Rory Sutherland interviews Pete Markey, CMO Boots UK

Rory: Hello and welcome to Mail Unleashed, brought to you by Marketreach. This is a series of short films in which we talk to leading figures in the world of marketing about their relationship with direct mail and some of the stories around their greatest successes with the medium, as well as talking about life, marketing in general, and prospects for the future.
Now today, I'm joined by someone who needs no introduction – Pete Markey (30 secs), currently Chief Marketing Officer at Boots, but previously also at, I think, Aviva, More Than, TSB, British Gas, the man behind a billion mailings, in other words. And so it's an absolute pleasure to be here today with you, Pete. And I think I can confidently say you're a fan.

Pete: I am, Rory, great to be with you today. 

Rory: I suppose those are all, in a sense, brands, all the brands you work with, have been brands which have made fairly extensive use of direct mail and probably still do. (60 secs) What was your first kind of baptism into the discipline?

Pete: I've always loved direct mail. One of my first big marketing jobs at British Gas was running direct marketing campaigns using the rich data we had at British Gas. And so I first, I guess, uncovered the power of mail by just seeing what it did to help convert our gas customers to electricity and then we started selling telecoms as well. And so all the cross-selling opportunities of building relationships, using data and using the power of mail, (90 secs) it was incredible. And the results we saw were amazing at that time. 

Rory: I mean, interestingly, when you think about it, there have been huge billion-dollar investments made on the basis of cross-selling. You know, the whole idea of quad-play and telecoms, for example, is the assumption, probably erroneously actually, that people want everything with one bill. Then obviously there's the gas, electricity, energy cross-selling. I'm not sure, thinking about it, that you can cross-sell effectively other than on the telephone perhaps when it comes to renewal. (120 secs) I'm not sure you can cross-sell effectively with any other medium other than direct mail. Is that an over claim. Maybe it's going too far.

Pete: No, I think you're right. It's quite hard.

Rory: Yeah.

Pete: And I think what's great with a mail pack is you can get all the information across that you need to. And even in those days when it wasn't just gas and electricity, we were selling, the two acronyms I remember well, I was cross-selling HEC – home electrical cover. 

Rory: Got it. 

Pete: And KAC – kitchen appliance cover. And both of them you could explain each of those products really well with a direct mail pack. (150 secs) You'd be writing to a loyal base saying: “This is the product, these are the benefits, this is what you get”. So what I love with direct mail is you've got time with the pack. You can read the data, you can consume its content, you can make a really smart decision. And then particularly even now in a time-poor environment, I think actually having the chance to put almost your sales pitch in front of someone I'm not aware of any other medium that can do it in such a powerful way.

Rory: No same here. I started as a direct mail copywriter and in that sense every other medium, I’ve used since always feels (180 secs) it's got something missing. And it's that storytelling appeal, it’s obviously direct relevance in the sense that I imagine when you are selling, for example, when you were cross-selling electricity to British Gas customers, you could give them a reasonable estimate as to how much they might save rather than a vague promise. That kind of concreteness that you can achieve with personalisation is really, really good.

Pete: I think you're right. That's a brilliant point Rory I found that particularly with electricity what you'll be able to say you could save on average X. And then when I went into my insurance (210 secs) days, my first insurance job with More Than we went a step further and did what we called “a one stage” where because we knew where you lived, we knew the car you drove. If we previously had insured you and then you, you've gone somewhere else we could write to you each year and say your quote is this, provided you were driving the same car, you're in the same house, and you put the price through a window in the envelope, your price is this. That pack, it was incredible. And this £10 cost per acquisition response rate was through the roof because it was just that immediate to say to the customer: (240 secs) “This is the price you'll pay”. So, it used the data and then brought the rest of the policy to life.

Rory: So it was actually a pre-emptive quotation.

Pete: Pre-emptive quotation. 

Rory: Why is that not done more? Intriguingly

Pete: I don’t know. But it was the most successful thing we did at More Than. Then I created a pack called “A fake one stage” where we used comparative sorts of data to say: “This is the sort of price we think” not as accurate. But that performed brilliantly as well. The idea that you would show a customer a price that you had some certainty they could get and it performed brilliantly. Because, back to your point, because it was personal, because it was about them (270 secs) and related to them in case of immediate benefit, it performed extremely well.

