Top line summary:

Following the recent positive feedback from our last White Paper which looked at why prospects agree to meet with creative, strategic and digital agencies, we decided to cut the new business cake a slightly different way and analyse success rates within the most widely targeted markets by our clients in 2011.

Success is determined for us and our 60 clients in several ways – the greatest of which is winning new projects and clients. For the purposes of this analysis we focused on our ability to set quality meetings for our clients with the right decision maker at the right kind of company where there is a current or future need for the services our clients offer.

We took the overall conversion rate (defined as setting a quality meeting from a number of decision maker conversations and represented as a percentage) from each of the 11 most widely called markets in 2011 (see the table below) and compared this overall conversion rate to the conversion rates by marketing discipline. We concluded that any discipline showing an above average conversion rate for that market was deemed to be well received by the decision makers in that market. For example, if the average conversion rate within leisure overall was 8%, and a digital offer within leisure was 9.5%, then we concluded that digital was well received within leisure.

This is a good indicator of the receptiveness of these markets to these offers, but is only based on our calling activity this year and isn’t a defining piece of research. There are a number of other contributory factors that influence the success of the call, including the agency’s relevant clients/case studies, specific proposition etc.

New business campaigns are most effective when the marketing services/disciplines offered are the ones a prospect wants/needs. We would recommend that targeting is based on one or more of the following key factors:

1. Those markets where the agency has in-depth experience (eg. retail, leisure, fmcg)

2. Those companies who are facing the kind of challenges/problems that the agency has experience of solving (eg. decreasing footfall)

3. Those companies who target specific demographic groups who the agency has experience of communicating with (eg. youth)

4. Those companies who are most receptive to certain types of solutions (eg. search, social media)

Here is a table of the 11 most frequently called markets this year based on a total of 107,000 calls made to prospective clients.

The percentages reflect the amount of calling we’ve made to each of these markets – the remaining 28% of our calling is split between other markets such as Automotive, Building & Property and B2B.

Comparison to 2007:

When we compared these most frequently called markets in 2011 to our calling in the same period in 2007, in pre-recession times, there are some interesting observations which reflect the market as a whole:

1. There is more calling now in those markets relying on consumer discretionary spend compared to 4 years ago; markets such as leisure, youth, travel and luxury

2. There is less calling now than in 2007 in high value, business related/long term investment areas; for example, finance, automotive, IT and property are all significantly down in terms of calling compared to 2007

3. Some markets remain constant irrespective of what’s happening in the economy, for example food & drink. There is no significant difference between the amount of calling we did in 2007 versus the amount of calling we did in 2011 in fmcg.

4. Interestingly though, although basic brands remain almost recession proof, retailers are fighting for business and need to differentiate themselves through a range of marketing channels. This is reflected in the number of calls made to retailers this year which is twice the amount in 2007.

Our bespoke software that drives our database enables us to look at the main disciplines within each of these market sectors and analyse the conversion rates from decision maker conversations to setting a quality meeting.

Here are the main disciplines that we used in this analysis:

The percentages next to each marketing discipline represent the breakdown of our calling on behalf of these disciplines since 1st January 2011. The remaining 13% of calling is divided amongst other specialist disciplines such as retail design and media buying.

We have summarised our findings in two ways:

1. By market sector – for example, if you’re looking to target financial services, which disciplines/services are most likely to have traction within that market, thereby making it easier for us to set quality meetings for you

2. By discipline/service offer – in other words, if you’re a digital agency, which markets are most receptive to your offer

Please don’t forget that this research is limited to our client base and to our calling in the markets listed above on behalf of the disciplines listed above and is by no means intended to reflect the entire market. However, it is based on some robust statistics from our database.

Another caveat is that the lines between disciplines are becoming more and more blurred; for example, in the table above, it states that 13.4% of our calling activity this year has been on behalf of digital as a discipline – this is only part of the story as most creative and integrated agencies will also offer digital as part of their overall proposition. The 13.4% refers to those exclusively digital agencies we represent.

The disciplines that are currently being well received in the clothing market are creative, digital, integrated and research. Any brand or retailer will be using all of these disciplines to help them understand their target demographic better and communicate with them via the most effective and relevant channels.

