The 2011 study is the latest in a series of studies conducted by Epsilon around communication channel preferences. In the latest study, it was found that the preference for direct mail extended to the 18-34 year old demographic, highlighting the risk in making assumptions around age and channel preferences. Part of this preference bias compared to email and other channels could be caused by the level of trust associated with the channels reviewed, since 26% of U.S. consumers found direct mail to be more trustworthy than email. The least trustworthy channel continued to be social media, with the channel only being viewed as trustworthy by 6% of consumers. Consumers also found direct mail to be more 'private' than email or online channels (important for 37% of consumers).
"Consumers use and trust certain communication channels more than others," states Warren Story, VP of product marketing at ICOM. "This means that marketers need to understand which channels resonate most at various stages of the consumer purchase cycle and incorporate a cross-channel strategy that leverages data and technology to communicate on a 1:1 basis." Story also suggests starting with direct mail and layering other channels into the marketing mix for message reinforcement.
Not only do consumers seem to prefer direct mail communication, but there seems to be an increasing frustration with the amount of email received and the level of satisfaction received from receiving emails. The study showed that 75% of U.S. consumers get a lot more emails that are not opened, with 65% saying they get too many emails overall. Conversely, 43% of consumers surveyed still enjoy receiving emails from brands on new products, indicating that targeting and messaging of communication is needed to capture attention.
For financial services communication, consumers also overwhelmingly preferred personally addressed mail as opposed to 'dear occupant' mail that doesn't have the emotional pull of a personally addressed communication. (This should be tested on an ROI basis however, since I have found that the financial benefits of less personalized direct mail can work in some instances).
Even with the strength of direct mail indicated in this study, financial marketers should not exclusively use direct mail or remove email from their marketing mix. In fact, the Epsilon study showed a greatly increasing use of Facebook and mobile phones as communication channels, while showing that the most trusted channels were newspapers, company websites and television. The study also showed that there were many perceived benefits to both direct mail and email as shown below from people who preferred direct mail to email and visa versa..
In this time of communication message overload, financial marketers need to balance the use of multiple channels based on consumer preference, financial considerations, objective of the marketing program, and the results of multichannel effectiveness measurement initiatives. Bankers also need to continue efforts to improve the targeting of messages through all channels from both a financial and customer satisfaction perspective.
And while social media did not perform well from the perspective of trust, social channels provide several benefits that should be leveraged in a multichannel communication program due to economic considerations and the expanded use and reach of social media. Mobile channel communication should also be tested as we enter the new year and are building our marketing plans.
Of greatest importance is the development and use of advanced metrics that can assist you and your team in measuring the effectiveness of channels and channel mix. As opposed to measuring only single channels independently, advanced analytics are now available that can provide a view into the consumer's media consumption patterns and the impact of different channels.
As we enter 2012, the importance of an effective and efficient marketing communications mix is important. Budgets should be shifting to digital and social channels to build a reservoir of learnings that can be leveraged in the future, but it appears that the projected demise of traditional channels such as direct mail has been overstated.
How will your team be shifting marketing channel dollars in the new year? How will you be measuring the impact of your efforts?
I would love your comments.
Without knowing the statistical details of these studies, it's hard to know what's significant here but, it looks like print and company websites have the edge in trustworthiness over various forms of social media - at least in the U.S. It would be interesting to see the trend data.
ReplyDeleteSome of the questions seem to be reaching, like, 36% of respondents agreed that, "receiving postal mail makes me feel valued." Thankfully, that means 64% of people don't -- my faith in humanity partly restored.
Overall, I agree that FI marketers won't abandon traditional channels anytime soon but, they should -- as you state Jim, measure the impact of each channel. What's the cost of acquiring a customer in each channel and how many customers does that channel deliver per quarter? And what's the profitablity of those new or cross-sold customers? Those remain the key questions --
Maybe your faith in humanity is not restored since more than 60% of households looked forward to going to the mailbox. The 36% was the percentage of people who preferred direct mail (only 7% preferred email).
ReplyDeleteThe significant takeaways from this study are that no channel can stand alone and banks (and any business) need to test for the best media mix. The study also shows that companies have most likely overplayed their hands with email, causing people to ignore this channel as they did with untargeted direct mail.
Finally, it serves as a warning that while social media has the potential to be powerful due to the reach and penetration, it too could create backlash if not correctly integrated with other channels.
In the end, the consumer holds all the media consumption cards and any organization the carpet bombs people with messaging will suffer from lost readership and customers. Every channel requires effective and efficient targeting with messaging that solves issues as opposed to selling product.
The great thing about direct marketing is that you don't have to necessarily take notice of research. We can test and see what works for ourselves. And even when we don't have a specific response we can still measure. We used to work on HSBC's customer newsletter (mailed out with customer statements). Sure it had items where we could measure response but we also wanted to measure the impact of the newsletter on customer behaviour. So we had a control group and we measured (over time) bank balances, products held, average time with the bank etc. and we found that these were all far larger with the people who had got the newsletter.
ReplyDeleteSo although research can guide our strategies we should never forget that we should test!!
"The study also shows that companies have most likely overplayed their hands with email"
ReplyDelete"Every channel requires effective and efficient targeting with messaging that solves issues as opposed to selling product."
These are both excellent points Jim. Regarding email, in the words on Don Henley, "...call someplace paradise and you can kiss it goodbye."
Targeting is critical but we're finding that getting to messaging that solves problems, we need to better understand the individual customer's situation - which is why we digitally interview prospective customers before suggesting a solution.
What strikes me most about this data is that virtually NO marketing channel is "trusted." All preferences aside, the most trusted media studied (direct mail and company websites) still make a weak showing at only 21%. So while people may prefer to get direct mail, most still don't trust the message they receive.
ReplyDeleteSome in the banking industry have woken up to this (i.e. USAA, Amex, Charles Schwab, Navy Federal CU), and have started gathering and publishing ratings and reviews from their customers on their website, letting their customers' authentic messages do the job of building trust - with measurable results. Over 9 months, USAA generated 16k+ more conversions from pages with consumer-generated content vs. pages without it.
Forrester research notes that 78% of consumers trust online reviews/WOM, and more than 60% rely on it to make purchase decisions. Banks and credit unions who gather and publish reviews from their customers are seeing increased conversions, enhanced impact of traditional and online media backed by authentic consumer input, and deep insight into what customers/members think about the FI's services. Their customers' input is contributing to the bottom line while helping FIs improve services in ways that are directly tuned in to their customers' preferences.
It simply no longer makes sense to keep pouring marketing dollars into distrusted channels, especially those like TV, radio, and print, whose results can only be measured indirectly at best. Retailers figured this out years ago, which is why virtually no major retailing site is without some form of consumer feedback to build trust and provide decision information at precisely the time the consumer is in the market. They use traditional marketing to acquire attention, and back their value proposition with reams of testimony from their customers on their websites.
More banks and credit unions should take a page from that successful playbook.