Download Please give a three page overview of how you see the role of Direct

Question 2 - Please give a three page overview of how you see the role of Direct Marketing has
changed in the last five years and how this has impacted the marketing mix. Specifically commenting
on factors including: the economy, social media, interaction with other channels (marketing and
retail) and future innovation
The role of Direct Marketing: have the old values gone out of the window in the digital world?
On the contrary, they’ve never been more important.
Because, the key trend that has happened in the last five years is that all marketing is now mostly
Direct Marketing - but less of direct mail.
By that we mean the way that digital technologies have brought in an ever growing number of ways
for us to react to messages that surround us, targeted and powered by an ever growing data vapour
trail that we leave behind us.
Maybe you don’t want to hear that. But we believe there is an opportunity for Royal Mail
MarketReach within it. Or, several, depending on how wide or how deep you want to develop the
business.
What drove this trend towards everything becoming more direct?
The age of economic uncertainty: the economic crisis and the retrenchment of consumers have
squeezed companies’ budgets. Marketing money has to work harder and show better connections
between spend and results. Trackable and accountable channels benefitted.
The unstoppable rise of digital platforms: more and more around us is becoming electronic, but
also connected. Even our TVs and DVD players are now powerful connected computers. This has
changed how consumers behave and their expectations of marketing communications.
The mainstream adoption of the social media: the broadcast paradigm of marketing of old is now
being undermined by an always on, conversational approach to marketing. And, due to the rise of
transparency, consumers are now in more control of how brands behave and even what they stand
for.
The multichannel consumer: the new world of a multitude of options has given birth to a new
consumer – one that is at ease in transacting both offline and online, creating along the way more
complex user journeys.
The emergence of the Big Data thinking: as we leave an ever growing data trail behind our daily
lives, the opportunities to use that data for richer insights has been a strong force for the rise of
direct thinking.
The case for Direct Marketing values
If by Direct Marketing we mean: personal, relevant, responsive and stimulating communications
based on consumer insight and with a direct response path - then, the need for these attributes has
never been greater. If anything, the proliferation of digital platforms demands even more DM
discipline.
1. To target more efficiently across the customer journey, as it becomes more complex,
multichannel and with more flexible personal scenarios required by consumers.
2. To talk to customers with relevance.
3. To test robustly, as digital channels are easy to get lost in. Testing rigour and building ongoing learning has become one of the key marketing requirements.
4. To measure effectiveness, as attribution in the complex world is increasingly becoming the
new gold mine. It is not enough just to know if something worked, but how and why, so it
can be replicated.
5. To allow for the ultimate aim of all great customer-value building programmes: to let the
customers manage the relationship where, when and how she wants it. The ultimate 1-2-1
marketing: Customer-Managed Relationships (CMR).
What did the new Direct Marketing do to Direct Mail?
The drive for accountability has created a somewhat schizophrenic trend: traditional ATL TV and
press advertising budgets are being transferred into more direct channels, but because the ROIs on
direct mail – particularly acquisition - are declining, a large chunk of that money is moving into
digital, usually with a lower cost per contact.
The pervasive use of digital has created an increased propensity for consumers to interact and
transact online, pushing direct mail further down the customer journey into the area of customer
service, monthly bills and statements. This has limited the scope for the “Power of Real” to excel.
The mainstreaming of social media has created new notions of privacy – or the lack of – and new
perceptions of speed, flexibility, frequency of contact and content delivery that direct mail cannot
match.
The Big Data brought both opportunities and threats to direct mail. The opportunity: with less
competition hitting the mail box, well-targeted and relevant direct mail based on a true customer
insight can stand out. The threat: paper is not a very suitable format for dynamic, on-the-fly
personalisation around hundreds of variants.
What does all of that mean for MarketReach? – SWOT analysis
Strengths
Market Reach (MR) is a brand associated with Royal Mail, one of the most trusted institutions in the
country and a veritable expert in all things mail. It inspires an immediate confidence.
It is also a great platform to start building a case for the use of direct mail in the digital world. The
current content on the site is going in the right direction by using successful case studies and
prominent industry figures as spokespeople.
The website itself is modern, bold, optimistic, focused and clearly has a service and educational
focus. The structure tries to pre-empt and answer many of the questions audiences will have.
Weaknesses
The homepage would benefit from leading with an inspirational creative case study to immediately
establish the case for direct mail and frame the rest of the journey through the site.
There is a conspicuous absence of rich media material on the site, particularly infographics and
videos – or at least ‘flippable’ slideshows. This would make the content less dry.
The navigation is idiosyncratic, as the ‘Play’ button in the main navigation takes users out of the
main site and main navigation.
Opportunities
Organise the website along the lines of the key benefits direct mail brings to a marketing mix:
tactility, exclusivity, emotionality and collectability.
Use these highly engaging territories to build the case for direct mail from the ground up, not the
other way around, through engaging rich-media case studies.
Using prominent industry names: many are very passionate about using mail and talk engagingly
through conference platforms or in blogs. You need to have more of that on the site.
As for the case studies above, you have an opportunity to bring the story of data to life, as it is an
inseparable part of using direct mail. Videos, infographics and unusual angles/case studies would be
of great help.
Threats
They are mostly strategic and connected to the territory you’ve decided to own. They could be
summed up in two words: irrelevance and clarity.
Is owning direct mail enough in today’s world or is it better to own Direct Marketing? Although the
mail territory could be defended for some time, you have the right to think bigger and become the
UK’s leading resource for understanding direct marketing principles.
Your business case: at the moment, MarketReach operates as a consultancy/agency in direct
competition with many integrated and DM agencies. Is this position credible long-term, or are you
alienating your allies in the marketing world who can help you maintain the case for using direct
mail? Do you want to be the ‘direct mail’s IDM’, or an agency?
And if you do decide to keep the consultancy side of your business, who are then your prospective
clients? Smaller businesses with little experience in using direct mail (most of UK businesses)? Or
focus on a few specific sectors (e.g. charities, dental surgeries, opticians and similar)?
Or the other end of the spectrum and specialise in high-value, high-impact direct mail for big clients
as well, minus the overhead cost of bigger agencies?
In short, your biggest threats lie in failing to create two cases: for using direct mail in the increasingly
digital world and for why people should come to you for their direct mail campaigns.