Counting the cost of non-personalised comms€¦ · 4. The shift from selling products to selling...

www.ricoh-europe.com/thoughtleadership1

Counting the cost of non-personalised comms


INTRODUCTIONDavid Mills, Ricoh Europe CEO

“The way businesses communicate to consumers today is radically different to 20 or 30 years ago”

Of course, some things haven’t changed. Despite widespread predictions to the contrary, print remains a vital tool for companies everywhere and the paperless office is still far from a reality.

But since the 1990s, paper has been supplemented with an array of digital devices and techniques that have fundamentally changed how – and how often – information and ideas are shared by businesses.At Ricoh, we’ve witnessed these changes at first hand. Our business is built around helping companies communicate better, both inside workplaces as well as with the outside world, through products,

services and technologies that organise and manage their information.

When we speak with companies about their communications with customers, we regularly hear the same challenges. Customer data is stored in silos, making it hard to join up information and communicate efficiently. The range of communication channels is often overwhelming. And with typically low response rates, companies are unable to accurately assess the effectiveness of their communications.


The issues for SMEs are somewhat different but just as challenging. The information they have on their customers and prospects tends to be stored in paper form only. They are often uncertain how to best target customers and prospects with a high degree of accuracy. And they are unsure if, or when, they need to invest in a professional system to formalise their communication efforts.To that end, we wanted to help businesses understand consumer sentiment today, as the communication landscape continues to evolve. What do consumers think of the materials they receive from companies? How much do they get and how much of it is relevant? What impact does irrelevant comms have on their propensity to be loyal, and spend with a company? How do they think businesses could communicate better?

This EMEA-wide survey - of 3,000 people across 21 countries - provides some fascinating insights, which should also act as a wake-up call to businesses. The results show that too many companies have been taking their customers for granted by sending dozens of irrelevant messages every month, resulting in a negative effect on levels of loyalty, trust and spend.

In our view, this underlines the need for firms to invest more in processes and systems that streamline their communications and make them more targeted, efficient and effective. Without such changes, there is a significant risk of long-term damage to the customer relationships that are the bedrock of businesses.


CONSUMERS ARE SUFFERING THE CONSEQUENCES OF BEING INUNDATED BY IRRELEVANT COMMS:

A quarter of consumers have missed a payment deadline, while a third have missed important changes in terms and conditions, or offers from brands, because those communications were lost among junk mail.

IRRELEVANT COMMUNICATIONS ARE PUSHING CONSUMER PATIENCE TO BREAKING POINT – WITH LOYALTY, TRUST AND SPEND ALL BEING ERODED:

84% of consumers have taken action in response to irrelevant communications from a brand or service provider.

Two-thirds feel less loyal and would spend less with brands communicating irrelevant information.

57% are willing to go so far as to stop being a customer if communications are poor.

EXECUTIVE SUMMARY

CONSUMERS ARE GETTING A HIGH VOLUME OF IRRELEVANT COMMUNICATIONS, AND FEEL INUNDATED AND FRUSTRATED BY THE AMOUNT THEY RECEIVE:

of consumers get more than 20 branded emails every week.

of all brand communications are considered junk by consumers.

of consumers are frustrated by the amount of irrelevant brand material they receive.of consumers believe brands should do more to tailor communications to their individual circumstances.

25%1/3

68%64%


BRANDS NEED TO MAKE THEIR COMMUNICATIONS MUCH MORE RELEVANT TO CUSTOMERS’ INDIVIDUAL CIRCUMSTANCES – AND INCREASINGLY THAT MEANS DIGITAL:

of consumers want digital communications to serve the majority of purposes.

say email is their preferred method for receiving communications from brands.

claim the quality of printed communications directly impacts their perception of a business.

CONSUMERS ARE INCREASINGLY OPEN TO THE IDEA OF SHARING PERSONAL INFORMATION IN EXCHANGE FOR MORE RELEVANT MATERIAL FROM BRANDS:

Overall, 80% of consumers are willing to share some personal information to ensure the messages they receive from brands are relevant to them.

Significant minorities of consumers would even share information often perceived as highly sensitive:

of consumers want digital communications

to serve the majority of purposes

70%say more targeted comms would encourage them to be more loyal.

agree it would enable brands to approach them with highly targeted offers and discounts.

are happy to share their salary brackets andinternet browsing habits, are happy to share their health records.

35%

70%

18%

62%

10%

57%

44%


Unfortunately this theory did not always play out in practice. As early as the 1950s the phrase “junk mail” was coined to refer to poorly targeted and unnecessary business communications.

Today, of course, the problem is even bigger. Businesses can now use an ever-expanding array of methods – emails, text messages

and social media – to communicate with current and potential customers, in addition to postal mail, which remains a

preferred channel for some people and for certain types of information.

