InT uch From GI Insight
Issue 01
UN L I K E
Social Control
LIKE
How do users of social media sites REALLY feel about advertising? DMA update on EU Data Protection Directive See how a leading retailer uses customer management to improve loyalty
Delivering proven profitability
Welcome to InTouch Welcome to the new customer magazine from GI Insight focusing on current topics, industry news and features on customer loyalty, communication and database marketing. There has been much debate about the effectiveness and acceptability of advertising on social media sites. Companies are keen to use this medium to communicate but how do users of social media really feel about advertising? Our in-depth study asked this question and we share some of the responses on pages 4 and 5. Data privacy issues affect us all. See page 6 for an update from the DMA about the EU Data Protection Directive. And we are often approached by customers asking specific questions relating to database marketing and customer loyalty programs. We have launched an ‘Ask the Expert’ section on page 7 to answer some of these questions. Page 8 lists dates for our 2013 seminars. Let us know if anyone on your team would like to attend. We welcome customer feedback. Let us know what you think and thanks for reading InTouch. Yours sincerely
Andy Wood Managing Director, GI Insight
E andy.wood@gi-solutionsgroup.com http://uk.linkedin.com/in/andywoodgiinsight
Contents 03 | How american golf improves loyalty with Database Marketing 04 | Study deciphers consumers’ love-hate relationship with social media 06 | Uses of Digital Print 06 | DMA update on EU Data Protection Directive 07 | Ask the Expert 07 | Loyalty Guide Offer 08 | Come to our Seminars Sign up for regular newsletters. Email your contact details to: marketing@gi-solutionsgroup.com Follow Andy’s blog. Log on to: http://giinsight.wordpress.com View an online version of this magazine. Go to www.gi-solutionsgroup.com/InTouch or use this QR code €B^^^B€ v-(w$sz A^- J Z €B^^^B€
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InTouch Case Study
How american golf improves loyalty with Database Marketing american golf are Europe’s largest golfing retailer with 94 stores across the UK and Ireland. A strategic part of that success is the company’s loyalty scheme ‘Club’. Club rewards customers with exclusive offers, promotions and invitations to special events instore, and has helped american golf deliver much improved customer retention over the last 6 years. The database is hosted and managed by GI Insight and is maintained with daily transactional feeds from all stores and online sales data and all new sign ups. They provide regular insight, analysis, and reports and work closely with the CRM team at american golf to ensure both the business and its customers get the most value from Club and maximise customer engagement.
“The team at GI Insight are an invaluable extension of our marketing team. Their analysis and insight has helped us build on our successful Club member’s scheme and has increased value, loyalty and retention rates within our customer database.” Lindsay Brown Customer Relationship Marketing Manager
marketing@gi-solutionsgroup.com
TARGETED COMMUNICATIONS american golf also use data insight to send out targeted, tailored customer communications. These lead to better response rates and increased engagement.
EMAIL DISTRIBUTION GI Insight provides an email broadcast service called Email Studio which allows users to send emails through a robust and easy to use email broadcast system. GI Insight create templates and provide segmented data for email campaigns.
POST CAMPAIGN ANALYSIS Response to all customer communication is fed back into the database and used for greater insight. It allows full transparency of the differences in their purchasing habits and response rates. Similarly the responses to direct mail campaigns are analysed to ascertain the effectiveness of the offers and promotions included.
0116 232 1711
www.gi-solutionsgroup.com
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InTouch investigates
Survey uncovers social love-hate relationship Our latest research reveals the vast majority of consumers view social media And yet their actual behaviour shows that they do, in fact, engage with brands Our survey of over 1,000 aled British consumers reve belong to that 82% of those who ork reject at least one social netw ey use th the idea of the sites rtising or being ‘invaded’ by adve commercial messaging.
All using consumers social media sites
However, while consumers’ gut reaction towards advertising s on social networking sites appear e, ativ neg to be overwhelmingly 64% of the respondents who use , social media sites have, in reality ‘liked’ or ‘friended’ pages run by brands or companies.
