Listening to Your Customers: Focus Group Results Revealed
DMW Worldwide and Erard Moore Associates conducted two focus groups in Fort Lee, NJ: one consisting of 10 women and another with 10 men. Their average income was $35,000-$75,000 with ages ranging from 35 to 54.
Participants were screened to produce direct response buyers who had an immediate interest in one or more of these products: home equity loans, auto insurance, life insurance and credit cards. Marketing executions included more than 40 direct mail envelopes, two direct mail packages and six television commercials for products such as home equity loans, credit cards, term life insurance and auto insurance.
There were several research objectives:
· To learn where today's consumers are in terms of direct response media preferences and use, as well as offer acceptance and rejection.
· To reveal the strategic and tactical issues that influence reaction to overall messaging.
· To learn how brand awareness affects perceptions of direct response advertising.
This research sheds light on issues relevant to all direct marketers, regardless of industry or product focus. Because research groups tend to focus on specific issues about a particular marketing campaign, they gloss over larger -- but equally important -- issues related to direct marketing as a whole, such as reactions to media, privacy and more. These focus groups offer the insider's view on these critical issues.
What we wanted to know. The focus group sessions were designed to reveal the following insights:
· What media do participants use/prefer today? Why?
· How are specific marketing efforts perceived?
· What tactical efforts are most appealing? Why choose one over another?
· What are the key determinants in your decision to open an envelope? Call a toll-free number? Respond at all?
· What are the strongest barriers to acceptance?
It is important to remember that this focus group examined responses from a limited sample with a geographic skewing. While reading finding highlights, consider that what consumers say and what they do are often different. Rather than deliver hard-and-fast edicts, this focus group led to hypotheses and resulted in questions for direct marketers to ponder, rather than supplying answers to specific problems.
Respondents reviewed direct mail packages and direct response television commercials that are in the marketplace in rollout. A few were test packages. Because these efforts are common in the market, the assumption is that most of them are producing acceptable results for the advertiser.
Topline observations. Today's consumer is much different than even a few years ago. This project confirms results seen in more than 250 focus groups and 1,000-plus in-depth interviews conducted over the past five years.
Consumers are more sophisticated in their decision making. They have increased time pressures like no consumers before them. The advent of the Internet has dramatically changed the purchase decision-making process. The Internet affects direct response behavior as it is a major source of additional product information. And finally, concerns over privacy affect the likelihood of response as well as response channel.
These changes in consumer behavior directly affect overall receptivity to offers and creative executions, attention and, ultimately, rate of response.
Today's consumers know (or soon learn) that they get progressively more generous offers. For example, a common perception exists that the longer you wait to renew a magazine subscription, the better the price offering.
Whether this assumption is true, the reality is that consumers will compare what they've seen in the marketplace to each offer they receive in order to compare the value. Consequently, this sets the standard for what others must offer to even compete for attention and interest.
Consumers are clued in to know that attention-getting devices -- such as governmental/official-looking envelopes -- are just that. So it is incumbent upon today's DMers to develop the next generation of ways to break through the clutter.
Consumers today expect multichannel access when it comes to responding, whether by phone, fax, online or through the mail.
Overall response and media perceptions. Several issues and concerns arise. Let's look at them.
Security. Security is obviously a personal issue. Participants indicated that they are much more aware of security issues today than five years ago. Concerns over security affect mail-opening behavior and response-channel choices. Identity theft was mentioned as a concern by all participants and, for some, influenced mail-opening and response habits. Some said they open more mail to ensure that documents with security information could be torn up before being thrown away.
Security concerns have yet to be fully addressed, or leveraged, in creative executions. Herein resides major opportunity.
Use of multiple media. Participants generally like to receive mail, but the irritation factor grows with the proliferation of other direct media, namely telemarketing and e-mail.
Participants reported that they interact with multiple media channels as part of the purchase decision and in selecting how they will respond. For example, some receive a catalog and browse. When they see a specific item of interest, they go online to obtain additional information or to place an order. They felt that often this is easier than talking on the phone to a customer service representative or mailing back an order form.
