get the max out of your mix (dm discovery 3, 2007)

GET THE MAX OUT OF YOUR MIX

SOME NEW DM INSIGHTS FROM BELGIAN POST

SOLUTIONS

Brussels february 9th 2007

DM DISCOVERY BREAKFAST MEETING

2

TOPICS

Fast changing market & media landscape

Belgian Post Solutions as a DM facilitator

Some key DM Insights

Belgian Post Solutions direct mail services offering

3

THE MARKET AND MEDIA LANDSCAPE IS CHANGING FAST …

- Products / services ( proliferation , sophistication and premium-discount polarization)

- Additional offline and online sales channels

- Additional marketing power of retailers (data base driven)

- Increasing media diversification & fragmentation with resulting decreasing power of traditional media

- More & finer segmentations ( socio-demo + lifestage + lifestyle + shopping)

- Complex consumer attitudes ( ao less brand loyalty, hybrid shopping )

Increasing pressure to increase ROI of marketing communication investments

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33

OFFER SIDE :

DEMAND SIDE :

SHAREHOLDER SIDE :

4

Increasing media diversification

1920 1930 1940 1950 1960 1970 1980 1990 2000

Radio

Television

Cable

PC

GSM

CD

Internet

VCR

1G gaming consoles

Satellite TV (DBS)Broadband Internet

DVD

PDAs

DVR

Entertainment robots (Sony Aibo)

Electronic ‘e-ink' books

Tablet PCsEmerging

Digital cable

Home wireless networksHDTV

MP3

VOD

2010

Sources:Veronis Suhler Communications Industry Forecast, 7/03; TVB; Kagan; eMarketer; Jupiter

5

DIRECT MARKETING IS A PRIVILEGED TOOL TO RESPOND TO THIS CHANGING ENVIRONMENT

Changes in market & media landscape Direct Marketing is well suited for :

- Products / services ( proliferation , sophistication and premium-discount polarization)

- Additional online and offline sales channels

- Increasing media diversification & fragmentation with resulting decreasing power of traditional media

- Raising brand awareness and inspiring consumers- Explaining complex messages

- Activating sales - Triggering consumers to appropriate sales channels

- Improving communication recall rate and brand perception

Complex consumer attitudes (ao less loyalty, hybrid shopping) & finer segmentations (socio-demo + lifestage + lifestyle+ shopping)

-Addressing each consumer individually with the appropriate language and offer - Increasing brand loyalty

Increasing pressure to increase ROI of marketing communication investments

- Avoiding communication & promotion waste and increasing effectively net ROI

- Allowing more accurate / analytical ROI measurement

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ANIMATION

6

TOPICS



Some key DM Insights


7

BELGIAN POST SOLUTIONS AS A FACILITATOR

MISSIONMISSION

Consultative selling"Media House""New business" Data (Select Post)

Mail Media offer Data Quality

To increase the usage of Mail Media by facilitating the ‘mail’ experience for the advertisers together with intermediaries (agencies, routers, printers, associations)

To help advertisers build strong and lasting relations with their customers & prospects

To increase quality of current products

To innovate eg :

– Non standard formats

– PubliPack

– New Distripost

To understand the media market and your needs

To provide you with industry relevant benchmarks & fact-based evidence of DM specific added value

To position clearly added value of unaddressed and addressed mail versus (in support of) other media

Pro-active approach for understanding communication challenges in order to better integrate unadressed & addressed mail in the mediamix

To provide solutions with the support of an experienced Direct Marketing Consultancy team

To increase the ROI of your campaigns by reducing mail wastage

To save costs via reduction of manual handling and better use of postal returns

To provide you with new powerful prospect data

To reduce waste by sending mailings only to those interested

8

TOPICS



Some key DM insights :– The Mail Moment

– The power of DM unveiled


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THE MAIL MOMENT

2 X WEEK

97 %

80 %

1’52

11

TOPICS



Some key DM insights :– The Mail Moment– The power of DM unveiled

Belgian Post Solutions direct mail services offering- The power of DM unveiled

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THE POWER OF DIRECT MAIL UNVEILED

• The Post has developed with McKinsey a methodology to assess the added value of Direct Mail to several media-mixes in terms of :

