More on Consumer Privacy

It's always interesting to read how other countries are handling the same concerns that we face here in the US. Take, for instance, this article from The Toronto Star, titled: Protecting privacy makes business sense.

The article discusses how marketers "collect, use and share a consumer's personal information in the marketplace". It talks about how recent data breaches and the US legislation around privacy issues are fueling increased public scrutiny of this topic. The article makes the right conclusion and recommendation to marketers: "Companies that people see as trustworthy will be rewarded with a higher degree of customer loyalty. For this reason, consumer privacy and good data handling practices make good business sense."

All good info. But, the primary reason why I'm talking about this particular article today is because of one sentence kind of buried within the article that talks about Canadian law: "Canada's federal privacy law quite rightly gives individuals the right to control the collection, use and disclosure of their personal information. And consumers are demanding the ability to exercise that right."

So, what does this mean exactly? How does a consumer get to control the use of their public data, for example? If a mailing list compiler takes a name and phone number from a phone book, does that compiler have to offer a mechanism to the consumer to change/add/delete his info? Can that consumer control which marketers have access to his name and address? How is this regulated and how does it work?

Prior to starting my own consulting business, I worked for several of the leading data collectors/compilers such as Experian and InfoUSA. I know that it would be a logistical nightmare to let people control data that is compiled about them. It's hard enough to do this in a regulated environment (i.e.: credit bureaus are required to respond to consumer corrections about their credit reports, and rightly so). In an unregulated environment (think of all the mailing lists out there), it would be madness. But, it might be the right thing for the consumer.

I'd love to hear from Canadian direct marketers who may be dealing with this federal privacy law today, or making plans to comply with the finer points of the law tomorrow.

Consumer privacy issues are only growing. We need to face them head-on and anticipate how to keep data secure AND give control back to the consumer.

JC Penney -- Leading the Way in Multi-Channel Marketing

JCPenney is leading the way towards a successful retail-oriented multi-channel marketing approach. Through the utilization of micro-websites targeted to their specific customer segments, they are driving more traffic online. In addition, by advertising these websites in their retail stores and catalogs, they are increasing sales in all channels. This is smart direct marketing at it's best -- using the traditional, more-costly channels to drive traffic to the less-traditional, less-costly channels while increasing sales in all channels. Brilliant!

In the recent DM News article, JCP.com is Linchpin in JCPenney's Multi-Channel Marketing Strategy, Senior Editor Chantal Tode reports that in "hoping to encourage in-store shoppers to purchase more at JCP.com, JCPenney devised a program to take advantage of the complementary nature of the retail and direct assortments in its newborn/infant/toddler business, where 90 percent of in-store sales come from apparel and 87 percent of online sales are generated by furniture and strollers. The pilot was launched during the third quarter of 2006 in 40 stores with several in-store displays featuring signage communicating the expanded department available online. Shoppers could also pick up a catalog highlighting baby furniture or learn about JCPenney’s Baby Solution microsite, where pregnancy advice and tips for decorating a nursery are available. Results from this multichannel strategy were encouraging enough that JCPenney is planning to roll it out nationwide."

This strategy has proved so successful for the infant/baby/toddler market segment that JCPenney is continuing to use this synchronized approach across channels to launch many of their new brands across market segments. And as their retail strategy (in terms of store size and location) continues to evolve, the article reports that this internet-focused, multi-channel approach also helps them to better determine new store type and location.

We often discuss the importance of using multi-channel marketing as part of your direct marketing strategy. In fact, we're so passionate about this subject that we've created a white paper on best practices for Multi-Channel Integrated Marketing. JCPenney is proving how a traditional retailer can embrace the use of all channels to not only better target their customer segments, but also to decrease costs by efficiently driving traffic to the less-costly channels. It'll be interesting to track the success of JCP.com as they continue to expand and to see the overall impact to JCPenney's bottom-line. We think profitability is bound to rise!

Nine New Customer Segments

I love it when advertisers get involved in understanding and defining consumer segments. They normally package the data nicely to really bring segments to life (something all of us Direct Marketers and analytical folks could learn from).

See this Ad Age article, The Latest Consumers You Need to Get to Know.

"Consumer Eyes, a New York-based marketing firm, recently released its first collection of data on the subject in a book titled "Karma Queens, Geek Gods, and Innerpreneurs." After culling thousands of brand insights -- S.C. Johnson & Son, Motorola, PepsiCo, and P&G are on its client roster -- using the consultancy's Consumer Immersion process, founder Ron Rentel and his team selected nine C-Types of true-to-life consumers who they believe should be on every marketer's radar."

In an attempt to coin the next Metrosexual or Soccer Mom classification (ones we all are now very familiar with), Consumer Eyes has identified nine new customer segments, all complete with their celebrity representative. Here is a flavor of the nine: "Culture Crossers" represented by Gwen Stefani, "Innerpreneurs" represented by Rachael Ray and "E-Litists" as personified by Al Gore.

It's a really interesting way to approach customer segmentation and the article also provides a nice PDF of the 9 groups, complete with pictures.

