Promote Fun. Promote Profits

I have to admit, some of the antics that this article reports sound a tad bit wacky. Fun, yes, but definitely wacky.

"Direct Magazine" reports on online shoe merchant, Zappos.com's focus on the customer and their unique belief that a fun, eclectic culture will promote and drive great customer service.

From the article: “Co-workers will burst into song and dance at random intervals throughout the day,” writes human resources staffer Christa F. “Upon request, the CFO will groom your hair.”

She adds: “Parades. Why, you may ask? Why not!”

But, it's not all fun and games at Zappos.com. They also have the right attitude about enabling their customer service reps. "Zappos' call center reps are not scripted and have the power to do most anything they want to make sure the customer leaves the call happy.

“There's really nothing a manager can do that the rep himself or herself can't do,” Hsieh (Tony Hseih, CEO) says. “A customer should never have to be transferred for any reason, because the rep can pretty much take care of everything.”

Reps are even encouraged to recommend competitors' Web sites when Zappos doesn't have what shoppers are looking for. The reason: Next time these people are in the market for a new pair of shoes, they'll think of Zappos first."

And guess what, this fun, crazy, empowered environment is delivering success. "The company is on track to do $800 million in sales this year, up from $597 million in 2006. That's a good chunk of the total online footwear market for 2006, which totaled $2.9 billion last year, according to Forrester Research."

In my opinion, there are two key lessons to be gained from this case study:

1. Empowerment drives customer service. Let reps do the right thing for the customer and that company's earned a customer for life.
2. Make the corporate atmosphere FUN. Happy employees make for a better company, they really do. If someone has fun going to work (and, I personally think that a mid-day parade would be a great thing), they're going to be more productive. Heck, at Zappos, they even work for a lower wage!

I would love to see some of the stuffy Fortune 500 companies take on more of the Zappos attitude. I truly believe we'd see increased productivity and definitely more innovation. Plus, the world would be a lot more fun.

Measuring and Tracking Your Marketing Effectiveness

I hate to admit if for all of cyberspace to know but . . . I guess we are kind of geeky. And, now, we have reason to be proud of our geekiness!

There have been countless studies on how few companies really have a handle on how their marketing campaigns truly perform. And, in the frenetic pace of life that exists within most companies today, marketers simply move on to the next campaign without fully understanding what occurred in the last one. This is pure craziness . . . and definitely where that geekiness comes into play.

Vtrenz has recently written a whitepaper on this very subject and some of the statistics noted within it are astounding. For example, "38% of marketers say that new marketing campaigns are rushed to market based on the limited intuition of a few people." What??!?!?! The paper goes on to talk about the fact that the very nature of many marketers is that they are more drawn towards the sexy, creative, right-brained part of marketing, rather than the "boring" left-brained analytical part of it. As strange as it may sound, this boring stuff is the very thing we live for! Let's face it, without the power of analytics, how are you ever going to know -- beyond a gut feeling -- how your marketing campaigns are actually performing? You can't know unless you close the loop and measure each campaign's performance.

Vtrenz also tells us that most companies are struggling with measuring the financial impact of marketing campaigns, and, in fact "42% of them say that their company's ability to measure financial returns from marketing programs is a long way from where it could be."

We're not saying that it's easy to put measurement systems into place, however, it really isn't that hard and it doesn't have to be expensive.

Vtrenz cites five first steps of getting this measurement system in place:

• Define marketing ROI and obtain agreement from the Leadership Team
• Create a closed-loop process through your marketing systems
• Draft marketing ROI plan and include sales in the thought process
• Monitor implementation for areas of improvement
• Incorporate ROI findings into the planning process

Now, we're not saying that a lot of thought and time doesn't go into this. In fact, it does. However, we'll argue any day of the week, that without some way to track the effectiveness of your marketing programs you are doomed to failure. Some time or another, you are going to be asked about the dollars that you are spending on your campaigns, how what you are doing is increasing sales or bottom-line profitability, or some such question. If you can't provide proof of the success that you are creating through your marketing programs, management scrutiny will increase, your budget will be cut or worse.

It is incumbent upon all of us direct marketers to take a scientific approach to what we do on a daily basis to increase profitability. If you are struggling with putting a measurement system into place, take a look at this whitepaper (you'll have to comment and ask for it from us or look on Vtrenz's website for it). It will give you the insight you need to get started on this process and at least provide an outline that you can share with your Leadership to get them to buy-in. We predict that you'll come out smelling like roses.

Just tell your boss that the geeks from RRW think it's a good idea!

The Usual Suspects

I came across this list of The Top 50 Mailers, as compiled by "Target Marketing."

The top 50 direct mailers were designated by projected mail volume. "Target Marketing" used pretty sophisticated methodology to estimate this, as mail volumes are definitely proprietary info.