And because these new tools are so easy to use (and are often free), they have become available to smaller businesses for the first time.

Moreover, customer communications have become so important to how a business operates

and grows, that it is no longer solely the domain of the marketing department.

HOW DOES YOUR BUSINESS COMMUNICATE WITH ITS CUSTOMERS? THIRTY YEARS AGO THE ANSWER WOULD ALMOST CERTAINLY HAVE INVOLVED MAIL SENT THROUGH THE POST.

Mail was the principal way businesses informed customers about new products or promotional offers they might like, as well as bills, statements, brochures, catalogues, changes to prices or terms and conditions.

There was a reason why this kind of direct communication was so widely used. Compared to other tools in companies’ armouries such as TV ads or poster campaigns, mail was (in theory) targeted to a particular audience, making it more relevant, more useful and ultimately more effective.

01. MEET YOUR CUSTOMER – INUNDATED AND FRUSTRATED


As the amount of customer data has exploded in recent years, other senior decision makers such as CIOs and CTOs have become more involved in managing and utilising this information for communication purposes – for instance through big data analytics – and are often involved in purchasing and implementing the large-scale printing and processing systems that make this communication possible.

Increasingly, CEOs and MDs also carefully monitor customer preference and engagement metrics as indicators of future growth potential. Some businesses keep close tabs on their Net Promoter Scores, for example, while others, especially in the digital and software sectors, use measurements like daily or monthly active users, and open rates of marketing emails.

Meanwhile in industries such as financial services and healthcare, customer communications are scrutinised by regulators to ensure they are accurate, jargon-free and not misleading, and non- compliance can result in heavy fines, as well as reputational damage.

All of this puts customer comms onto the boardroom agenda.

Issues pushing customer comms up the business agenda:

1. The multiplicity of communication channels driven by new technologies: over the past 20 years, email, text, social media and messaging apps have joined post and phone.

2. The democratisation of communication technologies, which has made them available to many smaller businesses for the first time.

3. The explosion of customer data means CIOs and CTOs are looking for ways to organise, manage and utilise this information, including more targeted customer communications.

4. The shift from selling products to selling services across all industries, making communications a central part of the ongoing customer lifecycle.

5. The onus on businesses in regulated industries to be accurate and fair in all their dealings with customers.


It was in this context that Ricoh commissioned research of 2,892 consumers across 21 countries in Europe, the Middle East and Africa, with the aim of gauging attitudes towards the communications they receive from businesses. The results make for difficult reading for companies who want to contact people directly and attract them to their products and services.

The research found that on average, consumers receive 47 pieces of communication from businesses every week. But this masks a significant percentage who are receiving much more. And taking branded emails alone, over a third of consumers receive more than 20 a week and a quarter get more than 25.

A substantial proportion of this material is irrelevant though. One-quarter of all business communications are considered junk by consumers – adding up to billions of wasted euros in marketing spend, not to mention the environmental impact of unnecessary paper use.

21 countries in Europe,

the Middle East and Africa

01.


The effects of this go beyond consumers, though. Businesses are harming their bottom lines by unleashing a deluge of irrelevant material onto the general public. 39% of consumers said they have missed offers from businesses among their junk mail, meaning low-quality communications are cannibalising efforts to increase customer spending and loyalty.

It’s no wonder, then, that nearly two-thirds of consumers (64%) said they believe brands should do more to tailor communications to their individual circumstances.

Ultimately, consumers feel inundated and frustrated by the amount of messages they receive from businesses, and this is pushing their patience to breaking point.

This led 68% of the people surveyed to say they were frustrated with the amount of irrelevant communications they receive. And over half (58%) even said they find junk mail more frustrating than their commute to work.

“I do feel annoyed, and it’s getting worse. I feel like I can’t escape it. It’s wherever you go. There’s always some sort of communication you don’t actually need” Consumer, Germany

On the face of it, getting some junk communication may not sound like anything more than a mild annoyance. But the research found that it has serious consequences for the people on the receiving end, who often end up missing important messages among the volume of irrelevant material.

One in four people said they have missed a payment deadline because the communication explaining it was buried among other pieces of junk mail, and 29% have missed important changes in terms and conditions – guidance which could have saved them money.

of consumers believe brands should do more

to tailor communications to their individual

circumstances

64%


IT’S NEVER BEEN EASIER OR CHEAPER FOR A BUSINESS TO SEND A PIECE OF COMMUNICATION TO A CUSTOMER, ESPECIALLY IN A DIGITAL WORLD WHERE THE INCREMENTAL COST OF SENDING ONE EXTRA EMAIL, TEXT MESSAGE OR PIECE OF MAIL IS NEGLIGIBLE.

