cartoon of REaD Group Director, Scott Logie, running with a glass of wine surrounded by a dog, 3 cats and chickens as an example of segmentation

by Scott Logie, MD, Insight at REaD Group

Many years ago, in the last millennium in fact, I worked in a large UK Bank.  One of the projects we undertook was to segment our customer base.  We started by breaking it down into lifestages, clustered each lifestage and then grouped them together.  We then overlaid a lot of data including attitudes, lifestyle and detailed customer research by segment.  This segmentation was then responsible for helping create the underlying marketing strategy.  And one that worked amazingly well, we were getting up to 25% response rate on some of our outbound direct mail campaigns.

This wasn’t my first segmentation project although it was probably the biggest I’d tackled at that point.  Since then I have been involved in many many more and frankly, I love them. Not just from a data point of view – they are pretty fun though – but also because they always throw up some exciting, interesting and useful segments for our clients.

Over the years, I’ve got pretty pissed off hearing about the death of segmentation.  Because we can track the behaviour of every individual on-line, and have the technology to create bespoke plans for each of them, there is now no need to segment.

The truth is that when you have millions of customers, and prospects, to engage with, you can’t make every decision based on a detailed and personalised plan for every individual. So segmentation is actually still really useful and for me is the bridge between mass marketing and the nirvana of one-to-one marketing.

And segmentation exists in endless varieties. From the micro-segmentation of traffic arriving at websites, to the attitudinal or behavioural segmentation of a brand’s customers, to the socio-economic segmentation of voters, to the geo-demographic segmentation of media consumers, there is segmentation at work everywhere, and with increasing sophistication.

Segmentation is quite straight forward to do and powerful when used correctly. While each of us are our own person, in many ways we still act like a lot of other people. We actually do exhibit common patterns of behaviours and attitudes, and it is useful for brands to acknowledge and act on those patterns.

However, there are some important considerations when looking to create a segmentation.

First, be clear about the usage that a given segmentation approach is intended to address. All segmentations answer some questions but no segmentation answers all questions. Maybe you want to retain your most valuable segments then the segmentation needs to be lead by value.  Maybe you want to understand where there is market potential, then the segmentation needs to address an overall market.  Or maybe you need to understand the demographics and behaviours of your customers to drive content and creative, then the segmentation needs to be demographics led.  It might sound obvious but a lot of segmentations are done without thinking about how they will be used.

Secondly, think about the data.  A lot of the time I feel that data is chucked at a segmentation.  I’ve been guilty of this myself, just throw all the data in and see what happens.  Over time, I’ve learned that this is dangerous.  Notwithstanding all the statto needs to normalise, scale and deal with data anomalies there are other important things to consider.  The most important of these I believe is to split the data into what is going to be useful to create the segments and what is better being used to describe the segments – this is not always the same data.    

Finally, this is not a data project.  Segmentation is a customer project.  I know it starts with the data but it should end with creative ways to engage customers and prospects and, sadly, that is never going to happen if the project sits in a data team (sorry geeks).  So it is really important to engage the whole team early, get them to understand what is being done and why and that this project will fly if they get involved and give it some life.  Some of the best projects I’ve been involved in are the ones where creative marketers owned the segmentation.

So the next time someone tells you that segmentation is dead, tell them you don’t think so.  In fact, not only is it not dead but it is alive and well and thriving for brands that want to build bespoke campaigns for their customers.  Tell them you are proud to be one of the people who sits in the segment called “believers”.

grey postage stamp with an envelope on it which reads '10 compelling reasons to use Direct Mail'
“Rumours of my death have been greatly exaggerated.“ – Direct Mail

 

Direct mail is alive and well! Far from being an outdated medium – when combined with latest technology, creatively and thoughtfully put together, personalised and targeted, Direct Mail is and will remain, a relevant and highly effective channel well into the future.

And by entrenching Legitimate Interest as a legal basis for Direct Marketing (in Article 47), GDPR creates a unique opportunity for marketers who have phased out or never used Direct Mail to embrace this versatile, tactile and creative channel.