I really wasn't too surprised by the list. The heavy hitting direct marketers are all there. Some key findings:

• Financial Services firms account for 14% of the Top 50
• Publishing/Media comprise 38%
• Fundraising consists of 34% of the Top 50

On the list were financial giants, including CitiGroup, Bank of America, American Express, Capital One and Washington Mutual.

Fundraisers included American Cancer Society, AARP, American Heart Association and UNICEF (among others).

What's also interesting is to think about the types of companies NOT on the list. There was not one high-tech firm (not even Dell). No packaged goods companies (unless Gevalia Kaffe counts). And, surprisingly only one telecom firm made the list (Sprint/Nextel).

It's funny, but I remember when I was a young sales rep (selling consumer data and processing services to large mailers). I used to use lists like this as my prospecting goldmine. If I could sell my stuff to these high-volume mailers, I'd be sure of a good year; I'd make lots of commission.

Now, I look at these types of lists with a different perspective. I wonder how (or if) they are using other channels. How are they managing channel conflict? Are they thinking about social marketing? How are they using interactive? How many trees are they killing with all this mail? Why are their mailing volumes so high--could they cut out some of the volume through more sophisticated targeting and segmentation?

So, today's question--is it a good thing or a bad thing to appear on this list of high-volume direct mailers?

P.S. If you have a hard time finding the download for the list on the link I supplied, just let me know and I'll e-mail you the PDF.

Social Media: A Highly Effective Channel for Non-Profits

Nonprofit organizations are very savvy and creative about how they spend their marketing dollars. Simply put, they have to be due to the nature of their business. In a recent DM News article, it is reported that these organizations are relying on the internet as another direct marketing channel to get the word out, and embracing social media is an excellent way to do this. When you think about it, nonprofits have a unique ability to touch people's hearts and build a community. And that's what Social Marketing is all about.

As the article reports, YouTube has jumped into the nonprofit space by offering them a free YouTube Channel to spread the word about the good work that they do. “This really validates how critical the Internet has become for all nonprofits,” said Fred Waugh, VP of marketing for nonprofit software provider Convio Inc, Austin, TX."

Waugh adds that "in the past year, his company’s clients have grown their e-mail files by 50 percent. In addition, these organizations are increasingly interested in leveraging Web sites like YouTube and FaceBook to reach out to new constituents, according to Waugh." What an excellent way to reach folks who may want to become involved in your organization -- either by volunteering or donating dollars.

The article explains, "The new program from YouTube, San Bruno, CA, will enable nonprofits to upload footage of their work, public service announcements, calls to action and more on a premium channel that will have enhanced branding features and increased upload capacity. The channel can serve as the nonprofit’s hub for their uploaded videos while also providing a way for people to connect with the organization."

Way to go YouTube! Not only does this channel give nonprofits an opportunity to demonstrate what they do (a picture's worth a thousand words, right?), but it really helps to establish the organization's brand and philosophy to a larger audience. According to Barbara Shimaitis, senior vice president of Interactive Services at The Advertising Council, New York,“It's a great distribution channel for non-profits, and at no cost. Users can have alerts sent to them for new PSAs. If you, the user, are passionate about an issue, you can embed the video on your persona pages. Marketers and brands are interacting more and more with the user, this is another example.”

In addition, visitors to the YouTube channel who wish to make donations to the organization can do so via Google Checkout for Non-Profits. "Concurrent with last week’s announcement, Google Inc., Mountain View, CA, which owns YouTube, also announced that it has expanded its online payment method Google Checkout to include nonprofits."

From our perspective, nonprofits should jump on YouTube to extend their reach. Using Social Marketing as yet another tool in their direct marketing toolbox can not only reach those who may not be as likely to respond to traditional DM methods, but it can also illustrate -- via video -- the important work in which the nonprofit organization is engaged. Finally, it builds an organization's community and really helps to establish -- or re-establish -- the brand.

Power to the People

I am so intrigued when I see true out-of-the-box thinking. When a company (or in this case a band) turns conventional sales and marketing on its ear and decides to go their own way.

This time it comes from Radiohead. From Yahoo News: Pay what you want for new Radiohead.

"On Monday, Radiohead sent shockwaves through the music biz with the announcement that its new album, "In Rainbows," will be released for download from www.radiohead.com on Oct. 10. The price? Whatever you choose. You elect how much to pay, be it one cent, $15 or $100. (A special edition box set with a vinyl version and other items is also available for approximately $81.)"

It's a great concept. And, talk about "Direct" Marketing! Radiohead is thinking of their fans. But, they're also thinking of themselves. Apparently, conventional music sales only garner musicians something like 10%. By going direct, and putting the power to the music buyers, they're almost certain to profit by more than 10%. And, then there's the side benefit of building fan relationships, and collecting customer data for future projects.

