A Direct Marketing Agency - Helping Brands Acquire and Retain Customers

Pick up any marketing trade pub these days and you'll find stories of "marketers cut catalogs" or "XYZ trims staff in cost-cutting measure." Aside from the impact it has on our brethren in the business, think about the impact these measures have on the brand connections made with customers. Every channel or opportunity that falls by the budgetary wayside could potentially be another missed sale. By using customer databases more effectively, perhaps the LTV of customers could be increased thus eliminating the need to cut channels in order to remain profitable.

A recent article in the American Marketing Association newsletter points to an interesting statistic from the CMO Council:

A two-percent increase in customer retention has the same effect on profits as cutting costs by 10 percent.

Mining a database for any and all opportunities to cross-sell, up-sell or even reactivate inactive customers could prove more profitable than cost-cutting measures that reduce brand-building and sales opportunities. If the typical marketer loses 10% or more of their customers through churn and burn, would it make sense that if that rate fell, marketers could see a rise in their ROI?

Something to think about before wielding the budgetary scissors.

According to a recently published report, adults aged 18-65 are now spending an average of 12.5 hours a day with six different forms of electronic media. Television and online are running neck-and-neck with a combined 7.3 hours a day of use. Add in the e-mail/IM component to the online figure and adults are spending an average of 5.3 hours a day with their Internet connections.

And of all of those 12.5 hours, many of them are spent simultaneously engaged in multiple mediums. Case in point, 73% percent of those surveyed said they have a computer and television in the same room.

If there was ever any doubt that customers have more control over the channels in which they are actively engaged in, facts like this petty much seal the deal. Marketers must been keenly aware of when and in what channel they are targeting customers or risk dwindling ROIs.

You have to love this latest idea. Men’s apparel designer Van Heusen bought ad space for an in-home campaign featuring eco-friendly dry cleaner hangers. These 100% recyclable hangers feature a full-color ad complete with the company’s Web site and are distributed via a network of more than 35,000 dry cleaners nationwide.

Aside from the fact that this is a great way to position Van Heusen as an environmentally conscious company – one of the hottest trends in marketing today – consider the relevancy of the marketing. How many times have you gotten ready to go to work in the morning, reached for your outfit du jour and said to yourself, “I really need some new shirts.” Right there at the start of the buying process is a message that hits you right between the eyes.

Targeting customers at their most opportune moments…what a concept. Whether it’s a laundry stain-removal product sponsoring a youth soccer league (where you KNOW grass stains are a hot topic amongst the soccer moms) or bar coasters that provide patrons with a Web address where they can purchase the cool new glasses they are drinking from, relevancy marketing is great way to make more solid and profitable connections with customers.

With the height of the holiday “return” season just around the corner, Newgistics, a returns solutions provider based in Austin, Texas, recently released their consumer returns survey that should get the attention of marketers.

The survey found that 90% of adults who have shopped online or through catalogs cite a convenient returns policy as somewhat important, important or very important in encouraging them to shop with a new or unknown online or catalog retailer. In essence, a return policy becomes a front-end, acquisition consideration as opposed to back-end retention one. The survey also went on to reveal that 93% percent said a convenient return policy and process is somewhat important, important or very important when deciding where to purchase a gift for someone else.

The lesson? If 9 out of 10 customers weigh marketers’ return policies this highly, we need to make the information as clear, simple and accessible as possible in our one-to-one marketing.

Not surprisingly, easy returns also play a role in securing customer loyalty, with 89 percent of adults who have shopped online or through catalogs reporting that they are somewhat or very likely to shop with a direct retailer again if the return process is convenient.

Okay, so an easy and convenient return policy is a must, but what steps are marketers taking to capitalize on the one-to-one interaction with the customer? It only takes a little extra effort to build a better brand relationship

• Apologize –Remember, somehow the customer was not completely satisfied. Perhaps it was because the portrayal of the product wasn’t 100% accurate or it didn’t live up to expectations the advertising set forth. That is ultimately our fault so we should be apologetic.
• Ask the customer what you could have done better – Maybe the customer has suggestions that you could learn from (i.e., a sizing chart to better determine fit, enlarged or more accurate color options, better product descriptions, etc.).
• Be flexible – Relax your return policy to be accommodating. If it’s day 31 of a 30-day return time window, let it slide. Flexibility creates an inherent positive image toward your brand.
• Give them a reason to give you another shot – A discount off or free shipping on their next order.

Depending on whose research you believe 35-55% of all internet searches are local. The big question is, do these searches translate into more face-to-face contacts.