Low cost communications has led many companies to blast out more and more material, hitting increasing numbers of consumers with irrelevant information.

Businesses might not think this causes any harm. The research finds it definitely does.

Today’s consumers aren’t just irritated by all of this irrelevant communication – they are highly motivated to take action against it. Companies need to beware – junk mail annoys consumers and damages their businesses.

The research found that a huge 84% of consumers have taken action in response to irrelevant communications from a business.

The research found that a huge 84% of consumers have taken action in response to irrelevant communications from a business.

The survey delved deeper into consumer perceptions of, and responses to, poorly targeted materials.

02. BUSINESSES BEWARE

of consumers have taken action in

response to irrelevant communications from

a business.

84%


The results clearly show that irrelevant communications are fundamentally eroding consumer loyalty, trust and spend – the three key elements of the customer relationship that matter to businesses.

Two-thirds of people (65%) would be less loyal to a company communicating irrelevant information, and a similar number (63%) would spend less with them.

Most worryingly of all for businesses, is that a clear majority (57%) said they were willing to go so far as to stop being a customer of a company if its communications were poor. And this is no idle threat: nearly one-fifth of consumers (18%) said they have taken their custom elsewhere after being spammed by irrelevant material. For small businesses in particular, this could be a serious threat to their survival.

The deluge of junk and spam is making consumers mistrustful of how businesses handle their personal data. The least trusted sector according to our survey was retail: three-quarters of consumers (74%) told us they don’t trust retailers with their information.


The sectors most trusted with consumers’ data were the public sector, financial services and healthcare, with around half of consumers trusting them (50%, 49% and 48% respectively). Perhaps not coincidentally, these are also the sectors with rigorous regulations about how customer information is handled and used.

These statistics reveal the impact that poorly targeted customer comms can have on a business’s bottom line. Alienating existing customers will have an immediate effect on a company’s revenue and cashflow, while irritating potential customers erodes its pipeline. These are issues that deeply affect managers of every business, from start-ups to global giants, and should be high up their personal agendas.

In a world where many companies are rapidly shifting from selling individual products to selling ongoing services, building strong customer relationships is more important than ever. It takes a long time to gain a customer’s trust – but generic and impersonal communications can destroy that trust almost instantly.

The days when businesses could safely assume junk mail had no consequences are well and truly over.

02.

Public Sector 50% trust

Financial 49% trust

Healthcare 48% trust


“I think consumers’ behaviour towards a brand will change because they get so frustrated with the brand contacting them all the time. I understand;

it happens to me at work. I have a technology vendor who contacts me all the time, and it’s certainly maddening. Even if I need that technology,

I am not going to use them now”

Head of Marketing, Retail, Middle East

However, there was only a small gap between public and private sector providers. According to the survey, 39% of consumers thought they received relevant material from financial services brands, 37% from utilities and 36% from healthcare companies.

What should be worrying from a business’s point of view is that no single sector was viewed positively by more than half of consumers. This underlines just how much work is needed to increase the relevance and targeting of B2C comms material.

How do different sectors perform?

In consumers’ eyes, there is little difference between how accurate companies and organisations in different sectors are when communicating to them. Yet no sector was exactly a star performer…

The public sector was viewed as the best performer overall, with 42% of consumers saying they receive relevant communications from organisations such as their local and national government.


Consumers today have increasingly sophisticated expectations when it comes to the messages they receive from businesses, and their patience with irrelevant communication is shorter than ever before.

So how should companies – whether they are SMEs or multinational blue-chips – respond to these savvy consumers?

The research clearly identified that building and maintaining a customer base can no longer be done by bombarding consumers with information to win them over. If businesses want their current customers to remain loyal, while also attracting new ones, then their communications must be much more relevant to individuals’ circumstances – and increasingly that means they need to be digital, with 70% of those surveyed saying they want more digital communications.

03. WHERE DO WE GO FROM HERE?


But not all consumers are wholly converted to digital – in fact 42% would prefer a combination of paper and online communications. And the traditional paper format is highly valued when it comes to really important business communications, with almost half of respondents saying they would not like to receive contracts digitally.

The research also found that paper methods carry more of a cachet that affects how people view a business. 57% of those we surveyed claimed the quality of printed communications from a company directly impacts their perception of it.

It’s clear that customer comms have changed, and will continue to change, as technology evolves. In previous decades communicating with customers involved what was essentially a one-off action: a letter was sent out with a new offer for example, and the effect, if any, was often felt in other ways, such as footfall in stores.

“If the alternative is paper, then email is definitely the best way. I’d like to have the possibility to decide which notifications I receive through email, and which I don’t.

My bank has this ability. I can decide which emails to receive and which to not, or even not to receive emails at all”

Consumer, UK

Consumers clearly feel digital channels serve the majority of purposes for business communications, perhaps not surprisingly as it gives them more power to read the messages at a time and place that suits them, and respond immediately if they’re interested.

