By Scott Logie, MD, Insight at REaD Group
The generally accepted wisdom is that the costs associated with repeat business are, for the most part, significantly lower than acquiring new business. Research suggests that 70% of companies say it’s cheaper to retain a customer than acquire one, while others have suggested that the cost of acquiring a new customer can be as much as seven (or is it four, five, six or 10?) times more expensive. None of this is new or shocking information and whatever the multiple, it has been shown to be true over many years and across many companies.
So why then do many brands continue to charge existing customers more for their products than they charge new customers? Research from Which? and shared by the BBC suggests that on average existing customers pay £70 more than new customers for Home Insurance. In addition, for combined insurance, the average premium paid for a policy 20 or more years old was £396 per year, compared with the £195 new customers paid.
I have recently had two experiences of this. First, when renewing car insurance for my wife and myself – we got quotes from our existing provider that had increased substantially from last year. We checked on a friendly meerkat site and saw we could move and save a lot of money. One call to the provider and they moved the price close enough for us to agree to stay.
We then had to renew the pet insurance on our large cat and dog collection. After many years of simply renewing we looked around and found better cover for a lower price from a very well-known provider. Half the cost in fact. We called again, and this time were offered only 20% reduction on the quote. They seemed genuinely shocked that we declined.
From experience, and this is not a defence by any means, merely an attempt to understand, there are a number of reasons this can happen. For example, the cost to acquire a new customer, along with lower rates to attract this new business, often means that the cost has to increase in year 2 to make some profit. Or maybe internal models show that these customers are loss making due to claims, so they force the second-year costs up to cover the claims made by the cohort they belong to. Or maybe the companies just think we are a bit lazy (after all around 70% of people still don’t move their insurance after year 1) and that we won’t notice.
No matter how we cut this, there is a problem. All of these approaches are company centric, not customer centric. As many brands and sectors have realised, focussing on existing customers can be very valuable.
Digitally native businesses, for example, value not only their customers but the data they have on those customers. Similarly, large retailers have invested heavily in loyalty schemes, in Sainsbury’s case literally in buying Nectar. This demonstrates investment in existing customers. They are not ignoring the acquisition of new customers but know that there is a balance to be struck.
That’s not to say that every customer is valuable, or indeed that every customer should be retained. Maybe my current car and pet insurers simply decided I was not worth keeping and tried to price me out of their brand but, in all honesty, given how they folded like a linen suit on the underground this July, I doubt that to be true. I think it’s more likely the case that those companies still have an “acquire at any cost” mentality that means the existing customer gets less attention.
It’s great to see that Which? are taking up the fight and that the regulators are going to look at this but surely the economics suggest that this needs to be looked at and rectified by the brands themselves. After all, it’s four, five, six, seven or ten times cheaper to retain a customer than acquire a new one.
by Dan Fossaceco, Lead Generation Director at REaD Group
Now that the GDPR dust has settled and everyone’s had a moment (has it really been 5 months!?) to catch their breath a little, I thought it might be a good time to discuss lead generation. Based on our many collective years of experience in the Performance Marketing team at REaD Group here is our take on the WHO, the HOW and the WHAT of performance marketing. First piece of advice, treat it with respect. When it’s done well it can be an immensely powerful and impactful tool, but when done badly…it can go ohh-so wrong!
Before embarking on a campaign, you should carefully consider the following three questions:
WHO do you want to target?
HOW do you want to target them?
WHAT constitutes success?
WHO – This is probably the most important thing to think about. If you haven’t identified your ideal consumer profile, then there isn’t really much point! You should be aiming to create tailored campaigns that appeal to the audience you’re trying to attract, as this is imperative to sustained success.
When you get this right, the volume shouldn’t affect your ideal customer profile and leads should still be giving you that ROI you’re looking for.
HOW – Here comes the tricky part. There’s no one method…but many! You’ll also find that different traffic sources will give you different results. The challenge is to choose the plan of attack that makes the most sense for you.
For example, a more universal product such as utilities would lend itself to a volume-driven approach as there are multiple product choices available to the end consumer. On the other hand, for a high value or niche product you would want to adopt a method that provides you with a smaller amount of more qualified leads.
It really is well worth taking the time to plan your approach rather than blindly launching a campaign – it will save you a lot of time in the long run! If you throw too large a net when you don’t need to you will only end up with large volumes of consumers who will need further qualification before any potential sale.
WHAT – This is an incredibly important question (ok…they’re all important). It should be very straightforward for marketers to answer, but increasingly it’s not as black and white as you might think. What is it exactly you’re trying to achieve? Are you looking to diversify your customer base? Or maybe looking to promote a more expensive product? Unless you know from the outset what you’re looking to get out of your campaign, you’ll find it impossible to understand whether it is ‘successful’.
