Bills an untapped marketing opportunity
It’s not all that widely recognised that customers pay greater attention to their bills than probably any other form of communication that they receive from businesses.
On face value that may sound like a negative result, but it also provides businesses with a tremendous sales and marketing opportunity. And the opportunity is one that many Australian businesses are yet to capitalise on.
Grant Stewart, managing partner of the strategic marketing agency Vectis, says that many businesses are realising the value of including targeted marketing messages on the transactional mail that they’re already sending to their customers.
“Most businesses have always viewed their transactional mail, such as bills and account statements, as quite distinct from the direct mail that they send out,” explains Grant. “But that shouldn’t be the case any more.
“This type of essential mail is an ideal medium for selling to existing customers, because we know that they actually spend time analysing the bills and accounts that they receive via the mail.
“We’re advising our clients to stop thinking of their transactional mail as just a cost and to start viewing it as an opportunity to generate revenue. When they actually see the return on investment that can be earned from a clever campaign, that’s when they start thinking of transactional mail as a serious marketing tool.”
Grant’s belief that customers pay close attention to their bills and account statements is supported by the findings of a British study from 2005 by The Henley Centre, called Beyond the Gate.
This study, which looked at how people process and prioritise their mail, found that most people dedicate an average of five minutes to reading their bills and account statements. From this, the researchers concluded that transactional mail actually provides a valuable opportunity for brand engagement – and selling. It’s not all that widely recognised that customers pay greater attention to their bills than probably any other form of communication that they receive from businesses.
On face value that may sound like a negative result, but it also provides businesses with a tremendous sales and marketing opportunity. And the opportunity is one that many Australian businesses are yet to capitalise on.
Grant Stewart, managing partner of the strategic marketing agency Vectis, says that many businesses are realising the value of including targeted marketing messages on the transactional mail that they’re already sending to their customers.
“Most businesses have always viewed their transactional mail, such as bills and account statements, as quite distinct from the direct mail that they send out,” explains Grant. “But that shouldn’t be the case any more.
“This type of essential mail is an ideal medium for selling to existing customers, because we know that they actually spend time analysing the bills and accounts that they receive via the mail.
“We’re advising our clients to stop thinking of their transactional mail as just a cost and to start viewing it as an opportunity to generate revenue. When they actually see the return on investment that can be earned from a clever campaign, that’s when they start thinking of transactional mail as a serious marketing tool.”
Grant’s belief that customers pay close attention to their bills and account statements is supported by the findings of a British study from 2005 by The Henley Centre, called Beyond the Gate.
This study, which looked at how people process and prioritise their mail, found that most people dedicate an average of five minutes to reading their bills and account statements. From this, the researchers concluded that transactional mail actually provides a valuable opportunity for brand engagement – and selling.
“WHEN [OUR CLIENTS] ACTUALLY SEE THE RETURN ON INVESTMENT THAT CAN BE EARNED FROM A CLEVER CAMPAIGN, THAT’S WHEN THEY START THINKING OF TRANSACTIONAL MAIL AS A SERIOUS MARKETING TOOL.”
Grant Stewart, Vectis.
TRANSPROMOTIONAL MAIL
Within the mailing industry this growing mail category is referred to as “transpromotional” mail – derived from the union of “transactional” mail (ie invoices and statements) and “promotional” mail (ie direct marketing).
Meanwhile, most marketing professionals are referring to it as “transactional relationship marketing” or “TRM”.
But regardless of how you refer to it, there’s no doubt that the adoption of transpromotional mail has been encouraged by the emergence of digital colour printing technology and the widespread use of customer relationship management (CRM) tools and software.
Taken together, these technological advances are enabling businesses to create transpromotional mail items that are colourful, personalised and directly relevant to the recipient.
THE IMPORTANCE OF BEING PERSONAL AND RELEVANT
Most businesses take a first step towards transpromotional mail by including a generic sales message on their bills or account statements. But the real gains are achieved when these marketing messages become more targeted.
