Forrester Research’s Dave Frankland on Environmental Trends
As environmental and social responsibility issues begin to collide to create a perfect storm for the direct marketing industry, where do companies in this sector stand when it comes to factoring these larger considerations into their business practices? Dave Frankland, senior analyst at Cambridge, Mass.-based research firm Forrester Research, recently released a report on this subject that found direct marketers have been slow to move on this front for a variety of reasons.
For Direct Marketing Needs a Green Wake-Up Call, Frankland interviewed 55 direct marketers on Forrester’s Direct Marketing Research panel in the first quarter of 2008. This week, he shares with Target Marketing Tipline some of the highlights of his research along with a few insights on why direct marketers should get in front of this issue now.
Target Marketing: What were some of the good practices used by the greener companies?
Dave Frankland: Some of them would be the really obvious ones, like [using] recycled paper, environment-friendly inks—so either soy or vegetable-based inks—mulchable envelopes …
And then there’s what you’d almost call good direct marketing practice that reduces the environmental impact. So, increasing targeting and suppression, testing new formats … things like that which would be good direct marketing principles but obviously have a positive environmental impact.
And then you’ve got things that are usually done for financial reasons, especially given the changes in postal rates over the last couple of years. So, changing the bulk of mailings, changing the size and formats, sending postcards. Again, the environment might not be the primary driver of that—and our research shows, in most cases, it’s not—but that doesn’t mean it doesn’t have a positive environmental impact.
TM: Where are they lacking focus and action?
DF: The lacking focus part of it is almost an awareness issue to start with. I was quite surprised at how seldom the environment is a consideration [in businesses’ decision making] …
When you look at something like direct marketing, which already comes under criticism for various reasons … there’s already sort of a negative perception. So it struck me as odd that in an industry that is a unique target, where it looks like a lot of paper coming into my mailbox, the lack of consideration was pretty high.
I’m not going to criticize a business that’s decreasing direct mail in favor of other channels or reducing the size of its mailings when it’s primarily for cost-saving reasons. But that was one question [in the report].
The second question was, “How often do you consider the environment?” And you had 24 percent who said, “Rarely,” 7 percent said, “Never” and only 28 percent was either “Often” or “Always.” It strikes me that even if they’re not necessarily making the correct environmental decision, they should at least be, I would say, often considering it.
TM: What factors are driving direct marketing practices that are considered “green”?
DF: Cost cutting’s an interesting reason. Going into this [research effort], we expected a response saying, “We’d love to focus on the environment, but it’s too expensive.” What we found was for the small number that heavily focused on it, it doesn’t have a major negative financial impact. There’s obviously some environmental concern out there, but I think the larger [percentage of] focus is on relevance as well as a sort of focus on the financial side, such as reducing the bulk of mailings, using other formats … And again, I’m not criticizing that, but it’s not done in tandem with a consideration for the environment.
And I think, along with that, not with the awareness of the consumer environment today. Part of the challenge for any business or any marketer is that consumers often say they want one thing and then sometimes do another. Look at any direct marketer, who will tell you that nobody wants to receive phone calls during dinner, but [they] get responses … I think that when you look at consumers, the concern level is higher than the action level. There’s a potential danger that the consumer’s action, rather than necessarily changing their own behavior, is to criticize others’ behavior. And I think that direct marketing is one of those areas that needs to watch out [for this projection].
TM: What obstacles might be slowing direct marketers’ adoption of more environmentally friendly practices?
DF: I honestly think some of it is kind of an inertia—doing things the ways they’ve always been done. Clearly, if this lack of consideration is there, that’s probably the biggest obstacle.
But then the question would be what’s the obstacle to consideration? I don’t know the answer to that. I think it could just be, “This is the way we’ve always done it.” It could be, and again I sort of expected to hear there’s a perception that [the barrier is] higher cost. But those that I mentioned are doing it have clearly shown that it’s at least the same if not actually saved them money in some cases.
But again, you look at direct marketers, and it’s in their nature to test. So I would have expected to see there’s been a lot of testing of digital papers, inks, windows, gums on envelopes, whatever it might be. And maybe it would have been the case that, “If response rates decline as a result of that, we step back from it.” But there was no evidence to suggest that [direct marketers] even got to the consideration and testing part. So if this wasn’t a research-based discussion, I’d be saying, well maybe it’s that and maybe it’s this. And yet the research points to lack of consideration at all.
And then you look at … targeting and suppression. How many years have we been talking about these? There may be some technical challenges in some organizations … silos and all the usual reasons.
Direct marketing is going through a change, and I think the old way of just mailing a larger number of recipients at a declining response rate to hit a revenue target—there’s still a lot of marketers in that mind-set. I think if consumers and marketers continue on these divergent paths—and having said “divergent paths,” there’s still going to be a collision at some stage that will force marketers [to make changes].
The other important thing to highlight is the whole idea of recipient preference. The two could be linked in somebody’s mind. But it’s interesting when you look at the driver for any of the activities that could be seen to have a positive environmental aspect; the two lowest responses [in this study] were “environmental reasons” and “customer stated preferences.” This is the challenge, right? This is when things like Do Not Call come along, when there is no respect for that consumer preference.
Another thing worth pointing out from a what-should-marketers-do perspective is that the DMA has done a lot of good thinking in this area and a lot of thought leadership. There’s a lot of good advice out there … they can’t force their members essentially, but I think their members need to embrace what the DMA is recommending. [Learn more about the DMA’s leadership on environmental issues at www.the-dma.org/Green15/OverviewDMAGreen15.pdf ]
TM: What consumer signals should direct marketers be heeding on the green marketing issue?
DF: What we included in my report is one chart [from Forrester’s Technographics market research] that shows 65 percent of respondents said they’re concerned about the environment and global warming; 50 percent said they’re more concerned about the environment than they were a year ago; 41 percent said they would pay more for products or services that were environmentally friendly; and 24 percent said they believe the green movement is a temporary fad.
But if you look across the board, from Al Gore through the number of blogs and mainstream media picking up [on green issues], I think there’s every indication that consumers are increasingly focused on the issue.
A tip for marketers is to mine their customer service calls or complaint and comment letters, and use it as a benchmark; start tracking concerns that are raised directly to the company. See how it tracks over time.
To learn more about this report, visit http://tinyurl.com/3l6yn2