Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association

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Business Confidence Depends on the Company You Keep

            I'm still finding it a bit hard shaking off a heavy attack of the "blues" which affected both myself and other "old hands" in the cross-border DM industry at the DMA's International Day last June 19. We stood in the corridors gloomily discussing the good old days and how difficult things are now by comparison.

            But in retrospect much of the gloom was being spread by service providers who simply saw lower volumes of business out there compared with the past. As usual, the larger, active mailers stayed away.

            A couple of days later I was on the West Coast USA enjoying entirely different kinds of discussion full of specific plans and a positive outlook --- based on new business moving out of the U.S. into the international sector.

            Since returning to Asia I've had further positive discussions with players in fresh, new sectors such as international fundraising, natural health solutions and financial services --- and I've been discussing fresh, new highly responsive markets such as Russia, India, Vietnam, Pakistan, Japan and Eastern Europe.

            Business confidence really does depend on the company you keep.

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Go On - Test New Markets! It Doesn't Cost Much...

            In the last issue I led with the story: "Don't be shy --- test new markets". Since this last issue I've received a lot of positive feedback on new markets that are performing well to tests --- and significantly better than the usual, traditional markets many of which have become tired. One surprising strong example given to me by a mailer over breakfast in Hong Kong last week was Vietnam (population: over 84 million).

            During DMA International Day in New York, Daniel Rutenberg, Director of Marketing, International Air Passenger's Association (IAPA) talked about another large market BRAZIL which is often overlooked (it's the largest economy in Latin American and the 5th most populated country in the world --- with 182 million people).

            It was interesting to hear from Dan that IAPA's control package in Brazil is 100% English bearing in mind it's a Portuguese speaking market. However they've just tested the addition of a "Summary" in Portuguese and this has beaten the English language control --- despite the slightly higher mailing cost.

            As in other larger markets, you need to test a US$ payment option versus a local currency offer. You should also test a local drop versus mailing into the market from offshore with response back offshore. Your response will vary depending on your product category and order value. A couple of small tests will show you whether or not onshore really is a more cost effective strategy than mailing into any market from offshore.

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Let's Talk about Data Gathering...

            During a recent conversation with Charles Prescott, Vice-President, International Business Development & Government Affairs at the U.S. DMA, he discussed his role as Chairman of the UPU Consultative Committee. This Committee represents the interests of international mailers, postal users, private postal operators and other service providers and provides a framework for direct dialogue with the public postal membership of the Universal Postal Union. He mentioned that other representatives of Direct Marketing Associations (for instance) would be welcome to join the Committee. We both noted there was as yet no Asian based member of the Consultative Committee.

            My own strong feeling (as expressed in these columns before) is that the cross-border direct mail industry should be working more closely with the international postal industry since their mutual interests in helping to grow direct mail volumes around the world are so closely matched . I believe that dialogue along these lines should be held both at a local level and directly with the UPU membership at a strategic level. This could result in some very practical and specific joint data gathering programs, for instance. Like many other things in business, discussion needs to come first --- for actions to follow.

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Yet Another China DMA ...

            It was only a matter of time. When the China Direct Marketing Association opened it's doors in 2002 --- it was seen by the Chinese as an expatriate dominated temporary association incorporated (by necessity) in Hong Kong --- and not in China.

            Sooner or later the Chinese would have their own national association ... and last May it has actually appeared and is known as the China Direct Mail Association (CDMA).

            Like DMA's all over the world the early meetings have been dominated by Chinese postal officials and some service providers --- and users have been scarce. This will no doubt change as the CDMA gets its particular act together.

            Meanwhile the original China DMA has an established series of events, and a Shanghai pub-based social calendar, so it won't just disappear into the sunset. In fact, it may even begin to flex new muscles to the benefit of a direct marketing industry in China which is still struggling to get off the ground.

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Help Fight Cross-Border Mail Fraud...

            According to www.fraudwatchers.org. two years ago around 50 million people worldwide fell for an average 1.4 scams each costing them billions of dollars. Whether these scams are based on the "Nigerian letter scam", "lottery scams", so-called "investment/business opportunities" or "phishing" --- they continue and they are bad (very bad) for the international direct mail business. If you have a Customer File and you want to help your customers lodge complaints, which helps combat the insidious, fraudulent misuse of cross-border mail, the Federal Trade Commission offers a complaint form at http://wwwe.ftc.gov/ftc/complaint.htm. The FTC enters internet, telemarketing, identity theft and other fraud related complaints into "Consumer Sentinel", a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

            Another very helpful anti-fraud site is 419legal.org. managed by the South African Police Services. Their anti mail fraud activities go beyond the Nigerian 419 email scam. If your customers decide to send sample fraudulent emails to organizations such as these for actioning it is essential they send the entire email (including the header information) as an attachment --- otherwise they'll be wasting everybody's time.

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How You Can Now Acquire New Customers in Japan for a Lot Less

            It's interesting to observe how attention in the Japanese market from international mailers has escalated since the new Data Protection law was introduced into Japan a year ago last May.

