Great Links

Welcome to this week's edition of the Blog Log! Here are our favorite links of the week. We hope you enjoy them!

1. Dana Blankenhorn: What Starbucks Can Learn from Barack Obama. This post resonated with me because for years, I could travel nowhere without knowing where the closest Starbucks was. Actually, that is still true. I am a true addict. As Dana points out, Starbucks has lost their customer focus, and I think it's because they have grown to be such a giant. Dana thinks that it's because they don't really focus on the customer relationship. And, he actually provides them pointers on how they could do a better job. In addition, he feels that they could learn a lot about CRM from watching Barack Obama and his flawless campaign of bringing people into the campaign and creating loyalists. This is a great and humorous read -- we think you'll enjoy it, too!

2. Bob Sullivan: Does it take a Recession to Shape Up Marketing Efforts? Hear, hear . . . is this recession a self-fulfilling prophecy? That's what I want to know. I was talking to a colleague this week and we were wondering this very thing. Everyone's talking about a slow down in marketing efforts and spend -- are we actually causing it to happen??? Let's all take a pledge to just stop it now -- just in case it's true! Bob makes a great point . . . he's seen some great tips out there on how to effectively plan your marketing strategy in case of an economic-slowdown. And they are all great tips. However, he asks a great question: "Shouldn’t marketers be performing all of these activities regardless of economics? Isn’t that just good marketing?" Once again, you're right, Bob!

3. Ted Grigg: How Do Consultants Establish their Daily or Hourly Rate? As usual, Ted figures out the equation for us. As consultants, we've been in the pickle of charging by the day/hour or by the project. I'm not sure about the rest of you but our clients normally want a per project charge simply because they don't want any surprises. Ted brings up so many good points in this article that I wanted to feature it today. It's great education for both consultants and their clients. Ted's approach to the equation is eye-opening for all parties. This is a great post.

We hope you enjoy all of our great links for this week. TGIF!

Mobile Marketing and the Presidential Race

If you've been tuning in to the already almost year-long Presidential race, you know that this one has been very different -- on many levels. Not only have we had a longer head-start to understand the various contenders, but we have also seen an unprecedented number of debates and other "media moments" thus far. And we still have almost 9 months to go before the election!

Direct marketers have definitely been involved in this process. And this time around, it's gone further than direct mail and telemarketing campaigns. Case in point . . . according to DM News today, mobile services firm, Mogreet, is jumping on the election bandwagon with a new free video text service. According to the article, “It's all about empowering young voters with a voice through the channel that they know best,” said James Citron, CEO of Mogreet. “The youth vote is very important in this election and using new media channels is the best way to reach a younger demographic.”

And, as we've seen thus far in the primary's and caucuses so far, there has been an unprecedented amount of involvement from America's youth. Mogreet has seized this opportunity by sending a mobile phone to each of the major presidential candi­date's new media managers. Those interested in the candidates viewpoints can go to http://www.mogreetthevote.com/, and "select from a series of 10- to 15-second videos, deemed Mogreets, on topics that include the economy, gay marriage, the Iraq War and global warming and send them to a candidate's mobile phone, with a personalized text message, for free. General consumer-to-consumer Mogreets cost 99 cents."

As you can imagine, Mogreet is doing this for more than just educating kids about the voting process. They are also educating them on their platform, and hope to create more awareness nationwide about their services. Since texting is most widely embraced by the youth market, this is a brilliant idea!

Results so far show that Barack Obama has received the most texts (37.5% of the 4,000 messages sent so far). Hillary Clinton has received 22.5%. The area of most interest so far is global warming.

What a wonderful idea! This is where creating awareness through social media and mobile marketing can come together to create a direct marketing success story. It will be fun to see how widely used this campaign becomes as we get closer to the election.

Intelligent E-Marketing Campaigns

E-mail marketing is definitely becoming the darling of all of the direct marketing channels. In the past, it was looked at with skepticism -- and e-marketers were oftentimes branded as spammers. We're happy to say that the world has finally caught up!

Many of us want to be contacted by e-mail. It's just easier than talking to someone or even opening up a piece of mail. Spam definitely is still an issue but most folks have either implemented excellent spam filters or are getting good at going through and getting rid of spam manually. All in all, when I get an e-marketing message that is relevant to me, I'm happy to read it -- and very likely to respond.

Case in point, last week K&L Wine Merchants sent me an e-marketing message regarding two great wine selections that they were featuring on sale. As an avid red wine drinker (ever wonder what RRW stands for--think UB40), both were big reds -- a Beaulieu Vineyards Tapestry Red and a Sterling Vineyards Cabernet. The price point was excellent -- so I ordered a half-case of each. The online shopping experience was excellent and I even got the chance to fill out a survey on my observations.