So, allow me to let you in on the secret – if you really want to ensure that you’re practicing good lead generation as opposed to bad…you must QUESTION EVERYTHING.
If you make sure that you’re asking (and answering) these questions, then there’s no reason you shouldn’t get the most out of your lead generation and have successful campaigns flying out the door!
If you’re ready to ask these questions get in touch with a member of the Performance Marketing Team and we’ll be happy to help!
Marketers spend hours meticulously crafting the campaign message, creative and a compelling call to action. Then when it comes to the data to fuel the campaign – often the same attention to detail isn’t applied. Even the most creative campaigns can fail if the data is poor quality and inaccurate – containing gone-aways and deceased contacts or incorrect addresses for example.
Here are 5 really good reasons why data quality should be (at least) as important as the creative and CTA….
Keeps you on the right side of the GDPR data quality requirements
Keeping ALL of your data clean is also now law with the advent of the GDPR. Article 5.1d is explicit: you must keep data accurate and up to date or delete it!
Reduces the risk of brand damage – does your brand want to market to deceased contacts?
Marketing to the deceased is bad practice and bad news for your business, causing unnecessary distress to relatives and risking costly damage to your brand reputation. It is so easy to avoid by using a trusted data cleaning partner, so why risk it?
The better the quality of your data, the better it will perforM! good quality data will help you increase revenue, reduce costs and make better business decisions
The phrase “rubbish in, rubbish out” is well known and often used. It is also very true. Your data is a valuable, strategic asset and maintaining its accuracy and quality should be a priority across your business. It should not be seen as a one-off task but as an ongoing process of improvement. Research by The 451 Group, identified the top 5 benefits of good data quality as:
- Increased revenues
- Reduced costs
- Less time spent reconciling data
- Greater confidence in analytical systems
- Increased customer satisfaction
Your customers and prospects expect their data to be accurate
Recent research conducted by DataIQ and REaD Group confirmed that consumers expect the data held about them by brands they interact with to be accurate.
72% of consumers expect companies that hold their data should get it right every time or most of the time. But what they actually experience is a different story, with almost half of consumers stating that companies get their data wrong sometimes or more often than not! [GDPR Impact Series 2018: Accuracy and Relevance]
It has never been easier to achieve!
And while it has never been more important to your business to keep your entire database clean and accurate, it has also never been easier to implement and maintain.
With established and trusted data quality services such as GAS, TBR and GAS Reactive from REaD Group – available via a choice of flexible delivery methods to suit organisational and technology requirements, it is now achievable and affordable to optimise the accuracy of your data.
Download our handy infographic below!
Last week we were delighted to be joined by a room full of senior data marketers, CDOs and analysts from a broad range of sectors and from brands as varied as Glasses Direct, Macmillan, RR D, Deloitte, Sodexo, Gobsmack and Go Travelyn at our Late Summer Soirée.
With the highly photogenic Tower Bridge as our backdrop, our guests were taken through a whistle-stop programme – from compliance and the future of data delivery to the power of segmentation via key messages about trust and transformation. Huge thanks to our stellar line up of speakers including, Andrew Mann, Partner at North Bailey (formerly of Asda, Sainsburys, Tesco Clubcard and more), Graham Davis, Head of Customer Insight and Marketing Effectiveness at Ageas and Andrew Wilson, CEO of My Life Digital.
When the going gets tough, the tough get it right!
REaD Group Chairman and Founder, Mark Roy, opened the evening with a review of the state of the data environment – challenging but full of opportunity for businesses who have adapted. Talking about the importance of keeping consumers at the centre of your business, as a fitting introduction to the themes of the evening.
Data you can trust!
Kicking off with some no-nonsense precis about GDPR and REaD Group data, Andy Bridges, Data Compliance and Governance Manager, referenced the strict due diligence applied to all REaD Group data. Giving our clients the confidence to use our data post GDPR. And the clients that are using our data are seeing some compelling results, as outlined by Head of Business Development, Adam Tolcher in Data that delivers:
A well known furniture supplier is seeing consistently positive ROI of £6.50.
One of our charity clients recently achieved a conversion/donation rate of just under 3% from a DM campaign (further highlighting why there has never been a better time to use Direct Mail!)
A travel company, specialising in cruises, has seen an astonishing £240,000 of revenue following a DM campaign using REaD Group data.
Introducing Data as a Service (or DaaS), an exciting new delivery model for REaD Group, Commercial Director Clive Rumsey outlined some of the business efficiencies, compliance and data quality benefits of DaaS. A short animation reinforced the concept of DaaS being the future of data delivery.
Which way is North?
