Laughing all the way to the rubbish dump

We may throw most of our junk mail in the bin but, with a response rate producing sales of pounds 15bn a year, advertisers are happy to persist
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The Independent Online
Go on holiday for a couple of weeks, and if you are part of a well-heeled couple with catholic tastes and a history of responding to offers that come through the post, the chances are the hall floor will be covered in junk mail by the time you get home.

No one likes junk mail but everyone gets direct mailshots, and some of us do in fact reply to them, which is why the volumes continue to grow.

Last year, according to the Royal Mail, it delivered 3.1 billion items, of which 2.5 billion went to consumers - just over 100 items a year for every household in the country. That was 9 per cent up on 1995, and 126 per cent up over the last 10 years. Preparing and printing the literature alone cost pounds 900m, and sending it cost pounds 500m in postage.

Traditional mail-order offers have dwindled from 25 per cent of the market a decade ago to just 15 per cent last year, although in actual volume they continued to grow. Estate agents sent out less than 1 per cent of the total last year, compared with almost 5 per cent in 1987.

But insurance companies, banks, building societies and credit-card companies between them now account for 30 per cent of this growing market - against 23 per cent in 1987.

Meanwhile, charities asking for donations sent 7 per cent of the traffic last year - or 180 million mailings - and book clubs touting for customers sent 130 million, or 5 per cent of the total.

Just over half the items were sent to homes that had expressed no previous interest in the subject. Most of the rest was sent to people whose names and addresses had found their way on to commercial lists, and a little over 11 per cent of it was requested in response to conventional advertisements.

Direct mail is a cheap but rough-and-ready method of marketing. The average mailshot will cost the company 41p inclusive of postage, and 63 per cent of the population admits to having both opened and read the last item they were sent. A further 15 per cent opened the item, but didn't bother to read it.

The average response rate works out at a modest 6.5 per cent, which means that a typical household will put 100 items a year in the bin and respond to perhaps half a dozen.

As there are roughly two adults for each household, that means each one of us on average actually buys something as a result of a direct mailshot three times a year. It may not seem an enthusiastic response, but that is still three times the recorded response to leaflets that are pushed through the door.

The volume of direct mail went down in just one recent year, 1991 at the height of the recession. It has hardly been affected by the growth of telephone sales and, in fact, companies such as Direct Line, the car insurance and mortgage specialist which relies heavily on telesales, are among the Royal Mail's biggest customers when they send out forms and documents in response to telephone applications.

The total volume of goods and services sold in response to direct mail is now in excess of pounds 15bn and the average sale is worth a little over pounds 80.

These statistics go a long way towards explaining why direct mail advertisers refuse to be embarrassed by the large numbers of mailshots that continue to find their way into the bin.

Meanwhile banks, building societies and insurance companies get a favourable response of some 7 to 8 per cent, while less than 5 per cent respond to companies' invitations to take out new credit cards. Even charities only receive just over a 5 per cent response rate.

If you wonder how on earth the mailshot people got hold of your name and address, the answer is almost certainly that you supplied it yourself in responding to a previous offer which put you on a list.

If you have ever cut out a coupon and sent it off with half a dozen labels from your favourite brand of baked beans, you will be on a list. If you once took out a subscription to a magazine, joined a book club or sent off some money to a charity, you will be on a list.

If you accepted the offer of a loyalty card from your friendly neighbourhood supermarket, you are on a list. Tesco and Sainsbury in fact are busy building up their databases and classifying the names to establish a picture of how much you earn and spend. They will also be forming an idea of what you buy and therefore what you might be tempted to buy; and the chances are they will start trying to sell you all sorts of things from gas and electricity to credit and cars.

These databases are valuable items in their own right, and lists will find their way into the hands of specialist "list brokers"

who will buy and sell lists of likely punters for anything from pounds 40 up to pounds 200 per 1,000 names, depending on how the names were collated. Punters who have spent several hundred, or even thousands of pounds, on goods or services will be worth considerably more than those who sent off for a set of soup mugs. PEP buyers are presumably better off than those who respond to cut-price travel offers.

Dutiful householders who spend up to an hour filling in detailed, official- looking "consumer surveys" that arrive unsolicited through the mail, giving details of their age, gender, occupation, spending powers and patterns and investments are giving someone a valuable document that can be sold and resold several times.

But if you would rather be selective about the amount of direct mail you get in future, there is something you can do about it. If you do reply to offers, there should somewhere be a little box to tick to ensure that your name is not passed on to other suppliers of goods and services to cross-sell on the back of your transaction.

You can also contact the Mailing Preference Service on Freepost 22, London W1E 7EZ, or call 0345 034599 and ask for a form to have your name removed from databases that are swapped or sold. Any company that sells or rents out its database must comply, or risk having its right to cheap postal charges removed by the Royal Mail.

If you do ask to be deleted you will be removed from all circulating lists, but you will remain on the master list of companies you have yourself contacted in the past. To escape entirely you will have to write to each one you responded to in the past or move home - or learn to love the rattle of the letter box.

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