Don't be Shy:  Test New Markets

        I hear from Europe there's still widespread reluctance to mail and build customer relationships across borders.  Pan-European mailings are currently static.  I heard also last week from an experienced mailer and DM consultant in the USA who said he finds it hard to persuade US mailers to test new customer acquisition outside the USA (despite a declining list universe within the USA).

        For the life of me I can't understand why this inherent prejudice against mailing across borders persists.  Average  order values internationally are significantly higher than domestic.  Response rates are higher (in nearly all sectors).  The US dollar continues to be the standard currency which responders recognize and understand (although a local currency payment option can lift response), credit card orders can be processed offshore using Global Collect or PacNet and proceeds credited within the week to any onshore or offshore bank account. 

        As experienced practitioners know very well, mailing across many countries is no different to mailing across many states or counties.  You simply geo select and de-select as in your domestic market.  You can telemarket your customers across many markets from your headquarters at negotiated cheap rates (and there's no multinational “Do-Not-Call Register” to worry about).   Consumers and businessmen these days give no attention whatsoever to the postal indicia on the outer envelope (you can print and post from anywhere to anywhere as long as you know you have low competitive costs and reliable suppliers) and consumers are perfectly happy to respond offshore and receive fulfillment from offshore. 

        There's a trend away from investing in local or regional offices overseas where you incur overheads, extra costs, management, training and staff problems and (in some places) extortionate taxes.  Quite simply you can operate multinationally from your existing headquarters.  So what's the problem?  The only problem lies in the perception that cross-border is difficult and complicated.  Not so.  If you haven't already done it, test a multinational, Pan European or Pan Asian mailing step-by-step across several countries, quantify and compare response by country within list and find out for yourself just how straightforward it all is…(bear in mind smaller countries normally perform better than larger countries).

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Let Local Postal Administrations Sponsor Local DMA's

        The multinational DM market as a whole will grow more quickly if smaller markets around the world can create larger, more accurate local list universes.
 

        It was for this reason I was particularly interested to have breakfast recently in Hong Kong and lunch in Bangkok with senior members of the Hong Kong and Thailand DMA Committees.  Both groups shared the same concern.  They believed there would be no strengthening of their local DMA's ability to build membership and grow direct marketing locally until the chairmanship of their DMA became a full-time rather than a part-time role (as in the USA, Canada, Australia, the UK and some other larger markets).  They claim the time and effort required to lobby, organize networking opportunities, arrange events, focus on issues and plan DM presentations to educate and inform members and to liaise on common programs with other DMA's elsewhere – cannot be fulfilled effectively on a part-time basis.
 

        They may well be right.  But there's a practical consideration.  How can smaller national DMA's with smaller membership bases and lower incomes possibly justify the cost of a full time executive officer and staff?
 

        One way this can be done is through corporate sponsorship from “stakeholders” with a vested interest in the growth and success of a local DM industry.
 

        What larger possible “stakeholder” could there be than the national postal administration?  As members of the Universal Postal Union (UPU), almost every single significant postal administration in the world these days is being exhorted to help build their local DM industry to help fill the gap left by personal mail which has gone online.
 

        So why don't national postal administrations become major (but not necessarily sole) partners of national DMA's?  National posts would benefit, the DMA's would benefit, the DM industry would benefit and so would consumers in the market place.
 

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How Such Partnerships Can Expand the International List Universe

        Perhaps the single greatest limitation today in the growth of direct mail worldwide is the lack of good, accurate, constantly refreshed consumer databases.

        One way this can change is through partnerships between national Postal Administrations working with local Direct Marketing Association secretariats along the following lines:

1. Postal Administration distributes a consumer lifestyle questionnaire survey at their cost (negligible).  Recipients are invited to return completed questionnaires free of postal charges.
2. Sponsors pay for specific questions to be included which will help defray the cost of data capture and database development.  This process can be managed and coordinated by the local DMA as an independent body (under the direction of a CEO).
3. The DMA would also professionally manage the Consumer Database and makes it available to list brokers and legitimate local and international mailers (note the word legitimate) at normal list rental fees and with the usual security precautions (including seeding).