OTHER SURPRISING FINDINGS INCLUDE: n 75% of consumers say they belong to at least one social media network, with nearly 90% using social media once a week or more. n Young consumers are both the most active age group on social media and yet, surprisingly, are also the most averse to commercial messaging on the sites they use, with 88% of 18-24 year olds saying they do not want social media to be ‘invaded’ by advertising at all. n But where the younger consumers have control, they are most likely to engage with a brand on social media, with 72% having ‘liked’ or ‘friended’ a brand or company. 4 | InTouch
n 87% of female respondents who belong to at least one social media network object to these sites being ‘invaded’ by advertising and commercial messages, compared to only 76% of their male counterparts. n Nevertheless, women are more willing to engage actively with a brand or company by ‘friending’ or ‘liking’ its page, with 68% of female social media users having done so, compared to just 58% of men. n Just over 92% of respondents to the survey want social media channels to keep advertising ‘very separate’ from ‘real chat’ and never allow the two to become mixed up.
UNLIKE
media with brands
LIKE
as a no-go zone for companies – on the surface, at least. in this very personal space, but only if they control the relationship. All using social media sites who have ‘liked’ or ‘friended’ pages run by brands or companies
In the main, these to be consumers are willing ying they contacted, with 68% sa vertising are happy to receive ad ercial m m or personalised co ds or messages from the bran have companies which they endorsed in this way. Nevertheless, brands fully in this need to tread very care ows that 49% area, as the research sh endorsed of consumers who have have gone on to brands on social media mpany or brand ‘unfriend’ or ‘unlike’ a co ying level after receiving ‘an anno of messages’ from it.
Andy Wood, GI Insight’s managing director, observes: “Overall, the results show that the vast majority of British consumers are extremely wary of commercial messaging via social media and are keen to retain control over how and where they are exposed to it. This is an area in which companies and brands need to tread with a great deal of care. It is very easy to spook the consumer on social media by making uninvited overtures or getting heavy handed with too many sales pitches.” Wood adds: “The evidence is that brands cannot utilise social media as a cornerstone of their marketing programmes but it has tremendous potential as part of a more broad-based approach that involves traditional direct channels – email, post, SMS, telephone – and other activities aimed at building customer relationships, including loyalty schemes.” marketing@gi-solutionsgroup.com
0116 232 1711
delivering proven profitability
Social Control and companies face in The challenge brands social media engaging consumers Through
gi insight January 2013
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marketing@gi-solutionsgrou
0116 232 1711
www.gi-solutionsgroup.com
To read the full white paper, email: marketing@gi-solutionsgroup.com www.gi-solutionsgroup.com
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How digital print can help increase relevancy Using digital print can help you to tailor your communications more closely to your customers’ requirements. There are several ways digital print can improve response rates and reduce costs: Highlight important offers in colour
Merge mailing runs together
Include a map of your store locations
Different types of customers mean different drivers to make a purchase. However some offers are lost in a mass of text. With digital colour you can personalise and highlight the offer. This means your offer is more likely to be seen and used.
Sometimes the same communication may be going out on the same day but from different brands or product categories. Printing digitally allows you to merge these runs together so no need for pre-printed stationery – saving money and reducing postage bills.
If you have retail outlets, letting customers know visually how far your nearest store is can encourage them to visit. Include a map of your store location and a personalised coupon to encourage footfall.