We love it when attention is focussed on customer segmentation--a topic near and dear to our hearts. Typically, when we approach the task of identifying discreet customer segments within an overall customer portfolio, we don't rely on off-the-shelf, pre-determined customer segments. Instead, we let statistical techniques do their job of finding clusters. If a marketer has the bandwidth to personalize offers and messages, segmentation is a super way to boost response rates and sales results.

It's always great to speak to your customers and prospects with a message that resonates with them. We've found that customized segmentation is the best way to go. We've put together a paper, called "Advanced Segmentation Game Plan". Click on that button on our website and we'll gladly send it to you.

Online Shopping Behavior Changing Due to Identity Theft Concerns

Yesterday, we reported on the new proposed legislation regarding the use of social security numbers and the protection of consumer data. From a direct marketing perspective, we mentioned that this is an area where we need to be very proactive as an industry to protect our customers (and their consumers) from identity theft and other consumer privacy concerns.

We have a unique opportunity to impact this before consumers are impacted -- or heaven forbid -- they change their buying behavior. If we don't figure out a positive way to impact this problem, our customers will react -- and their reaction will definitely mean a negative effect on our bottom line.

Case in point . . . DM News reports today that "in the wake of recent massive data breaches at businesses, educational institutions and medical facilities, consumers are growing more concerned about identity theft and, as a result, changing their buying behavior . . ." In fact, the article goes on to report that "thirty-six percent of respondents said they would not use their credit or debit cards to make a purchase with a Web merchant they do not know. The study also shows that 62 percent of respondents have been notified that their confidential data have been lost, and 84 percent of those reported increased concern or anxiety because of data-loss events."

This is not good news. Online purchasing behavior is changing due to these heightened security concerns -- and let's face it -- it's changing for good reason. If any of you have ever gone through trying to clear things up after your identity has been stolen, you know what a painful and time-consuming process this can be.

As an industry, it is imperative that we attack this issue head-on. As discussed yesterday, we do have the tools and technology to help protect our clients with sound data management and data security techniques. Companies like Experian, Acxiom/TransUnion and Equifax have full suites of tools developed specifically to combat identity theft. I realize that it is difficult to stay in front of identity thieves but it is incumbent upon us to anticipate their next move and squash it. Of course, there are definitely some steps that consumers can take on their own in order to protect their identity. However, as direct marketers, the best course of direction is to share best practices with one another as we come up with creative ways to ensure that our customer databases remain secure.

If you have a success story or best practice that you'd like to share, please comment so that we can post it here. At the end of the day, it behooves every single direct marketer to attack this issue to protect our valuable clients and stop those thieves in their tracks!

Protecting your Identity

As the days, months and years pass, and as consumer privacy and identity protection become pressing concerns to consumers, Direct Marketers have less and less data available to them. And, that's a good thing, I believe. We'll just have to learn to be smarter.

From today's DM News: House passes Senate SSN bill

"If the bill, HR 3046, is passed by the Senate, companies would be restricted in the ways they could use Social Security numbers.

“Federal, state and local governments would be prohibited from selling SSNs [and] displaying SSNs to the general public, including on the Internet,” the bill says. “[They would also be prohibited from] displaying SSNs on checks issued for payment and accompanying documents.”

The Direct Marketing Association expressed concern over the bill’s language in a letter to the House Ways and Means Committee.

The DMA was looking for a specific addition to the bill that would say it is acceptable for marketers and companies to use Social Security numbers as long as it’s for legitimate purposes. The DMA seeks an exemption in the bill that would preserve critical business-to-business uses of the numbers for fraud-detection purposes."

Let's assume that this bill will pass (and it really should, right?). Financial marketers will simply need to be more clever in their fight against fraud, and in their abilities to make appropriate financial offers to their customers and prospects. For example, in the pre-screen arena (where marketers access consumer credit reports to extend the appropriate credit or loan offer to a consumer), the credit bureaus will need to figure out accurate matching without the use of SSNs (and they're already there, I believe).

We cannot fight the fact that consumers are fed up with their personal information being available to hackers or other bad people. Direct marketers need to go the extra mile to develop systems and processes that protect their customer data. We need to do this BEFORE legislation happens.

It's not enough for us to reluctantly comply with new regs. As an industry with intelligent data processing tools and a long history of working with data and databases, we need to innovate NOW in the areas of consumer privacy and data security.

I'd love to hear stories of how marketers are addressing the very real needs to protect consumer information. Horror stories of how they aren't are welcome, too.

Intelligent Direct Marketing with Effective Use of Data

I'll bet you're all familiar with those cute little robot vacuums -- the Roomba -- right? Well, not only are they cool machines, but iRobot is using all of the right direct marketing techniques to understand and build their customer relationships. By using RightNow Technologies, iRobot has managed to use data to "get into their customer's head."

