Feb 19, 2008
Improve the Channel
By George Linkletter
Sometimes the future just arrives at your doorstep. Such was the case a few days ago when I received – in the course of just an hour or so – several e-mail messages that illuminate the future of customer messaging.
The first was a plea by a vendor for assistance in lobbying state legislators. The purpose was to counteract a nascent ‘Do Not Mail’ initiative that is aimed at eliminating unwanted junk mail.
The suggested lobbying message is reasonable. It centers on these facts:
1) direct mail is an invaluable tool used by countless businesses both large and small to acquire new customers;
2) direct mail has a far less onerous carbon-footprint, i.e., negative impact on the environment, than other human activities;
3) the industry already offers an effective and voluntary opt-out procedure for consumers who do not want to receive direct mail offers; and
4) a more widespread ‘Do Not Mail’ registry was unneeded and harmful to business interests.
The second e-mail announced a penny increase in First-Class U.S. Postage costs, along with other cost adjustments, effective in May. This increase helps the USPS keep pace with the rise in inflation and will likely be followed by similar modest increases each year as the USPS adjusts the amount of revenue it needs on a more frequent basis.
The third e-mail, from Wal-Mart, listed dozens of products for sale in categories in which I had already pre-selected an interest. It was just one of many e-mail newsletters that I and tens of thousands of other consumers receive from airlines, hotels, stores, pharmacies and other retail organizations. These businesses are busily and successfully converting previously anonymous and routine transactions into ‘frequent buyer’ programs to strengthen their hold on customers.
Taken together, these e-mails show that:
1) stand-alone, broadcast-style direct mail messaging is likely trending toward a long-term, downward spiral unless it becomes more highly-targeted to the specific needs of recipients;
2) TransPromo messaging, i.e., the merging of marketing and transaction- or account-based messaging, is increasingly more valuable as postage costs continue to escalate; and
3) electronic delivery options such as e-mail, SMS, inbound telemarketing and Web postings are increasingly important customer messaging channels.
Marketing managers face two key challenges today: how to acquire new customers and how to retain existing ones. Unfortunately, in their zeal to acquire new customers, marketers often burn out perfectly good communications channels. Outbound telemarketing calls, especially at dinnertime, are a perfect example. (No one misses those annoying calls!) Excessive TV commercials, now widely Tivo-ed, are another. Political ‘Robo-calls’ are likely next, possibly followed by a ban on direct mail because too much of it is still too poorly targeted.
That’s a shame. Studies show that consumers, if given a choice, prefer receiving marketing messages via direct mail rather than the other channels, and for several good reasons. Direct mail arrives at a set time. It is not intrusive. It is easily handled and reviewed. It usually tells the full story, rather than just a tease. It enables recipients to take action, either immediately or at a later time. And it is easily avoided or discarded if it is not pertinent. Considered another way, it provides consumers with control, an invaluable attribute in a world where consumers are assaulted daily by thousands of random, intrusive and unwanted marketing messages.
For marketers, direct mail is also cheap. It must be if response rates of one-half of a percent or less are viewed as an acceptable return on investment -- even considering the potential lifetime value of a new customer. Despite the recent increases in paper and postage costs, and the likely future increases as well, direct mail can remain an effective and cost-efficient way to connect with new customers.
But making it more difficult for consumers to stop receiving unwanted direct mail – by opposing the ‘Do Not Mail’ initiatives at the state level – is not the best course of action.
It is far more effective for marketers to more fully utilize customer data and the analytics-based software and digital color hardware technologies that are available today. These technologies enable far better targeting and tailoring, and dramatically enhance the appearance and appeal of messages. Such investments will strengthen individual messages – and boost their response – and bolster the channel as well, making both the individual messages and the entire channel more valuable to recipients and senders alike.
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Comments? Contact georgelinkletter@charter.net.