In a hugely insightful and entertaining talk, Andrew Mann assured us that Data isn’t difficult! Getting everyone up on their feet, we were reminded in a very practical way that to succeed you need everyone in your business pointing the same way. Every business should tap into the power of their data but remember you can’t fly before you can crawl. Leaving the audience with a practical checklist of 7 steps to data driven customer growth and the message that it’s never too late to instigate change – as the old proverb sates, ‘The best time to plant a tree was 20 years ago. The second best time is NOW.’
Never a truer word spoken – at speed!
In his presentation No job too big, no job too small, Scott Logie, Director of Customer Engagement at REaD Group, proved that you can complete a 20-minute data-packed presentation in just 5 minutes. If you talk really fast. But making the serious point that there is no marketing problem that data cannot solve.
Insight in Action
Graham Davis, talked about the impact of commissioning REaD Group to build a bespoke segmentation for Ageas. The message – using data to truly understand your customers and (most importantly) using that insight to inform and optimise your marketing strategy – is transformational.
Andrew Wilson – in Mark’s words “the new kid in the block” as CEO at My Life Digital, talked about keeping consumers and their choices at the centre of business being an imperative. In a post GDPR world, it is the brands who do the right things by their customers and potential customers – using a trusted and comprehensive preference management system, like Consentric – who will thrive.
Dan “the man” Fossaceco, Lead Generation Director gave us a quick tour of the evolving world of Performance Marketing – a powerful tool for marketers to gain opt-in prospects post-GDPR. The Three simple messages to take away? It’s easy to set up, it works and…get in touch with our established and experienced performance marketing team to deliver results!
Rounding up the night, REaD Group CEO, Jon Cano-Lopez, summarised that we had covered a lot in a short space of time, and that despite the challenges the new data regulation has presented – now is the time to seize opportunities!
If you want to know more, just ask!
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”.
“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.
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!
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.
*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.
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
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!).
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:
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:
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?
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.
By Scott Logie, MD, Insight at REaD Group
At our recent GDPR briefing, a mere 3 days before May 25th, we asked those attending to sum up their final thoughts and feelings on the new regulation in 1 to 4 words. Needless to say, we received quite a range of responses! Many were whole-heartedly optimistic – ‘About Time Too!’, ‘An Opportunity’ while another begrudgingly conceded that it was a ‘necessary evil’. And one (we certainly hope they were being tongue in cheek!) simply labelled it ‘a pain in the a**e!’ – GDPR has been labelled as the 4 letter word.
‘Necessary’ seems like a very appropriate word. GDPR’s predecessor (the Data Protection Act) was introduced in 1988 – long before much of the technology involved in today’s marketing practices had been developed and before the amount of contactable data available exploded! Analogue legislation for a digital world.
There is no doubt that the last two years plus spent preparing for GDPR have been a challenging period for many. Particularly smaller companies who have more limited resources to ensure that they meet all of the new regulation’s requirements (of which there are quite a few).
Don’t give up!
Those who find themselves still just short of readiness, now that we are on the other side of the deadline, should not fall into utter despair just yet. To quote some sage advice from Hannah Crowther of renowned law firm, Bristows LLP – as long as you can clearly evidence that you are working towards adhering to the new Regulation (but haven’t quite crossed every ‘t’ and dotted every ‘i’), it is extremely unlikely that the ICO will come a-knocking. Information Commissioner, Elizabeth Denham, has been quite clear that they would rather use the carrot than the stick!
However, those who consider themselves to be ‘GDPR ready’ should not be taking their foot off the pedal – far from it! As a regulation, GDPR demands ongoing compliance which is no small task. Undoubtedly, once you have the proper systems and procedures in place and they have been adopted into company culture, this task should only become easier.
A ‘New Challenge’
While some are concerned that GDPR signals an end to marketing practice as we know it, this is hardly a bad thing! ‘Inbox bombing’ has become widespread practice over the last few years, to the extent that consumers have definitely become desensitised to email offers.
Marketing will not cease to exist now that GDPR is law, it will simply require some refinement and a change in approach – as well as a renewed focus on the consumer. There will certainly be a substantial dip in terms of contactable individuals initially, as companies determine which legal bases they intend to process data under.
Nevertheless, by using data intelligently to understand your customer base and utilising techniques such as segmentation and modelling, marketers will be able to offer consumers more personalised communications that they are actually interested in receiving. A ‘new challenge’ as one attendee aptly described it.
What is more, GDPR champions openness and transparency – consumers that are being contacted should now actually EXPECT to receive these communications.
Another word to crop up was simply the word ‘consent’. Truth be told this has been the main concern for the majority of marketers since GDPR was first incepted – and the media furore has hardly helped matters. However, in the FIRST statement of the ICO’s recent consent guidance it clearly says:
“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.”