RightNow's approach is very intelligent. The AdWeek article reports on their novel approach. "To stay in synch with individual customers, the company also tracks every interaction with each consumer, so past interactions can be used to improve subsequent interactions. That data is fed back into e-mail marketing campaigns that produce more consumer data and generate sales of the circular $300 vacuuming robots. In all, hundreds of thousands of customer interactions across multiple channels are tracked and managed each month, and the data is used to constantly refine its communications. To prospective iRobot consumers, it can seem that the company is reading their minds."

RightNow accomplishes this by tracking iRobot's self-service web site and its phone and email interactions with customers. This is effective customer data integration and management at its best. They then utilize all of this customer intelligence in their direct marketing campaigns.

In our opinion, utilizing data intelligence with analytical tools allows for the most efficient direct marketing campaigns. Not only are you effectively communicating with your customer base, you are consistently utilizing customer feedback to hone your campaigns for the greatest response and conversion rates. This leads to campaigns that become better over time and helps your company to become proactive in terms of product/service development. This approach assists in the creation of marketing campaigns that can be measured and reported on to the leadership team for the ever-important profitability metrics.

If your company has had success using intelligent direct marketing, let us know so that we can share your success in an upcoming post. We love acknowledging savvy direct marketers and reporting on DM successes. It makes us all better at what we do every day!

Commercial, or not?

This piece from the Baltimore Sun got me thinking this morning: Turning to corporate America to save the world.

It talks about how the lines are getting blurry between celebrity fundraising and the corporate sponsors who help make the events a success. Discussed specifically are Bono's Red Campaign and Al Gore's Live Earth concert event. Both of these are highly visible campaigns to support a worthy social cause. Both of them included extensive advertising sponsorships--necessary to make them successful.

But, is the mix of corporate advertising and fundraising all good?

From the article: "By intertwining political messages in corporate advertising, Mr. Gore and Bono are attracting support for their causes, but they are also blurring important boundaries between commercial advertising and politics. The emerging role of advertisers as gatekeepers for political messages is a trend to be feared, especially with a Supreme Court that stands ready to bury the doctrine that distinguishes commercial speech (which may be regulated to protect the public) from political speech (which is protected by the First Amendment)."

Of course, this is the author's take on this (Robert Koulish). And, he has more to say:

"Mingling commercial and political speech would allow corporations to mislead - even lie to - the public about such matters as product safety, product effectiveness and corporate profits. Another danger is that once corporations start calling the shots and setting the agenda regarding global warming or HIV/AIDS, potential remedies for these ills would likely be limited to those that are also profitable."

I'm really struggling with this. On the one hand, I do understand the fears of big corporations misleading consumers, hiding behind the good message of a good cause.

On the other hand, I like the fact that more and more people and large organizations ARE standing behind a good cause. They're putting their money and their time into it--why shouldn't their brand benefit?

Regardless on where you stand on this topic, I do believe that this type of partnership between a celebrity, a social cause and big business is here to stay. It's an effective way to raise money and let the corporation build their positioning and their brand.

Thoughts, anyone?

Effective Data Management: The Key to Green Direct Marketing

As in all industries, there is increasing pressure to be more environmentally efficient as direct marketers. In recent news from QAS, it is reported that the Envelope Manufacturers Association, in conjunction with the Direct Marketing Association and the Magazine Publishers Association, have launched a recycling initiative. It is hoped that this initiative will "encourage companies to recycle more of their waste and to combat suggestions that the direct marketing industry is not doing enough to tackle environmental issues."

As QAS reports, this is a wonderful step in the right direction, however, they feel that by utilizing effective data management techniques even more can be done to make our industry more eco-friendly. We heartily agree with QAS!

Here's the thing: When we integrate sound data management techniques into our direct marketing strategy, "companies can ensure that they are not sending information to incorrect or out-of-date addresses, meaning that packages are not simply wasted." In addition, by utilizing analytics with sound data management practices, you can more accurately target those who are most likely to respond to you -- and really boost your direct marketing efficiency by mailing less, while increasing your response rates. All-in-all, this is a sound strategy for increasing profitability for your company, while supporting the environment at the same time. This goes right in line with our philosophy of consistently working towards building more profitable customer relationships.

So, kudos to the Envelope Manufacturing Association, the DMA and the Magazine Publishers Association for taking this first step. Now, it is incumbent on the rest of us to ensure that we are practicing sound data management techniques to take environmentally-focused direct marketing to the next level. We've written a white paper on effective data management strategies if you're interested in learning more about this important subject.

Once again, some good ideas for becoming more green! TGIF!

Voting with your Remote

Surprising news from "DM News" today.

DRTV spots least fast-forwarded in April: TiVo

"The least fast-forwarded television campaigns in April were dominated by direct response ads that ran during the day.

That was a key finding from TiVo Inc.’s first Top Commercial Rankings report. Using TiVo’s Stop-Watch service’s ability to track consumer viewing behavior on a second-by-second basis, in both Live and Timeshifted viewing context, TiVo will release these reports monthly."

So, are daytime TV watchers just bored, or did someone working on media placement (for products like "Perfect Pushup Exercise Equipment," "Air Hogs Toys" and "Almost Golf Sporting Goods") just do a super job of media placement? Maybe a combination of both...