            This has had three positive effects. Volumes of domestic direct mail have declined resulting in more attention being given by consumers to mail dropped into Japan from overseas (with air mail flashes on the outer envelope).

            In response to demand from offshore mailers, some very responsive lists have now also become available which are held offshore and therefore accessible offshore.

            As a result of both the above, mailers are currently securing excellent response rates out of Japan (for the first time for a long time). This is very significant because of the high retention rates and long term relationships which make Japan such a profitable market once the initial (comparatively) high cost of acquisition has been covered. With improved response rates, these acquisition costs (I'm delighted to report) are declining. Costs can also be reduced by printing and lettershopping from offshore and mailing into Japan from offshore for a lot less than the domestic printing and mailing costs.

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Serif as a Body Copy Font ALWAYS Works Better than Sans Serif...

            I had a fundraiser friend of mine in my office last week about to embark for the first time on that traditional (but highly commendable) exercise of writing and designing your own DM package. This is exactly how I started in the business myself thirty years ago --- by following Rule #3, Page 2 of the Direct Mail Handbook which reads: "Thou Shalt Steal Other People's Ideas"! I did just this and produced a package which delivered an initial paid subscriber response rate of 23.7% on a 22,500 house list and never pulled less than 8% on any outside list over the following 2 year period. (Response rates then plummeted when I hired a professional DM copywriter/designer to do the job "properly"!).

            Back to last week's conversation with a fundraiser. We discussed the absolutely fundamental issue of selecting a font for his body copy. What was true 30 years ago is also true today. Always use a serif font --- (such as Times Roman) rather than a sans serif font (such as Helvetica). This has been tested again and again and again. Serif always wins --- not marginally --- but by lifts of 500% and more!

            Another no-no I discovered many years ago is how hard it is to read reversed out text from a dark background --- and how this kills response. Those just starting up in DM often don't know this --- and believe that because something looks pretty then it must work! Wrong!

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Ethical Practices Pay...

            I don't often praise MLA staff or services in these columns since to some extent it undermines this newsletter's integrity. But I want to do so today.

            Specifically I want to congratulate MLA's staff in India under the leadership of Nikki Sachdeva. (Nikki headed MLA's Hong Kong office between 1992 and 2001 after which she left to set up MLA's India office in Mumbai).

            I don't particularly want to refer to MLA India's long list of blue chip clients or to their growing turnover and record profitability month after month, but more to their simple achievement in persuading the Indian DM industry to accept and support ethical business practice.

            For the first few years after launching, MLA India struggled against the prevalent industry practice in India of relying on "gray lists" --- gathered and compiled databases which had either been stolen or (at best) obtained unofficially. These were unreliable --- but cheap -- and provided a very rocky foundation indeed upon which to grow a direct marketing industry. Indeed this has been one of the very reasons the Indian DM industry has grown so slowly.

            Over the past 12 months after adhering relentlessly to ethical principles, and explaining again and again to clients and listowners why ethical practices (and the trust that arises from these practices) were so important, I'm glad to report that major DM clients and listowners are now choosing to support MLA India's lettershop, permitting de-duping , merge-purge and personalization outside their own premises and using MLA for caging services, credit card processing, cheque clearance and response management.

            These are some very powerful reasons why MLA India has now become a leading service provider today to the rapidly growing Indian DM industry.

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Is "Buy Two, Get One Free" a More Successful Offer?

            In the last issue of DM Diary I mentioned that over the years "Buy One, Get One Free" has proved the ultimate offer in both domestic and international direct mail. This is vehemently disputed by one of the more experienced international direct marketers I know in the business who has for many years been direct marketing natural health products across borders (and still does!). He tells me he has no doubt whatsoever (based on his own experience) that the most successful (and rewarding ) offer is "Buy Two, Get One Free"!

            I wonder if agreement on this is unanimous (and across all product sectors)?

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This International Direct Marketing information has been provided by James Thornton, Managing Director of MLA Response, 5/F CNT Tower, 338 Hennessy Road, Wanchai, Hongkong
Tel:   +852 2526 1208   Fax: +852 2524 9177 http://www.mlaresponse.com

MLA was founded in Hong Kong in 1983 as the first international list brokerage based in Asia.

List specialization remains a core component of the company’s service with 280 lists under management and over 4,500 lists available through the company’s brokerage services.

Beyond being a provider of lists, MLA outsources direct mail printing, laser addressing and lettershopping from carefully chosen suppliers in Manila, India, Shenzhen (China) and Bangkok. Cost savings for clients based in Hong Kong, Europe and the USA are between 20% to 50% depending on the components of the DM package.

MLA through its contacts with reliable private and public sector postal operators can negotiate competitive postal rates within Asia and from Asia to the USA, Europe and Rest of the World.|

MLA has been handling regional and global direct marketing campaigns since 1983. With its network of partners, and extensive experience, the company recommends responsive lists, provides strategic advice, manages low cost DM printing and production and negotiates low postal rates for regional and international campaigns.

MLA can also provide print media buying for direct response advertisers (negotiating discounted and stand-by rates and premium positioning). The company outsources call center services, fulfillment, data management and email broadcasting.

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