Royal Mail’s role as a data services provider

Royal Mail’s role as a data services provider
I can understand that marketeers wouldn’t naturally think of Royal Mail as a provider for some of the data services they have, and that’s a challenge for us as an organisation to start to address. And it’s really important that I think as an organisation we start to support our mailing clients, people that put letters in the post with services that help them do that more easily.

As head of data strategy for Royal Mail I think I have two main objectives. One is to support direct mail campaigns and ensure that our clients, that is those companies that are pushing mail into the actual system, are getting the best possible service to ensure that what they’re sending gets to the destination. So supplying data and ensuring data is as accurate as possible for those organisations is very key to our role. And we also help people build audiences for their creative campaigns, so if they’re pushing new messages out to new markets we’ll support them in making sure they get the right data.

The second part of my role is looking at the data inside Royal Mail and how we can use that data to help our clients build creative campaigns. One example is we have quite a lot of data relating to people moving house. They naturally redirect their post. Where permissioned, we’re able to use that data in very creative ways, so if you as an organisation had products or services particularly focused on people at the time they move we can help people, help put a campaign together that would allow you to push your product to those individuals at the time they’re moving, and that can be very powerful. It’s something we call trigger event data. There’s a specific event happening that would make products or services feel particularly attractive.

The second area that we’re focusing on is our returns data. So this is mail we can’t deliver. It may be that the individual has moved away or the address is not relevant or not accurate and we want to try and capture that data, and in essence we should be the source you would come to for the most accurate address data, and that’s really important in direct mail campaigns. The more accuracy you have in your data the more likely it is your message will get out to the right individual and the more likely you’re going to get the right level of response and therefore return on your investment of the campaign.

What’s more important - customer acquisition or retention?
The great question about what’s more important to a business – retention or acquisition? In the current climate most people are focusing on retention. Why would businesses do that? I think point one is you try and keep what you’ve already got and it’s also proven that keeping existing customers is a lot more profitable for businesses than going out trying to acquire. Rule of thumb is it costs seven times to acquire than it does to keep, so keeping customers is a sensible thing particularly in the current economic climate. You would normally expect to get higher levels of response, assuming your product and service is something that is required by people that you’ve already dealt with in the past and that will be the natural place to go. 

You’ve also probably got more accurate data because you’re transacting with those customers and by definition it should be fully permissioned for you because you’ve already done the transaction. So there’s a lot of good reason why you do retention, but I would also caution businesses that focusing just on retention is a dangerous game. You know, churn in customer bases can be double digit and any focus on that without complementary acquisition campaigns can mean that, in effect, you have a declining business, so what you should do is a mix between the two. 

I won’t deny probably at the moment acquisition probably takes a bit of a backburner but it’s important you keep it going. It’s important you keep on trying to acquire new customers. It’s important you test your offers in the marketplace. It’s important you look at who could be new customers for you. So when and if the economic climate does turn round you’re best placed to really capitalise on that. Plus new business is the lifeblood of any business. You can’t just rely on your existing customer base.

Campaign planning and data
Modelling and analytics should be a key part to campaign planning. There are sometimes rules around how much data you need before a model or an analysis becomes relevant, and that’s probably for another day to discuss, but the fact is modelling and analytics helps you segment and target in a much more effective way. 

So if you’re able to understand who your best customers are, the ones that buy from you the most frequently, the ones that have the highest value over 12 months, the ones that when they buy one product are more than likely to buy another product, modelling and analytics can help all that really come to life. And what it means is working your customer base a lot harder you can develop campaigns that create much more effective ROIs.

It can create significant uplift in performance of the campaign. And it’s well worth looking at some simple techniques. Some can be just simple selection criteria, but lifetime value analysis, recency, frequency, value analysis, these are standard analytics that are available on the web. They can be selected and downloaded.

There are free packages available as well as some very sophisticated ones. But if you’re new to modelling and analytics well worth just taking a view as to what is available on the web. There are some very clever packages and it can really make a difference to the performance of the campaign.

Royal Mail data services – the future
As a data provider Royal Mail has a great vision I think going forward. We have two major focuses. One is to be the best in class supporter and adviser to our clients to support their direct mail campaigns. And that will be originating data for them, making sure their targeting is right, making sure the data is accurate, it’s cleansed correctly, it’s fully permissioned. So all the services that apply around the data as part of a direct mail campaign. We want to be seen as really top class in that environment. 

And the second one is to really position ourselves as the address change business. As you would expect Royal Mail should know when people move. We redirect a lot of post, we should know when we can’t deliver letters. And capturing all that data and ensuring it gets back to our clients so that they’re able to clean out all this wrong or inaccurate data which will help improve campaigns, help improve ROI, that’s a great goal I think for the business to have. It means that direct mail remains a very competitive channel to be used by business to either communicate to their existing customers or acquire new customers, and that I think has to be the overarching vision for a data services provider like ourselves.