Read on to find out why Direct Mail should be a permanent fixture in your marketing mix!

1. Direct Mail…Is opened AND read

According to an InfoTrends study 66% of direct mail is opened. Great start! If opened, 82% of direct mail is read for a minute or more.  Impressive!

Not only that, the same study confirmed that of the 56% of consumers who stated that they responded to direct mail went online or visited a physical shop.

Those are some remarkable stats and conversion rates (unless we’re missing something) unheard of for any digital channels.

2.Direct Mail…Works!

This is the really exciting bit…research confirmed that 62% of consumers who responded to direct mail within three months, made a purchase.

A well targeted, well-designed piece of direct mail can resonate with recipients in a way an email cannot. Something tangible and physically engaging can be a novel, tactile and enjoyable change from words on a screen.

Collaborative research by Millward Brown and Centre for Experimental and Consumer Psychology at Bangor University found that tangible materials leave a deeper footprint in the brain.

3. Direct Mail CAN be done using Legitimate Interest as the legal basis under GDPR

The prevailing legislation, GDPR, states in Recital 47 that processing of personal data for direct marketing purposes may be regarded as carried out for a legitimate interest

Latest guidance from the ICO highlights that all the legal bases for processing data under GDPR have equal weighting and the first line in the guidance on consent states: The GDPR sets a high standard for consent. But you often won’t need consent. If consent is difficult, look for a different lawful basis!

And ICO advice to charities on using Legitimate Interest confirms:

You won’t always need consent e.g. for postal marketing.

What’s more, if you don’t need consent (under PECR) you can rely on legitimate interests for marketing activities if you can show how you use people’s data is proportionate, has a minimal privacy impact, and people would not be surprised or likely to object.

4. Direct Mail increases ROI

According to Brand Science review.  Campaigns including mail had 12% bigger ROI than those without mail!

5. Direct Mail makes consumers feel valued

The Value of Mail in Uncertain Times study found that 70% of consumers indicated that mail makes them feel valued.  That’s an impressive stat – and all the more so for engendering feelings of being valued (an elusive goal for many brands).

And Direct Mail still resonates with every age group according to findings from a study by InfoTrends and Prinova.

In support of addressed and personalised mail, InfoTrends found that over 84% of respondents reported that personalisation made them more likely to open a direct mail piece.

*Sources: The Value of Mail in Uncertain Times, August 2017

6. Direct Mail creates a better impression of the company

“Tangible material leaves a deeper footprint on the brain”.

And scientists have proved it!  The Centre for Experimental Consumer Psychology at Bangor University recently conducted an experiment using an MRI while presenting participants with both digital and physical advertisements. The results showed that printed materials not only make a deeper impression but are also perceived as more genuine!

Research presented in The Private Life of Mail: Mail in the home, heart and head confirmed that Direct Mail is more likely to grab the recipient’s attention.

Sources: Millward Brown, “Using Neuroscience to Understand the Role of Direct Mail,” 2009,

The Private Life of Mail: Mail in the home, heart and head

7. Direct Mail has longevity!

27% of all mail is still “live” after the twenty eight days*

Contrary to the transient nature of email and other digital channels – direct mail can be retained for weeks (or even months) and is more likely to be shared or interacted with by more than one person in the household.

And in his paper, Print vs. Digital: Another Emotional Win for Paper, Roger Dooley proved that while digital ads were processed more quickly, paper ads engaged viewers for more time and, a week later, subjects showed greater emotional response and memory for physical media ads. Physical ads also caused more activity in brain areas associated with value and desire.

https://www.neurosciencemarketing.com/blog/articles/print-vs-digital.htm

*Source: JICMAIL Q2&Q3, Kantar TNS

8. Direct Mail is more believable

Research by Market Reach has revealed that 87% of consumers consider mail communications to be more believable*

In the age of fake news, malware and phishing, it may be that a growing unease and lack of trust with digital channels is fuelling an increased consumer desire for the tangibility and trustworthiness of mail.