Some see online couponing as a key driver to generate sales – especially at a local level. It’s nothing new, after all Coupons.com and CouponSurfer have been around for a while, but they focus largely on consumer packaged goods.

Enter the newly launched Zixxo, a company specializing in Internet couponing for small to-mid-sized local business with some distinct advantages. Merchants can design the coupons themselves online, and Zixxo will syndicate them to Web sites in its ad network and to subscribers within those local markets via RSS feeds. Distribution costs are kept low enough for small businesses to affording couponing.

The niche may be there, only time will tell. But savvy local businesses can perform similar one-to-one marketing on their own by simply giving visitors to their site added incentive to visit the store personally. “Print out this page and bring it in to our store and receive $5 off any order of $25 or more.” A simple line of text or graphic treatment added to your site and you’ve begun to drive sales and build a brand relationship with local customers.

According to an article in DM News, a recent analysis of site searches found that the top 4 percent of all unique search-term queries on a Web site make up about 50 percent of the total searches on that site.

WebSideStory, makers of a site search solution program and key player in the study, found that one- and two-word queries make up 83 percent of all site searches. Among e-commerce sites, this measure rose to 91 percent.

Give them an easy, intuitive way to find your information and you’ve fulfilled their need. Looking for more reasons why you should hone and refine your search terms? Here are some other findings from the study:

1. Visitors who use the site search application on a site are nearly three times more likely to convert than the average visitor.

This statistic alone should alert markets to the importance of having robust site search capabilities. To be able to triple a customer’s propensity to convert is a no brainer.

2. Nearly 12 percent of all site searches led to zero results. Among e-commerce sites, this figure was 8.5 percent.

We know from our own research at Ovation that with every search returning zero results, marketers say “goodbye” to prospective customers almost immediately. All that work getting them into the door and then the “helpful sales staff” disappoints.

A recent study commissioned by marketing services firm Valassis says consumers have “an emotional connection and are engaged with preprinted (free standing) inserts, including 59 percent of people surveyed saying they ‘love reading inserts’.”

You can take comments like that with a grain of salt because of course the bulk of the media-buying Valassis’ business is FSIs. But it does bring up an interesting note. The survey results show that 73 percent of consumers, age 18 and older, believe inserts are not intrusive like other advertising media because they can be viewed when they choose.

This could indicate that consumers may be receptive to inserts – much like they are to online media - because they choose when and where to engage with them.

In addition, 87 percent of respondents said they would actually visit a store based on learning about it in an insert and 70 percent said they would purchase the item advertised in the insert, as well as additional items.

The report didn’t make any links between visiting an online site or online purchases driven by FSI’s. That would make for an interesting study as well.

Being in the business of one-to-one marketing, we're often asked by those unfamiliar with targeted direct marketing why we do what we do. One of the standard answers is that because one-to-one marketing is where the future lies (in our opinion). Now there's more research to back up our claims.

A recent study by the Winterberry Group (backed by secondary research from such notables as the Direct Marketing Association, eMarketer, Forrester Research, Jupiter Research and Universal McCann) reported a shift from above-the-line (ATL) marketing to below-the-line (BTL) marketing. ATL marketing channels are defined as branding efforts and mass media advertising including television, radio, print advertising, outdoor advertising and yellow pages. It defines BTL marketing channels as targeted direct marketing efforts such as database marketing, direct mail, interactive marketing, insert media and promotional marketing.

The data claims that BTL channels are projected to average 7.8 percent annual growth between 2003 and 2007 while ATL advertising is expected to grow an average of 5.5 percent yearly. Annual growth for the whole industry in that time is forecast at 6.9 percent - meaning BTL is gaining steam while ATL spending just isn't keeping up.

The report also listed seven trends facilitating the shift to BTL marketing. Sounds a lot like our reasons for bounding into work every day!

1. Changing consumer demographics decrease the influence of traditional mass media (i.e., "one-size-fits-all") marketing messages.

2. Growing consumer sophistication heightens the demand for channel-agnostic communications.

3. Widespread marketing "clutter" diminishes the impact of commercial messages that don't address specific and individually relevant consumer needs.

4. Enhanced information availability empowers both marketers and consumers with insight that allows for precise customer targeting and intelligent purchase decisions.

5. Heightened client pressure to deliver quantifiable value forces marketing services providers, especially agencies, to re-evaluate services platforms.

6. Growing effectiveness of multi-channel campaigns (those that cross multiple media) reinforce demand for tactics that establish one-to-one relationships between marketers and consumers.

7. Rapid technological advances allow for consumer/marketer interactions that are frequent, easier and more relevant than previously possible.