– Media recall rate– Brand awareness and perception– Sales activation– Brand loyalty– ROI

• Several pilots have been run in several sectors , with different sales & marketing objectives and using different media-mixes

• In-depth market research was run by independent research companies. – 15’-20’ minute telephone interviews were made in samples of minimum

1500 to 3500 persons representative of the relevant target groups– Sanitized results are presented in the next slides

13


Brand perception

Sales activation

Boosting of ROI

Loyalty building

DM is a strong sales activator

Integrated with other media DM increase the ROI of your campaigns

DM builds strong long term relations with your customer

DM improves brand perception

High & better

recall rate

DM gets high recall rates even of complex messages

11 22 33 44

55

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DIRECT MAIL GENERATES HIGHER AND BETTER RECALL RATES THAN ATL Sector Objective DM recall rate

index 100 (= 42% on average : min 17%- max 83%)

Daily Press /Magazines

TV Radio Internet /E-mail

FMCG Case 1 Case 2 Case 3

RecruitmentRecruitmentRecruitment

100100100

57-

86

--

108

-41-

6--

Retailing Case 1 Case 2

LoyaltyLoyalty

100100

--

37-

--

-72

Car Recruitment 100 14 46 3 1

Utilities Case 1 Case 2 Case 3 Case 4

Cross-sellingCross-sellingCross-sellingCross-selling

100100100100

37241855

142-

61118

16-5

11

57-25

Bank Cross-selling 100 15 48 4 -

11

15

Percentage of respondents

Source: Market research on 1533 primary customers, November 2005; Team analysis

"Do you remember having seen or heard over the past month an ad concerning product “X”? Where?" "Do you remember having received over the past 2 weeks a letter concerning product “X” ?“ “The letter / ad showed …. Do you remember it now?“

1

4

5

7

13

6

14

0

DM

TV

Poster

Press

Radio

Internet

Media recall rate

(x) Total sample

size

(1054)

(836)

(1533)

(1533)

(1533)

(1533)

27

13

Unaided recall (no content description)

Aided recall (content description)

Aided recall not tested for these media

BANK - INSURANCE SECTOR CASE

DIRECT MAIL GENERATES HIGHER RECALL RATES THAN ATL11

16

Source: Ask market research on 2000 customers, October 2006

Percentage of respondents recalling medium

None70%

At least one30% None

47%

At least one53%

Recall content of ATL ad = 100% Recall content of DM mailing = 100%

Number of correct elements mentioned Number of correct elements mentioned

n = 471** n = 310*

* DM read amongst ‘ATL+DM group’ & ‘DM only group’

** ATL recall amongst ‘ATL+DM group’ & ‘ATL only group’

Description of correct ad elements is by 77% higher for DM than for ATL

UTILITY SECTOR CASE

DIRECT MAILING GENERATES ALSO BETTER RECALL (CONTENT) THAN ATL

Percent of respondents recalling medium

11

17

Media funnel

DM 100 2749 5555

Received DM / E-mail

Recall DM / E-mail

Read DM / E-mail

Correct recall content

22

Email 100 1628 5757 12

4949

2828

8181

7575

“Do you remember receiving a DM / email from advertiser X?”

“What did you do with the DM / email from advertiser X?”

“Can you describe what the DM / email from advertiser X was about?”

Direct Mail is more effective throughout the media funnel leading to an 83% higher content recall rate compared to e-mail

Source: Market research on 1800 customers

+83%+83%

UTILITY SECTOR CASE

11 DIRECT MAILING GENERATES ALSO BETTER RECALL (CONTENT) THAN ATL


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WHY DO DIRECT MAILINGS GENERATE HIGH RECALL RATES ?

