Survey ranks European direct marketing by sector

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By: Wise Marketer Staff |

Posted on August 31, 2006

Survey ranks European direct marketing by sector

Direct marketing campaigns produced by Europe's retail sector are considered by consumers to be the most convincing and effective, followed by travel companies, charities and banks, according to consumer research commissioned by Pitney Bowes.

The study, conducted for Pitney Bowes by market research firm Harris Interactive, covered consumer opinion in the UK, France, Italy, Spain and Germany.

Following the retailers, travel/holiday companies, charities and banks were credit card firms and insurers at the bottom of the list. Spain was the only country to buck the common trend, with the country's travel companies being seen as the most effective direct marketers, followed by retailers.

Consumer interests But the results of the study may reflect consumer opinion as to which sectors they are more intrinsically interested in.

Financial services buying decisions, along with the consumer's utilities supplier, tend to be seen regarded as a "distress purchase", whereas fun purchases (e.g. retail and travel), and those which touch our more principled nature (e.g. charity), are perhaps regarded by consumers as being more important to them.

Sector differences Sector differences between countries were also quite revealing: 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. According to Pitney Bowes, this could possibly reflect the importance that Italians and Germans put on style and fmcg purchases (an interesting theory involving national stereotypes).

Regional differences The UK was the clear winner in terms of successful charitable direct marketing. 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.

Perhaps the most surprising finding in the utilities sector was a very poor performance in the UK, where mature deregulation should perhaps by now have produced the kind of high quality direct marketing found in other competitive markets. Pitney Bowes' conclusion is that this may be due to the UK's utilities still focusing on infrastructure investments rather than core business and multi-product marketing.

Banking on direct marketing French and Spanish banks are seen as most effective in their direct marketing, which parallels the acquisitiveness of institutions in the 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, the survey report concluded. British banks sit in the middle of the countries studied, possibly 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 in terms of direct marketing efforts - a definite worry considering recent initiatives in both countries to extend banking brands throughout a widening range of services. However, it is significant that both of these countries are over-banked (both have a high number of providers compared to the size of the population), which robs the banks of the kind of scale that encourages investment in sophisticated targeting and one-to-one marketing.

Financial services 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 past two to three years.

The UK is also currently 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.

Survey methodology A balanced sample of more than 1,000 consumers was interviewed in each country, and the survey was completed in July 2006. Each respondent was asked the same question: "Which of the following sectors do you consider performs highly effective and convincing direct marketing that is likely to make you consider purchasing from them?"

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