I'd love to see how this translates to sales. And, with DRTV, those sort of metrics are certainly available. Common sense tells me that people who watch are more likely to buy, right?

In any event, I like the fact that TiVo is tracking how people are using their tool. One of the things that advertisers worry about is the fact that, with TiVo, we can fast-forward through commercials. As more and more of us use TiVo, how effective will TV advertising even be? TV Execs are scared that advertising dollars will shift dramatically from TV, and rightfully so.

Because of this, TiVo is brilliant to add tracking capabilities.

My gut feeling is that their tracking tools will prove that people WILL watch ads for things that they are interested in, or interested in buying soon. Perhaps they're turning TV into another true direct marketing channel--one that can be measured and tracked, even if it's NOT an infomercial. And, in my opinion, that's making television a much more important and effective advertising medium.

You know my position on measurement--I'm all for it. I wanna see more!

Direct Marketing for the Pharmaceutical Industry

One thing is clear -- as all five generations alive today continue to age, there will be an unprecedented focus on healthcare and the pharmaceutical industry and how they communicate with their customers. According to a recent post by the Direct Marketing Association, Cegedim Dendrite has just completed their latest Direct-to-Consumer (DTC) Industry Check-Up Survey.

And the survey says . . . "the pharmaceutical industry is using technology to build a better and more proactive dialogue with consumers,” says Carl Cohen, president of marketing solutions for Cegedim Dendrite, which provides technology products and services to the global pharmaceutical industry. "According to the annual survey, pharmaceutical companies in 2007 will increase their spending on online activities, such as web sites, search engine marketing, and e-mail."

In addition, "national TV, spot TV, radio, and direct mail will top the list for decreased spending." This is the first article we've seen in a while that speaks of a decrease in direct mail spending -- ruh roh.

According to Cohen, “the continuing growth of online media and technology to build and sustain consumer relationships, coupled with the decline in traditional mass marketing advertising confirms that pharmaceutical companies can use alternative media to match the impact of general advertising more cost effectively and with quicker results. At the same time, the pharmaceutical industry is using new approaches to help patients comply with taking their prescriptions, which can have a major positive impact on public health.”

This just makes good sense. There is practically nothing more sacred than an individual's relationship with their healthcare provider and those who support those drugs that help them lead a healthier life. And, as privacy concerns continue to arise in this very sensitive area, consumers will want to be communicated with a more "one-to-one" message, directed towards their specific health concerns.

It will be interesting to see how this fast-growing industry continues to communicate with its consumers as time goes on. Of course, we're huge proponents of utilizing a sound direct marketing strategy that encompasses an intelligent approach to communicating with your customers, and ensuring that they receive a message that is extremely relevant to them. It sounds like the pharmaceutical industry is right on target.

Even Prince Does Direct Marketing

This is something I never thought I would be lucky enough to write about--Prince and Direct Marketing! Oh Joy--my mundane marketing world is getting exciting!

Found an interesting article today, Prince Does Direct Marketing with Latest Album. The article discusses how Prince used fundamental DM principles to market himself. His decision (which apparently is not making all music people happy) was to give away copies of his latest album away to promote the album and his shows.

From the article: "Prince's latest album entitled Planet Earth was recently released in the UK in three million copies of The Mail newspaper...Record shops in the UK were angered with the promotion, saying that the move devalues the music itself and that it should be sold, while some UK bloggers who uploaded the album for free after receiving their free copy in The Mail said Prince makes the majority of his money with ticket sales and tour merchandise and saw it as a way to get the word out rather than devaluing the music."

Here's my take on this--if it makes Prince fans happy (and how can FREE ever make them unhappy), then it's a great thing. I'm sure that this move has built loyalty among his key fanbase. The promotion has made headlines (heck, even me, a marketing blogger, is talking about it), thus boosting awareness of the new album. Sampling, or giving away free product, is certainly not a new marketing tactic, and I think it was used correctly in this instance.

I take my hat off to Prince. Not only a brilliant musician and one of the most creative people in our time, but he's also a savvy marketer. I guess I'm not surprised in the least :)

Managing Those Important Customer Relationships

It's always an interesting conundrum when determining how to most effectively manage your customer relationships. In a recent article by Bob Sullivan of InfoGrow, he discusses how companies are determining that marketing should be the keepers of customer data and lead management systems and strategies. It just makes good business sense. In working with our clients, we've heard some horror stories from both sales and marketing on lead management. The funny thing is that it takes a lot of work from both parties to bring on new customers. It behooves everyone to come up with the most efficient system that assists everyone in doing a better job of managing those important customer relationships.

Here's what we've experienced: Sales thinks that marketing doesn't always provide the bests leads, and in response, they work only those leads that they determine are "hot," leaving others to get lost in a proverbial black hole. Marketing works hard to feed the very best prospects to sales and gets annoyed when sales doesn't want to work them -- plus, they never get feedback on the leads from sales (because they don't work them), or the feedback that they get is something along the lines of "we need some better leads -- these leads are bunk (or some other expletive)." So, it becomes a vicious cycle as marketing continues to provide the same leads to sales, sales doesn't work them, no reporting occurs to determine campaign effectiveness -- as you can imagine, not the best environment for a win-win situation!