Rory: When you think about it? Moment really matters. Because one problem with email is you decide maybe at the end of the day you've got a purge your email, okay. Now you're getting a lot of commercial emails alongside a lot of other commercial emails. And if you're not in the mood right now, the overwhelming odds, I know theoretically you can snooze it to the weekend, okay, but the overwhelming odds are you're going to delete it.

Pete: Because, you know, there's a pile more coming tomorrow.

Rory: Exactly, more coming tomorrow. Now actually mail has that (300 secs) unique property, which is you pick your moment, you know, when you're in the right kind of frame of mind, which I think is very, very different. And actually, you made the point about impact that, I mean, we shouldn't stereotype the kind of people who like it. Because my daughters who are 21 now, okay, they don't get very much direct mail. They don't remember the era in the 90s and early 2000s where the volumes were insane. And so it's massively high impact for them.

Pete: 100% yeah, (330 secs) I think that's a really good point is that I would equally like to see there being more direct mail again, you know, I think the volume that goes out now is of a kind where it is a unique moment. It is that point where someone’s taken the time to write to me, clearly, it's a brand that I've got a relationship with. Let's see what they've got to offer. I love digital marketing. We do a lot of data driven, I know you do as well. But you can't survive on that alone. And also you can't just have a strategy that's purely that. I mean when I worked for Aviva, (360 secs) we put in the whole Adobe Marketing Cloud, we implemented all that varied data and went to squad model. That was okay, but then it became a sense in the business that that's all we needed to do. It was all digital, it was all about managing the incrementalism.
And that wasn't a healthy strategy for the business. And they did see some challenges on the sales front as a result. When they then brought back in other things subsequently in the mix, they've seen that healthiness, you know, come back to the brand and to their sales line. So I think you do need to bring those bits together and you do need to look at the strategy. (390 secs)  It's like the customer first approach Rory, isn’t it?
Who do I want to reach? And therefore – what's the right way to reach them? Because I mean, we know in Boots that I'll talk about it in a moment, but things like the quarterly mail that we sell, there's still an audience for that who want to receive something in the post. But equally, there are some groups that would prefer to have something through digital, but it's knowing your audience. And I love that point you made around and actually tailoring the content, knowing who your customer is. Saying: “I know this audience will prefer this product or this approach or this, you know, the personification of the brand (420 secs) more than this audience”. So it's all about the data and then tailoring the creative and every bit of the approach to make it more and more personal.

Rory: I mean, it strikes me as very odd. Just that thing you mentioned, which is obviously digital and mail could work very harmoniously. It’s not helped by the fact that outside marketing, efficiency and effectiveness are kind of the same thing. So you've got a lot of people in an organisation, you know, finance, etc. operations who tend to see efficiency and effectiveness as the same. And therefore because (450 secs) digital media seem efficient, they naturally assume they're the most effective. And of course, they see mail as in a sense unnecessary cost, but the cost is actually what gives it its potency.

Pete: I agree. And then the response as well isn’t it? I just think as well that we get so many emails and I love email as a channel, but we do get a lot of emails. I just need to look at my own personal inbox and work inbox. So therefore I find myself getting quite selective about the ones I open and read. And that's the same for consumers. You take something (480 secs) like Black Friday, the number of emails people get is huge. Therefore, when mail arrives, it's what we find in our research is it’s more of an event now. Yeah, someone has taken the time to write to me, I'll read it and actually, I will keep the pack in that. I won't, sort of, read it immediately and put it in the waste or whatever. I will hold onto it and I'll read it in my own time. 
And we find that with some of the advantage card No7. Many people are holding onto them and using them a few weeks down the road because they've thought about it and go and I'll take that the next time. (510 secs) It’s the ‘toast rack effect’. And it works, whereas with email it is a bit ‘arrive, read, use or delete’. It's a very quick, immediate sort of thought reaction. Direct mail has this lovely sort of cocktail to it of ‘I’ll hold on to that , I’ll read it. Because it's more personal to me.’