*Source: The Value of Mail in Uncertain Times

9. Direct Mail is liked by Millennials!

It’s true, the born to be digital generation like and engage with direct mail!

The “Millennial” generation (i.e. born between 1982 and 2000) is now the largest living generation in the world. While many generalisations about these “digital natives” abound, that they do not like or engage with printed material is not true.  Gallop research found that 95% of 18-to-29-year-olds have a positive response to receiving personal cards and letters.

A study by InfoTrends and Prinova – which surveyed a group of 18-66 year olds and their mail habits – also showed that 63% of Millennials who responded to a direct mail piece within a three month period actually made a purchase.

10. Direct Mail is good enough for Amazon!

Yes really! Amazon’s latest new (old) idea is….Toy catalogues!

According to Bloomberg News, Amazon’s first catalogues will be published in the US before Christmas and will be posted to millions of US households and also handed out at Whole Foods Market shops (bought by Amazon last year). There is also the possibility of a roll out in the UK to fill the gap left by the demise of Toys R Us.

This surprising move into print for the archetypal online retailer is further proof that print as a marketing channel is alive and kicking.

So, its clear that when executed well, Direct mail is an incredibly effective channel for response rates and engagement.

So what are you waiting for? Get in touch to talk to us about your next Direct Mail campaign.

At REaD Group we have been helping businesses of all shapes and sizes get great results from Direct Mail for more years than we care to remember.  And with the advent of GDPR our services have become even more important and relevant to our clients (from optimising data selections and data quality to campaign reporting and analysis). We’re a safe pair of hands.

Red book with the title 'GDPR: New Rules'

In an attempt to inject some lightheartedness into GDPR (no easy feat!) we thought we’d have a go at addressing some of the regulation’s key changes…by reappropriating Dua Lipa’s recent hit,  ‘New Rules’.

I’m sure Ms. Lipa never envisioned her song being used in such fashion, and might well be appalled… Anyway, let’s delve into these new rules in a bit more detail.

 

One – Do pick up the phone, but if they’re on TPS then leave them alone

 

It clearly states in guidance from the ICO that individuals are still able to be contacted via telephone using Legitimate Interest as a legal basis. Consent is not strictly needed. However, an LIA must be carried out which concludes that you have a legitimate interest in contacting said individual, and that they equally would have an interest in hearing from you. Likewise, it goes without saying – if they’re registered on TPS then put that phone down.

 

Two – Don’t let bad data in, you must do your due diligence

 

Despite concerns over the use of 3rd party data post-GDPR, as long as the data has been collected correctly, in a transparent manner – and is GDPR ready – then there is absolutely no reason why 3rd party data cannot (and should not) be used. This is precisely why due-diligence is imperative. All 3rd party data should be linked to the most recent privacy policy or consent statement, as well as the most recent engagement date – this should also be broken down by channel. (REaD Group’s Active database consequently ticks all of these boxes!)

 

Three – You must clean and amend, or you’re only gonna wake up with a fine in the morning

 

Article 5(1)d is explicit about this – data must be kept up to date and accurate or be deleted. Simple as. Besides the obvious threat of a substantial fine from the ICO, perhaps more troubling for many businesses should be the potential for brand damage. Consumer expectations around data accuracy have never been higher.

Recent research conducted by REaD Group found that more than 70% of consumers expect their data to be accurate [Source: Accuracy and Relevance – GDPR Impact Series 2018]

Continuing to market to deceased individuals and goneaways could have huge repercussions and lead to losing loyal customers. Keeping data up to date and accurate couldn’t be simpler and can be done real-time nowadays with Data as a Service (DaaS) solutions. So clean your data!