And, guess what? It appears that the concept is right on target. This Wired blog post quotes band spokesperson Murray Chalmers: "Although the idea is that you can decide what you want to pay, most people are deciding on a normal retail price with very few trying to buy it for a penny."

I think this is an idea whose time has come. I tip my hat to Radiohead and vow to do my best today to rethink the conventional ways that I do business.

Direct Marketing and the Economy

This is the time of the year when we all start looking at our revenue performance and begin to set our strategy for 2008. Over the past several months, we've reported some wonderful results for the direct marketing industry on this blog. We've reported how data sales are increasing, direct mail numbers are up, higher results from using e-mail marketing, and so forth. While we've been talking about the strength of our industry, the US Economy has been going through some definite shifts. With the flailing about of the mortgage market and the tightening of credit, some economic analysts consider this the start of a recession, while others state that we are firmly ensconced in one already. Whatever you believe to be the actual case, this bears some looking into as we plan for next year . . . or the next few years.

In the midst of all of this, DM News has reported that Silver Lake and Value Act's acquisition bid of data compiler and database giant, Acxiom, has fallen through. According to Bruce Biegel of Winterberry Group, “This deal was announced back in May, with Silver Lake jumping in with ValueAct Capital, but the credit markets have changed since then. Consider this pricing issue with the fact that Acxiom has a substandard quarter and the risk of a second one doesn’t create a comfort level for investors.”

The article goes on to state that Biegel does remains confident in the potential for growth in the data sector. However, he points out what we already know (at least those of us who have clients within the financial services sector) -- "that the bad credit market is not helpful to Acxiom, many of whose clients are credit card companies and financial services firms suffering from the current economic slump and subprime issues. In addition, he acknowledged challenges to the postal increase earlier this year and the expected increase next year."

However, as you'd expect, Acxiom's retiring CEO, Charles Morgan, remains confident about the strength of his company, and promises to work harder than ever to show value to Acxiom's various stakeholders.

What all of this proves to us is that during the peaks and valleys of our economy, the playing field is strangely leveled. It doesn't matter what size firm you are . . . it seems that everyone is impacted in some way or another.

The other takeaway from this experience is that though you are working hard in the present to assist your clients, you must do so with an eye towards the future. If you can effectively diversify your client base or product offering, you simply have more staying power as the economic factors shift.

Obviously, Acxiom is going to be A-OK -- and then some. They are a giant in the industry and it sounds like they are already planning their next critical steps. As Morgan puts it, “Acxiom has been an industry leader for over three decades. We will continue to execute on our long-term strategy to remain the market leader in database marketing, services and data products.” And, the beauty of the economy is that it tends to be cyclical. Those of us who have been around for awhile remember when this sort of economic pullback happened in the 90s . . . and the 80s . . . and so on.

So, as 2007 enters its final quarter, we advise you to start planning exciting new things for 2008. One of the best places to start your planning is to take a hard look at your overall marketing strategy. We've written some Holiday Tips that may help to spark some good ideas as you begin this planning process. They were written at the end of last year but now is the time to take them out, dust them off, and re-look at them to get some ideas flowing for your 2008 Marketing Strategy. After all, the Annual DMA Conference is right around the corner. By putting these plans into place now, you'll be armed with some great ideas so that you can do some solid research at the conference and come home with your 2008 strategy well on it's way to being completed.

You'll be so far ahead of the game that you'll look like a hero to your CMO. It's like having all of your Holiday Shopping done by the day after Thanksgiving! That's always a great feeling!

Consider randomized, real-time testing

I think all marketers have had a similar experience: You're meeting with a client/superior/colleague discussing an upcoming campaign. Your client is absolutely sure that one offer/creative will outperform another. You, on the other hand, just KNOW that the alternative offer/creative is the winning package. You argue about the benefits of one over the other. Voices are raised; you're passionate; YOUR idea is the best. What happens at the end? Typically, the debater with the most clout (i.e.: the client or the boss) wins. Their idea ends up getting implemented...

What's the better resolution to this dilemma (and the answer that direct marketers are typically first to suggest)? It's simple--test both concepts and let results decide the winning idea. Unfortunately, however, rigorous testing just isn't done often enough.

This article from Advertising Age, Randomized Testing Is Fast and Cheap, but Few Seem Interested made me think about testing in a new way.

It's all about real-time testing and the author cites an insightful case study of how an author let clicks from a Google ad determine the title of his soon-to-be-published book. The author was certain that he had the right title. His editor was certain that another title would be more interesting. Well, the editor was right, based on responses to the Google ad.

The article cites other testing examples and also discusses how the Internet has enabled real-time testing.

It may be time to evaluate your testing strategy. RRW has written a white paper on this subject. If you'd like a copy of that white paper, just comment on this blog and we'll send it your way. We've also discussed testing on this blog a couple of months ago. Testing is always a good idea.

Happy Monday!