In B2B, direct mail is fundamental. The ability to target and communicate with extremely specific audiences established the mailer as the bedrock of business-to-business marketing communications.
However, it’s never been without its challenges: the accuracy of data is a perennial problem for anyone using B2B direct marketing techniques; creativity is often sorely lacking in business mailers; whilst an increasingly tangled web of legislation has restricted how marketers are able to exploit the medium. And these are only some of the issues facing B2B direct marketers.
As a consequence, and to find an answer to some of the conundrums facing B2B direct mail and its practitioners, B2B Marketing joined forces with Royal Mail to hold a round table discussion enabling leading practitioners to debate these issues, and provide some insight to the shape of things to come (see panel for attendees list).
Proceedings were structured around various discussion points, covering some of the fundamental issues affecting B2B direct mail.
Joel Harrison,
: B2B data has always followed behind B2C but can it ever overtake B2C and become more sophisticated?
Richard Anderson, TRG Strata: B2B data changes a lot faster than B2C; change in consumer data is only about 6.5 per cent of the population per year but in business data can decay at up to 35 per cent which is a hell of a churn. At the same time, there’s a much smaller database: 20 million houses on the consumer side, and about 3.7 million businesses. In that respect there’s a lot of catching up to be done for B2B data, and yes I do think it can become more sophisticated. There’s much more information that we can find out about a business than a consumer, people living at home either move or die; that’s about as complex as it gets. In business there’s so much more going on; they can change their name, addresses, employees move on. There are opportunities, but much of this is down to how much an organisation is willing to invest in its own data.
JH: The key battle then is inhouse?
Derek Owen, Thus: It’s a bit of both actually. We have done two distinct strategies; one for retention and one for acquisition. Both of them have their headaches. We’ve done an awful lot of work in the last three years on cleansing our customer database but it’s out of date very very quickly. On the acquisition side, the issue is how to get really true data that works very effectively. That also has its problems.
Steve Cook, Market Location: Is ‘sophisticated’ the right word? At the end of the day it’s more about the quality of the data. Data is one of those rare areas where B2C marketers look at B2B with envy because of its structure. It’s a totally random area and they’re using demographics, psychographics to try and get some sort of profile, whilst in B2B we already have some parameters in place. ‘More sophisticated data’? Great if they’re going to use it, but my thoughts are always on the quality that already exists. There is variable digital print, for example. I received something the other day, a very nice piece of creative work, with ‘Steve’ written with a ‘ven’. This is the worst thing you can do to someone who’s a ‘ph’. It’s the quality of the data that is one of the key issues here.
Richard Roche, Royal Mail: I agree, data accuracy is fundamental, if you don’t get this right it jeopardises the success of the campaign.
Paul Cash, Tidalwave: The challenge from the agency side is whether you play it tactically or strategically. Many clients work campaign-by-campaign, with a view that you bolt data on at the end, as opposed to having a sophisticated data strategy that allows you to build customer-rich data over several years. This enables personalisation.
Steve Dyer, Clockwork IMC: Having a strategy is being sophisticated but Steve Cook’s right; you still have to have accurate data. In the first place you have to look at how the data is collected and also what is a business, how do you define a business? Richard said there’s 3.5 million, others say there’s two million.
DO: There’s no electoral roll on British industry.
PC: I think at the top level when you’ve got complex decision-making at enterprise level, you can have sophisticated one-to-one strategies. But I think it has to be a client-driven objective to want to do that.
JH: What’s holding them back?
DO: Education, education… many of the marketing directors I have encountered do not have any type of real data background.
Paul Hewerdine, Loewy: There’s been a recognition of CRM in the last 24 months. Five years ago CRM was something that Siebel did and it took months to implement with no guarantee of a return. But now people are acquiring systems that are easier to use and have recognised the importance of the sales guys capturing data. They have that information that they didn’t have before, which is absolutely critical to some of the campaigns we run.
SD: I do also think that CRM is responsible for expectations that could never be met
DO: We need education at board level, but there needs to be a degree of education for the foot soldiers the account managers because sometimes data will not be seen as an operational issue.
JH: How high is the understanding amongst the average B2B marketer?
All: Low.
PC: I think it’s improving year-on-year
SC: There’s a difference of psychology we have a data team and a marcoms team, if I was to ask the marcoms to take responsibility for our data that would be the end of our campaigns as we know it. Not because he can’t do it but he would spend the next three years learning data and we would have lost three years. The key thing here is the quality of the people that you have on your teams and that they understand what to do with the data but more importantly how to tell the business the benefits of that data.
JH: Do we know enough about companies to be creative?
PC: From a planning point of view, customer insight can be amazing; just to see how many times people go for a cup of coffee, or discovering that they open their post at the end of the day rather than the beginning. If you can match these insights against data, you can build a model.
SD: For an agency, knowing too much can be dangerous, because you can lose your objectivity by being moulded into the way the client thinks. One of the biggest tasks we have is taking the products that people want to sell and converting them into what people want to buy. Sometimes I get the feeling that we’re taking the safe option too often. The reason clients come to us is they want an outside opinion to help them move things along and invariably we sit where the customer sits and we ask pretty hard questions.