Sullivan reports that some companies are now letting marketing own this process. "Often marketing has the need, interest and time. As a result, marketing departments are taking ownership of the CRM database. They are bringing sales reps into the system and monitoring the usage to close the loop on the lead generation process. Key Performance Indicators (KPI) are monitored by marketing and reported to management."

The informations that then comes back out of marketing is imperative to understanding your prospective customer relationships. According to Sullivan, here's a smattering of the value that these reports provide:

- Lead generation source – tradeshow, website, mailing, ad, etc.
- Where assigned, such as distributor or rep – number of days to follow-up or assigned elsewhere
- Status update – what did rep or distributor do with the lead
- Status tracking – hot lead, warm lead, bad lead, sale, or don’t know
- Which follow-up activities, lead sources, conversions, and next actions work

All of this information is important for each group involved -- marketing, sales and the leadership team -- to follow the customer through the course of their relationship with your company. It is also important to marketing because they can more intelligently feed leads to sales in upcoming months that are increasingly more targeted. In addition, from a customer satisfaction perspective, you are no longer annoying prospective customers by over-contacting them and you are closing more of the warm leads that used to get lost and not fully worked by sales since they were not closed right away.

Bridging this gap between sales and marketing leads to overall profitability for your company. We think that by allowing marketing to do their job -- manage customer relationships -- that sales will be able to their job better as well -- bringing in new business. In essence, you are creating a win-win scenario for your customers and your company. Now, that's effective customer relationship management!

If you're as passionate about this subject as we are, you may want to take a look at our whitepaper on Performance Based Marketing and Goal Setting. From a marketing perspective, this document provides some ideas on how to effectively provide feedback on the effectiveness of all of your marketing campaigns to ensure that the lines of communication between marketing and sales, marketing and leadership, and marketing and finance are wide open.

It's Not Junk Mail, If It's Not Junk

We post a lot about 'good' direct mail programs in this blog--innovative campaigns that generated new customers and sales. We like to cite industry numbers that illustrate the growth of DM, and other direct response channels. We like what we do. We like the data, analysis and database aspects of DM. We like the fact that at the end of the day, our campaigns are measurable--we KNOW we've made an impact (or not).

With all that love of marketing, sometimes it's easy to forget that the majority of the consumers out there think that Direct Marketing is right there under terrorism...Let's face it, people HATE junk mail. They hate telemarketing. They see all of it as bad, bad, bad.

See this blog from Seattle Post Intelligence, called Livin' la Vida Eco: No More Junk Mail (great headline, by the way). Author Janna Cawrse wants to "Just Say No to Junk Mail." Her post gives helpful advice as to how to remove your name from mailing lists by signing up with the Direct Marketing Association's (DMA) service.

So, here's my challenge to all of you who dabble in direct marketing. We need to make it relevant! Consumers would not hate junk mail if they didn't perceive it as junk. Anything arriving in your mail box should be relevant, should be something that you have at least a little bit of interest in. The first thought in the recipient's head shouldn't be, "Why did they kill a tree to send me THAT letter?".

Direct marketers need to make sure that they've targeted the list. We need to always be on the look-out for ways to cut the mail quantities down, by only sending to people most likely to want the offer. We need to stay on top of privacy rules and make sure that we're applying all the right suppressions (such as the DMA Do Not Mail file).

We need to always strive for customer delight and we need to listen to our customers and prospects. We need to try to reach them through the channels they want to hear from us (maybe they truly DO hate snail mail--stop sending them things!).

A direct mail campaign done right will make the company money. More important, it will not make customers mad, IF they can see a value in the offer sent to them.

I'd love to hear more ideas on how to make sure that it's not Junk Mail. Any tips, case studies, ideas out there?

Summertime Fresh -- Keeping your Direct Marketing Ideas Flowing

Often, we are faced with a lot of hurdles as direct marketers. It seems like the IT guys, the Leadership Team and the Sales Force just don't seem to understand why we are doing what we do. And, frankly, we get very, very annoyed. We've even tried to help bridge the gap -- by getting different divisions within the companies that we consult with to communicate better, to understand each other's goals, and to just all sing from the same flippin' hymnal. It is difficult -- but it can be done.

In a recent article from Direct Marketing News Magazine, author Raquel Hirsch talks about this conundrum -- and relates it squarely to our responsibility as direct marketers. When I first started to read her article I thought, "Oh boy, this is going to hurt." However, Hirsch makes some very valid points that we all need to keep in mind.

