Download Greatest ever letter of complaint

Marketing Society Star Awards 2009
Category 02: Communication Excellence
Direct Marketing Excellence
Climbing the ladder
How VisitScotland’s new approach to direct marketing
has generated a 68:1 return on investment by
creating loyalty to Scotland as a tourist destination.
Gus Chalmers, Managing Director, Union Direct
Susannah Low, Account Director, Union Direct
Gwen Raez, VisitScotland
Heather McKinlay, Fraoch Marketing
11th February 2009
Word count – 1,926
Introduction
Consumers face an ever-increasing choice in most markets these days. Visit
the local supermarket and you are presented with an array of vegetables most
of which twenty years ago you wouldn’t even have heard of let alone tasted.
Visit the off-license and you’ll be spoilt by a choice of dozens of beers and
wines. Innovation, technology and reduced transport costs have shrunk the
world.
This is particularly true for the holiday and short-break markets. The
proliferation of budget airlines such as easyjet and Ryanair combined with the
development of a network of regional airports has resulted in an everincreasing list of overseas destinations being available to most of us – at a
low cost.
But whilst choice may be considered a good thing for the consumer the flip
side of the coin is increased competition for providers and in the context of
holidays, for individual destinations.
In this environment, Scotland has ambitious targets to grow its share of the
market. It is a market which is of critical importance to the Scottish economy
with UK consumers representing 83% of volume and 65% of value to Scottish
tourism, delivering £2.7 billion to the economy (source UKTS 2006) a figure
that VisitScotland have been tasked to grow by 50% over 10 years.
2
In the face of these challenges this paper will
demonstrate how a new direct marketing strategy
implemented at the start of 2008 has delivered
incremental tourist revenue for Scotland of £18
million in its first six months representing a
stunning 68:1 return on investment.
3
Background
With an annual direct marketing budget of £500,000 yet more than three
million records in total on its database VisitScotland had to be selective about
who it chose to mail through the year. The question was how could it use the
data it held on these individuals to maximise returns?
Since 2002 contacts on VisitScotland’s own database had been asked a
loyalty question at the point of data-capture allowing them to be placed on a
‘loyalty ladder’ reflecting their attitude to Scotland as a destination and their
likelihood to travel there – from ‘Rejecters’, through ‘Prospects’, ‘Lapsed’ and
‘Occasionals’ to those at the top of the ladder, the most loyal ‘Regulars’.
Compared with the wider market these database contacts were far more likely
to be classified as ‘Regulars’ (45% v. 10%) or 'Occasionals’ (30% v 14%) and
clearly had a much stronger affinity with Scotland
The database was therefore a huge potential asset. Given the relatively
limited budgets and the need to increase the efficiency of all marketing spend,
was that asset being utilised in the most effective way?
Historically VisitScotland’s direct marketing had tended to be product focused,
promoting individual activities such as golf, fishing, walking or city breaks to
individuals based on a previous expression of interest. The issue with this
approach was essentially twofold;
4
1. It was product rather than consumer focused. This meant that one
individual could potentially receive multiple mailings throughout the year
from different product teams. From the consumer’s perspective this could
potentially appear haphazard. VisitScotland’s research also indicated that
most visitors had multiple interests and reasons for visiting so it made
sense that its marketing materials reflected this.
2. It was wasteful; spend per individual consumer was not allocated by
potential value but principally by whatever activity that individual had
previously expressed interest in. One low potential consumer might in
theory be mailed five times through the year whilst another, high potential
value individual may not have been mailed at all.
An ambitious change in direction was therefore proposed; a move from
direct marketing to relationship marketing – a programme believed to be
the first of its kind for a tourist authority. Marketing spend would be
targeted where the most potential lay. Mailings would become more
personalised, driven by individual consumer data. Individual consumers
would be encouraged to interact with VisitScotland, to take more breaks
in Scotland and to climb the loyalty ladder.
The Keep Discovering
programme was launched.
QuickTime™ and a
TIFF (U ncompressed) decompressor
are needed to see this picture.
5
The new approach
The strategy
The underlying insight behind the new approach was that if high potential
value consumers are provided with inspirational ideas of what to do on holiday
in Scotland that were relevant to their own interests and if this information was
combined with targeted, personalised offers from travel, accommodation and
activity providers then they would be more likely to visit Scotland - and to keep
coming back. Research indicated that a ‘Regular’ was worth £900 to Scotland
annually compared to £320 for an ‘Occasional’ so the potential benefit to
Scotland of encouraging movement up the loyalty ladder was enormous.
Marketing spend would therefore focus on contacts on the database
categorised as ‘Occasionals’; these individuals would receive four mailings
through the year in a concerted effort to drive them up the loyalty ladder and
to become ‘Regulars’. Regulars would be mailed one higher value, high
impact communication a year – on the basis that they had already shown a
higher degree of loyalty to Scotland as a destination and were therefore more
likely to return, and would contact VisitScotland proactively themselves to
gather relevant information.
Content would be driven by what was known from the database about an
individual. If, for example, they had previously registered interest in, or
requested information about, walking, touring and city breaks then would
receive information and offers personalised to those interests.
6
Relevance and personalisation would drive engagement and response
encouraging loyalty amongst consumers and ultimately generating
incremental visits and tourist spend for the Scottish economy.
Objectives
A challenging objective was set to deliver a minimum return on investment of
25:1 from the programme over time, representing a significant uplift on
previous direct marketing campaign performance.
Additionally, a movement of 10% from ‘Occasional’ to ‘Regular’ was targeted
from the database.
Both of these core objectives would be measured though a robust telephone
tracking panel comparing the mailed group to a non-mailed control sample.
7
Executional excellence
Inspire, individualise, incentivise, interact, integrate – the five ‘i’s at the heart
of the programme:
1. Inspiration
Stunning photography that creates the desire to visit is used throughout
beginning on the outer envelope in recognition of the fact that for many it’s
Scotland scenery and sights that hold its strongest attraction.
8
2. Individualisation
Individualised content; designed to inform and inspire, relevant to an
individual’s known interests and tailored to their level of engagement with
Scotland;

