Tuesday, October 23, 2007

Direct Marketing and the Creation of Trust

At times, direct marketing is a tough gig! When bad press comes out, it really affects the work that all of us do on a daily basis. It's the whole story about the "one bad apple that spoils the whole barrel" thing (a few of you almost broke out in song there, didn't you?). The point is, it is imperative for us to market ethically -- otherwise, we lose the trust of our current and potential customers. We can be creative -- however, we must be truthful. Otherwise, consumers and businesses have no reason to trust what we say -- or what we sell. We strongly believe in creating trust through direct marketing -- and that by doing this, you build more profitable customer relationships.

Apparently, New York State attorney general Andrew Cuomo agrees with us. Last week, Cuomo called the direct marketing industry out when he announced he was expanding his investigation into the student loan industry to include direct marketers. In the article from DM News, Cuomo's office issued a statement that "described misleading marketing practices through direct mail, teleservices, television, radio, and online channels." The article further stated that Cuomo's office cited examples that "included some companies who are accused of mailing commercial offers designed to look like official letters from the US Department of Education that warn students to protect their rights by calling the lender." Other inquiries went out from the attorney general's office that asked about other practices such as offering gift cards for applying for student loans and utilizing sweepstakes that encouraged students to take out loans.

Additionally, Cuomo is looking into how companies market themselves through their slogans. For example, "LendingTree.com is being targeted because it promotes itself with the slogan 'When banks compete, you win,' but, according to Cuomo’s office, LendingTree.com 'had an exclusive agreement with EduCap and essentially offered only its [own] student loans.' " This seems to us simple folks like not a lot of competing was going on there. Geez!

The Direct Marketing Association (DMA) came out quickly in support of this investigation saying that "illegal marketing activities erode trust for the entire industry." In fact, Jerry Cerasale, SVP of government affairs for the DMA, went further: "If these actions violate the law, then they should be stopped. Legitimate marketers need to have trust in the marketplace, and violating the law undercuts that trust. This is not retail, where you can walk in and touch a product and buy it. With direct marketing, you don’t hold the product until after you’ve bought it, so trust is essential.”

Like other areas in business, there are some gray areas in direct marketing. I think the simplest way to look at it is with your "truthful lenses" on. If you are representing something other than what you are actually selling, you're not telling the truth. It's as simple as that! And, you're making it worse for the rest of us that do practice truthful direct marketing. Let's face it, we're all consumers of many different products and services. And, as such, we've run into offers that are "too good to be true." So, we've become skeptical for good reason.

We don't want our industry to be over-regulated by any form of government, however, someone has to step in when those in our industry make the decision to cross the line. We agree with the DMA -- trust is essential in direct marketing. We applaud Cuomo for his efforts to protect students!

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