        A “responder” file like this will always perform better than any “compiled” file and the income generated would help pay for the cost of the DMA's CEO and secretariat.  Postal administrations shouldn't themselves manage the database as they have sometimes attempted to do in the past rather badly.  They would be better focusing on their core business of delivering the mail in full and on time.

        Consumers responding to the survey questionnaire would  either be given the opportunity to opt-out or opt-in to receive good, legitimate offers from responsible companies.  Segmentation would allow targeted mailings so direct marketers can in turn build and refresh their own customer files which would create an even larger responder list universe available to local and international mailers.

        The local DMA (as an independent industry body) would rigorously prevent junk mailers from accessing the file.  (The criteria used to quantify “junk” would be the decision of the DMA executive committee).  Irresponsible and misleading mailers would then become the “pariahs” of the industry – as they should be.

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Consumer Lifestyle Databases Would Then
Effectively be Owned by the Local DM Industry

        There's a precedent for some of the above which was described by Peter Rosenwald of Consult Partners ( Brazil ) in a keynote speech he gave at the end of late last year to the World Mail & Express Conference.
 

        In this speech he mentioned that Brazil Post generated a 20% response rate from an incentivized questionnaire survey to gather consumer data along the above lines which has now been completed by 3.5 million Brazilian consumers.  According to Peter this has become the most responsive database in Brazil.

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How to Get Users Back into Becoming DMA Members

        There's one final point about DMA membership around the world.  The majority of members should really be direct mail users (paying a lower, preferential rate).  Service providers should pay a higher rate.  If meetings are dominated by service providers, then users will stay away.

        By contrast DM users (especially experienced ones) will attract other users who together will attract service providers much as nectar attracts bees!  One extra way to attract users into DMA's incidentally, is to make access to the collective Consumer Lifestyle Database available to DMA members only.
 

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Farewell to “Senor Goodloe”

        Nearly all of us will by now have read the sad news of Al Goodloe's death in February from a brain tumor.  For many years he was one of the most relentless, enthusiastic and successful supporters of international direct marketing through his PDM Conferences held in New York and through the publication of his Publisher's Multinational Direct Newsletter.  He will be much missed by his many friends and colleagues.

        My last meeting with Al was at the IDMF in London last year when he invited Colin Evans (IAPA and ICLP Managing Director) and myself to breakfast at the Oxford & Cambridge Club in Pall Mall to discuss a new digital newsletter he was planning to launch on international DM – at the age of 80.  He was indefatigable!

        He loved the cross-border direct marketing business and his face would crease and light up with joy especially when recalling his days in Latin America as “Senor Goodloe” negotiating list barter deals on behalf of the company he managed for many years (Alexander Hamilton Institute).
 

        “Senor Goodloe” experiences would invariably be recalled during dinners I had with him for many years at the Harvard Club (usually at the table in the far left corner of the dining room) on the Sunday evenings before his PMD Conferences in New York.   We would review the forthcoming program (in which I was always a speaker or a moderator) and debate topical DM issues.
 

        We would then meet again for dinner the day following the program to discuss exactly how it all went, the issues raised and to gossip about the participants.
 

        I would arrive on the afternoon flight from Hong Kong and turn up at the Harvard Club on Sunday evening without fail at 6:15 PM precisely.  My unfailing reliability in this respect after a journey of 8,509 miles was always the cause of great amusement and mirth with Al.
 

        During DMA'05 in Atlanta I called him to confirm dinner in New York where I was planning to stopover to see him after the Show.  He said he wasn't feeling well but his mind was as clear and lucid as always.  “6:15 PM at the Harvard Club, right?”, he said.  But it wasn't to be.  Alice, his sister, called me the next day to report how ill he really was and there was no way he could meet up.  So quickly (just a few weeks later) he died…
 

        Farewell, Al!  Your verve, energy and ready laugh will be sorely missed by all your friends in this industry.

