Direct mail has an assured future as an effective means of selling goods and services. But it could be still more assured if it avoided irrelevant targeting, writes Robert Dwek.
July 8, 1996: 'Dear Mr Dwek, If you have already returned the application form from my recent letter, please accept my apologies for writing again.
However, the new American Express Credit Card has so much to offer someone like you I wanted to take this final opportunity to run through the advantages ...'
July 9, 1996: 'Dear Mr Dwek, Thankyou for applying for the American Express Credit Card. After careful consideration, however, I am sorry to have to inform you that your application has not been successful ...'
October 1996: 'Dear Mr Dwek, You might wonder who on earth would consider paying £145 for a Gold Card. And, to be honest, not many people do. Quite simply that's because we only offer The Gold Card for Business Travellers to a very select number of people ...'
Marketing databases are supposed to allow 'sniper-style' targeting nowadays, and companies, especially multinationals like Amex, are meant to be armed with geo-demographic and lifestyle information aimed at penetrating the wallet and psyche of potential customers.
So much for the theory. The reality is that direct mail remains a blunt instrument. An Amex spokeswoman concedes that 'occasional mishaps' occur, usually as a result of inaccurate consumer lists rented in for specific campaigns. An excuse of sorts, but not really good enough for a company which has been praised so highly for its use of direct-marketing in recent years.
Witness another example of the blunderbuss approach: a middle-aged, very socially minded woman was fed up with a major charity mailing her with constant appeals for cash. So she wrote, asking them not to write anymore.
She explained she had already given all she could and that no amount of correspondence would change that. On the contrary, this would put the charity in a very bad light, revealing them to be wasteful of their resources.
The mailings continued and the woman stopped donating to them.
But for every cock-up there are many apparent successes. 'We wouldn't carry on with it if it didn't work,' says the Amex spokeswoman. Certainly, the figures show a massive pick-up in direct mail's popularity: UK direct mail items sent in 1991 were just over two billion, according to the Direct Marketing Information Service (DMIS), and the 1996 figure is expected to exceed three billion. This, despite all the summer postal strikes.
The Direct Marketing Association (DMA) estimates total spend on direct mail in 1995 at well over £1 billion.
So who's behind the surge in popularity? Supermarkets (Tesco and Sainsbury's loyalty schemes have resulted in hundreds of mailings each month), publishers (The Times and Telegraph have embraced 'below-the-line' big time in their long-running circulation war), credit card companies (135 new cards were launched in 1996), direct insurers (the fastest growing direct mail group), financial services companies (accounting for a third of all direct mail) and general insurance companies (the biggest user of direct mail, along-side publishers and credit card companies, with a 10% volume share).
Overall, the number of companies in Britain using direct mail has leapt by a staggering 75% in two years.
All the signs are that direct mail is set to continue its dramatic growth.
BT, for example, has over the past year seen its share of total telecoms direct mail fall from 49% to 11% because of a flood of new entries to the market. Its response? 'We've gone from mailing tens of thousands to tens of millions of pieces a year,' says a bullish BT marketing man.
How much are consumers influenced by direct mail? More, it would seem, than they care to admit. A recent survey by DIMS asked grocery shoppers if they were likely to visit a store after receiving a mail shot. While only 26% said yes, 36% actually made the visit. The discrepancy was even greater for supermarkets (28% against 48%) and department stores (27% against 49%), which suggests that, in spite of the junk mail perceptions, the medium is a formidable Trojan horse when it comes to storming the Englishman's castle.
There are threats to direct mail's dominance. There's telemarketing, which for the first time ever has overtaken direct mail in terms of expenditure.
The DMA's 1995 Census put telemarketing expenditure at £1.75 billion compared with direct mail's £1.35billion. Yet not so long ago telemarketing was seen as too intrusive by privacy-minded Brits. Another threat comes from Direct Response Television (DRTV), which showed the biggest increase in spend between 1994-5 of any direct-marketing medium: up by 68% to almost £400 million. Moreover, the Royal Mail/ DMA Direct Marketing awards this year gave their top gong to a DRTV campaign (from Daewoo Cars), marking a break with tradition.
Despite these young guns, and for all the hype about new channels of electronic communication, direct mail has an assured future. However, it would be that bit more assured if it could avoid irrelevant targeting. Perhaps Amex should send letter beginning: 'Dear Mr Dwek, as a valued potential customer, we apologise profusely for wasting your time'.