THE THINKING BEHIND IT: ATTITUDINAL IMPERATIVES FOR DIRECT MARKETING

THE TIME IS NOW

Among the many ways of connecting with consumers, direct marketing is unique. While the challenges of the emerging marketplace are disruptive for most forms of marketing, they portend a boon for direct marketing. Why? Because the need to reach consumers in a direct and measurable way is growing stronger as a result of new technologies, new consumer expectations, new competitive pressures and new demands for demonstrable marketing return on investment.

Like marketing as a whole, though, direct marketing has struggled over the past few years. For example, figures from the Direct Marketing Association for the most recent year measured show that despite a $1 billion-plus increase in spending on direct mail, the total number of people purchasing by mail was down nearly 2%. In the midst of a sluggish economy, direct marketers have been struggling to stay even. But notwithstanding this battle for business, there is an underlying strength to direct marketing that positions it well for the future.

In particular, direct marketing enjoys fierce consumer allegiance. A pioneering study of DM consumers completed last year by Direct and Yankelovich (“Consumer Outlook,” Direct, August 2002) found that the universal dissatisfaction with direct marketing was rooted in a desire to improve direct marketing, not in a desire to curb it. It turns out that the most active resisters to direct marketing are the heaviest users!

Direct marketers must take advantage of the mandate for change coming from consumers. The marketplace as a whole is moving in the direction of what DMers do best, so finding more compelling ways of connecting with consumers is critical to realizing the full potential of the opportunities that lie ahead.

To provide a deep, action-oriented understanding of what direct marketing consumers want, Direct and Yankelovich worked together again this year to follow up last year's survey with another groundbreaking study. Special questions focusing on direct marketing attitudes were added to the 2003 Yankelovich Monitor questionnaire that was fielded door-to-door among a representative sample of 2,510 adults, ages 16-plus, from Jan. 2 to May 3, 2003.

The inclusion of questions on direct marketing in the regular Monitor interview provides a rich database of attitudinal information about DM consumers that yields unique insights into their needs and interests — not just their attitudes about direct marketing but their lifestyle values and aspirations as well.

More change is occurring in the consumer marketplace today than at any point since the early '70s, and these changes are creating unprecedented growth opportunities for farsighted, ambitious marketers. With some forward thinking about what consumers want, direct marketers can offer the best ways to reach the full potential of these emerging marketplace opportunities.

VOCAL AND VALUABLE

The use of direct marketing channels is unchanged from year to year in the Direct/Yankelovich survey of DM consumers. Like a year ago, three-quarters of those responding to a direct marketing offer purchased something through a direct channel.

Direct marketing purchasers are more likely than direct marketing non-responders to have graduated from both high school and college, which accounts in part for the higher average income of purchasers. The average household income of purchasers is $70,900 compared with $57,900 for non-responders.

DM purchasers continue to be the most likely to take action with respect to direct marketing. Table 1 (page 43) shows that direct marketing purchasers are much more likely to engage in one or more forms of active resistance. Perhaps most worrisome is that refusal to buy something has shown a big jump from year to year.

What is most interesting, though, is that direct marketing purchasers are more likely to tell others about their shopping experiences. As seen in Table 2, a higher percentage of purchasers express their opinions, positive and negative, to others.

Direct marketers interact with the sorts of consumers who generate more word-of-mouth. This is a benefit of using direct channels that DMers should tout. Of course, direct marketers must step up to the attendant responsibilities. What is delivered through direct channels has a greater capacity to build a brand's image and positioning but also greater potential to hurt a brand's reputation and standing.

Direct marketers must take steps to address consumer dissatisfaction by improving the emotional resonance of what's delivered. The all-consuming focus of direct marketers on process efficiencies must make room for attitudinal relevance. Consumers want to use direct channels, but without improvements they will continue to resist direct marketing and in doing so, significantly raise the costs of marketing and thereby reduce profitability and ROI.

The various forms of direct marketing should be the primary tools of every brand that wants to take a leadership position in the marketplace. There is no better way to get the word out than to connect with direct marketing consumers. And there is no better way to connect with direct marketing consumers than to incorporate elements that resonate most strongly with their values and emotions.

Direct marketers are keenly interested in finding and applying tools and approaches that boost lift and performance. Now is the time to utilize a more sophisticated understanding of why people buy. As seen in the study conducted by Direct and Yankelovich, this entails incorporating attitudes into the tactical execution of direct marketing, particularly the seven attitudinally based imperatives identified by this research as key ways for achieving growth and success in the marketplace of tomorrow.

1. Sell the intangibles

   The contemporary definition of success is not about material things or money. In the Yankelovich Monitor tracking, all the material luxuries have lost ground while all the intangibles have gained ground. Nowadays, the No. 1 sign of success and accomplishment is “being satisfied with your life.”

