Agents have traditionally been leveraged as the key sales channel by the insurance industry. It is not surprising that new brands entering China find themselves challenged with the agent recruitment process due to under established brand awareness. This challenge however has not lowered revenue pressure.

For fairly new players in town, it would take a lot of financial investment and time before they get anywhere close to the reputation of the big local brands. So very often insurance firms would adopt an alternative sales strategy – that of direct marketing. While consumers in major Chinese cities tend to embrace this purchase channel, many companies that have tried direct marketing as a channel to acquire new customers have failed miserably. The fact is, direct marketing is still fairly new in this market. Quality data and skills in direct prospect conversion are lacking.

Insurance firms can leverage TNT's EYE™ consumer database to pinpoint who they want to target, and TNT can manage the rest of the prospecting and conversion process, combining various channels to eventually convert the prospects. As important as the data source, the process of conversion is critical in learning how one could continuously improve to better the cost per conversion. Through TNT, insurance companies will get a clear picture of the entire prospecting process – the reasons for conversion or non, tactics to achieve the highest premium deduction, customers profile and more. The entire process is made transparent so that continuous program enhancements can be made to achieve a lower cost of conversion.

Today, direct marketing has been increasing in importance to the sales channel mix of insurance companies. It is fast becoming a key channel that helps them to meet their aggressive sales target, and one that will set in apart from competition by building a direct relationship with its customer base.

Between April and August this year, Haagen Dazs launched a VIP card upgrade program in 12 cities. The purpose is for Haagen Dazs to re-activate valuable customer base, and start collecting information critical for building customer loyalty and increasing transaction frequency and value.

TNT was engaged to manage the upgrade program. Before the DM mailer was sent, invalid addresses were removed and the database de-duplicated. As a result, wastage created by un-mailable addressed or double mailings were prevented.

In July Haagen Dazs sent a summer newsletter along with their new membership cards to its updated club member database. This marks the start of its new membership program that will give Haagen Dazs solid overview of its most valuable customers.

TNT now manages the Haagen Dazs member database, and would in the near future be involved in in-depth customer analysis as the transaction data accumulates.

The China Direct Mail Association (CDMA) was formed and held its first meeting in May 2006. TNT as a core member was elected Deputy Chairman.

Initiated by China Post, the CDMA comprises of direct marketing related companies and individual members nationwide. Some 200 members from the Ministry of Information Industry, China Post, telecom operators, commercial banks, insurance firms, airlines, IT companies, retailers and local post offices attended the meeting in May.

At the conference Mr Jiang Yao Ping, Deputy Chief of the Ministry of Information Industry pointed out that the formation of CDMA aimed to build closer communication and cooperation between participants in the direct marketing industry. The Association will serve as a bridge between the government, corporations and end-users. CDMA will do its best to promote self-discipline and standards of the direct marketing industry, and sustaining growth of the industry.

Direct marketing refers to the communication channel which builds direct communications with target groups to promote products or business. Such kind of one-to-one marketing has the characteristics of high predictability, interaction and precision, irrespective of where and when it takes place.

Eric van den Berg, CEO of TNT Direct Marketing Services China hosted a special seminar for all participants at the conference. He introduced TNT's track record in direct marketing, the market situation and development potential of direct marketing in China.

Eric van den Berg said that the formation of CDMA would promote better understanding of direct marketing and grow the postal market size in China. In addition, CDMA would drive industry standards and provide input to legislation formulation. CDMA will serve as a platform for exchange and cooperation between its members, all these, making direct mail a more viable and sustainable communication channel for marketers in China.

He said, "TNT looks forward to more cooperation with China Post. With our global experience in direct marketing, we will offer the greatest support to CDMA. We hope to uplift the development of direct marketing in China to new heights at higher speed."

Unlike mature markets where mailboxes are cluttered with mailers, residents in China's urban cities only get an average of eight addressed mailers a year as compared to 88 in Europe. Direct marketing, in particular direct mailers has become an important communications channel for some marketers in mature markets to create brand awareness, acquire new customers and grow existing customer value. But does direct mailer work in China?

Multiple researches conducted by AC Nielsen in Shanghai indicated that up to 89% of recipients have at least glanced through the content in the mail packs they received. Curiosity and good information source were the two key drivers for opening and reading. Up to a further 70% indicated that they would retain the mail packs for future use. In mailers providing response channels or purchase offers, up to 23% of recipients have either responded through telephone, online or have purchased or intend to purchase. Unlike consumers in mature markets, it appears that consumers in China are highly receptive and responsive to direct mailers.

Marketers in China who are considering this effective channel should be aware of the fact that fundamentals like using good mailing lists which allow accurate targeting remain critical to the success of direct mailer campaigns here as well. Although mailboxes in China have yet to be cluttered with addressed mailers, in more developed cities, unaddressed and untargeted mailers have often flooded the mailboxes. This is why TNT has invested in building our own consumer preference database EYE™ - probably the first of its kind in China. We can now help our clients to target their prospects with precision.

Today, direct marketing only accounts for an average of about 5% of total advertising spend as opposed to the US where it already has about 35% share. With media inflation and diluting effectiveness of mainstream advertising, marketers who integrates direct marketing with their mainstream advertising now can gain from first movers' advantage and start to accumulate prospect and customer knowledge that will be critical in formulating more dynamic and competitive marketing strategies.

TNT Direct Marketing Services is a wholly-owned subsidiary of TNT Group, a Fortune 500 company with headquarters in the Netherlands.TNT is a leading multi-national providing mail and express network solutions for customers in over 200 countries.

With over 25 years' of expertise in providing world-class direct marketing solutions, TNT Direct Marketing Services is now in China. We have built the TNT EYE™ Database, China's first consumer preference database containing data about demographics, product ownership, purchase intention and preference. And with our unique targeting tool China Connect™, we help companies to pinpoint and deliver their offers directly to their prospects.