Apparently, K&L is very aware of the value of e-marketing. In fact, they've even taken steps to upgrade their e-marketing platform recently. According to DM News, "Online wine retailer K&L Wine Merchants has tapped e-mail marketing services firm StrongMail Systems Inc. in a move to increase its white listing and more easily manage its program." Apparently, their in-house system was harder to manage and resulted in a lot of blacklisting. This new solution will help with both of these problems. In addition, according to the article, it will help with campaign management and provides some robust reporting tools.

Brian Zucker, CTO and co-owner of K&L, wants to ensure that his customers receive offers that are relevant to their tastes (based upon previous orders) and that they always have the inventory on hand when the customer orders. Zucker states: “We always have to determine how many e-mails to send, because our products are not limitless,” Zucker added. “We have a new wine with only 500 cases made and so we have to determine who would probably respond to this wine and not oversend e-mails.”

Once again, this is music to our ears . . . sending relevant messages via the direct marketing channel that customers prefer, and ensuring that there's enough red, red wine to go around!

Cheers!

Direct Marketing Strategy: Data Mining

We talk about direct marketing strategy in just about every blog post. The reason why we do this is because we see so many marketers in a frenzied state -- just trying to get the campaigns out on time without fully thinking through how they will track and measure them on the back end. Therefore, this step never occurs, or occurs only as an afterthought. So, the value of it is diminished -- it becomes more of an exercise than a defined part of your overall strategy.

What to do about this? Well, we found an excellent article in MultiChannel Merchant today that gives you some excellent advice on how to integrate data mining into your strategy. The article, written by Rich Brough or Transcontinental Database Marketing in Toronto, provides his ideas on what he feels are "the six stages in the hierarchy of data analytics, and the value of each to a well-rounded strategic approach."

Brough emphasizes that the first thing that marketers need to employ is a consistent approach up-front to identify opportunities within the customer base. He argues that while this may take some time to put in place, the results will be well worth the effort. Therefore, he identifies these six stages for us to consider as part of building this framework:

1) Data access: This is the foundation on which marketers build by collecting all pertinent information about customers, including name, address, demographic data, history of transactions, product and service purchases, and responses to past campaigns. Every business should earmark the appropriate resources to ensure this data is as accurate and up-to-date as possible.

2) Reporting/profiling: Key performance indicators are developed and applied to track the performance of customer relationship management (CRM) initiatives over time and across customer segments. Here, marketers can also track client migrations across various segments, compare responders versus non-responders, and gauge campaign response over time.

3) Current value: The underlying premise for CRM is that not all customers provide equal value to an organization. Therefore, the first step for any CRM initiative is to measure customers by their value to the organization.

For example, 20% of clients might account for 80% of a company’s business, and would be worth a lot of the marketer’s time and money. Another 30% might be designated as moderately valuable, but having the potential to move up into the top 20%; they’d require a different kind of pitch.

The last 50% could account for just 5% of the company’s business; they are less committed, motivated largely by price, and require still another approach (or, maybe, none at all).

4) Segmentation: In this stage, marketers identify prospects who share similar characteristics – who, therefore, belong to one of several specific segments.

This provides the opportunity to focus on the highest-value segments and acquire new customers who match the segments identified as most desirable. As well, sales pitches can be custom-tailored to suit each segment using what is known about those segments. Customers can be segmented using many criteria.

But segments should focus on identifying customers with similar product and service needs as implied through neighborhood socio-demographic characteristics, life stage, usage behavior, or needs and attitudes as identified by market research.

5) Predictive analytics: Use this to predict each customer’s likelihood to initiate a particular activity in future based on their unique characteristics and past behavior.

The benefits represent a “win-win” for the organization and its customers, with marketing ROI rising, and customers receiving more relevant offers – the principle of “right message to the right customer.” Predictive models are developed to assist marketing at all stages of the customer lifecycle, including acquisition, cross-sell and up-sell, retention, and re-activation.

6) Potential value: This is assessed by combining each customer’s current value with their potential to buy more in the future. As with current value, potential value creates an even clearer way to identify the most valuable customers, the ones worth keeping.

It also helps to identify those less valuable customers with potential for entering the most-valuable category, and those low-value clients on whom it may not be necessary to spend as much.

I'm sure that you'll agree that this is excellent advice. As Brogh's states: "Using these six stages, marketers can develop a database-marketing strategic framework that differentiates customers based on the value they currently contribute to an organization, their product and service needs, and their potential future value." This is a much more strategic approach to direct marketing, and one that will have a positive impact on your ROI.

Let's face it, if we are consistently in a hurry in getting out our campaigns, we need to be as efficient as possible. This approach may take some time to set up at the beginning. However, as you move through time, your campaigns will take you less time to create, they'll be more responsive, you'll be targeting the most profitable customers, and you'll be able to demonstrate that your DM efforts are paying off -- in terms of bottom-line profitability.

Case Study Monday: World Vital Records

On of our business goals for 2008 is to include more social marketing strategies in our direct marketing tool-kit. Therefore, we’re always looking for success stories of marketers who have figured out how to use social marketing to grow their business. We were intrigued by this case study, published in its entirety on Marketing Sherpa.