DM captures high attention:

Part of a unique , expected & privileged Mail moment:

– ‘Expected’ moment 97% opens every day their letterbox

– Immediate attention 74% read their post right away

– Preferred media 50%-60% prefer DM vs. other media for advertising communication

DM breaks through the advertising clutter:

– No advertising clutter Per household, only 1 DM every 3 days

– Getting attention 63% is fully focussed ;78% opened; readership 1’52”

– Targeting power Relevancy of target group ensures higher response

Power of paper :

– Convenience & especially appreciated for long & complex information

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MULTITASKING : DIRECT MAILINGS CAPTURES MORE FULL ATTENTION

Full attention 53% 26% 52% 63% 63% 52%

Also listening the radio

1% 32% 27% 22% 24%

Watching TV 1% 10% 3% 6% 5%

Also other activities

29% 73% 6% 7% 8% 19%

Wat

chin

g TV

List

enin

g

the

radi

o

Read

ing

daili

es

or m

agaz

ines

Rea

din

g M

ail

Surfi

ng o

n

Inte

rnet

Read

ing

e-m

ails

“Last time you watched TV , listened to the radio, read a magazine ….etc , did you had another activity ?

Source : MAS search – La Poste – 1100 interviews -June 2005

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Sales activation

Boosting of ROI

Loyalty building






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55

High & better

recall rate

Brand perception

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DIRECT MAIL IMPROVES BRAND PERCEPTION

Sector Objective Average number of measured brand attributes : 10

Index 100

% brand attributes where DM (integrated with ATL or stand-

alone used ) scores significantly better than ATL only

FMCG Case 1 Case 2 Case 3 Case 4

RecruitmentRecruitmentLoyaltyRecruitment

100100100100

45100870

Car Recruitment 100 33

Utilities Case 1 Case 2 Case 3

Cross-sellingCross-sellingCross-selling

100100100

00

17

Bank Insurance

Cross-selling 100 60

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DIRECT MAIL IMPROVES SIGNIFICANTLY BRAND PERCEPTION

'To which extent do you agree with the following statements concerning brand x?' Percentage of respondents

0

20

40

60

80

Rating on a scale 1 to 5; % Completely or somewhat agree (% of 4 or 5)

Professional service

Good reputation

Original advertisement

Wide range of insurance products

Products easy to understand

High compensation level

Excellent value for money

Flexible payment options

Products customized to my needs

Easy to contact

TV only

TV +Direct Mail

0

20

40

60

ATL + Direct Mail

Control group ( ATL only )

Makes my life easier

Has modern and attractive packaging

Is an innovative and modern brand

Is convenient to use

Is dedicated to continuously improve its products

Offers a complete range of products to deliver the best results for each need

Is an expert in its field

Rating on a scale 1 to 10; % Completely or somewhat agree (% of 8+)

EXAMPLE IN FMCG SECTOR EXAMPLE IN BANK- INSURANCE SECTOR

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WHY DO DIRECT MAILINGS IMPROVE BRAND PERCEPTION ?

DM improves brand perception because :

- Possibility to add high eye catching and strong emotion if right creative approach

- Possibility to give more personalized content involving the customer

- Possibility to explain in-depth brand values and key benefits

- Possibility to provide a long media exposure

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Boosting of ROI

Loyalty building






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High & better

recall rate

Sales activation

Brand perception

25

DIRECT MAIL IS A STRONG SALES ACTIVATOR

Sector Objective DM sales activation index 100(= % of respondents recalling DM with intention to buy product ,visit store .. )

Above the Line sales activation (% of respondents recalling mass-media with intention to buy, visit store etc ) Indexated versus DM

FMCG Case 1 Case 2 Case 3 Case 4

RecruitmentRecruitmentLoyaltyRecruitment

100100100100

78538062

Retailing Case 1 Case 2

LoyaltyLoyalty

100100

8876

Car Recruitment 100 77

Utilities Case 1 Case 2 Case 3 Case 4

Cross-sellingCross-sellingCross sellingCross-selling

100100100100

61764572

Average DM sales activation rate vs mass-media

42 % (Min +8% - Max + 78%)

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26

9333547

16465365


Direct Mail only

E-mail only

Recall having received it

Opened it Read itStimulates visit to store

82 86 35

75 95 27

Base = Received DM only (n=307)/ Received e-mail only (n=311)/ Received DM + e-mail (n=310)/ Control group (n=151)

Source: Market research

+78%

• Which addressed DM l email,do you recall having received recently?

• Did you open it ?

• Did you read it : rapidly , read it carefully ?

• Did you decide to go to the store ?

DIRECT MAIL IS A STRONG SALES ACTIVATOR33

RETAILER SECTOR CASE

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WHY DO DIRECT MAILINGS ACTIVATE SALES ?