   This change in the definition of success reflects a broader shift away from first priorities rooted in the accumulation of more things to first priorities rooted in the enjoyment of time and interesting experiences. Being able to enrich and enhance the quality of one's time — as opposed to the quantity of one's stuff — is the new luxury that consumers covet.

   This focus on the intangibles is particularly true of direct marketing purchasers. As seen in Table 3 (page 46), purchasers are more likely to identify with all of the intangible signs of success. While a minority of consumers believe that money is the only “meaningful” measure of success, the percentage saying so is smaller among purchasers than among non-responders.

   The opportunity: There are two ways that direct marketers can capture the advantage in this shift. The first is to provide an interesting experience. If direct marketing is nothing but another shopping experience, then consumers will continue to resist it because it is unrelated to the intangible values they prefer and because it takes time away from other experiences. Each interaction with consumers must deliver value, not simply promote the value of something else.

   The second way is to make intangibles a key part of the value proposition. Don't just promise more stuff at a better price, show consumers how satisfied they will feel, how much more in control they will be, how this will benefit their families, and how this will contribute to their sense of fulfillment and psychological well-being. These days, this is what matters most.

2. Deliver service to the nth degree

   The broad shift to intangibles doesn't mean that consumers are giving up nice things. Indeed, they are not. It is only to recognize that consumers have come to take luxury tangibles for granted, so there is no longer any distinction or special satisfaction provided by them. At Yankelovich, we characterize this expectation of nice things as the affluent attitude. In such a marketplace, only the intangibles can provide brand differentiation and the opportunity for premium pricing.

   One of the most important intangibles is service. As seen in Table 4, direct marketing purchasers are disproportionately insistent about receiving service that matches their affluent attitude.

   Tangible luxury is now nothing but the cost of entry. Going forward, the best opportunity for brand differentiation will be service, for which direct marketing should be in the vanguard.

   The opportunity: Unlike other marketing vehicles, every DM contact involves an actual interaction with consumers. Hence, direct marketing, unlike advertising, can be used to deliver service. With the marketplace pushing service expectations to the nth degree, direct marketing can make the crucial difference for success. Direct marketers must broaden their vision of what they provide to consumers.

   Service is more than prompt delivery, pleasant operators and a liberal returns policy. Service should be delivered as the key component of brand value, not simply maintained as a necessary part of efficient process management. In doing so, there are two directions to pursue.

   The first is to offer service that provides education and advice. Consumers are looking for smart tips and to-do lists. As seen in Table 5 (page 50), direct marketing purchasers are especially interested in self-improvement.

   The second is to offer service that is empowering, particularly with respect to information. As seen in Table 6 (page 50), direct marketing purchasers have a greater interest in researching their purchases and in getting information before buying.

3. Give time back

   The most important intangible sought by consumers is time. People's lives are over-full. Even leisure is regimented by a strict calendar. Consumers want to recapture time and are willing to pay a premium to do so.

   Consumers are avoiding anything that requires a time commitment or that takes time away from highly valued priorities. Shopping is avoided when it fails to be an enriching experience in and of itself. The more that a brand forces consumers to spend time watching ads or browsing stores, the less fulfilling consumers will find it to be. Preferred brands are those that give time back and those that make every interaction enjoyable and fun.

   As seen in Table 7, direct marketing purchasers are looking to recover time in their lives. They are more likely to be doing everything possible to save time, including multitasking. This has a bearing on shopping decisions like buying takeout meals or hiring a service to help with chores.

   The desire to recoup time also leads to the use of the Internet and catalogs as shopping alternatives. It's no surprise that consumers who place a high value on time prefer catalogs, but the opportunity for catalogs is much more than being a convenience.

   The opportunity: The time that consumers spend with direct marketing should be time well spent — enjoyable, educational and enlightening. More than a quick way to shop, consumers should find direct marketing to be a good use of time. Unless a marketing interaction delivers value, consumers will fight it. Marketing must do more than promote the value of what's being sold; marketing has to provide value itself.

   For example, adding content that corresponds to the interests of individual shoppers — news, tips, ideas, updates and more — would not only save time, it would offer consumers a better time as well.

4. Build affinities with technology

   Direct marketing purchasers make greater use of and feel more comfortable with technology. As seen in Table 8 (page 52), this facility with and interest in technology is true across the board.

   Additionally, as seen in Table 9, direct marketing purchasers are less concerned about security and privacy issues related to Internet usage and online shopping.

   The chance to make full use of technology is an advantage that direct marketing has over other marketing vehicles. Already, technology is an integral part of direct marketing and more can be done. But direct marketers must take care to fulfill any promises made to consumers. The great broken promise of direct marketing to date is customization. The recent push to build databases was justified to wary consumers with the promise of a personalized shopping experience. However, that has not happened, which in turn has increased consumer resistance to direct marketing.

