International Direct Marketing News from DM Diary
Better to Dialogue with “Commercially” (Rather Than
“Environmentally”) Aware U.K. Politicians About the Benefits
of Opt-Out Direct Mail?
Earlier this year, while still Parliamentary Under-Secretary
of State for the UK’s Department for Environment, Food and
Rural Affairs, David Milliband stated in an interview with
the Evening Standard that “war on junk mail” had been
declared and that all direct mail should in future become
“opt-in”. When Milliband was promoted to Secretary of State
for Foreign Affairs recently in the Gordon Brown Cabinet
re-shuffle it was no surprise there was an audible sigh of
relief from the UK’s direct marketing community. However,
this hasn’t prevented the “opt-in” dialogue continuing with
his successor at the Dept. for the Environment, Joan
Ruddock.
My old friend Rosemary Smith in London described the UK
situation rather nicely: “Let’s not kid ourselves, universal
opt-in is Armageddon for this business and we need to stay
awake to stop it happening”.
According to Rosemary the most powerful lobby against direct
mail in the UK right now is from the “Greenies” and the
environmental issue seems to be at the core of the DM
industry’s dialogue with Government – rather than privacy.
Every political party in the UK is fashionably green these
days and the environmentalists don’t like the perceived
paper wastage that direct mail represents (despite figures
showing only 2% of household waste consists of direct mail
materials and most direct mail in the UK is already being
printed on recycled paper anyway).
Meanwhile Rosemary tells me Ealing (where she lives) was
completely inundated by direct mail recently from every one
of the UK political parties prior to the first by-election
which was held there after Gordon Brown took over from Blair
as prime minister.
Where generating political support is concerned, Governments
all over the world use direct mail because they recognize
its inherent usefulness and value. In the UK I suspect that
(when push comes to shove) the business and commercial value
of direct mail will ultimately be perceived as being more
important in the Government’s eyes than the significance of
perceived “paper wastage”. Meanwhile the DM industry in the
UK should continue to articulate the benefits of authentic,
legitimate, useful, recycled, opt-out direct mail (through a
preference service if necessary) – preferably by talking to
the more informed, commercially minded, less prejudiced
types at the Department of Trade and Industry (now called
rather forbiddingly “Department for Business, Enterprise and
Regulatory Reform”) – rather than to the political
“environmentalists” whose positioning is really not that
strong at all).
* * *
Do Online Ordering Options Reduce Postal Response?
Several mailers (including a well-known book publisher) have
told me recently they’ve found that using a website (and
therefore an online ordering option) to support postal
direct mail campaigns reduces rather than lifts response.
This is interesting. Their rationalization is that positive
response is something immediate, powered by emotion or
excitement and creating a momentum, which leads easily to
calling either a telephone number or completing an order
form sitting there right in front of your nose. If there’s
an online ordering option, you must go find your computer
(with the full intention of placing an order) but often
there can be a diversion on the way to any website – and
sometimes you just don’t get there! An A/B split or two will
tell you whether an online ordering option does – or does
not – work for your particular offer. (I do assume, of
course, your online response tracking is fully in place when
calculating total response – which takes into account
response from each channel including mail, telephone and
online). I say this because I know that some mailers’
online(and telephone) response tracking is somewhat less
than 100% efficient.
* * *
Good News – and Bad News – from
the United States Postal Service
The costs of mailing internationally out of the USA are now
higher. IPA rates are up 35% and ISAL rates are up by an
average 14.1%. However, one huge breakthrough for the USPS
is that representatives are now explicitly permitted to
negotiate rates enabling the USPS to compete on price with
international postal operators. We’ve been offered an ISAL
rate from the U.S. to Japan recently by a USPS postal
consolidator which is significantly lower than the best rate
we can get from any international postal operator (even
though we’re based in Asia – and therefore a lot closer to
Japan)! Delivery time for USPS’s ISAL service to Japan is
also only 4-5 days which is at least twice as fast as their
delivery time to most other destinations.