In a second example, participants indicated they receive direct mail solicitations that require the submission of extensive personal information. In this case, the consumers may read the mailing to determine interest and then respond by phone, as they felt this option provided greater security than mailing the response. For some, an Internet "secure site" was safer than direct mail.
Mail volume. Mail is still part of the daily routine, and receiving it is perceived as non-disruptive. Participants felt that mail volume had increased in the past five years. As a result, they screen more pieces and scan mailbox contents quickly.
Because of "time deprivation" that a majority of today's consumers face, there is a reluctance to go beyond a quick scan of mailbox contents. Consumers need to know right away that there is a special or differentiated offer for them. They may read bulleted, "scannable" copy and like to see heads, subheads and callouts.
Consumer sophistication. A feeling existed among participants that consumers are more savvy and aware of devices used by direct marketers to increase response.
Channel comments. Most opened mail, at least briefly, to ensure that no private information was contained. Participants seemed most receptive to mail offers versus other media channels. Participants will open e-mail if they have a relationship with the sending company and/or if they had provided their e-mail address to the company.
Most participants reported use of the Internet to increase their product knowledge prior to a purchase. This use includes researching comparative offers and companies. Some participants are most likely to purchase/apply for products online. Some male participants view secure servers as "safer" than responding via mail or even over the telephone. Participants reported major increases in the number of spam e-mails.
Most participants are aware of telemarketing no-call lists. The perception is that telephone DM calls did not provide unique offers.
Outer envelope review. Several factors encourage mail-opening. The perceived importance or prioritization of the communication is one. Participants look for specific mailing elements such as use of UPS envelopes and stamps versus bulk-mail indicia. Participants also look for the mailer's name/logo and are most likely to open the piece if there has been a prior relationship or if they are at least familiar.
Outer envelope copy that features an offer also increases the likelihood of the envelope being opened. Participants look for an offer that is equal or superior to what is available in the marketplace and/or a gift or other incentive for responding. They tend to react favorably to copy that is brief, in a large font and that summarizes key benefits.
On the flip side, participants said they are less likely to open an envelope that they recognize as featuring gimmicks or devices, such as "government-type envelopes."
Participants discussed the creative approaches that increase the likelihood of mail being opened. Regarding envelope size: some thought that irregular-sized envelopes would stand out most from the other mail. Participants were split regarding copy versus no copy on the outer envelope. Whereas some participants felt that a lack of outer envelope copy may pique curiosity, others felt specific information would encourage opening.
Some participants felt that colored envelopes would distinguish letters from other white mail. Brown envelopes were cited as looking official. Because of the speed with which the mail sort occurs, consumers who don't have time to ponder offers often will be misled if the message is not crystal clear and easily grasped.
For example, respondents were shown a Capital One mailing offering a 4.9 percent APR (fixed rate) offer. In their haste -- and because they had been conditioned by the market to expect a zero or otherwise very low rate balance transfer offer -- they didn't "get it" and dismissed this offer as not competitive.
Subsequent versions of this campaign clarified the outer envelope offer with words such as "new" and "not an introductory rate" to ensure that the offer was understood amongst other credit card offers.
Mail package components. Participants discussed a traditional four-element direct mail package and a smaller package containing only a letter and short brochure. The four-element package was described as being too much to read, too confusing and -- as a result -- less likely to be reviewed. In the smaller package, participants would read the brochure first. Headlines and subheads made it easier to read and, subsequently, enticed them to read the letter.
It was preferred that packages prominently identify all response options including toll-free phone number, mail coupon and Web site.
It was learned that participants prefer packages that are short, contain minimal pieces (two or three at most), summarize key benefits and offer comparisons (when relevant). Letters should be brief and include subheads and/or bullet points to aid reading.
Some participants preferred personalization in the letter, whereas others felt it was an unnecessary device that did not connote true personalization.
Brochures were deemed useful only when they offered different information than what was in the letter. The brochures that were viewed positively effectively summarized key points. The use of color and graphics increased overall appeal.