Earlier this month, my fellow associate Jack Felsheim wrote about making sure local businesses don't overlook the power of the Internet to deliver specific local content.

Here's a new twist.

The newly evolving local search and mapping services from Amazon.com, Microsoft and Google, where aerial photographic images are typically rendered as search results, are making it easier than ever to scout out everything from a local restaurant to a new hairdresser.

Never before have searchable databases of detailed pictures covering wide swaths of urban areas been readily available like this to the public.

Expect the continued development of such tools because of the potential for online advertising from local businesses who may not want to buy national online ads.

Microsoft, which late last year began offering detailed images of metropolitan areas taken from airplanes, recently said that it would team with Verizon Communications to distribute local business advertisements from Verizon's superpages.com on Microsoft's local search pages.

And Amazon's A9 subsidiary, who has already been offering street-level images taken from vans, says the main goal of its site is to help people find local businesses. The company's site currently lists images from two dozen U.S. cities. The aim of A9's street-level is to give people what A9 Vice President Barnaby Dorfman calls "a very human experience," similar to what you would see walking or driving down a street.

Could store front signage soon be considered Internet advertising? Time will tell.

During a recent promotion and sweepstakes, Orville Redenbacher's microwave popcorn sponsored a mini-site on ABC.com in conjunction with "Lost" (the popular ABC television hit) on which consumers could enter an on-package code for deals, exclusive content, and a chance to win a trip to Hawaii.

Point-of-purchase messages, an on-pack promotion, and TV commercials drove consumers to the mini-site. In addition to entering the contest to win the trip to Hawaii participants could download a $10 rebate offer for a "Lost" DVD.

But it was the additional content on the site that gave fans of the show reason to keep returning and further the impact of the Orville Redenbacher brand. Visitors could view exclusive video clips; download "Lost" desktop images, photos, and buddy icons; learn about the upcoming season of the show; and opt in for e-mail from Orville Redenbacher.

"Users were actively engaged on the site," said Kevin Doohan, ConAgra Foods' (Orville Redenbacher's parent company) director of web marketing explained. "Without the online component, the brand would not have received any of these benefits. Leveraging online was a great way to extend Orville's engagement beyond the 30-second spot."

By adding a web component into their marketing plan, Orville Redenbacher received three times the response it had expected.

Once again, we see how customer-controlled media can be harnessed with the creative use of multi-channel marketing.

It’s an old advertising axiom, but one that should be questioned according to a recent survey.

MediaAnalyzer Inc., recently conducted an online questionnaire and Web-based visual test of what people were looking at, and more importantly thinking, when they view advertising with sexual images.

The findings support that men’s’ interest in sexual images increased their intent to make a purchase, but had the opposite effect on women.

More than 40% of women indicated that sexual images in ads promoted a deterioration of moral and social values – while posing a threat to children.

It could be the sample they surveyed, but time and time again we’ve witnessed how “maternal” attitudes affect female consumers. The lesson? Maybe the ad with the black and white photo of the stud with six-pack abs and a view of the little further south region might not cut it with your female audience.

Know thy target.

You’ve just been handed your paycheck by your boss. As he thanks you for the contributions you make to the company, you realize, “man, this guy’s breath stinks to high heaven.” But how many of us would actually tell him?

Seems like a lot of advertisers are having the same problem with retail giant Wal-Mart.

According to a recent article in Advertising Age, there are rumblings from marketers who have purchased time on WMTV – Wal-Mart’s in-store TV advertising system that hits retail visitors with ad messages while shopping – that WMTV just isn’t selling their products. They cite poorly placed television monitors (that sometimes are not even turned on) and insufficient testing as contributing factors to the “station’s” shortcomings. But, and here’s the big “but,” no one wants to publicly criticize the retail-giant for fear of angering Wal-Mart, a company that controls so much of their business.

That stinks worse than that bad breath.

Speaking on anonymity, a food-company executive told Advertising Age that they “look at advertising on WMTV as more of a relationship build with Wal-Mart as opposed to a wise media purchase.”

If that’s the case, I’d make sure that those media dollars came out of the public (read: vendor) relations budget and not the marketing budgets. Are people buying as a direct result of what you’re doing? Ask that question every time.

A recent article in Chief Marketer brings up some interesting points about the future of mobile marketing.

Heralded as the next great marketing medium, mobile marketing, or reaching customers via their wireless devices, presents some unique challenges that make you wonder if the marketing community has really done its research homework.

