Direct Marketing Champs and Chumps in Europe Pitney Bowes Research

							       Direct Marketing – Champs and Chumps in Europe
Pitney Bowes Research Study Reveals Vertical Sector Winners and Losers
                          in the Rising World of Direct Marketing

Budgets are moving away from advertising and into direct marketing. As a result, we are all recipients of
an increasing level of direct mail through the door, emails in the inbox, adverts with a telephone response
number and text messages on the mobile. But companies would hardly be doing it if it did not work. So
whose direct marketing do we think is effective and convincing, and what ends up in the bin? Who are
the champs of direct marketing, and who are the chumps?


Direct marketing campaigns produced by the retail sector in Europe are felt to be the most convincing and
effective according to a wide ranging research study commissioned by communications company Pitney
Bowes amongst consumers in Europe’s five main economies. Travel/holiday companies, charities and
banks are the next most effective with their direct marketing campaigns, with credit card firms and
insurers trailing in sixth and seventh place respectively, amongst the sectors studied.


The Pitney Bowes study, executed by international market research company Harris Interactive, covered
consumer opinion in the UK, France, Italy Spain and Germany. Only Spain bucked the trend, putting
travel and holiday firms in the top slot for direct marketing convincingness and effectiveness – perhaps an
endorsement of the importance and sophistication of the travel industry in Spain’s economy.


The results of the study may also reflect consumer opinion as to which sectors they are more intrinsically
interested in. Financial services buying decisions, along with one’s utilities supplier, are often regarded
as a ‘distress purchase’ by consumers, whereas fun purchases (retail, travel) and those which touch our
more principled nature (charity), are often regarded by people as more important in their lives.


Sector differences between countries are also revealing. Reaction to direct marketing approaches from
retailers are regarded as almost twice as effective in Italy and Germany than they are in the UK, France
and Spain, possibly reflecting the importance that Italians and Germans put on their style and fmcg
purchases – an interesting observation on national stereotypes and competitive markets, which refines
and changes received wisdom on retail purchasing patterns.
The UK is the obvious winner in terms of charitable direct marketing approaches, perhaps showing how
competitive charitable fundraising is in the UK. In Spain, consumers regard the direct marketing activities
of one of their key national industries – travel and holidays – as being the top performer when it comes to
direct marketing campaigns. Utilities in France and Spain are seen as particularly dynamic in their direct
marketing activity, reflecting the fact that utilities in these countries have not yet started to experience the
rigours of deregulation, but are nevertheless highly expansionist in overseas economies and in their own
domestic environment. The most surprising finding in the utilities sector is the low performance in the UK,
where mature deregulation might have been expected to produce the kind of high quality output found in
other competitive markets. It may be that UK utilities are still focusing on their infrastructure investments
rather than directing spending into core business and multi-product marketing at the moment.


French and Spanish banks are seen as most effective in their direct marketing, something which parallels
the acquisitiveness of institutions from this sector, such as Banco Santander’s acquisition of Abbey
National and Credit Agricole buying Credit Lyonnais. Effective customer communications are critical to
realising value from acquisitions. British banks sit in the middle of the countries studied, probably
because the UK banking industry has a very mature investment in CRM systems, making the sector
highly developed but also highly competitive in its direct marketing activity. Italian and German banks, by
contrast, perform very poorly on the direct marketing front, something of a worry considering banking
initiatives in both countries to extend their brand across a widening range of services. However, it is
significant that both of these countries are over-banked (a high number of providers compared to the size
of the population). This kind of fragmentation robs players of the scale that encourages investment in
sophisticated targeting and one-to-one marketing that is the hallmark of the sector in other countries.
Finally, effective and convincing direct marketing in non-banking financial services – credit card and
general insurance - shows a very clear lead for the UK. This is especially true for the credit card sector,
where there has been a well-documented move from high-volume direct mail, into much more targeted
campaigns over the last two or three years. The UK is also the most competitive market in Europe for
general insurance, following the rise of direct insurers in the 1980s, and online insurance marketing in the
1990s.




For further information, please contact:-
Clare Garnham 020 7087 8054
clare@lindsellmarketing.com
or
Naomi Bloomer 020 7087 8053
naomib@lindsellmarketing.com


Methodology
A balanced sample of over 1,000 consumers were interviewed in each of Europe five main economies –
Germany, France, UK, Italy, Spain. The research process was completed in July 2006. Fieldwork was
conducted by Harris Interactive.


Each respondent was asked the question, “Which of the following sectors do you consider perform highly
effective and convincing direct marketing that is likely to make you consider purchasing from them?”