   The opportunity: Technology should be deployed to deepen the affinity that consumers feel for a brand. Traditionally, technology has been utilized to achieve process efficiencies, and in many cases this has led to applications that frustrate and alienate consumers. When the objective is efficiency improvements rather than emotional connections, direct marketing will fall short of capturing the full potential of technology.

   Technology can broaden the ways in which consumers can interact with a brand. Multimodal marketing gives consumers more options and greater flexibility to build a connection that fits their needs and wants. This is not about customer relationships in the current sense of the term. Consumers want technology to do more than just deliver upsell and cross-sell offers with ever-greater frequency. Consumers want technology to empower them to use a brand to satisfy their lifestyle ambitions. Technology should be focused on the attitudes that define what people want rather than the behaviors that show what people do.

5. Provide novelty and fun

   Direct marketing purchasers want to enjoy interesting activities and products. As seen in Table 10, they like novelty and fun.

   They also like to experiment. As seen in Table 11, direct marketing purchasers are trendsetters who like to set the pace.

   The opportunity: Do something fresh, unusual and innovative. Break out of the box with something distinctive and original. Too often, direct marketers stick to the tried and true. Yet, purchasers are not averse to something out of the ordinary. Indeed, providing novelty and fun will build the affinity that direct marketing purchasers feel for a brand because that better fits their attitudes.

6. Connect with hiving

   Home and family are the new focus of life. Consumers are remaking their lifestyles and work styles to reflect a surging interest in home and family. This affects everything.

   Using the metaphor of a beehive, at Yankelovich we have dubbed this shift hiving. Hiving is the embrace of others in a safe setting abuzz with activity and engagement. As seen in Table 12 (page 56), this is particularly true of direct marketing purchasers.

   The interest in home and family is not cocooning. Cocooning is a retreat from others to a protected, self-indulgent environment. This is not what consumers are doing today. They are returning to home to connect, not to retreat. They are focused on family and friends, not on themselves.

   Hiving is centered on home but also involves an intense interaction with the surrounding environment, just like bees in a beehive. Thus, hiving is a broad dynamic that includes the home but is not limited to the home. The key element is a revived interest in connecting with others.

   The opportunity: The communications and merchandising opportunities go without saying. The more fundamental opportunity is to build stronger connections with consumers. Operators, for example, are a personal touch-point for building the kinds of connections that consumers want. Community building through sponsorships or events will boost the likelihood that consumers will pay attention to a brand's direct marketing. In general, as consumers look to reconnect with others, a personal face must be put on direct marketing. Anything that works against or is irrelevant to greater connectedness will face an uphill battle.

7. Build brands

   There is a tendency in direct marketing to dismiss brand building as a program objective. Brand image is built through other marketing vehicles, it is thought, while direct marketing is only about selling. Yet, this view ignores the fact that the image of a brand is an opinion formed on the basis of every contact a consumer has with a brand, including direct marketing.

In fact, direct marketing purchasers are much more brand-focused than non-responders. As seen in Table 13, purchasers have more interest in every aspect of what a brand can provide. Buying through a direct channel does not mean that consumers do not focus on the brand or form further opinions about the brand based on their direct marketing experiences.

When direct marketing divorces itself from brand marketing, a schism is created that has nothing to do with the ways in which consumers perceive brands. To consumers, every contact is a brand interaction. Brand impressions are formed on the basis of everything, not just advertising. A poor service experience, one too many direct mail pieces, or a telemarketing call at the wrong time all shape the overall image of a brand.

For better or for worse, brand image is affected by direct marketing. When brand is ignored, the ultimate impact is left to serendipity. This is reckless. The image of a brand should not be left to vagaries of luck and fortune.

The opportunity: Direct marketers should take advantage of the opinions that consumers have about a brand and of the attitudes they have about how brands can contribute to their lifestyle objectives. Smart use of these attitudinally based insights can enable direct marketers to remind consumers why they prefer a brand and thus help sustain their loyalty and patronage.

As the marketplace becomes driven more by emotions and experiences and less by accumulation and tangibles, direct marketers will have to refine their measurement of success. Sales that are won with a negative impact on brand image will come at too high a price.

NEW INSIGHTS, NEW POTENTIAL

Many challenges lie ahead for direct marketing, but so do many opportunities. A new competitive edge is needed. This can come from the one area typically ignored by direct marketers — attitudes.

As revealed in this research, there are new insights to be gained from a close study of the attitudes, values and motivations of today's direct marketing consumer. And from this comes new potential for innovation, growth, leadership and strong competitive advantage.