Sure, predictions have the world’s wireless-user population reaching more than two billion by the end of the year. But what are these users doing with them? The bulk of users are using them for simple voice calls…nothing more. Ask someone above the age of 30 to show you how to text message or content download and my guess is more than half wouldn’t have a clue. Ask 50 year-olds and that number of puzzled looks increases. Simply put, the universe of two billion is actually a lot smaller for delivering marketing content.

And remember, we’re talking primarily about phones – a highly-personal device. Invade someone’s phone and you’re invading their space. People got fed up enough with being bothered at dinner time with credit card offers from telemarketers that the national No Call List was developed. Just how are people going to respond to a text messages that causes them to do the “vibrate dance” during a company meeting?

No one doubts that the opportunity is there, but for mobile marketing to reach is fullest potential, there needs to be a shift in attitudes and behaviors and a whole lot of marketing research.

Of course you don’t. But unfortunately that’s what a lot of commercial web sites are doing in an effort to track their consumers.

In a recent article in eMarketer, a survey conducted by Taylor Nelson Sofres (TNS) for the web hosting company, Hostway, finds that Internet users could actually be voicing their displeasure for annoying sites with their wallets. Seventy percent of the 2,500 consumers polled said that they are unlikely to make purchases when web sites have features that annoy them. Topping the list of annoyances are pop-up ads, registration log-on pages to unblock access to online content or moving text.

And those 70% of consumers who said they would be less likely to purchase from annoying sites also said the negativity trickles down to their perception of the brand (ouch!) and may affect their willingness to buy from a company’s offline store.

Not a good sign for multi-channel marketers…unless they nix those annoying pop-ups.

Maybe the days of “if you’re gonna have a hit, you gotta make it fit” are fading. Or maybe the old direct marketing axiom of the “the more you tell, the more you sell” is back!

Recently, an E-marketing services company, BlueStreak of Providence, RI, studied what they termed “e-mail marketing leaders” - marketers who have open rates surpassing 45 percent and click-through rates of almost three times the industry average - with "average" e-mail marketers.

They found that leaders e-mail subject lines are slightly longer than the average e-mail marketers to subject lines, which is 38.3 characters.

The open-rate and click-through champions are also more descriptive in message content, including 60 words more than the average in their messages, and providing 27 links per message to encourage calls to action, compared with the average of 19.

Industry figures show that about half of all consumers shop by catalogs and online. Many experts predict that 2005 might be the year when U.S. Internet sales surpass those of mail order catalogs. However, good old-fashioned print catalogs will still generate many of those online revenues and should be an important part of the multichannel mix.

A recent study by the U.S. Postal Service points out that consumers who receive catalogs are more likely to become multibuyers online, accounting for 15% more transactions. And these same consumers will spend on average 16% more than customers who did not receive catalogs, according to the study.

The USPS also reported that consumers who receive catalogs in the mail are more than twice as likely to make an online purchase, compared to consumers who don't receive catalogs, regardless of household income, education or geography.

And existing catalog customers are increasingly going online to place orders. Forty-three percent of catalog orders are processed by telephone and 33% are completed online, according the 2004 Abacus Annual Catalog Industry Trend Report.

The dynamics between online and catalog shopping are in a rapid state of transition. L.L. Bean's customers shop more via the Web than traditional print catalogs, and in Britain more consumers overall buy online than by mail.

Looks like the trend is continuing over on this side of the pond.

Some 15 years ago, triathlons were seen as sadistic tests of stamina for a handful of athletic zealots who seemingly enjoyed the pain that came with pushing one's body to the extreme.

Now, as triathlons and extreme sports are becoming more popular, advertisers are taking notice. Take, for example, Ford and The Ironman Triathlon. The grueling race circuit has signed up the automaker as its first title sponsor in a decade.

The recently announced deal calls for all eight U.S. Ironman events to be renamed "Ford Ironman Triathlon," including the world championship in Hawaii, as well as full Ironman and Half Ironman races in Florida, New York, Wisconsin and Idaho. As part of the deal, Ford is boosting the prize purse for the race in Hawaii — the granddaddy of triathlons — by $100,000 to a total of $580,000.

This year, 150,000 to 200,000 Americans will attempt a multisport event, according to the USA Triathlon, the sport's governing body. The percentage of female triathletes has grown to 29% from 11% in the early 1990s. NBC has a multiyear TV deal to broadcast Ironman, which now stages 28 events worldwide. The sport's popularity took a quantum leap when triathlons were included on an Olympic program for the first time in 2000.

The lesson? Keep your eyes open for possibilities and evolution. What may be popular to only a few today, could be the emerging trend down the road — no matter how long that road is.