However, a word of caution: I hear that the USPS in their
eagerness to become more profitable are seeking to cut ISAL
costs by using “hubs” and by negotiating “space available”
contracts with airlines. In many instances this will carry
the risk of creating even longer ISAL delivery times for
some mailers to some destinations in the future. Not good if
you’re mailing “hotline” names – or if you’re uncomfortable
with the “uncertain delivery time” factor.
* * *
There’s no Turning Back. Print Publishers
Must Try to Find Ways of Making Money from Digital Editions
One beneficiary of the decline in postal response rates to
publication subscription offers has been the “Asia-Pacific
Publishing Convention” 2007 held earlier this month which
was designed to help print publishers find ways of making
digital editions profitable. However, the perennial
challenge of acquiring and maintaining audited circulation
is not a lot easier online (especially paid circulation) –
and circulation costs will continue to eat into publisher’s
profits. Useful ideas on digital were exchanged at the APPC,
and it’s clear many of the larger publishers (who stayed
away from this first conference – as big players tend to do)
will be attending the second event next year. They have
little alternative but to “stop treading water” (as the
convention organizers put it) and to actively begin to find
ways of making money out of the digital editions they will
soon be forced to develop.
* * *
If Advertising in Digital Editions Becomes More Interactive,
Would Advertisers Spend More Money?
Whilst circulation costs have become every periodical
publisher’s nightmare, advertising continues to be every
publisher’s life’s blood (print or digital). David Ennes,
ASEAN general manager of L’OREAL, who spoke at ACCP 2007,
spelled out how L’OREAL is actively capturing buyer details
at point-of-purchase enabling the company to track buyer
purchases, value and frequency through a database where
relationships and sales are grown through tailored direct
e-mail offers. Their objective, Mr. Ennes said, is quite
simply to encourage repeat purchasing – and this is proving
very productive.
However, David Ennes did point out that leading women’s
magazines were not yet offering advertisers sufficiently
interactive ways of reaching their high-value readers which
would enable advertisers (such as themselves) to acquire new
customers online and to further grow profitable direct email
activity.
It’s clear that “exposure” alone derived from online
advertising is no longer good enough. Advertising in digital
editions will simply have to become interactive to the point
where advertisers are willing to invest money because the
response they are actually receiving online is trackable,
quantifiable and measurable.
* * *
Compliance With New Stringent Postal Sort Conditions Needed
to
Secure Maximum Discounts When Direct Injecting into the USPS
Many fundraisers believe they have a “moral obligation” to
their donors not to spend more on new donor acquisition than
is absolutely necessary. To this end, U.S. fundraisers cut
costs by printing in China (often sourcing premiums there),
and then ship by surface container back to the U.S. West
Coast and direct inject into the USPS.
To get maximum postal discounts from the USPS you must now
arrange for enhanced Post Code accuracy through DPV
(Delivery Point Validation) Certification. You’re not
allowed to access or use this software outside the USA, so
you must have your mail sorted using DPV software (effective
August 1 this year) offered by one of the postal sort
companies on the West Coast (PSI, Pitney Bowes, Anchor or
Smartmail, for instance) who will then direct inject on your
behalf.
‘Dimensional’ packs are being used successfully by many
fundraisers these days, but there are also now maximum size
and thickness rules being applied by the USPS (and a new
“flexibility” test), so to avoid overpaying on postage make
sure your ‘dimensional’ package is approved before you print
in China and ship back to the U.S. for direct injection.
These are extra ground rules being applied by the USPS – but
if the extra cost is reasonable and they facilitate full
delivery of our mail within the U.S. – who are we to
complain?
* * *
Make Way for the Good Guys
With Good Products
It has always struck me that one of the greatest
international mail-order opportunities out there lies with
manufacturers and distributors of authentic natural health
products which work. Such products are not always prescribed
by general practitioners (they weren’t taught about them in
medical school) and they tend not to be sold by health
product retailers so many of whom are controlled by the
pharmaceutical industry against whose drugs many natural
health products are competing.