DM is a strong sales activator because:

By design , it’s first objective is to call the customer/prospect to act : visiting a store, receiving a brochure , getting an offer etc.

It explains in-depth the value proposition of the brand , its differentiation versus competition .

It prompts the urgency to decide now

It engages the advertiser and is trustful

DM activates best when:

The activator offers high perceived value for money ( More is sometimes less )

The call to action is clear, unambiguous, re-assuring

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Boosting of ROI






11 22 33 44

55

High recall rate

Brand perception

Loyalty building

Sales activation

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SERIES OF DIRECT MAILINGS BUILD BRAND LOYALTY

Sector ATL + regular DM *Index 100 = Consumers declaring buying always/most often brand A , B , C , D

ATL only*

FMCG Case 1

Case 2

Case 3

Case 4

100

100

100

100

62

69

80

77

* Customer profile and brand awareness is identical in both groups

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30

DIRECT MAIL BUILDS BRAND LOYALTY


Source:Market research, 2005; Team analysis

Awareness Familiarity Consideration TrialRegular use

Purchase funnel

92.192.1 89.4 98.698.6 62.9

92.392.3 87.6 100100 49.4

ATL + Series of DM (>5 over 2 years)

Control group (no DM – ATL only)

Media received

94.594.5 59.4

90.890.8 44.8

Loyalty

56.4

71.399.5 97.0

96.9 94.9

97.597.5

97.997.9

88.1

87.6

Series of direct mails drives higher regular use (+27%) and ultimately

customer loyalty (+33%)

FMCG SECTOR

44

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WHY DO DIRECT MAILINGS BUILD BRAND LOYALTY ?

Regular Direct Mailings

= Regular appointments

with your key customers

Consolidation

of

Brand intimacy

Brand preference

at

the Moment of Truth

44

32


Boosting of ROI






11 22 33 44

55

High recall rate

Brand perception

Sales activation

Loyalty building

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DIRECT MAIL YIELDS A HIGH ROI

Several ROI calculation models have been designed according sector,

sales & marketing objectives and media-mixes

Elements to consider when calculating ROI :

A) Revenu :

- Short term impact : net incremental margin on addtional sales versus baseline sales

(ie sales which would have occured in any case (without media)

- Long term impact : net incremental margin on lifetime sales

(average number of loyalty years x purchase frequency X average purchase)

+ net margin on cross-selling sales

B) Costs :

- Data base (address hiring / data base set-up)

- Creation

- Production

- Media

- Fulfilment (eg coupon redemption)

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DIRECT MAILING YIELDS A HIGH ROI

Active customers

Source:Market research; Media agency; Team analysis

Indexated cost per useful contact of TV campaign :

Cost of TV campaign per reachable customer

Fraction of correct add

recall

Loyalty card penetration

138

Fraction of respondents recalling TV

add

Increase in respondents

knowing retailer's

offering versus no media

Indexated cost per useful contact of DM campaign :

Cost of DM per customer

Fraction of recipients

recalling DM

Increase in recipients knowing retailer's offering

versus no media

100

Fraction of correct PM

recall

RETAIL SECTOR CASE

55

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COMMERCIAL RETURN: PROVEN IMPACT OF MAIL

Brand perception

Sales activation

Boosting of ROI

Loyalty building


Integrated with other media DM increases the ROI of your campaigns

with at least 20%



High recall rate


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2 to 20 times better recall

>50% of brand attributes improved

15% to 200% extra sales

>25% more loyal

customers

36

TOPICS


Belgian Post Solutions strategy

Some key DM insights :– The Mail Moment– The power of DM unveiled


37

BELGIAN POST SOLUTIONS DIRECT MAIL SERVICES OFFERING

Distripost

DM Consultancy

ONE -TO-ONE

ONE -TO- ALL

Addressed Mail

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UNADDRESSED (DOOR TO DOOR) DM : ONE-TO-ALL

PubliPack (Deltamedia)

Week promotion related timing : distribution on Monday & Tuesday

High selectivity : NIS 9

High visibility : “Post” branded blister pack or “encartage”

Quality distribution ( controls )

Low gross cost per contact + only invoicing of effectively distributed items

Distripost

Distributed every weekday with regular mail : possibility to fix distribution day