A recent report in the April 27 issue of Advertising Age says that radio groups/networks and advertisers have begun to embrace the concept of podcasting through a series of new and varying strategies ranging from subscription to ad-supported. Podcasting allows listeners to turn audio content into MP3 files, which are easily downloadable on iPods or other MP3 players.

Public Radio was the first radio group to enter the podcasting arena, offering for download a handful of its popular shows. Infinity Broadcasting recently announced plans to offer podcasts, and Clear Channel Radio has promised it will begin soon podcasting popular on-air sketches and personalities. Premiere Radio Networks, a subsidiary of Clear Channel, has already begun podcasting several of its popular syndicated personalities, including Glenn Beck and Phil Hendrie.

In terms of marketers, now the big boys are getting into the game. Blue chippers General Motors Corp. and Heineken are producing podcasts while Ford Motor Co.'s Volvo and Time Warner are sponsoring podcasts.

The reason? Many experts point to tapping into the power of the "influentials"…the early adopters.

Marketers want to stay current with consumers who stray from traditional media, the so-called early adopters who influence others. In a recent white paper by Zenith Media’s radio and strategic resources group, they claim that, “Advertisers who embrace the new technology and communicate to consumers in meaningful ways through podcasts may be viewed as innovators, forward thinking, cutting edge and the envy of the neighborhood,” the paper states.

But is podcasting just another trend soon to be yesterday's news? Perhaps it's too early to tell, but as noted by Zenith Media, marketers don't have a heckuva lot to lose.

“At the anticipated low cost of entry, podcasting provides advertisers an opportunity to enhance radio’s existing 'one-on-one' relationship with its target audience. We believe the upside potential could be significant, while the downside is pocket change.”

Well, sort of.

In a move that wields the power of the fast-forward button on your digital video recorder, Loews Cineplex Entertainment, with 200 theaters nationwide, recently announced that it will begin advertising movie showtimes with the caveat that most movies start 10 to 15 minutes later - effectively allowing moviegoers to skip the advertisements, coming attractions and pleas to keep the noise down.

Too bad. Now a whole generation could miss out on back-flipping hotdogs, dancing popcorn boxes and sometimes, some really cool ads on the big screen.

The indication of delayed start times will start appearing in newspaper and Internet listings for the theater chain beginning in June, said John McCauley, Loews' senior vice president for marketing. He said the change was a response to complaints from moviegoers, he said.

Another indicator of how much consumers value their time and how, as marketers, we've got to be very selective in the methods we use to reach them - and when we reach them.

Not knowing or implementing this into your business can have serious consequences.

A study reported in USA Today cites that the profitability and customer satisfaction rankings for the so-called "value airlines" are higher than the traditional full-service airlines.

Why?

Boil it down to customer expectations and what's important to them.

For years, the major airlines such as Delta, American, Northwest and others spent millions of dollars promoting and lots of effort providing high levels of personal service, fine meals, in-flight wines, attractive frequent-flier programs and posh airport VIP clubs.

But now, that's not what customers value. What's important to them are low prices.

That's where low-cost carriers are winning. They're not over-promising, they're simply giving the customers what they are asking for and the consumers are voting with their pocketbooks and wallets. These airlines deliver on the fact that they will get you there and get you there cheap.

Makes sense right? Customers have a need (to travel) and have an expectation (to spend as little money as possible). Shouldn't the marketing and business model address those needs and expectations? Pretty simple.

$611 billion. That's what a report in the TDWI Report Series: Data Quality and the Bottom Line, says American businesses lose every year due to poor customer address data. Imagine if your organization was responsible for even one, one-millionth of that figure….that's an astounding loss of over $600,000 per year for your company!

Everything from depressed direct marketing ROI to wasted printing and postage costs adds up unless you examine ways to stem the flow of invalid customer addresses. Things like looking at when to use front-end and back-end address correction and validation. Why traditional back-end "batch" address cleansing may not be enough and why front-end analysis may prove more cost effective in the long run.

http://www.tdwi.org/Publications/display.aspx?id=6626&t=y

In a recent study presented by comScore Networks, thirty-four percent of respondents reported that they frequently shop at web sites first, before buying in a store.

Once consumers have initiated a shopping trip online, they unanimously expect that retailers will conveniently support the continuation of the purchase process throughout other channels. In fact, 97 percent of consumers expect a seamless shopping experience across online and offline channels.

An increasingly visible example of channel integration, offered by leading retailers including Best Buy, Circuit City, Sears and Lowe’s, is the ability to purchase a product through a retailer’s online storefront and pick up that product in an offline store location. While relatively few online merchants currently offer this option, 36 percent of online shoppers report they have used in-store pick-up.