Just like other forms of direct marketing, the rate of response to a transpromotional campaign will invariably increase when the sales message is relevant to the recipient and it addresses them personally.
The message can be targeted according to an individual’s past purchasing behaviour – or it can be aimed at a customer segment based on their age, gender, location or other demographic details.
OVERCOMING THE CHALLENGES
For many businesses it requires a shift in mindset to successfully implement an effective transpromotional campaign.
A primary challenge is to stop looking at transactional mail as an administrative task and begin seeing it as a marketing and customer relationship tool. This, of course, requires close co-operation between the IT, operations and marketing areas of the business.
Another challenge is to gain access to customer data that may be stored in several different systems. With ready access to this data, the marketing team can gain a clear view of customer preferences and use this information to create targeted transpromotional campaigns that may generate new revenue for the business.
BIG IN AMERICA
The Americans have rapidly adopted transpromotional mail as an effective way to sell to existing customers.
In fact, a study by the American market research company InfoTrends predicts that the volume of transpromotional items sent in North America is set to double every year between 2006 and 2010.
Here’s what the InfoTrends report, called The Future of Mail 2006, had to say about the prospects for transpromotional mail growth in the United States and Canada:
“Transactional documents are among the few types of mail that are almost always read. Organisations are investigating new and more efficient means of producing and distributing these documents, and this has resulted in the so-called ‘transpromotional’ category.
“The adoption of ‘transpromotional’ documents could transform the existing document landscape. Our study indicated that the North American market for transpromotional documents printed in full digital colour had reached 1.62 billion impressions in 2006. By 2010, we expect this number to be valued at 21.72 billion impressions.”
CASE STUDY:
ING AUSTRALIA
THE CHALLENGE
In the lead-up to the introduction of the Federal Government’s new superannuation rules in July 2007, the team at ING Australia was looking for the most effective way of educating its members about how the changes affected their superannuation savings.
Mark Pankhurst, Head of Marketing & Product, ING Employer Superannuation, says the rule changes were clearly going to have a financial impact on its existing members – so communication was critical.
“We defined the legislative changes as ‘significant’ and immediately set about planning a campaign to educate and inform members appropriately,” explains Mark.
But beyond informing members of the new laws, Mark and the team at ING also saw this mailing as an opportunity to encourage members to increase their contributions to the ING Employer Superannuation fund.
THE APPROACH
ING Australia worked with an alliance of direct marketing suppliers that helped manage the data transformation process, the creative approach and the execution of the mail-out.
The creative response involved a dynamic- looking, full-colour letter with a clear benefit statement. The letters were sent to all members, but the imagery and the main message printed on the letters varied according to the recipients’ age and income.
The ING mailing featured a photo of a happy couple and all recipients were segmented by age to ensure that the letter they received featured a couple who were (roughly) in their own age bracket.
The dominant message of the mailing was customised according to the recipients’ income. By targeting this message, ING was able to quickly explain why the superannuation legislation was relevant to each member (based on their current financial situation).
The database was also segmented to identify members who had not yet supplied their tax file numbers (TFN) – and a specific communication with a TFN notification form was sent to them.
The mailing also encouraged members to “roll-over” any other superannuation accounts they might have and thus consolidate their super savings in the ING account.
THE RESULTS
This ING transpromotional mailing led to an increase of $22 million in funds under management for the ING Employer Superannuation fund.
The additional funds were derived from funds that were rolled over into the ING Employer Superannuation fund, as well as members deciding to increase their after-tax superannuation contributions.
The campaign also resulted in ING collecting almost 3,000 tax file numbers from members with existing superannuation accounts – an initiative that has real tax benefits for those members as well as benefits for ING.
“Being able to use essential mail to deliver targeted marketing messages has opened a new revenue opportunity for us,” says Elizabeth Houteas, Sales Strategies and Support Manager, ING Employer Superannuation. “Our expectations were exceeded and we will continue to use more intelligent marketing within essential mail to maximise member value.”