Hirsch points out that we have to constantly be thinking about how our fresh marketing ideas will impact the bottom line. For instance, "How will this investment in “fresh” marketing help the company actually increase revenues and improve profitability? What are the business levers that will be impacted by these flashier online banner ads, novel email campaigns, ever-crazier viral campaigns? Where is the return on investment?" HA! You know this is music to every CEO's and CFO's ears! It's just true -- if we can't quantify how well our DM efforts are impacting the overall business, we may as well just go to Tahiti for an extended vacation. In business today, everything MUST be measurable. Luckily for us, most intelligently executed direct marketing campaigns are quantifiable and measurable. And because of this, we can continually tweak them as we go to make them even better with time.

This is all very good news for us because as Hirsch points out, "Without the discipline to understand how marketing decisions impact the corporate business model, when budget-cutting time rolls around, marketers have no data to defend what the CFO sees as 'the largest pool of unallocated dollars' – i.e., the marketing budget. And when the CEO decides the current ad campaign, the flashy splash page, or whatever, is 'tired' and needs 'refreshing,' marketers have no data to protect the current tactic or strategy."

So, as this Summer rolls along (and we're firmly ensconced in the third quarter of 2007), let's keep in mind the relative beauty of our field. We can measure and report back. We can prove the value of what we do. All it takes is a little forethought and strategic planning -- and mostly just paying attention to the business. When fourth quarter rolls around, the direct marketing team can be the heroes who have taken the business ROI goals to the next level. And as budgets are being planned for 2008, it isn't ours that are getting slashed -- we're getting what we need to do our jobs more effectively. See, this is fun stuff! This is what we live for! That Raquel Hirsch is one intelligent marketer.

More Evidence that with Direct Marketing, Timing is Everything!

In a recent post, we talked about the article in DM News that outlined that direct mail is the direct marketing vehicle of choice for consumers. Now, the Direct Marketing Association (DMA) has published an eight-part series that discusses that consumers remain highly responsive to all types of direct marketing programs -- and that the key to this responsiveness is timing. This article comes to us from Circulation Management magazine.

Consider these key statistics from the DMA series:

• On average, consumers respond to direct marketing every 16.4 days.
• By channel: 48 percent of respondents say they made a purchase or donated via catalog, followed by internet search, 37 percent; direct mail, 28 percent; and newspapers, 17 percent.
• TV, radio and magazines are the least popular DM channels.
• Top reasons for parting with money: attractive price, 35 percent; customer loyalty, 16.3 percent; uniqueness, 11.1 percent; and special offers,10.4 percent.
• Top reasons for not parting with money: not the right time, 25 percent; not relevant, 23.6 percent; already have, 13 percent; and price, 6 percent.
• Some 70.2 percent of consumers said they were privacy concerned, but as a group they were more likely to respond to direct marketing than those who say they are privacy unconcerned.
• 53 percent of the privacy concerned say they made a catalog purchase, compared with 35 percent of the privacy unconcerned.

Peter Johnson, VP, Research and Market Intelligence for the DMA believes that while privacy is an issue, as long as the timing is right, consumers will most likely respond and/or buy to your direct marketing efforts.

Wow! These are some great statistics to have in our back-pockets as marketing budgets are being set. It seems that there is always a lot of competition for marketing dollars between advertising, media and direct marketing groups within our client companies. This series points out that direct marketing is still the best bet to ensure that you meet your departmental profitability goals. In addition, when you plan your direct marketing campaigns strategically, you can statistically prove the success of each of your campaigns so that you can continue to get a nice allotment of those (sometimes) scarce budgetary dollars.

Now that you have the proof you need that your DM efforts will pay huge dividends, you may want to review our tips on how to integrate timing into your direct marketing campaigns.

And, for more stats and info on the impact of timing on DM response, check out this post from last month.

Choosing to Lose

Did Sprint Nextel do the right thing when they 'fired' some of their most needy customers?

RRW holds a strong belief that business strategy must be based on customer profitability. We're forever preaching to our clients that it makes no sense whatsoever to implement programs that acquire unprofitable customers. And, we're always trying to push them to direct retention efforts to customer segments that are highly profitable.

Yet, we continue to be amazed at how few companies really have a handle on value or customer profitability.

On the other hand, we are huge proponents of top-notch customer service. We believe that if you treat your customers right then they'll respond in turn with high loyalty. Heck, they may even become evangelists and spew your praises to all of their friends and family, if you treat them the right way.

That's why it's been so tough to develop an opinion on the recent Sprint decision to dump some of their high maintenance clients. This article in Washington Post, however, firmed up my opinion. Sprint Nextel Defends Cutting Customers.

I think that Sprint made the right decision, IF you're only looking at the decision in terms of profitability, or even from a service perspective. Those 1,000 or so customers that Sprint Nextel chose to cut were making 40-50 calls each month to customer service. Clearly this wasn't the right fit (and they may just be kinda wacky to begin with--who has the time to make 50 calls a month??). Handling those calls was certainly detracting from legitimate customer issues.

However, look at all the bad press that this customer-firing incident has caused Sprint Nextel. When you consider that, overall, their subscriber base is more than 50 million customers, how much impact could servicing 1,000 pesky customers really have?
Then, balance service requirements to handle 1,000 wacky customers against the bad press generated from this incident.

Did they do the right thing, overall? The jury is still out, in my opinion.

