It's rare to find someone who has not got a bad word to say about direct marketing (DM), but Katie Vanneck, marketing director at the Telegraph Media Group, appears to be the exception to the rule.
"Direct marketing is the most exciting communication channel to use," she says. "Many people have a negative perception of it but it's the biggest part of my marketing spend. We are striving to develop an emotional relationship with our customers, which makes DM that much more interesting."
All the more surprising then that eight months after Vanneck came on board to head marketing of The Daily Telegraph, its Sunday sibling and the Telegraph website in January 2005 (she was previously promotions director at rival News International), she initiated a clear-out of the DM team. It culminated in redundancy for the then head of direct marketing, Askold Jakura, and five of his team.
According to Vanneck, there is now no longer a 'DM function' at Telegraph Media Group. In place of the DM department, CRM and data units have taken centre stage, commanding 60 per cent of the marketing budget, with Vanneck in charge of these and the marketing department. She also appointed Hall Moore CHI to the £8.5m DM account in June 2005 (it already held the above-the-line business). Previously, she says, the existing DM team had worked on an ad hoc basis with several agencies.
Vanneck is wary of using the word 'cull' to describe the transformation, instead referring to 'a philosophical and cultural change' that has affected not just the DM department but the entire business. Since the Barclay brothers acquired the Group's titles in mid-2004, circulation figures and senior staff turnover levels have seesawed. Last October, the company relocated to central London offices in Victoria, after more than a decade at Canary Wharf. The hub is a 24-hour digital newsroom, where journalists can file traditional copy and create audio-visual content distributed on digital platforms. This is central to Vanneck's vision of reaching customers through whichever media they want.
"The Telegraph was the first newspaper to understand the power of subscriptions and direct selling but DM was part of the circulation department - it was seen as a sales function rather than a marketing and customer-focused one," she says. "There was no customer insight before I arrived. The legacy was fantastic, but innovation had taken a back seat. I inherited ten disparate databases and combined them into a single customer view. Major work on customer segmentation has helped us to better understand the different groups that read the newspaper. This allowed us to merge, purge and clean existing data."
The legacy Vanneck refers to was The Telegraph Group's reliance on lifestyle data, pioneered in the late 1990s by Tony Coad and David Cole. "We don't use lifestyle data as much now as it has dropped off in terms of effectiveness. It has its place but too many companies are using it now," says Vanneck.
Her aim is to replicate Tesco's achievements with its Clubcard model - although she admits her plan "is not as sophisticated as that because I don't have dunnhumby's (Tesco's data partner) expertise at my fingertips!"
Broader appeal
Equally important to Vanneck is expanding the newspaper's audience. Typical Telegraph readers are in their 50s, a feature Vanneck has been trying to tackle. Digital media is an essential part of her plan to convert the hard-to-reach younger audience, with investment in paid search and search engine optimisation. An e-CRM programme has been created around brands ranging from Fantasy Football to crossword clubs, with the emphasis on cross-selling other products such as travel and wine. Telegraph TV has also launched, giving subscribers access to news stories in a multi-media environment.
Given that the Telegraph's print readers are far more profitable than its digital ones, is this a wise move? "We have scaled down our direct mail but increased investment in other direct channels such as email marketing, where for example we provide restaurant offers tailored to our readers' locations and likes," she says. "There is more competition online but we want the relationship with the customer, even if they buy the paper only at the weekend and read it online the rest of the week. Although our online audience is radically different from our offline one, in attitude and behaviour the two are very similar."
Affinity partnerships are also key to rewarding customers and to keep them coming back. Vanneck has secured long-term relationships with brands such as Costa Coffee and Eurostar. "Affinity deals are massively important. As a lifestyle brand, we want to reward our customers with experiences," she says.
The newspaper industry is fiercely competitive, under pressure to adapt or die in the face of growing digital communications. Few would argue that Vanneck's background, in particular her stint at News International, where she launched Times Online, will not stand her in good stead to meet this challenge. But has she put the right foundations in place to ensure that Telegraph Media Group keeps several steps ahead of its rivals?
The figures are encouraging. When she joined, subscriptions accounted for 25 per cent of sales - this is now 40 per cent and there are 335,000 subscribers with a 90 per cent retention rate. Circulation for last month stands at 909,000 (but the six-month average is almost unchanged) and the Group claims it is the number-one national quality newspaper website in the UK, based on the number of visits to the website each month.
Mail was traditionally the only direct channel used but in the past two years outbound telemarketing, email marketing and online channels have been used with direct mail to acquire and retain customers. Email open rates are in the 70 per cent range, and cold direct mail has achieved an eight per cent response rate for some campaigns. Achieving anything less than one per cent, says Vanneck, would be seen as failure.
"We are ahead of our competition but we could do more online," admits Vanneck. "Direct marketing is key, because digital is fundamentally part of direct activity."
Ultimately, Vanneck is seeking to build a database around what she calls 'Telegraph people' - customers who live and breathe the brand - as she aims to secure the lion's share of quality news consumption. In the past, Vanneck has been earmarked as a rising star in the media firmament - given her performance thus far in her current role, many would say she is already there.
KATIE VANNECK CV
1992-1995: Studied Modern History at St Hugh's College, Oxford
1995-1996: English teacher, Japan
1996-2000: Graduate trainee, rising to marketing manager, News
International
2000-2002: Digital director, Times Newsapers, where she launched Times
Online
2002-2005: Promotions director, News International
2005-present: Marketing director, Telegraph Media Group
REWARDING CUSTOMERS
As part of its aim to increase subscriptions, the Telegraph launched its Welcome Programme in June last year, with the branding 'Time Better Spent', in a campaign created by Hall Moore CHI.
Every new subscriber to the newspaper receives a welcome letter from the editor and an introduction to the benefits of being a subscriber.
"Benefits were previously one-dimensional - all based on price," says Vanneck. "The pack aims to reward them and create a platform where we can cross-sell other products and make subscribers aware of all the elements of the business, such as our website and other multimedia aspects."
Every quarter, the newspaper's 335,000 subscribers receive an exclusive reward pack, based on their individual interests. "This enables us to take DM from the mass to the personalised," adds Vanneck.
Each pack costs £1.50, and the Telegraph has seen a 13 per cent increase in first renewals.