Financial Services: (includes banks, building societies, health insurance, fund managers etc)

This continues to be a tough market to penetrate as decision makers within finance companies prefer to meet agencies with in-depth experience in their market. However, this isn’t as important as it was 4-5 years ago and they now like to meet agencies with experience of other markets as this can bring alternative thinking to their marketplace.

The most successful discipline in finance is research as it is widely used by the major banks and building societies seeking to understand their consumers better. For example, tier two companies in this market are looking to take advantage of the criticisms being levelled at the big boys and are therefore looking to run customer satisfaction surveys.

We have also helped our clients secure business from smaller companies within this market, such as fund managers.

FMCG: (includes food and drink, personal care, pet food, household products)

Although this is difficult market to get through to decision makers (partly because a lot of agencies are keen to work with consumer brands and so voicemail is a common problem and equally because decision makers change jobs fairly regularly in this market) this continues to be a fertile market across all disciplines, particularly in digital, sales promotion, research and packaging design. Research is particularly important for early product and campaign development.

The increase in BOGOFs and price led promotions has been used by FMCG brands to sustain sales during the recession. This is reducing their profit margins and can cheapen the brand; customers get used to buying the product for less and then stop buying it when the price returns to its previous level. Brand owners are therefore looking for ways to promote their brands whilst at the same time boosting the value of the brand, thereby justifying charging a premium price. Thus, they are looking to work with agencies who can deliver value added or partnership campaigns/promotions.

FTSE 250/Top 1000 corporates:

These lists obviously have a mix of companies from all markets, so it’s quite difficult to draw any firm conclusions.

We often target these larger companies as we know that they have the right kinds of budgets. However, a fair percentage of these top 1000 corporates will have been covered off by the statistics from the other market sectors.

Integrated, creative, research and below-the-line (particularly DM and Live Events) seem to fare best in this market. We have also helped our clients win business from corporate/stakeholder communications in this market, helped by having an angle, such as sustainability.

Home: (includes consumer electronics, home improvements, gardening, white goods etc)

Generally a receptive market all round with all the disciplines doing well, particularly creative and BTL. The only exception in this market is research (due to our current research clients not prioritising this market)

IT/Telecommunications: (includes a range of businesses including Dixons, Ericsson, Garmin, Microsoft, Mitsubishi, Motorola and Nokia)

The service offers with the most traction in this marketplace are Direct Marketing, Channel Marketing and Research. Research is always needed in a highly competitive market and a lot of IT/Telecomms related products and vendors use DM.

Success in this area tends to be with the commercial/consumer end of this market rather than with hardware/software vendors for example.

Leisure: (includes bingo, cinemas, gyms, pubs, restaurants and attractions)

This has been a productive market for our clients over the past 2 years with a significant number of the wins we’ve generated for our clients coming from this sector. The core disciplines with most resonance in our study are all of them except PR (again, this is probably due to the fact that we haven’t done much calling in this market on behalf of our PR clients.)

A key discipline for this market not mentioned in our list in retail design consultancy who do very well in the leisure market, branding and designing bars, restaurants etc.

The biggest issue for the UK leisure market is how to capture a larger portion of people who are staying in England for their holidays, thus they are particularly interested in agencies who can help them build loyalty and get repeat visits, which will involve DM and digital marketing.

It’s really important for restaurants for example to stand out on the High Street with better branding and signage for example, thus the need for retail design specialists and leisure branding experts.

Professional Services: (including accountants, civil engineers, management consultants, solicitors and representative bodies)

The most productive calls in this market are on behalf of creative, BTL and corporate communications agencies. This is probably because traditional B2B firms such as Accountants still have a need for traditional paper based communications/sales tools such as brochures and direct marketing.

Retail: (includes department stores, online retailers, supermarkets, mail order, off licenses)

This is another productive market for our clients across most disciplines, particularly creative, below-the-line, corporate communications, digital and research. Again, specialist retail design consultancies (although not in our core list) do well in this market, unsurprisingly!

The main issues for retailers are the changing habits and behaviours of consumers, for example, UK shoppers have spent £31.5 billion online so far this year, which is up 19% on last year.