High selectivity : NIS 9 ( planned)

High visibility ( “Mail Moment” + max 2 pcs per day + no direct competition )

Quality distribution (100% postmen)

High impact and attractive net cost per contact

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ADDRESSED DM : ONE TO ONE

Benefits : - High targeting (minimum waste)

- High involvement ( personalised content )

- High visibility (“Mail Moment” )

- High opening, reading rate & reading duration (average of 1’52” per mail)

- High recall rate ( medium + content ) & brand equity improvement

- Sales activation

- Loyalty tool ( when repeated DM’s)

- High demonstrable ROI

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SELECT POST :

Consumers Advertisers

Preferences

Mail theyWant

Data

BetterResults

Today feb 2007 : 450.000 fully qualified addresses available

Target dec 2007 : 800.000 fully qualified addresses available

THE SHORTEST WAY TO RECRUIT PROSPECTS

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SELECT POST : INFOREQUEST

InfoRequest is a special section in the Select Post survey where you can ask up to 1,5 mio consumers if they want to receive your mail.

Benefits:Visualization of your logoor product/service about 4mio timesExclusivityReady to use addresses

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SELECT POST : SPONSORED QUESTIONS

Thanks to Select Post, you have the opportunity to start a dialogue with your prospects with a question “made by you”.

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BELGIAN POST SOLUTIONS MAIL MEDIA OFFERING

Distripost

DM Consultancy

ONE -TO-ONE

ONE -TO- ALL

Addressed Mail

44

DM Consultancy

Jacques Bruyneel

Xavier Degraeve

Elke Quatacker

Claude Verstraete

Laure Helfgott

Ann Schuurmans(agencies)

In-depth know-how in several sectors : FMCG , Bank-Insurance , Distance Selling, Publishing, Retailing , Consultancy

Know-How in several DM related disciplines :

- strategic marketing - campaign management - data warehousing - call center - loyalty programs - market research - DM organisation

Martine Moors

BELGIAN POST SOLUTIONS MAIL MEDIA OFFERING

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Response & Results

DataCreationPrinting

Mail Handling

•ROI metrics & tools

•Impact research

•Response rates benchmarks

Services:• Muta Data• Select Post

• Franking solutions

• e-Masspost• e-Shop• Exbo• Special format

DM Consultancy :

•Do’s & dont’s (DM « rules »)

Delivering mailPreparing mail

ReplyUnaddressed Addressed ROI

Imp

act

Selectivity

UNADDRESSED DM

“One to All” “One to One”

Ave

rage

Hig

h Speed: D+1, D+2, D+4

Formats: • normalised & non- normalised,• special,• very special

Promo tariffs

Type: • Twin (max 2 per day – Distripost),• Bundle (max 8 per day – Deltamedia)

Formats: • standard & non- standard • special, • very special

ADDRESSED DM

RESPONSE TOOLS

Imp

act

Selectivity

UNADDRESSED DM

“One to All” “One to One”

Ave

rage

Hig

h Speed: D+1, D+2, D+4

Formats: • normalised & non- normalised,• special,• very special

Promo tariffs

Type: • Twin (max 2 per day – Distripost),• Bundle (max 8 per day – Deltamedia)

Formats: • standard & non- standard • special, • very special

ADDRESSED DM

RESPONSE TOOLS

AREAS OF DM CONSULTANCY

•Audit of current DM practices

•Alternative media mix test set-up

•Market segmentation & data base set-up

•Loyalty program •Overall DM organisation

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QUESTION TIME

ANY QUESTION ?

Get the MAX out of your MIX with Direct Mail

For more info , surf on www.post.be/dm or call your key account manager

THANK YOU AND SEE YOU AT THE

MARKETING DAY – MARCH 22 !

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DIRECT MAILING GENERATES ALSO BETTER RECALL (CONTENT) THAN ATL


Recall content of TV ad = 100%

Number of correct elements mentioned

Recall content of DM mailing = 100%

Number of correct elements mentioned

41

59

At least one

None

57

43

At least one

None

Source: Market research on 3000 households, August 22nd – 29th; Team analysis

Description of correct ad elements is by 39% higher for DM than for TV

RETAILER SECTOR CASE

11

get the max out of your mix (dm discovery 3, 2007)

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