Consumer complaints: is the industry pouring money down the drain?

Congratulations to the Direct Marketing Foundation for commissioning research into complaints about one-to-one marketing.

I am not saying I buy into all the numbers and every conclusion in the report – particularly the millions of complainants implied when the sample data is extrapolated. But I feel the research tells us a lot.

It shows direct marketing is all but universal – 95+% of those surveyed were getting mail, e-mail and calls. Unfortunately, two-thirds or more of those surveyed had an issue with the marketing received. And only one in four to one in ten “complainants” were satisfied with the outcome of their complaint.

That is an awful lot of hacked-off people. What does the report tell us about why?

It tells us we have little feel for the cumulative effect of all the marketing that is going on. Firms may make no more than 2 repeat calls a day or send e mails only every third day ….but any single individual might be getting 10-20 calls a day and 50 -100 e-mails a week when everyone’s messages are tallied.

It tells us different forms of marketing have different impacts on people and that these differences in tolerance are still there when the volume of marketing goes up or down.

It tells us people place huge value on relationship and relevance: that they are far less likely to complain and far more likely to engage if they have a past relationship with the entity that is marketing and the material is relevant. Unsurprisingly, they also respond best when there is a value-exchange: when there is something for them as well as something for you in the engagement.

It tells the industry it should be more honest in its messaging. I see too many cases at the DMC with invented and transitory trading names to conceal lead generation as the real purpose of a call or mailing to understand. I see why the public are sceptical and cynical. Are you really doing yourself a favour with this sort of badging? It makes business sense for customers to get to know you. If you don’t want them to do that perhaps we or others should be looking at the sense in your business?

It tells the sector that it needs to listen more: 91% of those surveyed said it should be easier for people to opt out of receiving marketing, and 82% said they feel badly towards organisations that send irrelevant material. Are you pouring money down the drain when you needn’t?

There’s a message here saying preference services need to work. If they do not the complaint levels will be higher than if the service had not been there in the first place.

Reading across the report there are a couple of big-picture messages I took. The first is that “one size does not fit all”. It has been painfully obvious through the PPI personal injury debacle that there are firms in this and perhaps every sector who have no long-term ambitions, little or no brand to promote or protect and whose “business model” is anchored in reckless prospecting or marketing designed to confuse or mislead.

It’s all very well Which? saying every firm should have a director charged with data responsibilities and for Future Foundation to laud O2’s complaint handling. Not everyone is O2. Not every business aspires to be O2. What works for mobile networks does not work for funeral directors and what works with them does not work with affiliate marketers for pension-miss-selling claim management companies! Regulators need a better understanding of the dynamic of markets and the drivers in them.

This goes to my second thought – we need to look generally and then on specific issues at the best way to put the customer first. Future Foundation seem to want more and more of us to complain in the expectation the Government and its agencies will get tougher and tougher and the world will become a better place. I do not think this old-school approach works.

I believe in a Pre-empt, Prevent, Protect agenda – working to build understanding, compliance and coverage as DMA has with its new Code, doing risk assessment work as we have started to do with possible new cold-call activity and heading problems off through prevention where possible and far faster targeted “protection” work when necessary. In that regard the mechanical way state regulators seemed to respond to the PPI issue could be a case study in how not to do things. Doors are being bolted but many of the horses have gone. Let’s learn a little!