Direct Marketing To Baby Boomers

It's amazing to think about the fact that Baby Boomers (me being among them) make up 25% of the US population, hold 70% of US assets, and collectively, spend over $2 trillion a year in products and services. Wow!

Savvy direct marketers are learning how to more effectively communicate with this large group of consumers so they can cash in with them -- and get some of that $2 trillion applied to their bottom line. In fact, a new book has been released to help direct marketers and advertisers do just that. Advertising to the Baby Boomers by Chuck Nyren, a veteran creative strategist, explains how to approach this important demographic. This second edition update is divided into three sections. The first part helps us understand Boomers' self-image and desires; the second suggests marketing strategies; and the third offers a listing of some practical resources. This book is a great resource for all of us in understanding the uniqueness of this large group of potential and/or current customers.

In case you aren't aware, there are an unprecedented five generations alive today that we must take into consideration as we plan direct marketing and advertising efforts. And, as you can imagine, each generation has very different needs and desires in terms of how they want to be communicated with, marketed to, etc. The Baby Boomers represent the largest generation alive today and (as Nyren points out) it is imperative to effectively communicate with them, while not alienating them in the process.

If you are interested in learning more about the five generations and how to better market to them, we have created a white paper on this very topic. It's interesting to see the differences between the generations -- and there are many. Although for most of us, these differences become very apparent at any family gathering! Or is that just Cousin Harold's personality that's shining through??? : )

Data Breach at Fidelity

Sadly, the few times that our industry (direct marketing, data, lists) makes the news is when something bad happens. See "Direct Magazine's" article: Two-Million-Plus Names Stolen Data from Fidelity National Information Services.

Apparently a disgruntled (or just greedy) database admin decided that he, too, could get into the data business. He took a copy of 2.2 million Fidelity customers and sold the file to a direct marketing company/list broker. He was caught, fired and the data was recovered.

The original story reported over the last couple of days was that sensitive financial info was taken (not simply name and address). Did this ever make the bloggers fume, lashing out at everyone from the government to big business to (of course) junk mailers. Now it turns out that the stolen data only consisted of basic name/address info (still not a good thing, of course).

But the message I saw all over the Internet was that no one should EVER give their name and address out, or something really bad would happen to you. Identity theft, fraud, spying, etc. etc. Of course, all of these things CAN happen in today's information-rich times.

But, it's much more likely, for example, that the waiter who takes your credit card for dinner will sell that info to his friend than it is that a mail order company will jeopardize your private information. The mail order company understands that they need customers to stay in business...

Regardless, I believe that in these times, the onus is on direct marketers to be extremely sensitive to customer privacy. We need to make sure that each time we collect and use a piece of data that there is a valid benefit to the consumer. We shouldn't collect and store data just because we CAN collect that data.

And, as consumers, we should guard our personal data. We all know not to carry around our Social Security Cards. We make sure that the website we're ordering from is a reputable one, before we ever give out payment. We're onto the phishing scams and would never send any money to a strange African country, regardless of the huge payout promised.

But, there are times when it's very much in our best interest for businesses to understand things about us. When an airline remembers that you prefer an aisle seat, that's a good thing, right? Or, if your favorite restaurant sends you a free birthday dinner coupon, you're happy, correct?

Again, it all comes down to the fact that the stored data absolutely must bring value to the consumer or it needs to be deleted from the database. Yes, it is that simple :)

House of Blues -- Using Mobile Marketing to Effectively Target the Youth Market

The House of Blues really hit it this time! Not only are they an excellent nightlife and music venue, but they are forward-thinking, leading-edge direct marketers. Recently, a case study was published by Mobile Marketing in the News outlining what the House of Blues (in partnership with Motorola) accomplished with the help of Soapbox Anywhere.

Here's what they did: "House of Blues, presently using the Web for consumer interactivity in addition to other more traditional means of marketing, decided to leverage the mobile channel to deepen its relationship with its existing and new customers. Recognizing mobile as a personal, one-to-one mass market medium that is 'always on', House of Blues tapped Soapbox Mobile to create its mobile campaigns. The Soapbox Anywhere platform provided personalized mobile interaction in addition to a valuable database of mobile users. The House of Blues mobile trivia campaign placed a 'call-to-action' across in-house TV screens and person-to-person street team interaction by means of unique short codes assigned to House of Blues venues across the U.S. The Soapbox Mobile solution empowered House of Blues to track and report, in real-time, the effectiveness of its mobile campaigns for each of its nationwide locations."

So, here's a case where a company, i.e., House of Blues, used emerging technology to accomplish a lot of things. First, they have built a unique way to acquire new customers and build loyalty (and stronger relationships) with their existing customers. Second, they have definitely figured out a nifty way to build brand awareness. Third, they were able to use their creativity to bring value to their partner, Motorola, in a way that most certainly makes their hearts sing: new revenue streams. Finally, and near and dear to us, they were able to create a program that was easily trackable so that they could see the effectiveness of the campaign in real-time. That's smart direct marketing for sure!