Retailers therefore need to rethink how to understand and communicate with their consumers, thus the constant need for research. They need to embrace multi-channel marketing such as digital, social media, m:commerce, thus why they are receptive to meeting digital and social marketing agencies. They also need to constantly improve the shopping experience such as pop up stores, interactive window displays, thus why they are receptive to seeing genuinely creative agencies.

Success in this market also tends to come from agencies with a specialism, such as POS or local marketing.

Travel & Transport: (includes airlines, airports, trains, hotels, tourist boards and travel agents). The most effective disciplines in these markets, resulting in us setting a quality meeting for our clients to attend are BTL and research.

Summary by marketing discipline:

Here is the same information but presented by discipline. I have extended the discipline list to include, for example, Direct Marketing separately from the overall BTL discipline, whilst still keeping BTL as a discipline. I have also added in others like retail design and packaging design

I have added in some additional markets such as Automotive and Building & Property for example where there was a significant trend. 

Here’s a Christmas tale of woe for you all. I’ll leave you to decide whether I’m over reacting and am in fact probably the re-incarnation of Ebenezer Scrooge or if I’m the greatest champion of consumers against rip-off Britain since Matt Allwright from Rogue Traders.

 It follows on from my blog about how much more cost effective it is to retain a customer as opposed to solely focussing on trying to win new ones and how a certain restaurant chain has attempted to completely disprove everything I’d written.

Let me set the scene first: I’m one of those fairly loyal customers. If I find a brand I like, I can be a bit of a creature of habit and stick with it. In terms of new business I can be quite hard to win over initially, but once you have me and providing I am kept reasonably satisfied I’ll keep coming back for more – particularly if you wave a good bargain in front of my nose every so often – because nothing pleases me more than value for money.

So this is where my story starts.

Last Wednesday, whilst ploughing through my inbox and sorting out the serious work related emails from the vitally important messages from the long lost son of the ex-president of Nigeria (who needed my bank details so he could transfer $10,000,000 into my account) something caught my eye. It looked like a bargain: ‘Eat all you want at La Tasca for £10!’

I could hardly contain my excitement – this wasn’t some scam email – it was a proper bargain from a reputable company! I knew I’d been a loyal customer of theirs throughout the year and I know it’s the season of goodwill and all that, but truly this was Christmas coming early.

I had to pinch myself to make sure I wasn’t dreaming – surely there must be some sort of catch. I feverishly read the small print after downloading the voucher. The offer was from a slightly limited menu, but there was still a reasonable choice on it and for £10 I’m not going to complain. Oh, and it was only valid for two days – Wednesday 15th and Thursday 16th December. Well, that’s a pretty short lifespan but at those kind of never-to-be-repeated (until next month) prices you sometimes just have to throw caution to the wind and go for it.

So I decided I was going make a special journey to La Tasca. It was my duty as a loyal customer to reap the benefit of this voucher – not just for me, but for them too. Why? Because no doubt somebody in their marketing department had thought long and hard about a way to increase revenue streams from existing customers and since the success of this email campaign would definitely be monitored I for one wasn’t going to put this person’s job in jeopardy through apathy.

Originally I was meant to be meeting some friends for pre-Christmas drinks in Covent Garden – but with an offer like this on the table I could hardly keep it to myself. Let’s push the boat out I thought. I know we’re living in times of austerity, but I can spread the news of this voucher and give the economy a helping hand, albeit in my own small way. So our plans of Christmas drinks were changed to plans of drinks and a meal at La Tasca.

By the way, did I mention that it was one voucher per person? Well it was – but that’s OK, the kind people at La Tasca would let all of my friends have a voucher too – all I had to provide was their email addresses so that said friends could disclose various personal details deemed useful to the La Tasca marketing department and carefully screened third parties. Everyone signed up and was raring to go.

Now, I’m not one to ask for the moon on a stick or anything but I do have very strong views about brands acting honourably if they want my loyalty. And so the cracks started to appear.

The first one involved their online booking system. Half an hour after receiving the confirmation email of my reservation for four people I received a phone call from the manager. He was awfully sorry and he didn’t know how this had happened but their automated online system had somehow accepted my reservation by mistake. Yes, if in doubt blame it on the computers. Probably the Y2K bug or something I’d imagine. Not to worry, he said, we could still come in and eat here – just not reserve the table at a specific time.

