Direct marketing among local restauranters


Leaflets sent to South East London

I get a lot of junk mail through my door. A lot. They span multiple product verticals and initiatives (not to mention religious or political groups), but the majority are food-related. And given that I live in South East London, most of those tend to be fast-food.

So I thought I’d do a little experiment. Rather than immediately throw them away, I’d keep every leaflet or flyer and see if there were any discernible patterns to the madness.

I intended to do this for three months. But I’ve had a rather busy year and by the time I’d managed to put some time in thinking about it, it had been eight months. You can see the results of my hoarding in the picture at the top of this post.

Numbers

I was surprised I hadn’t received more mail than I actually did, but the numbers break down as

  • 71 – pieces of direct mail from food outlets received over a 35 week period
  • 30 – the number of different companies that sent me direct mail
  • 7 – the number of communications I received from the most active
  • 1 – mailshots from a company I’d previously heard of (Domino)
  • 45 – number of leaflets from pizza companies
  • 14 – number of different pizza companies that sent me direct mail
  • 10 – number of different pizza companies that sent multiple mailshots
  • 5 – number of different Indian restaurants that sent me direct mail
  • 0 – number of different Indian restaurants that sent me multiple mail
  • 11 – remaining outlets (5 Chinese, 3 Kebab, 2 Thai, 1 Lebanese)
  • 63 – number of mailshots for outlets in either SE16 or SE1 (the others were E14, SE8, SE10 and SE14) – the two furthest away from me were both Indian restaurants

(Note: I’ve seen plenty of quant presentations where there’d be happy to break down figures for a sample of 71 into percentages – I’ve even seen one presentation breaking down a sample of around 50 into tenths of a percentage – but this is indicative and so numbers are fine)

Observations

Other observations I made include:

  • The only recognised company (Domino) were the only ones not to explicitly mention free delivery. They did, however, specify, that all homes placing an order would be placed on their database, unless they actively opted-out.
  • The minimum size of order for free delivery varied considerably – the highest was the Lebanese restaurant at £15; the lowest was a pizza shop at £6 (though it rose to £8 if you weren’t ordering a pizza)
  • The Indian restaurants tended to specify a radius or a list of postcode sectors that they would deliver to – none of the pizza or kebab places did this
  • All but one pizza outlet mentioned a special offer (in addition to meal deals), but few Chinese and Indian outlets did
  • Special offers would tend to be free side orders or drinks (the kebab places offered non-alcoholic drinks), though a couple of the pizza outlets had BOGOF offers or similar
  • One pizza outlet had a special offer whereby you could win a PS3 with FIFA 10. The leaflet had the official World Cup logo on. As the company is a single outlet in SE London, I doubt this is an official endorsement
  • The pizza outlets mostly mentioned in the small print that any offers had to be explicitly mentioned in the order, though a couple had this information next to the deal itself. No non-pizza outlet said the special offers had to be mentioned
  • Few offers mentioned had closing dates – perhaps because many are continuous or also available in-store. The 5 companies that did have were all pizza companies – Dominos and 4 of the more frequent distributors of flyers
  • None of the Chinese restaurants had a website; only one of the Kebab places did. Conversely, all pizza companies had a web presence.
  • Asian food door drops tended to be slight embellishments on menus, while the other food types tended to highlight the special offers more than the depth of the offering
  • Many of the pizza outlets may have had the same owner, or were part of the same franchise/business network. The designs of their flyers (from A5 to long A4)  and the nature of the special offers (from free muffins to money off) tended to change in line with each other

Rationale

Smith and Taylor (2004) identified six factors fueling growth in direct marketing

  • Market fragmentation
  • Tailor-made technology
  • The list explosion
  • Sophisticated software
  • Hybrid marketing systems
  • The constant search for cost effectiveness

Of these “rational” reasons, I suspect only the first applies here (with the second a factor only so much as it lowers the cost of executing). Clearly, I live in an area saturated with different options for the avoidance of cooking. Word of mouth will be a difficult thing to achieve, particularly if there is little differentiating the outlets. DM is a cheap way of letting people know your name, location and offering. But with the volume, perhaps outlets are engaging in DM just to avoid losing ground, rather than actively gain it.

With this in mind, I wonder if the main reasons for the volume are “irrational” – copying others as it is perceived to be the thing to do. Not wanting to be left out, despite not really appreciating the nuances of what they’re engaging in.

While there is something to be said of the convenience of having a menu to hand if you spontaneously decide to order takeaway, the DM I’ve collected holds little evidence of a quest to understand ROI. Thus, while there should be a constant search for cost effectiveness, it doesn’t appear to be happening. Admittedly, some flyers do specify that offers should be made explicit, and these could be tied to the postcode of the delivery. I wonder if this happens, and whether different campaigns are compared to one another in terms of effectiveness. It would be nice if they were.

Improvements

Having not spoken to any of these outlets, this is entirely conjecture. But since many local restaurants – particularly (it seems) Asian ones are local and family-run, it may be the case that there is a business and marketing knowledge gap that could be recognised. Obviously, things like Business Link exist but that and initiatives such as Ogilvy’s Idea Shop (which is a great concept) should be more active in promoting advice.

The strengths of DM are in its accountability and integration with CRM databases. DM allows business owners to understand their audiences and the effectiveness of offers through things such as

  • Comparing different offers in different areas, along with a control group
  • Including overt calls to action, with closing dates
  • Explicitly tying back revenues changes to marketing spend through different offer codes
  • Combining with in-store surveys for those that pick up the food/eat at the outlet themselves

The more effective DM is, the less wastage. Less wastage means fewer leaflets through my door. Which means fewer irrelevant things I have to throw away. Irrespective of my feelings, it also reduces the environmental footprint of a method of marketing that to be seems extremely ineffective and inefficient.

sk

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3 Responses

  1. Nice experiment. However, what you have analysed technically is not Direct Mail, it is actually ‘unaddressed mail’ i.e. ‘door drops’.

    Direct Mail is always addressed, and is targeted at an individual level. So, for example a proper Direct Mailing would have identified people who live on your street who like pizza and target only those individuals (potentially using past purchase data, looking at the profile of their base vs your data etc).

    The bad news is that proper ‘direct mail’ gets all the flack from what is actually not direct mail i.e. blanket bombed ‘unaddressed’ flyers and leaflets from local pizza companies.

  2. #justsaying.

  3. Hi Nick

    Thanks for stopping by and leaving your thoughts. You make some good points – to an extent it is analogous to a random person knocking on my door to ask me questions, saying it was market research.

    However, despite that person being unaccredited and not following industry guidelines, I would still call it market research as it is researching the market. Similarly, while door drops may be unidentified and delivered by hand rather than post, they are still unsolicited marketing comms sent directly to me.

    While Wikipedia specifies advertising mail is sent via poist (though it says that a synonym is junk mail), the IDM is more vague – The IDM’s preferred definition is “The planned recording, analysis and tracking of individual customers’ responses and transactions for the purpose of developing and prolonging mutually profitable customer relationships.”

    I’d be highly surprised if any of my local pizza companies outside of Domino fully planned and tracked response, but it is perfectly possible that they are.

    So, while I agree that my mangling of DM with door-drops is a bit misleading, I still perceive door drops to be a sub-set (and perhaps the unwanted stepchild) of DM as a whole.

    Simon

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