In mailings that required the respondent to provide a lot of information -- including an actual application -- the reply device was positively viewed by respondents. Participants indicated that they would prefer to call the toll-free number, using the printed application as a guide in talking with the phone representative. Some said they would use the reply card to ask for more information.
Overall, respondents feel that the way a package is organized is key; language must be easy to understand. Credibility drivers include brands, logos, applications and deadlines. Conversely, barriers to response include the unbelievable use of personalization and too much copy and other elements that might be viewed as irrelevant.
Television commercials. Participants were shown selected television commercials for auto insurance (Geico, Progressive and Safe Auto), home equity loans (ditech.com), credit cards (Capital One) and insurance (Matrix and AFLAC). Respondents indicated a greater likelihood of responding to direct mail from companies whose commercials they had seen on TV.
A company's credibility can be improved by airing TV commercials. However, negative company perceptions can arise if the commercial is not understood or if it lacks basic production values. Respondents were most likely to watch (and most likely to respond to) commercials with higher production values (for example, Progressive or Geico versus Matrix). They linked "higher-quality" TV commercials with a "higher-quality" company. If a commercial message was not immediately understood (i.e., Safe Auto or AFLAC), participants had negative reactions.
Specific reactions to the TV commercials were as follows:
Auto. Participants positively remembered the following aspects of the Geico commercial: humor and low rates (15 percent less than other insurers). The negative perception -- "every man for himself."
The Safe Auto commercial performed poorly in both groups. Most participants were confused by its message. The second group's participants reacted positively to the humorous presentation of Progressive's commercial.
Credit cards. Note: Only the second group saw the Capital One No Hassle Card commercial. Some participants did not think this commercial was relevant, as they did not have revolving credit. Some also doubted whether the commercial's message was credible; for instance, participants thought they would be unlikely to buy lunch based on the premise that their credit card had a low interest rate.
Participants may be more likely to look at direct mail from Capital One as a result of seeing their commercials on television. However, most thought this would be true only if they were in the market to get another credit card.
Home equity loans. Both groups saw the ditech.com commercial. Participants generally responded negatively. Respondents remembered the phone number (though incorrectly), the annual percentage rate and the company name. They viewed the interest rate and prominent phone number as positives.
Overall, they thought the commercial was annoying and viewed it as being too "light" or silly for such a serious financial decision.
Insurance. Most people understood that AFLAC offered some type of insurance. In addition, many were familiar with the duck. However, most were unaware of exactly what type of insurance AFLAC offered and how one would get it.
Participants remembered the duck, the row of falling items, the celebrity endorsement and the cash-back offer. The duck was viewed by some as "catchy" and others as "annoying." Some thought the message was unclear.
Participants liked the no-nonsense approach of the Matrix commercial. However, some thought the lack of graphics was too bleak. Some participants were confused as to who was offering the product, as two names were given. In addition, most disliked the voice and rapid announcement of the telephone number at the end of the commercial, as they felt it lessened the company's credibility.
Final thoughts. Brand and credibility are key drivers. Credibility devices appear to be as important as response devices in direct marketing efforts. Consumers are increasingly savvy, and to gain their attention -- and interest -- we must offer more than "free." Offers must be relevant and well communicated.
Because of the burgeoning attention deficit, "less is more" should be a direct marketer's mantra. But remember, less is more doesn't mean to leave things out. Consumers desire clear and concise -- but complete -- information. Finally, privacy is a real issue that will need to be addressed continually if we are to gain, and preserve, the trust of our prospects and customers.
To receive a CD-ROM containing this presentation, contact Allegra Craig at firstname.lastname@example.org or call 610/407-0407.
Warren Hunter is president/CEO of DMW Worldwide, a full-service direct response advertising agency with offices in Wayne, PA, and Plymouth, MA. He can be reached at 610/407-0407 or by e-mail at email@example.com. Erard Moore is president of Erard Moore Associates Inc., Greenwich, CT, a marketing research services company. He can be reached at 203/637-5410 or by e-mail at firstname.lastname@example.org.