The same but different

Marketing basics are the same in most consumer-driven cultures. Direct mailers all strive to have the right offer, hitting their target market at exactly the right time to maximise response. Having worked in the US for the past 10 years with some of the largest direct mailers in the industry and now discovering the intricacies of the UK marketplace, I’m finding that there are some very basic similarities as well as some subtle differences.

Customer spend by channel
In 2009, Abacus US’s trend report showed that the proportion of spend coming in via the internet had grown by 12 percent over the past four years to account for at least 41 percent of the total demand across all order channels for the core business-to-consumer sector. This figure is much higher for specific customer segments, heading well past the 80 percent mark in many cases. It is also worth mentioning that one of the fastest growing segments for online activity is the senior market, which is a key customer segment for many direct marketers.

This trend has made US mailers very focused on optimising the online channel to maximise both outbound customer contacts and improving the overall customer experience on their websites. As consumers become more comfortable with the web, marketers will continue to find ways to target this highly customisable medium to engage their customers and prospects on a different level. Marketers should ensure that their branding, messaging and merchandise mix is consistent across all marketing channels. Customers should be able to shop in one channel and purchase in another but have a similar brand experience across both. This also makes it very important to have a single customer view in order to understand what promotions that customer has received across all marketing contacts and what likely path through all those contacts caused the eventual purchase. In a basic sense, we all know that it is a combination of touchpoints that drive higher response rates overall and now everyone is looking to maximise budgets to get the right mix.

To a certain extent, marketers have been regulating their own activities on the web in order to keep legislators from getting too involved in privacy issues online. Both sides of the pond are trying to maximise online marketing but treading lightly so to not step out of bounds with privacy regulations. Ensuring that you allow customers to opt out of communications is very important but equally important is ensuring that as online activity increases, your online privacy policy allows you to capture and promote to as many customers as possible. It’s always a good idea to review these policies on an ongoing basis and include in your policy that customers should always check back for updates.

Christmas purchasing shifting later in the season
Christmas purchasing is shifting later in the season and this appears to be a trend that is happening in both marketplaces. In the US, we began to notice this trend about four years ago with purchasing moving more and more to the web for last-minute gifts. Many US marketers picked up on this trend and offered low-cost shipping rates to guarantee delivery for Christmas in addition to deep discounts and promotions to gain last-minute demand.

Abacus UK’s pre-Christmas trends report showed a corroborated this. In fact, November was the strongest month in terms of year-of-year revenue growth compared to other months during the year with 19.7 percent more revenue in November 2010 as compared to November 2009. Consumers across the board seem to be waiting for those last-minute deals and promotions to get the best price possible on their gift purchases.

Rising costs
Marketers on both sides of the Atlantic are faced with rising costs: paper, print, cost of goods and, of course, postage. Everyone seems to be looking at ways to combat these increases through strategies that allow them to mail smarter and consolidate their own marketing spend whenever possible to keep costs in check. In my experience, many large mailers in the US are looking to be much more innovative in their mailing strategies. Enlisting trusted partners to help them with contact strategies and modelling for customer mailings as well as consolidating prospecting efforts to balance both cost and return across the board allows them to do this effectively.

I have seen that the postal services in both countries have tried to put programmes in place to help increase direct mail activity so it is worthwhile that marketers continually review these programmes to see how they may be able to leverage these discounts in their own businesses.

Promotions and offers
Promotional offers and tests became very prevalent with the US marketplace in late 2008 and throughout 2009. Often this was seen to be the cause of slightly lower average orders. In a time when economic pressure was limiting the disposable income of American consumers, there was a lot more competition within the marketplace to secure as much of that share as possible. In 2010, with indicators looking a bit more optimistic, consumers still seemed to be looking for a deal. Sites that publicly shared coupon codes for most online merchants made it really difficult to monitor if a customer had even been given a promotion or if he’d simply sought it out on his own steam.

Mailers in the UK do seem to test specific offers but it doesn’t appear to be as prevalent as the trend that was happening in the US for the past few years. It seems to be a balancing act to maintain average order values and still generate a boost in response rates. The “bargain shoppers” can be a great initial gain on a single campaign but their downstream value needs to be monitored closely so all the initial profit isn’t spent back in subsequent catalogue mailings where they aren’t likely to ever respond again.

Consumer trends are changing very quickly and it will take ongoing effort for marketers to figure out the best reaction to the changing times. It is a matter of understanding consumer behaviour and being flexible with plans in order to react to all of the changes in a timely manner. I think we do have to recognise in both countries that consumers are changing and to keep on the top of their mind and in their wallet, we will have to change with them.

Amanda White is senior account director at transactional database specialist, Abacus.