And while email spam has a bad reputation, 62% of respondents still said email is their preferred method for receiving communications from businesses.

By using digital methods, businesses can also improve consumer perception of their brands. 75% of consumers said their opinion of a company would be more positive if it offered “clickable paper” technology, for example.

of consumers would prefer a combination of paper and online communications

42%


It’s clear that customer comms have changed, and will continue to change, as technology evolves. In previous decades communicating with customers involved what was essentially a one-off action: a letter was sent out with a new offer for example, and the effect, if any, was often felt in other ways, such as footfall in stores.

But now customer comms is an end-to-end process, in which a message can be sent out and responses gathered by the same platform, providing companies with a mechanism to get immediate feedback on the impact of their communications. Information can also be collated in one channel and distributed via another: for instance, contact details can be gathered digitally, and then used to target printed materials. All of this should deliver more relevant and tailored communications.

There’s a particular opportunity for SMEs here, as well. Because they are more agile than larger businesses, SMEs are in a prime position to react to customer feedback faster, and to change their communication strategies more quickly, enabling them to win customers off bigger competitors.

“I think if the customer comes and tell us, ‘This is what I’m interested in’, it’s going to make life easier for companies. The consumer then gets tagged to the communication they want to receive. For our private banking customers, the manager fills in a form for each customer about what they like or dislike so they’re tagged, with their data ready to mine for insight”

Head of Marketing, Banking, UAE

03.


For the C-suites of large companies and owners of smaller businesses alike, the message is clear. Investment in data systems, content production and printing processes to ensure communications are targeted and relevant isn’t just the right thing to do for customers: it will deliver significant business benefits, too.

Of course, creating more relevant comms can’t be done by businesses alone. They need help to do it, particularly in the form of personal information from consumers themselves. Up till now, this has been something of a sticking point, but the research shows a large majority of consumers (80%) are willing to share personal details to ensure the comms they receive are relevant to them.

Many consumers are even willing to reveal quite sensitive information in order to achieve this. Nearly one in five (18%) are happy to share their salary bracket, the same number would share their internet browsing habits, and 10% say they are happy to share their health records if it leads to more relevant information from brands.

Consumers recognise the benefits that more personalised communications will bring. 57% agree it will save them time and 53% that it will reduce waste. More enticingly for businesses, healthy proportions of consumers also say it will encourage them to be more loyal (35%), and that it will enable companies to approach them with highly targeted offers and discounts (44%).

“It’s the 21st century. They can track me and know what I’m looking at,

using cookies. There are lots of ways to track me on the Internet. I’m okay with it because I can get very specific

products come up on Facebook, which in theory I want to see”

Consumer, Poland


IF YOU’RE RESPONSIBLE FOR YOUR BUSINESS’S COMMUNICATIONS, YOU MIGHT BE WONDERING HOW YOU CAN IMPROVE YOUR PROCESSES TO CREATE MORE RELEVANT MATERIAL AND MORE ENGAGED CUSTOMERS.

04. THREE STEPS TO GETTING YOUR COMMS RIGHT

FILL IN THE GAPS

As companies grow, customer data can become highly soiled. This can cause extreme difficulty in building an accurate image of who you’re trying to target. It’s imperative that businesses work to connect critical data sources so all customer information is stored in a single, easily accessible and coherent database. Over time, as new customer data continues to emerge from every touch-point, it’s important to ensure this is captured in a consistent manner and in a single location.


“It’s the 21st century. They can track me and know what I’m looking at,

using cookies. There are lots of ways to track me on the Internet. I’m okay with it because I can get very specific

products come up on Facebook, which in theory I want to see”

Consumer, Poland

RE-ENGINEER AND MAKE RELEVANT Customer data needs to be integrated with the content most appropriate to their individual circumstances. Organisations should compose documents to ensure critical information can be easily re-engineered to make it personalised and relevant. In a financial services company, for example, different mortgage products can be mapped against data to identify the most relevant customers for a particular offer. This specific information can then be communicated to the right individuals using an easily modifiable standard template.

RIGHT PERSON, RIGHT FORMAT The format and quality of a piece of communication makes a difference: nearly half of consumers prefer a combination of both paper and online communications, and six in 10 consumers claim the quality of printed materials directly impacts their perception of a business. Armed with the knowledge of how a customer likes to receive information, outputs and workflows should be directed to either a print room or a digital system accordingly.


Ricoh Europe PLC20 Triton Street,

London, NW1 3BF UK

www.ricoh-europe.com

www.ricoh-europe.com/thoughtleadership

Counting the cost of non-personalised comms€¦ · 4. The shift from selling products to selling...

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