‘Regulars’ for example receive personalised ‘off the beaten track’ ideas
presented in a book of glossy inserts; for example, a ‘foodie’ who is also
into walking might receive information about a wander through a leafy glen
with a wonderful pub or restaurant at its end. As ‘Regulars’ were to
receive only one annual communication the first one incorporated a handy,
glovebox size, filofax style folder for recipients to store these inserts for
future reference and use.

‘Occasionals’ get similarly personalised information but with more
mainstream suggestions less far from the beaten track, recognising that
they are yet to become Scotland ‘regulars’ and may not yet have
experienced some of the more ‘headline’ attractions. ‘Occasionals’ are
invited to request the ‘filofax’ style folder in order to manage costs and
encourage interaction.
9
3. Incentivisation
Offers are tailored to individual circumstances and interests by using cuttingedge digital-printing techniques. If you’re based in Ireland then the travel offer
will be a relevant one such as Stena Line ferries. If you’re into walking it will
be a deal from an outdoor equipment shop for discounts on kit. If you
generally prefer to stay in bed and breakfasts then the accommodation offer
will reflect that preference.
4. Interaction
Any relationship marketing programme must encourage response and provide
channels that allow consumers to provide updated personal details. Every
mailing incorporates an incentivised survey which has been personalised
according to what data is already held on that individual recipient – if we’ve
already had the answer we won’t ask the question a second time.
Relationships depend on dialogue and reacting to what the other party says –
10
so we pay close attention to ensure updates are logged in time for the next
phase of activity.
5. Integration
Integration with other channels and promotions is critical to ensure that an
individual’s experience of and interaction with VisitScotland is as seamless as
possible.

Online; VisitScotland’s digital agency, Equator, have created a sister web
site www.visitscotland.com/keepdiscovering which allows users to
personalise content and create their own online ‘filofax’ of relevant content.
A monthly ezine keeps those registered online up-to-date with the latest
content additions and offers.
11

National promotions; VisitScotland’s marketing calendar incorporates
some high-profile promotions to encourage tourism during the slower parts
of the year most notably Autumn Gold and Winter White. The Keep
Discovering programme seeks to maximise synergies with these
promotions by including relevant offers within the mailings and in
reflecting the promotional theme in the creative content and imagery.
12
Results and measurement
The Keep Discovering programme is measured in a number of ways, all of
which show the positive effects of the new strategy for direct marketing;
Response rates
Response rates are an important measure for assessing the level of
engagement consumers have with the programme over time. With five waves
of the programme now complete robust response results are available for the
first four phases of activity as outlined below. Given the high frequency of the
activity to ‘Occasionals’, the consistently high response rates both on and offline have exceeded expectations and indicate a high level of engagement with
the programme amongst the targeted group.
Phase one
Phase two
Phase three
Phase four
Mailed ‘Regular’
17%
Not mailed
Not mailed
Not mailed
Mailed ‘Occasional’
14%
11.8%
10.4%
14.8%
Ezine
6.5%
4.9%
5.0%
5.6%
13
Soft measures
Quantitative research confirms this high level of engagement;

74% of ‘Occasionals’ surveyed agreed that the materials made them ‘feel
that VisitScotland knows what interests me personally’, rising to 80% for
‘Regulars’.

82% of ‘Occasionals’ said they ‘looked forward to receiving the literature’,
84% for ‘Regulars’.

75% of ‘Occasionals’ agreed that the mailings ‘made me want to take a
break in Scotland’ with 86% of ‘Regulars’ agreeing.
Movement on the loyalty ladder
One of the core objectives for the programme at the outset was to move 10%
of ‘Occasionals’ over time to become ‘Regulars’. This movement was to be
measured through a telephone tracking study conducted to a sample of
mailed and non-mailed, control consumers. The last such research exercise
was conducted after phase three of the programme and at that point 5% more
of the mailed group had become Regulars whilst 10% fewer had lapsed
establishing a 15% improvement in loyalty over the non-mailed group. We will
continue to measure this impact as the programme develops. Additionally,
analysis of the database at the end of ’08 has demonstrated that the number
of consumers classifying themselves as ‘Regular’ has increased by 19.75%.
14
Return on investment
The same research exercise conducted after phase three established that of
the 160,000 consumers included in the Keep Discovering programme 127,529
breaks in Scotland had been taken at a total spend of £58 million. £18 million
of this total has been calculated to be incremental with a programme spend of
just under £265,000 up to that point giving an exceptionally high return on
investment of 68:1, significantly ahead of the targeted 25:1.
15
In conclusion
This new approach to direct marketing is now in its second year and has
shown significant success in its first twelve months.
Critically, it is creating increased loyalty to Scotland as a tourist destination by
encouraging consumers to move up the ‘loyalty ladder’ and in so doing is
delivering an increased number of visitors and incremental spend for the
Scottish economy.
Through the application of the five ‘i’s (inspiration, individualisation,
incentivisation, interaction and integration) the programme has laid very firm
foundations to encourage consumers to Keep Discovering Scotland.
.
16