This wasn’t the end of the world – we could spend our hard-earned cash in the bar at La Tasca whilst waiting for a table. We were meant to be out for a drink anyway.

So at 7.30 my merry group of friends stroll into the restaurant. There will be a table in 20 minutes, just take a seat in the bar and buy some drinks says the maitre d’. Not sure if that’s an appropriate description when talking in terms of La Tasca, but you know who I mean. But then she drops the bombshell – have we got vouchers? Why, yes we have actually – that was pretty much the inspiration for us changing our existing plans and visiting your restaurant on this freezing cold night. Well it turns out we can’t use them because they are “busy” tonight. Wait a minute – this smacks of Hoover airmiles all over again!

I thought I must have misheard. After all, the vouchers are only valid for tonight and tomorrow: if it’s busy tonight, 10 days before Christmas, then I will categorically stake my life that it will be even busier the next night; after all, Thursdays are always busier than Wednesdays. It’s the new Friday after all.

I read through the small print again – maybe there is something that says ‘not valid at Covent Garden because it’s always busy’ or ‘not valid in the evening as that’s when most people want to come here’ – that would be all that was needed to pacify me, but there’s nothing along those lines. Just that ‘the manager reserves the right to withdraw the offer’. This is the offer that is only valid for two days and it’s being withdrawn on the quieter of the two days “because it’s quite busy”.

Now, let’s be fair: La Tasca is not an expensive restaurant and it wasn’t going to really break the bank for my group to say ‘what the hell, let’s just eat here anyway’. But this is where my principles of brand loyalty kick in. I’ve been loyal to La Tasca. I’ve spent a lot of money with them over the years. I’ve given them my personal information for their marketing department to do with what they please and I’ve forwarded their email offers to friends who might be interested, thus helping them win new business on my time. I didn’t really ask for anything in return, but they tempted me with an offer I couldn’t refuse anyway. And how does this brand repay my unquestioning devotion at this time of goodwill to all men? It stabs me in the heart. Not literally, obviously, but definitely metaphorically.

I was apoplectic with rage at the injustice of it all – this time quite literally rather than metaphorically.

With one dodgy promotion, this brand has alienated a model customer for life. If I had never opened the email I would have been none the wiser to this dastardly malpractice and they may well have retained my business indefinitely. From my previous blogs you will see I have a long memory for shameful behaviour by brands and La Tasca has definitely made my “Easyjet” list. I vowed then and there that I would never set foot in a La Tasca again (unless it was to use their toilet without buying any food maybe) and I would make it my business to moan to everyone I know about this perceived scam.

The icing on the cake? The next day I got an email asking how I enjoyed my meal. The meal that I didn’t have. I responded with full details about my experience and I haven’t heard a peep out of them since. Perhaps they need a new research agency to help them out with customer insight – I expect they must be quite busy.

So, forget what I said in my last blog – this is one brand that should focus 100% on winning new customers rather than retaining existing ones. In this case it would definitely have been more cost effective.

Bah humbug and Merry Christmas.

Reading my copy of Metro this morning whilst crushed between commuters on the central line I was very interested to learn that researchers have discovered that a voucher or free gift triggers an emotional response as powerful as physical arousal!

Now admittedly these researchers were commissioned by the Institute of Promotional Marketing, but they were people of science nonetheless – from the University of Westminster – and they used the iMotions system which tracks pupil dilation and movement to gauge emotional response, which sounds pretty impressive to me.

One example cited said that a Marmite promotion which offered a free Horrid Henry audio-book resulted in scores of up to 5.8 out of ten. Put into context, erotic images usually trigger scores of between five and seven whilst ten is the equivalent of severe trauma.

I seem to remember reading somewhere before that chocolate can have a similar effect on the brain too.

Anyway, all this got me thinking: if brands can generate higher sales because consumers like being aroused by freebies in the same way that they like being aroused by erotic images surely the most successful campaigns would be those giving away free porn.

I can just see the Sun headlines now: “Hospitals at crisis point as trauma toll rises from Cadbury’s filth flick giveaway.”