Rory: So, Pete, the first pack you’d like to describe, I understand that's for a No7 anti-ageing serum, is that right?

Pete: It is, yeah. So, we obviously have this fantastic brand (540 secs) in No7 that is only sold in Boots in the UK. A range of fantastic products. I don’t run No7 directly day to day, I work with my colleague who looks after No7, but we do promote it and have shared marketing assets and marketing campaigns. We wanted to do something which was all about re-engaging an audience on No7 who had stepped away from being in Boots during the pandemic, and we wanted to bring them back. It was a lot of change, wasn’t it?.

Rory: That was an advantage club data that told you that?

Pete: Yes, so we could see that. But we knew (570 secs)  that historically they've been quite loyal to No7. So we wanted to do some really targted activity. To us take us seriously, actually, we paid for additional resource to sit in my customer loyalty team. There's a couple of people whose full-time job is now working on No7 and working on a classic data-driven activity – the stuff I've always loved doing. And direct mail has been a really important part of that mix. 
How do we connect with a core No7 audience that maybe have moved into a different shopping behvaiour and bring them back into the brand, (600 secs) back into Boots, back into buying No7? So the pack itself has done very, very well and it has a targeted offer within it as well but also brings to life a core part of the No7 range. We know that this audience will really engage with, because of their past-buying behaviour. So it's data-driven, it's offer-led and it's been a win-win for Boots and No7 to the point where we’ve now got more investment to do more of this activity. (630 secs) And the resource that was there was initially a temporary resource that's now a permanent resource because it's working so well. So it's really shown that power of digging into our own data, looking at shopper and buying behaviour and then using very targeted communication to get out and connect with customers again.

Rory: This is again one thing which, what you might call ‘reviving a relationship’ is something that mail can be extraordinarily potent at. And it also makes the kind of “We want you back” message sincere, because it comes at the cost of a stamp. (660 secs)

Pete: It does. And there's so much creatively you can do with the mail pack now that makes it, I mean, this pack particularly, you sort of peel it open, reveal it. And it just feels like a really special moment when you open the pack…

Rory: And a physical voucher.

Pete: Absolutely, yeah. So there's something about the theatre of direct mail that makes it, it’s a proper, wonderful experience if you get it right.

Rory: That’s fantastic. The other piece is one of the great quarterly mailings, is that right?

Pete: It is yeah, you can't beat the old favourites.

Rory: Everybody who effectively is not a ‘do not mail’. Does everybody (690 secs) on the advantage card database get a quarterly mailing?

Pete: Yeah. Unless they've given us as particular preference to want to go more down the email route. So it's still, you know, at least around 3 or 4 million people are getting this back. So it's a really good volume driver for us still and it does rely back to that theatre of you get a voucher booklet within the pack and there's vouchers you can tear, keep it in your purse, your wallet, your handbag, whatever, and you can use it in your next shop. And we know people also hold onto the pack (720 secs) and will use it for several months after. We've just actually got the results of the winter pack we sent. The results are over 20% up year on year. So what we're seeing is people really lean in, re-engage with the advantage card and our offers. I mean, we've added 1.1 million additional active cardholders to the advantage card in the last year alone.

Rory: 1.1 million?

Pete: New active cardholders in the last year.

Rory: And how do you personalise the quarterly mailing? 

Pete: Yes, good question. So we do things like on the outer of the pack that I'm talking about here today actually (750 secs) has personalised messaging like the advantage card has your name on it. So the outer’s got some personalisation on it. And then the deals inside are personalised to products and brands that we know that you love or brands or products connected to the way you shop.

Rory: Or cross-selling?

Pete: Cross-selling, yeah. So it all relates to you. So it should feel, hopefully when you get it, very, very personal that’s certainly, we can see that in the results is working well.

Rory: Well, Pete, thank you very much indeed. That's been incredibly valuable, it’s been an absolute pleasure. 
And to the rest of you watching. If you'd like to know more about how you can unleash (780 secs) the magic of direct mail, you can find out a lot more by visiting marketreach.co.uk 
See you next time!