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into our direct marketing strategy, "companies can ensure that they are not sending information to incorrect or out-of-date addresses, meaning that packages are not simply wasted."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!

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.

Customer Data Management -- Avoiding the Walking Dead

There are many schools of thought on how to most effectively direct market to your existing customers. This is especially true when you are looking at cross-sell, up-sell campaigns. How do you make sure that you are making the best-next-product offer to your clients at a time when they will be most open to it?

Well, there's some new, recently-completed research on this very subject that was conducted by the Wharton School of the University of Pennsylvania. Marketing Professor, Peter Fader is the co-author of the study and comments on his research in a very interesting article. In the research, three general states were identified that define a customer's relationship with a company. The research was conducted on a telecommunications firm.

"In State 1, customers are close to certain key services, such as basic cable. 'In this introductory state, you're just dipping your toes in the water and trying out one or two services to see if they meet your needs and if you like working with the company,' Fader said.

In State 2, 'you broaden your relationship, often acquiring additional services, like premium channels,' Fader noted. But that's not always a good thing. 'A customer who moves rapidly into State 2 is likely to reconsider his portfolio more quickly and possibly acquire additional services. However, while such customers may appear tempting, these same customers are also likely to transition into State 3 quickly and reconsider their portfolios (i.e., drop all services) without much delay,' the researchers write.

State 3 customers, the walking dead, are just one move away from severing their ties with the company. 'However, customers' transition to this state may not be immediately observable; they may maintain their current portfolio for several months (or longer) due to inertia. Having plateaued in their level of service, their next change almost certainly will be to drop all services,' the researchers state.

Fader adds an important caveat: 'While we see a relatively sudden drop in this particular dataset, there could be additional states in other settings. Customers might gradually shed their services as they slowly sever their relationship with the firm. It would be interesting to compare these evolutionary processes across different types of multi-service providers.' "

Understanding which customers are in each of these defined states can allow your company to better identify the next-best-product path for each customer segment, thus enabling you to market products and services appropriately to each specific customer state. We've conducted several studies that have helped our clients better determine which customers they should spend their time marketing to and which customers should be "pruned" because further marketing efforts and customer service efforts will be wasted -- or at the very least, not very profitable. In fact, we've created a case study on Building Customer Profitability.

So, as the Summer Solstice approaches, perhaps it's time to take a look at your customer database and determine which of your customers resemble the walking dead -- and which of your customers you can treat more like the living by continuing to build solid, profitable customer relationships.

It's Easy To Be Green!

In a recent DM News article, Chet Dalzell reports on how direct marketers are right in step with the environmentally friendly attitude that prevails today. In fact, the article touts 3 "green" companies -- Starbucks, General Electric and Toyota -- as companies who are actually "building their growth on products and strategies aimed at helping to preserve the planet."

When you think about what we do each day, it's true! We are measured on our ability to be efficient. We are constantly being measured for targeting better, increasing response rates on our direct mail campaigns, increasing the efficiency of our marketing databases, etc. As Dalzell so aptly points out, "Avoiding waste, more often than not, is avoiding cost." Deep isn't it.

It's nice to know that through our efforts to make our marketing strategy as efficient as possible, we are also being good corporate citizens -- both from a budgetary and environmental perspective. This philosophy goes hand in hand with corporate goals of doing what's right for all of our stakeholders -- and more importantly, for our planet.

It turns out that Kermit was wrong . . . it IS easy to be Green.