Don’t forget that there are five other legal bases for processing data, and in many instances consent may not be the right one to use. When it comes to honing your marketing strategy under the new legislation, it seems as though Legitimate Interest is in many cases the most obvious and appropriate for contacting prospective customers.
Mail has been found to be a much more trustworthy and tangible form of communication for consumers – and much more likely to yield a positive response. Furthermore it is a channel that has a much greater scope for creativity, as opposed to email which can be limiting, presenting an opportunity to create some truly engaging campaigns.
While our word collection was a fun exercise aimed at providing some levity before the big deadline, it was reassuring to see that so many people seem to appreciate GDPR as an opportunity and a change for the better. Regardless of people’s opinions towards GDPR, the fact remains that it is now LAW – no ifs, ands or buts!
See the full list of people’s GDPR words in the video below:
By Scott Logie, MD, Insight at REaD Group
It’s been a turbulent few months for the UK retail sector – Debenhams and House of Fraser both recently announced multi-million pound losses. On the other hand, Tesco revealed a rise in their annual profits to £1.3bn and Sainsbury’s and Asda announced a ground-breaking merger to make a super-supermarket.
The level of competition between retailers is reaching fever-pitch. Amazon’s seemingly never ending reach, the growth of online brands such as ASOS and boohoo, and the general rise of the discount retailer have disrupted a sector that has been slow to respond. It is therefore vital for retailers to demonstrate their value to consumers and develop robust strategies to capture and retain customer attention and loyalty. A strategy that has proven highly effective in both the past and the present? Loyalty schemes.
Is the loyalty scheme on its way out?
While some have criticised loyalty schemes in recent years, they remain a powerful way of connecting and engaging with customers. In our recent Retail Trend Report we found that there is an intrinsic link between how long a loyalty scheme has been running and the level of customer loyalty. The research found that Tesco lead the way in supermarket retailers when it came to customer loyalty – the Tesco Clubcard was the first scheme to be launched (in 1995). Consequently, retailers with less mature loyalty schemes have lower levels of trust – Morrisons was ranked 10th for customer loyalty and only launched its scheme in 2014.
Some critics have insisted that the loyalty scheme is dying out, however, Tesco’s announcement earlier this year that they were going to downgrade their Clubcard programme was met with widespread backlash from customers. The demand is still there it would seem. Loyalty schemes offer a tangible value and benefits to the consumer, and many budget and plan accordingly to make the most of them. They may not necessarily attract new customers but certainly encourage more frequent purchases and customer retention. Loyalty schemes have become expected as part of the offering by consumers – gaining points rather than just lower prices.
Changing consumer landscapes
It has gotten to the stage where many consumers are experiencing ‘’offer fatigue’’; being bombarded with endless 2-for-1-deals, flash sales and coupons to the point where they become desensitised to all of it. Comparable prices are no longer the differentiator, consumers expect retailers to offer them deals that are suited to their individual shopping habits.
With discounting so rife, consumers are no longer prepared to buy full price products unless they absolutely have to, which has meant that supermarkets like Co-op have suffered for a number of years now. In order to break the cycle, retailers must renew their focus on their customer loyalty propositions to make it worth customers investing their time and money in selecting their chosen retailer’s products. But how exactly?
The Digital Shift
Facilitating an easier process for customers to access their rewards is one way of tackling this challenge. Customers are increasingly using contactless technology and phones to make payments, and the prospect of carrying a wallet bulging with loyalty cards is becoming an increasingly unattractive one. It is high time that retailers shift their loyalty card schemes to digital platforms.
Tesco recently set an example by launching a contactless version of their Clubcard last year, followed by a Tesco Clubcard app. Customers who are presented with wads of paper coupons after swiping a loyalty card are, more often than not, unlikely to retain these for a future purchase.
Personalisation is key
Saving money is no longer the only priority for customers – they have come to recognise the value of personalisation and appreciate receiving deals that have been intelligently tailored to their shopping habits. Retailers therefore need to make sure that they are segmenting their customer data and analysing it to ensure that they are building and engendering trust and anticipating customers’ needs.
Building customer trust is a gradual process and not an overnight fix; this makes loyalty schemes more significant than ever before. Retailers must ensure that they are clearly explaining the benefits of a data-value exchange to their customers and remaining as transparent and open as possible.
Brands must demonstrate through these retail loyalty schemes that customers that consent to share their data stand to be rewarded for their loyalty and custom. And for those brands with long standing schemes already in place – now is not the time to abandon them! They’re a key means of understanding customer habits and maintaining valuable patrons.
The recent implementation of GDPR has provided a welcome impetus for brands to take this initiative. All things considered, by introducing loyalty schemes and using segmentation to enrich customer understanding, brands should soon enjoy better communication with an increasing number of data-savvy consumers.