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Lightweight Stock Pulls Better When Airmailing Internationally

        Last week somebody mentioned they liked reading “DM Diary” because of the international DM “know-how” it contained.  This surprised me since this “diary” (when I get around to writing it) has always seemed to me to be rather long on “provocative” issues and rather short on “know-how” and “how-to”!  So here's some material to redress the balance:
 

        The issue here is paper stock used for international direct mail.  Those of us long in the tooth in mailing across country borders do everything we possibly can to keep the weight of a DM package below 20 gms (or .7 ounce)  (which was one of Al Goodloe's favorite topics!).  This usually requires outer and reply envelope paper stock of 60 gsm which makes it look and feel like what it is – an airmail package.
 

        Those used to mailing domestically (and we talk to many of them) have a hard time reconciling themselves to using such lightweight stock for the envelopes and only slightly heavier stock for the cover letter, order form  etc.  The fact is  recipients expect mail received from overseas to be lightweight and they respond better to lightweight packages especially when the outer envelope has red and blue airmail flashes and/or a dark blue airmail indicia.  Such envelopes are more readily opened, receive better attention and generate higher response.  Very many tests by many international mailers have confirmed and reconfirmed this.  Lightweight envelopes not only pull better, they cost less to print and less to post.
 

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Handwritten Addressing Lifts Response

        In terms of envelope design and copy we all have our preferences and prejudices based on numerous tests on what works best in getting DM envelopes opened.  But it was interesting to see the results of a recent survey on envelope design arranged by the Envelope Manufacturers Association Foundation (who else?) who surveyed 1,800 US consumers with the following results:

• 75% said they paid three times more attention to direct mail than unsolicited email, internet banner or pop-up ads., telemarketing calls, mobile phone test messages or door-to-door marketing COMBINED.
• 3 out of 4 preferred to receive bills in an envelope in the mail (rather than online).

        Here's what influenced them most to open up and look at content inside the envelope:

• 70%:  “name of sender and return address on envelope”
• 55%:  “very obvious… I know exactly what it's about”
• 47%:  “addressed to me by name”
• 42%:  “envelope is hand addressed”
• 35%:  “has real postage stamp”
• 28%:  “a little mysterious – not quite sure what it's about”
• 27%:  “distinctive in some way”
• 23%:  “marked special delivery or priority mail”
• 22%:  “some message to me on outside”

        Handwritten addresses are worth a test.  Fundraisers report 25% plus increases in response when handwriting is used on the outer envelope  (this can be done cheaply out of developing countries).  Tests have also shown clearly that machine applied handwriting (which looks perfect) pulls less well than personally handwritten addresses (with all the corrections, deletions and smudges) which look less than perfect.  In fact, I know mailers who go out of their way to make sure the handwriting looks less than perfect so it appears to be what it is – patently authentic – thereby pulling higher response rates.
 

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“Buy One  Get One Free” Still the Ultimate Offer

        While on the subject (one of my favorites) on what most lifts response I was reminded by one of my copywriters the other day (who has 39 years experience in direct marketing) that if you offer consumers too many purchase choices, they end up making no choice at all!
 

        He advocates two options only, maximum three, (but there must be a big incentive if you use three).  Historically two options ALWAYS outpulls 5 or 6 options.
 

        Another point about offers mentioned by Eugene Raitt of AIG during a recent HKDMA luncheon presentation I attended is that “Buy One, Get One Free” is the well tried and tested ultimate offer in both domestic and international mail.  It's the offer you have to beat!
 

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Australia Post Revisited

        In the last issue of DM Diary I wrote briefly about our “spat” with Australia Post over complaints from some mail-order companies who had found in tests that an unacceptable percentage of their domestic and overseas mail (especially envelopes containing orders and cash) was not being received.

        Australia Post denied strongly that mail was being intercepted by staff and before commenting we decided to carry out an independent test of our own.  Between October 10 -18 (before our last issue of DM Diary was published) we dispatched a total of 420 pieces of conventional airmail pieces (via both Hong Kong and Singapore Post) to contacts in Sydney, Melbourne and Gold Coast.  The monitoring of the mail was found to be unreliable in Sydney and Melbourne which left Gold Coast as the only destination upon which we could fully rely for data accuracy.  This is what happened:

• Mailpacks 1, 2, 3, 4, 6, 9 and 10: out of 140 pieces mailed with different contents, 136 were delivered (97 %).
• Mailpack No. 5:  contained DM Letter, talisman coin and PhP20 note.  14 were received out of 20 mailed (70 %)
• Mailpack No.7:  contained DM Letter with scanned US$100 note positioned outside a folded letter.  Only 12 pieces were received out of 20 pieces mailed (60 %).
• Mailpack No. 8:  contained DM Letter with scanned US$100 note positioned inside folded letter.  Only 13 received out of 20 pieces mailed (65 %).