Situation Overview

Paul Allen, CEO, World Vital Records, wanted to use social networking as the strategy to market his subscription-based genealogy research service. His team created their own social networking site, FamilyLink.com, last spring to help genealogists create family trees and connect with researchers around the world.

The Challenge

So how did he go about augmenting the FamilyLink network of approximately 30,000 registered users? Allen’s idea was to take advantage of Facebook’s 64 million active users. “Our own social network is growing slowly, and it’s going to be a big part of our future strategy, but Facebook is the biggest opportunity I’ve seen in 10 years on the Internet.”

The Solution and Results

When Facebook opened its platform to outside developers last year, Allen and his team moved quickly. In October, they launched a genealogy application for Facebook users called “We’re Related,” which lets people connect to their family members on the network and create family trees. To date, the application has been downloaded by 2.8 million Facebook members, and the activity within the application has doubled, making it the network’s #1 genealogy application.

Along the way, the team has been testing promotional methods, advertising strategies and lead-generation techniques to learn what role such social networking applications can play in their subscription marketing efforts. They’ve even begun developing co-branded applications with partner companies that want to offer family-related content and activities.

In Summary

World Vital Records was able to augment and rapidly grow its existing social marketing strategy by incorporating a cool Facebook application. By understanding the value that Facebook brought to their business, and by getting there quickly once they opened up their platform, World Vital Records was able to launch itself into the world of social media/marketing.

Check out the full article that concludes with eight tips from Allen on how to build a successful Facebook application and monitor its revenue- and lead generation capabilities. As direct marketers, we predict that this will continue to be a big part of our future!

Have a great week!

Blogs we Like!

Another great week for bloggers, and those who like to read blogs.

We'll start off by pointing you to this post from Customers Rock. Author Becky Carroll provides an excellent example of how companies can earn a customer for life, relaying a personal situation that involved her skateboarder son. Her post is just as interesting as was her luncheon presentation on Social Media made this week at the San Diego DMA (which Nancy was happy to attend).

While we're on the topic of customer service, check out this blog post from Marketing Shift, titled: Customer Service as Marketing Tool. It discusses Friendly Computer's strategy of marketing their excellent customer service as a differentiator. If they do, indeed, come through on their promise and deliver a great experience, I think that great customer service is definitely a selling point.

Greg Verdino posed this interesting question on his blog: "If we literally turned off all this social media / Web 2.0 stuff for a day would business productivity soar? And inversely, would innovation stumble?" The question started some quite interesting discussion. My opinion--if we turned it all off, we may get more work done in a day, but we'd sure have a lot less fun. And, we'd be a lot less creative.

For fun, I wanted to share this site where you can obtain up-to-the-minute astrological horoscopes--for your dog! Nancy found it in her ongoing quest to understand her two twin Pugs, Willie and Woody. This link points to Aquarius, the sign of my black lab, Chance (who had a birthday this week!). It's kinda surprising how accurate these can be...

Happy Friday! Enjoy your weekends.

Mortgage Companies Still Upbeat!

You're probably saying NO WAY! How can mortgage companies possibly be upbeat with the subprime fiasco and the demise of so many mortgage lenders?

Well, according to yesterday's New York Times article entitled, No Lull in Mortgage Pitches, these companies are continuing to pump out upbeat messages to encourage consumers to continue to pursue the American Dream of homeownership. Countrywide's ad, for example, touts that "Countrywide can show you the way home." Bank of America's ad: "Homeownership is the best medicine." In addition, the article reports that "the National Association of Realtors is running national television ads saying there has never been a better time to buy a home. Home values nearly double every 10 years, the commercial claims, showing a young couple walk up to their white colonial-style home."

For direct marketers like us who have spent the last few years serving this industry with targeted multi-channel marketing campaigns, this is music to our ears. Companies like CountryWide, Bank of America and Wachovia have not decreased their advertisements -- and we're hoping that increases in direct marketing budgets will follow suit . . . if it's true.

As mortgage experts predict a strong Spring for home buying, other experts are not so sure. “'There’s been huge scrutiny on these companies, but they are continuing to advertise,' said Sally Greenberg, executive director of the National Consumers League, a nonprofit organization in Washington. 'Many of these companies are bleeding, and these ads are a way to get more money into the door.'” Even the Mortgage Bankers Association is not predicting a strong year, according to the article.

It'll be interesting to see how this unfolds. The other outstanding factor is the fact that this is an election year. Both major political parties have made the mortgage crisis a major theme of their campaigns -- with a myriad of approaches for bailing out those Americans who got in over their heads in the past few years.

From this direct marketers optomistic perspective, I'm hoping that the economy will continue to correct itself, and that consumers have better learned to read carefully over the fine print on those mortgage loan documents. If the National Realtors Association is correct in their research, and home prices do nearly double each decade, perhaps this will help to spur the economy in the right direction and get the direct marketing dollars flowing again in this industry! We're keeping our fingers crossed.