PC: I hate focus groups because it takes people out of their comfort zone and into an artificial environment. We’ve started using video vox-pops, where we go into a client in the SMB space and interview key personnel. We get them in a room for 40 minutes and talk about an issue, whether it’s telecoms or security, and the interaction you see between these people who’ve never spoken to each other before about these issues is amazing.
JH: What is the legislative future for B2B communications? What impact will it have?
SC: It is very confusing. It’s not illegal to send anyone an email. You don’t have to opt-in as an employee of a company to receive emails, you can receive unsolicited emails. Legislation for opt-in emails in business would do everyone a favour and might get rid of spam, might. That’s a good thing that could happen. But then you’ve got the Corporate Telephone Preference Service (CTPS) and that is a very, very bad thing because that’s stopping the message getting across to people who want to receive it.
JH: Has the legislation impacted much on your activities?
SD: I think on the DM side it’s still quite open and the rules are not so restrictive. The CTPS is a problem but even still there are ways around it.
RA: Even with the TPS they haven’t taken many people to task and I can’t see them doing that with the CTPS.
PC: I think the legislation is clear but it allows you to work around it. You’ve just got to know how to do this and make sure you’re not offending anybody or breaking any rules. Even if you aren’t, not an awful lot will happen to you. But you don’t want to do it too many times.
Lisa Addison, PH Group: There’s now half a million companies that are off-limits it’s as simple as that. We’ve got many clients that do voluminous telemarketing and month after month it’s just getting more and more scary it’s simply a no-go zone for us in terms of forwarding data to our clients.
JH: Do we think rule sets are rational or should we clarify?
SC: I don’t think the CTPS has been thought through and I think it’s too easy to register for it.
RR: I think somebody needs to take control.
JH: Will direct mail be the future of B2B communications?
PC: I think you’re going to see more new technology in terms of personalisation. The tools are there and if you get your data worked out, you can include behavioural, psychographical stuff.
RR: The interesting thing with that technology is that because you’ve already got the data the issue has always been about how quickly can you get that DM campaign out.
PC: HP has got wonderful technology now, from designer’s desktops right through to digital print presses, as soon as it goes on the web, it lands on their desk the next day.
DO: You can put an email marketing campaign together within an hour.
PC: But there will always be value in print.
PH: Personalisation means you can test and refine DM more, and tweak it, rather than do a run of 10,000.
DO: How many people around the table get a 15 page report, print it out and read it on the way home? Most of us. People like paper, people like magazines, they like to have catalogues etc. and you’re never going to get away from that, so direct mail through the post will always be there until somebody stands up and says it doesn’t work because we’ve got proof.
JH: But the volume of mail is coming down.
SC: It’s not. In B2B it’s flat, but the volumes of individual campaigns are coming down, although there may well be more campaigns. Personalisation is going to set a challenge to the data owners because now we’re maintaining a general database, but you can’t get into the detail that you need on all of those 1.8 million because it’s just not cost-effective. Sometimes the business isn’t big enough to want to get into the detail, it comes back to sophisticated customer database management. If you’ve got all these marketing tools is the data good enough to allow you to do what you want to do with it? Data owners’ role will change, and we’ll be helping customers to make more of their data and may do bespoke research on say 200 here, 5000 there.
SD: DM has a higher perceived value and if you personalise, it rises even higher. But you spell Steve with a ‘ph’ rather than a ‘v’ and they’ll be annoyed.
PC: When you’re talking to hundreds of thousands of people you’re never going to get it right all of the time.
PH: There’s a lot to talk about with environment issues and corporate social responsibility. A lot of organisations are sending out 100,000 mailers every week, how can they justify that? What is the environmental impact of that will that ever be legislated against?
RR: Clients are more concerned about cost. But government and the EU will be looking at marketing from an environmental perspective so we do need to look at that challenge over the forthcoming years.
SD: More fossil fuels get used in recycling paper than using managed forests, where they plant a new tree for each one cut down.
SC: I actually find myself looking forward to opening my DM because it’s a break from looking at the inbox.
DO: I get lots of stuff through my door and I critique it that’s all I do nowadays. I haven’t bought anything through DM for a long time but what has come through my door I take it, keep it and bring it into work and show it to others.
RR: That’s good because a few years ago it probably all went in the bin. You’re making conscious decisions about what you’re doing with it with a lot of mediums you don’t.
PC: I think the challenge is just getting away from the pure messaging of things, you know we can surprise people and entertain them rather than just deliver messages. You know Reed Exhibition and Reed Training and the DMA mailers I don’t open them anymore because it’s the same envelope, it’s the same A4 format and they’ve done it for years and years and years. I’m never going to open it until they do something different.
RR: When radio came along mail was supposed to die, when TV came along mail was supposed to die, it just takes a smaller and smaller share of the overall market place but it continues to grow.
