Editors Letter Direct marketing:
the tool for these challenging times.By Pat Atkinson
As editor, I get a lot of mail. In fact, I’m bombarded with information about myriad things —some of which are relevant—and most of which are interesting.
The preponderance of “irrelevant” material I receive comes from American PR agencies that have failed to notice that Canada has different postal and banking systems, unique currency, socialized medical care, an independent real estate outlook, and a separate economic forecast.
When I contact PR agents to inquire whether they have relevant data available regarding the subject matter they propose I present to my Canadian audience, these people tend to be gobsmacked that we here in the “Great White North” are not content to just sit on the sidelines and read American marketing data about American consumers.
That said, it is daily becoming clearer that economically at least, we are more blood relatives to the US than mere next door neighbours. The worldwide credit crunch lurches from one bad news milestone to the next. With each shock, investors and consumers everywhere are assured that the worst is now over but it’s clear that no one really knows how much more grief is in store.
Recently, I have taken to analyzing the dramatic news releases I get from the “lower 50 states” in search of practical wisdom and have actually discovered some. For example, this fall’s Wall Street debacle and the collapse of certain American banks caused a surge in direct mail use within the US banking sector.
Chicago-based marketing research firm Mintel Comperemedia estimates that US banks collectively increased direct mail volume 42%, compared to the second quarter. They mailed approximately 53 million pieces during the third quarter, almost twice as much as the third quarter of 2007 when banks mailed 29 million pieces. The research company also noted the increase in mail volume came from large institutions and also smaller regional banks. In a statement, Mintel’s director of research Diana Sheehan noted, “We saw many banks increase their direct marketing in an effort to hold on to the clients they have.”
It seems that the entire world is having the same “Aha” moment simultaneously. How did things go so terribly wrong? Companies and institutions failed to focus on the customer and served their own immediate goals instead. Don Peppers, a founding partner of Peppers & Rogers Group and co-author of the bestselling series of 1:1 business books, describes this phenomenon as “short-termism: the mother of all problems.” I had the pleasure of meeting Don recently in Toronto at an event sponsored by SAS. In his new book Rules to Break & Laws to Follow (written with his business partner Martha Rogers) Peppers notes, “Customers will do business with you tomorrow only if they (and their friends) trust you today. Customer trust is a prerequisite for long-term business success.”
Given the world’s serious economic challenges, it is clear businesses are going to have to re-earn and keep customer trust. This will be no easy feat.
As part of The Conference Board of Canada’s “Chief Marketing Executives Top Challenges 2007 Survey,” approximately 77 per cent of Canadian chief marketing executives had already identified “customer acquisition and retention” as a significant challenge. Current events demonstrate the degree to which customers are important—and rapidly withdrawing.
As marketers, we know from experience that direct mail is an excellent tool for building and maintaining customer relationships. (US banks didn’t send e-mail to quell fears and bolster retention when customers’ investments and savings were vaporizing into the ether. Financial institutions sent tangible reassurance by direct mail.) To acquire and keep customers in the current climate, companies will need a business philosophy that is customer centric, a longer term view of the customer relationship (lifetime), a robust Customer Relationship Management system based on solid data, and the ability to incorporate personalization and relevance (ideally using VDI and VDP) within customer communications. Careful list management and response measurement will ensure that ROI stays on track. Understandably, this may be more of a “Wish List” than a reality for many companies at the moment. Nevertheless, it is important to understand what to aim for. Trust me, direct response marketing will prove itself an indispensable tool for the job at hand.