDMF in London and often I had to elbow my way along the corrid
ors between the stands since these were quite narrow and attendee numbers were high.
Even the evening events were under pressure. One supplier I know asked a carefully selected 28
people to a sit-down dinner at a restaurant in Earl's Court. No less than 71 people turned up
which meant most guests had to stand because there was nowhere to sit!
At this particular party I spent some time talking with Charles Prescott from the US DMA who
gave me his new card as Chairman of the newly established Consultative Committee of the Universal
Postal Union (UPU). This Committee now provides a direct channel to the UPU membership (postal
administrations) and if you have any pressing concerns about the international postal system, or
the postal service you receive, you should contact him at cprescott@the-dma.org.
One postal issue was debated in some detail in Charles Prescott's presence (an issue to which I
have referred before in these columns) which is that premium first class postal services seem to
deliver higher bottom line response and a better ROI than slower “surface air lift” services. A
good example of this is the International Priority Airmail (IPA) service from the USPS which in
split A/B tests to the same lists nearly always significantly outperforms the slower International
Surface Air Mail (ISAL) service. Bill Graham, President of Global Postal Services (GBS), during
this discussion unequivocally confirmed this based on repeated large-scale A/B split tests between
the two services which they frequently mail into overseas
markets from the USA.
Why should a premium postal service (IPA) significantly outpull a surface airlift service (ISAL)
when mail from both is addressed to exactly the same lists with an A/B split? A surface airlift
service will, of course, generate response more slowly, but ultimately the response from both the
fast and slow service should be more or less the same. But consistently it isn't. Why not?
Is it the airmail flashes on the outer envelope and the priority airmail indicators which create
response uplifts of 30% – and more – over the slower service or are ISAL marked envelopes treated
as low priority mail, liable to be put to one side by receiving postal administrations overseas
and therefore often not fully delivered?
Every international mailer using a more slowly delivered bulk mail service should test against
a faster premium rate first-class bulk mail service. They may find (as others do) that the extra
cost of the premium service is more than covered by the higher response rate generated.
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Response Rates Sometimes Fluctuate for Indefinable Reasons
A number of large B2C mailers into Europe and the USA (from offshore) mentioned during the London
IDMF they experienced an unexpected slowdown in response last year between mid-October and December.
This worried mailers at the time but the universal experience is that response rates for regular
mailers into the USA and Europe have picked up again since late January and continue to hold up.
This is a mystery to me. We all know that major negative events on the scale of John F. Kennedy's
assassination, Princess Diana's death and the World Trade Center disaster have all dramatically
hurt response rates at the time and for many weeks afterwards. But nothing on this scale happened
at the end of last year.
All I can say is I've always found bulk mail delivery can become seriously delayed in the last two
months of the year because of Christmas post volumes which cuts off the tail-end of response because
it runs into the Christmas holiday period.
If there's another reason for this slowdown in response at the end of last year, I can't (for the
life of me) put my finger on it!
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Non-Personalized Letter Outpulls Personalized Letter
After responding to a direct mail offer I fully expect to be addressed by name in subsequent
communications from that company. I like it and the better they handle the relationship with me –
the more receptive I am to their subsequent offers.
On the other hand, I often bristle when I receive a personalized covering letter with “Dear Mr.
James Thornton” as a salutation from a company I don't know and with whom I have no relationship
whatsoever, trying to elicit a better response from me by using my name. I don't feel more receptive.
On the contrary, I feel defensive.
It was no real surprise therefore when I saw the results of an acquisition package recently where
10,162 pieces were mailed to an A split with full personalization versus 10,162 to a B split with
no personalization at all in the covering letter. The non-personalized letter package (B split)
delivered a 61% increase in response. It doesn't always work that way, but in this business to
make any automatic assumptions is a sin.
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Outsourcing is Now Perfectly Respectable According to the IMF
There's undeniably a continuing trend by direct market ers in Europe and the USA towards outsourcing
call centre services, and the print and production of large-scale DM campaigns and catalogs, to Asia.
The reason is simple: significant money can be saved without any deterioration in quality or
reliability as long as you choose your suppliers carefully.
Those who hold altruistic feelings of loyalty to their home country will be relieved to know that
an International Monetary Fund (IMP) report last month stated that outsourcing to developing
countries actually expands employment and enhances efficiency. “Jobs are not being exported, on
net, from industrialized countries to developing countries as a result of outsourcing. In fact,
the evidence suggests that job losses in one industry are often offset by jobs created in other
growing industries. Furthermore for many industrialized countries (including the USA), the rest
of the world outsources more business and computer services to them than the other way round”.
So you can now go ahead and save money for your company without any lingering unease that
outsourcing may damage your home country's economy!
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Prepare to Enter the China DM Market
A “China Interest Group” has been formed. This is an informal group of international direct
marketers and major service providers interested in investing in the China market who will meet
from time-to-time in Shanghai and exchange ideas and information. The first meeting will be held
on March 10. If you are active in the China Market, or are interested in b ecoming so, and would
like more details of this group's plans for future meetings – let me know.
* * * * *
We Must Keep the Relationship Between Addressees and Postmen Inviolate
New Zealand Post has always had the reputation as one of the more reliable and enterprising postal
operators often retained to provide postal consultancy services to other postal administrations –
usually in the developing world.
It was therefore of some surprise to me, while visiting New Zealand for some fly-fishing last
month, to read in the local press that a trial had been conducted in the suburbs of Wellington in
which local “posties” had been fitted out with lapel microphones attached to concealed recording
devices into which they were collecting information about the houses they were passing and their
occupants! NZ Post admitted they were testing the use of postal employees to gather data for NZ
Post clients and for the Post’s “commercial gain”. Quite rightly, after reading the press reports
the New Zealand public were less than amused – and the practice has been stopped.
It's important to the international direct mail community their customers around the world
continue to trust and respect the postman who faithfully delivers their mail (at least most of
it) – morning after morning – without any other commercial agenda in mind. At a time when the
amount of “advertising” mail in people's mail boxes is overtaking personal mail, opening the mail
in the morning is not exactly the “mail moment” it used to be, but we do hope the traditional
straightforward and open relationship between the householder who receives the mail – and the
postman who delivers it – does not become compromised.
* * * * *
Give Postal Customers What They Want
It's interesting to note what private competition can do for a public postal service. Last year
Royal Mail faced competition for the first time from the private sector and promptly made its
first profit for 4 years (220 million pounds). “Liberalization is good for Royal Mail” said the
Chairman of UK consumer group Postwatch. The Chairman of Postcomm, Nigel Stapleton, added: “We
can now look forward to a more efficient postal industry in the UK focused on providing customers
with the services they want, rather than being told by a monopolist what services they can, and
cannot, have”. And so say all of us...
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Do You Want to Join the “Word-of-Mouth Marketing Association”?
A US company called Bzz Agent (I like the name) now hires armies of “trendsetters”, “influencers”
and “street teams” to carry out “word-of-mouth marketing” known otherwise as “seeding”, “viral” or
“guerilla marketing” programs. One example is Sony Ericsson who hired 60 actors in 10 cities to
accost strangers and ask them: would you mind taking my picture? Those who obliged were handed
(naturally) a Sony Ericsson camera-phone to take the shot, at which point the actor would remark
on what a cool gadget it was! In this way an act of civility... became a branding event.
This fringe tactic now seems to have become mainstream since I notice a “Word of Mouth
Marketing Association” has been launched.
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Please contact:
Nikki Sachdeva / Sonal Gurav
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