We are advocates of using technology in creative ways to effectively build profitable customer relationships. Kudos to House of Blues, Motorola and Soapbox Mobile for leading the way!

How About a Little Wine with Your Social Marketing?

Social Marketing (also being referred to as "Nomadic Marketing") is quickly becoming the leading edge of Direct Marketing today. Once considered an underground movement, Social Marketing is becoming an important tool for your Direct Marketing strategy. In fact, an up-and-coming wine-maker in South Africa has built his complete direct marketing strategy around Social Marketing.

Stormhoek winery is forecasting sales of an astounding 350,000 cases of wine this year internationally -- up from a measly 10,000 sold locally last year -- and this increase is solidly due to the success of owner Graham Knox's social marketing campaign. The article states that "Knox -- a former advertising whiz -- knew he wouldn't sell wine in an already saturated market by putting pictures of the product on billboards or in magazines. 'Wine is social, people like to talk about wine, so we needed to figure out how to get people talking,' he says. 'Since ancient times word of mouth has been the most powerful means of communication.' "

So what was Knox's strategy? He enlisted the help of Hugh McLeod, who is a cartoonist and also runs the most popular weblog in the UK. He's been called "the most influential blogger in Britain" by the Financial Times. Here's how he did it: "In between designing quirky cartoon-style labels for Sauvignon Blanc and Shiraz, McLeod began blogging about Stormhoek, realising how easy it could be to create a buzz in cyberspace, which would then translate into profit. He offered a free bottle of wine with a personalised label to the first 100 people in the UK, France and Ireland who would include Stormhoek in their blogs." Brilliant!

Simultaneously, the winery started sponsoring "geek dinners, providing free wine in the hope that people would go home and write about it. They did. The idea spread like a virus and soon Stormhoek was the drink of choice among the smartest, most tech-savvy crowd in the UK."

This initiative created so much success for Knox, that he also applied it to the US market where it has also been very successful.

Interesting, isn't it? Advertising Age included this marketing campaign in its "Top 50 global marketing campaigns last year, along with well known brands such as Toyota, Nike, Microsoft and Apple." So, this is not just the latest Direct Marketing fad. Social Marketing is here to stay.

So, as direct marketers, we need to figure out how to integrate this important tool into our overall marketing strategy. By creating a buzz around our products and services, we can enlist the power of our most loyal customers to more effectively sell them. It's an idea who's time has come and we predict that those who embrace it quickly have the opportunity to reap some great rewards. Consider Knox's answer to the question, " 'Is this the future of marketing? 'Absolutely,' he said. 'It's interactive, it's inexpensive and it has a more potential reach than anything else.' "

So, as you're hoisting your glass of wine to celebrate the 4th of July tomorrow, consider commenting on it! Go find the winemaker's blog or website or go to a wine commentary blog. You'll be on the leading edge of wine drinkers, and directly participating in the success of your favorite bottle of white, red or rose!

Have a Happy 4th of July Holiday! And for those of you outside of the US, have a glass along with us -- then let's blog!

PS Any guesses on what RRW stands for??? Hint: We love wine. If you guess correctly, we'll send you our white paper on Building Loyalty: How to Make Sure They're Drinking Your Brand. Think UB40. : )

Making CRM Work

We comment a lot about why CRM systems fail so very often. A common reason is because the people behind the implementation did not consider the entire organization, especially the front-line users.

Prior to RRW, I was a salesperson for a large database/data provider. Some muckety-muck made the decision to install Siebel as a salesforce automation tool. (By the way, I have nothing against Siebel--this is simply an example of a super poor implementation.) As a sales rep, it seemed that the company's goal was at a minimum to keep tabs on their reps, and further to enable a seamless transition to a new salesperson if they wanted to fire you. Encouraging for the sales rep, right?...

To make things worse, old, inaccurate and duplicate customer data was imported to the system (the number one CRM sin, especially as it was commited by a provider of marketing databases). Bad data ensured that none of us would trust that the contact name or phone number coming out of the system would be correct. Then, The firm imposed mandates on us sales reps as to frequency of usage. They actually gave us minimal weekly limits of things we had to input (such as call reports, pipeline activity).

In a nutshell, this implementation was not successful. A wasted multi-million dollar investment that brought zero value to that organization.

Based on this experience, I was pleased to see this article in "Destination CRM" today that gives some practical tips on how to get the sales reps to not only use the CRM system, but to love the system. It talks about building value for reps by including tools that they will find useful, not just tools that management can use to evaluate sales effectiveness.

From the article: "Trying to convince a salesperson to use a CRM system is not unlike trying to convince a child to eat vegetables. As a child is told that vegetables are good for him, a salesperson is told a CRM system will improve the financial health of the company. Most of the time, neither one finds what's served to them appetizing.

This can't be ignored. Companies can try the forceful do-as-you're-told parental tactic, but this will likely breed resentment, and, unlike children, salespeople can choose to leave the table. So what's the solution? It's simple: Approach your salespeople as if they are your best customers and focus on providing them and the company value."

Interesting that it always comes back to value!