        This negative test result was, of course, of enormous concern for any Australian mail-order company expecting to receive orders and cash through the mail.
 

        So we decided to carry out a further test using scanned US$100 notes only positioned outside folded letters in standard DM envelopes.  This was done between February 9  15, 2006, some weeks after our earlier piece had appeared in DM Diary.
 

        The result was so much more positive in this respect for Australia Post that we wonder whether an “Operation Clean Up” had been instituted within Australia Post after our earlier report was published!

        Out of 20 pieces (with scanned US$100 notes) sent to a single Sydney contact address (through Hong Kong and Singapore Posts) all 20 were delivered.

        All 20 pieces sent to one Melbourne address were received but not one of the 20 pieces sent to each of two P.O Box No's. at two different locations in Melbourne (40 in total) were received.  This horrified the P.O. Box owner who had used these previously to receive DM response without a problem.
 

        Out of the 20 pieces sent to a single addressee in the Gold Coast, only one piece was not received at all.  Three other delivered pieces had all been opened with the scanned US$100 note left inside!
 

        Bottom line the second test reflected a massive improvement in Aussie Post security procedures.   What happened?
 

        One of our more cynical addressee contacts however, believes we should conduct one further test using only printed “BRE” envelopes since these are perceived by postal workers as more likely to be valuable and contain cash than plain envelopes.

        This we shall do, and so that Australia Post does not accuse us of singling them out unfairly we shall extend the test to other countries (and therefore other postal administrations).
 

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Beware  Any Small, Bulk Air Mail Consolidator
Who Offers You Great Rates

        It was recently reported in the UK press that two directors of a private mail company in the UK admitted dumping 368,718 items of mail during a specific 15-day period.  (They had in fact dumped more than this over a longer period).  They were fined 900,000 pounds and jailed for two years.  Good riddance!
 

        Judge Andrew Goymer of Southwark Crown Court told the two culprits:  “It's agreed by all sides that fraud in your industry is rife – indeed the word “endemic” has been used.  But that is no excuse for the way you behaved!”
 

        You can say that again!  If any small, private mail consolidator offers you a low, attractive rate for your international bulk mail, be careful.  The only way they can usually profit from the low rate they offer is not to deliver some – or not to deliver all – of your mail.  It's  quite simple, really!  In my view it's best to stick with large, well known brand names for your international postal consolidation requirements.
 

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How do we Nail the Big-Time Cross-Border Spammers?

        Last month saw the largest judgement so far against a spammer.  Based in Florida, James McCalla was ordered by a US judge to pay US$11.2 billion in damages and compensation to a small ISP in Iowa called CIS Internet.  He had sent 280 million illegal spam emails into their network.  The owner of CIS claimed under state law he was entitled to US$10 per illegal email and he “expected to see the money”.
 

        McCalla chose to defend himself without an attorney claiming he was insolvent, that the accusations jeopardized his reputation and that he would be counter-suing for defamation.  He later sent a letter to the court accusing CIS Internet of “taking advantage of their ability to afford lawyers in order to prey on smaller start-up companies and innocent people”!
 

        Americans would call him a “chicken-boner”.  But his story contrasts with a Nigel Roberts in the UK who recently sued for compensation under the UK 's Privacy and Electronics Communication Regulations for receiving email spam, and accepted 300 pounds in an out-of-court settlement.
 

        The financial penalties for sending spam may vary on either side of the Atlantic.  But it's sobering to think we're hearing here about the little guys involved only in domestic spam.  What about the big guys spamming on a really large scale internationally out of Russia and China ?  How do we nail them?

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James Thornton
Managing Director

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