 

Don’t contact them – without a legal basis for pro-cessing

 

Whichever legal basis you choose for processing, once you have chosen it you must use it thereafter – there’s no going back. With that in mind, you might want to reconsider the misguided notion that consent is the be-all and end-all. It is often not the best basis to use. Direct Mail can be used under LI and is set to make a huge come-back – Amazon in the US (a famously online-only retailer) recently announced their intention to distribute a printed toy catalogue at Christmas time!

Respondents to MarketReach research confirmed that mail is more believable (87%), makes them feel more valued (70%) and creates a better impression of a company (70%).

While I await correspondence from Dua Lipa insisting that I never again use her songs to highlight changes in data protection law, be sure to follow the new rules – And if you don’t abide, the ICO might skin your hide! (Well, not really, but you get the idea!).

 

silhouette of a bicycle on a road with the Eiffel Tower in the background

By Scott Logie, MD, Insight at REaD Group

The Tour de France is over and yet again we have a British winner, that’s 6 times in the last 7 races.  It is almost becoming de rigeur!  More correctly, there have been 6 Team Sky winners in the last 7 years.  Let’s leave aside for now any suggestion of cheating (my own opinion based on not very much is that they don’t break the rules but bend them as far as they can) and praise this for the amazing achievement that it is.

Since they formed, Team Sky have had a plan, they have run the team with clear objectives and they have succeeded in what they set out to do.  Mightily impressive.

And the win on this year’s Tour comes on the back of Chris Froome’s amazing three grand tours in a row.  I’m not a cyclist but I can appreciate how the planning and effort that Team Sky go into creates the possibility of victory.  To understand this more, listen to the excellent Podcast that the BBC made about how Chris Froome effectively won the Giro d’Italia on stage 19, it shows the meticulous planning that goes into creating the victory:

https://www.bbc.co.uk/sport/cycling/44372328

I used to work with a guy who came at the same inspiration from another sport, rowing, and a presentation he had seen from Ben Hunt-Davis:

(https://www.youtube.com/watch?v=lNOQAuMGxBQ)

The concept here is very similar to Team Sky, focussing on what makes for success and getting rid of anything that doesn’t.  It is an easy concept to get but a very hard philosophy to follow.

Summarising these two great sporting examples, I see three things that stand out that can be applied to businesses:

Sweating the small stuff

Key to success for the rowers and Team Sky are the small incremental changes that add up to moving them forward. Every day sees them looking for something that will make a very small but relevant difference.  These principles were also applied to the British Olympic Cycling team where things like heating the tyres, then the riders thighs were seen as minor changes to begin with but are now used by all the teams.  So it is in business, looking at the small stuff can be what makes a difference in winning new work or delivering a successful project.

The big idea

As with Team Sky on stage 19 of the Giro, sometimes it takes a big idea to make a change. Froome was losing the race and needed something to change that.  They sat down, developed a plan, a big plan, and executed it to perfection.  But part of that was actually coming up with the big idea in the first place.  I can imagine no ideas were off the table, that anything would be considered.  Pure blue sky thinking.  How often do we really sit down in our business and look at what the next big idea should be?  And even if we do, how many times does it fall away because we don’t agree, focus and deliver on it?

Great teamwork

With both the rowing team of 2000 and Team Sky one other key factor is true, that the team is more important than the individual. In the cycling world, the domestiques, the people that provide the support; drag the main rider through to the end of tough stages; deliver the food and drinks needed to get to the finishing line; are as important as the number one rider.  Geraint Thomas served his time as a domestique before he was allowed to win the Tour.  These riders know their role, they stick to it and the team wins as a result.  I don’t think I need to explain the analogy in business!

Many of us love sport, we sit and admire as our heroes deliver success.  Or, if you are a Scotland fan, occasionally beat a team 3 places above us in the world rankings.  However, there are also many lessons to be gained from studying what makes sports stars great at what they do; dedication, drive, grit, hard work and talent amongst many more.  Extending this into what we do every day isn’t always easy – not many of us will be as great at our jobs as Roger Federer – but we can hopefully achieve more by being inspired by them.