Alistair Ezzy is Sales Director for GI Insight’s sister company GI Direct. For more information on communications please call 07971 232 491 or email: alistair.ezzy@gi-solutionsgroup.com
DMA EU data law update The Direct Marketing Association (DMA) has welcomed the Justice Select Committee’s recommendations to the European Scrutiny Committee, which call for the EU data protection proposals to go ‘back to the drawing board’. In September, the DMA submitted evidence to the Justice Select Committee’s inquiry, which detailed industry’s many concerns about the draft EU Data Protection Regulation. Chief among the concerns were requirements for gaining explicit consent for the processing of most data, redefining personal information to include cookies and IP addresses, and introducing a new ‘right to be forgotten’. The report also cites specific issues that the DMA raised in the inquiry with regards to data breach notifications. Commenting on the recommendations Caroline Roberts, director of public affairs for the DMA, said: “We’re pleased that the Justice Select Committee has taken on board the many concerns that businesses
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have about the draft Regulation and recognises that as it stands the Regulation is not fit for purpose. Data protection legislation needs to be updated to reflect the realities of today’s digital economy. However, the draft Regulation would impose a serious burden on businesses without offering any meaningful protection to consumers’ right to data privacy. Tristan Garrick Head of PR & Content E tristan.garrick@dma.org.uk T 020 7291 3315 M 07884 338945
Barry Smith, Senior Consultant at GI Insight, answers your queries on database marketing and customer loyalty
Ask the Expert
“We are a 50 outlet retailer with stores across the UK, an eCommerce site and a database of 100,000 customers with full transactional information. We also have limited transactional information from various promotions across our stores. We know loyalty marketing can help but are unsure how to proceed on a limited budget. Is there any way I can use loyalty marketing without having to launch a full scale loyalty program?” An effective loyalty program works by linking the transactional information to customers. You already have this in your eCommerce database to your customers, but this is more problematic with your store customers. You need to be able link the store customers to their transactions. This is the role of the loyalty programme – to allow you to do this. I cannot stress enough the value that this information brings as it means you can communicate with your customers more effectively, driving incremental revenue and profit - and you can prove it. You want to know how to use loyalty marketing without a full scale loyalty program so let me address some specific concerns: n Loyalty marketing is expensive. Loyalty marketing is a commitment, but the average cost works out to around £3-£4 per customer per year. Once you compare this with how much a customer spends per year it becomes an affordable investment and one that your Financial Director and Managing Director understand. The essence of loyalty marketing is its measurability and how its incremental value can be demonstrated.
The benefits of loyalty marketing is that it gives you knowledge about your customers which will help you to deliver the marketing requirement of right offer, right person, right time. Through analysis of your customer data, you can identify and build a customer journey plan. This relates specifically to the buying patterns of your customers: how often and how much they have spent with you and can be used to track their behaviour. This allows you to decide both on who to send your messages to and what message you should be sending to them. For example, you may have customers who spend small frequent amounts with you. These customers can be encouraged to remain frequent shoppers and be incentivised to spend more. Similarly, you may have high spending customers who spend infrequently. These customers will be incentivised to make one additional purchase within a given time frame.
n You have to have a plastic card. The mechanics available to link information to your customers can be a plastic card with a magnetic stripe or chip. There are reasons why this is the most convenient, but there are other options available, such as capturing name and address details at point of sale or using a smart phone. Each one has pros and cons, and we discuss these at our free seminar on loyalty. n I t must be a points programme. Loyalty marketing doesn’t have to be based on points. We run both points and non-points programmes, and both have pros and cons. Non-points programmes are cheaper and more flexible, but the best system for your depends on your circumstances.
This allows you to tailor your messages to the different strata of customers within your database to encourage their loyalty. It also allows you to tailor your messages to ensure your valuable customers receive your best offers and remain loyal. This means driving incremental profit for your business.
Barry Smith, Senior Consultant at GI Insight E barry.smith@gi-solutionsgroup.com T + 44 (0)116 232 1711 M + 44 (0)7970 830 035
Loyalty Guide Offer Learn about how Loyalty Programmes can help to unlock the key benefits of database marketing. With our FREE Loyalty Guide, we outline some of the areas for consideration, including why they work, how they help manage your customers and what steps need to be taken to get up and running. The right programme will help you to improve your customer’s experience, introduce customers to new products and improve your targeted communications.
LOYALTY Can it really make a difference to your company?
For your copy of our free Loyalty Guide please email marketing@gi-solutionsgroup.com or call 0116 232 1711. marketing@gi-solutionsgroup.com
0116 232 1711
www.gi-solutionsgroup.com
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SEMINARS
Do you know someone new to a team or new to a discipline who could benefit from in-house training from a trusted supplier? GI Solutions Group have 3 seminars:
DIRECT MAIL & DOOR DROP: 28TH MARCH 2013 DATABASE MARKETING AND CUSTOMER LOYALTY: 4TH APRIL 2013 DIGITAL PRINT: 25TH APRIL 2013 To register, go to
gi-solutionsgroup.com/seminars or hover your phone over this QR barcode to access the website. Download a free code reader app at www.beetag.com marketing@gi-solutionsgroup.com 0116 232 1711 www.gi-solutionsgroup.com
Delivering proven profitability