It’s therefore very disturbing to see the negative publicity
being given in Europe and the USA recently to the scale of
bogus and low quality medical products being sold online.
This discredits an important mail order channel which
potentially enables consumers to obtain authentic, proven
and efficacious natural health products which can help their
condition but are not easily available through pharmacy
networks or the usual medical establishment channels. (I
feel strongly about this).
* * *
More Fresh Names… Will Lead to Larger Volume Mailings…
Which Will Lead to More Fresh Names… Which Will Lead to …
Last month I was very honoured to receive the 2007 “Lifetime
Achievement Award” from the U.S. DMA’s International
Council. I thank them for that. I flew to New York for lunch
to accept the Award (upgrading to first-class from business
class both ways using Asia Miles because of my bad leg). It
was good to meet up with many old friends in the business at
lunch and also the next day before returning to Asia.
In my brief acceptance speech I remarked on the difference
between the good old days when high response rates were
“normal” and today when low response rates are “normal”. The
common denominator between good response and poor response
was, and still is, the volume of fresh names available. Of
course, fresh names in the old days were still comparatively
“fresh” while today’s “fresh” names (within the major
markets) have all been hammered and overwhelmed by mail
pollution (ie. the sheer volume of useless and deceptive
offers – offline and online).
However, a freshly generated name still has value as a
freshly generated name. We know this from those blessed
markets where “hotline” names are available which deliver
much higher than average response rates. So much higher in
fact that in many markets (such as Japan) “hotline” names
can only be rented on a reciprocal basis against a similar
number of other “hotline” names. Existing mailers don’t like
to make it too easy for newcomers into the market…
One of the points I made in my Award acceptance speech in
New York concerned this issue of fresh names. MLA is
currently putting together (with the help of a data
compiler) raw data from the public domain in 125 countries
(which have been neglected for several years) where there’s
no local list industry and low to miniscule volumes of local
and international direct mail. This will form the basis of a
co-op mailing shared by reputable mailers with authentic
offers which would gradually convert compiled and gathered
names into ‘fresh” names and allow participants to
reciprocate their separately generated fresh names with each
other.
Many international mailers will argue that only the top
half-a-dozen industrialized countries matter. I disagree.
Multinationally there is one language (English) – and one
currency (US Dollar) – which, to a greater or less degree,
are universally recognized. This combination anyway is good
enough to generate response which (on average) tends to be
250% higher than response you get from industrialized
countries – probably because people in these smaller
countries experience less mail “pollution” and are exposed
to much less mail.
Smaller markets are like currents in a cake. No single
country is significant in itself (though response rates can
vary consistently by a significant percentage) – but
response from many smaller markets together in a single DM
campaign can make for a much sweeter overall experience when
viewing the bottom line.
Rather than continuing to experience a downward spiral in
the multinational market where smaller mailings chase fewer
fresh names which lead to smaller mailings chasing even
fewer fresh names – the reverse would apply. More fresh
names can lead to larger volume mailings… generating more
fresh names… leading to yet larger mailings… leading to yet
more fresh names … leading to even larger mailings… leading
to even more fresh names… leading to…
* * *
Bulk Mail Penalties Are One More Risk
When Mailing into Larger Markets
Another reason for mailing smaller countries is you can do
so by mixing and spreading your mail across many smaller
countries without incurring bulk mail penalties. Quantities
of more than 1,500 pieces a day, or 5,000 pieces over a
period of 2 weeks, identifiable from the same sender, which
are mailed into certain countries such as Japan, Germany,
UK, Greece and France for instance, can incur high bulk mail
penalties.
Obviously larger mailers have ways of getting around this
UPU restriction (it’s not for me to describe exactly how
right here and right now) – but it’s a bit messy and entails
more than a little bit of planning and one more element of
risk – as if there wasn’t enough risk already out there
every time we mail.
* * *
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