How does business and environmental sustainability relate to direct marketing? 

That was the question at last week’s New England Mail Order Association fall conference.  The topic was "growing green – business and environmental sustainability in today’s market."  Ideally, environmental sustainability and profitability go hand in hand. 

Efficient lighting is a great example of a sustainable and profitable "no-brainer."

King Arthur Flour, Timberland, and other firms are saving energy and increasing profits by swapping out the lights in their warehouses and stores.  Some minimize lighting requirements by maximizing natural lighting.  Switching to new lights also has the dual effect of reducing cooling costs.  All the heat generated from lights is wasted energy, so improving the efficiency of lights has the by-product of reduces cooling requirements.  Some have gone as far as to build LEED certified buildings, which is among the highest standards for efficient and green buildings.  Even with the up front capital costs of these programs, the payback is so quick and long lasting that it’s a relatively easy decision to implement.

Unfortunately, many sustainability decisions are much more difficult because they are at odds with profitability.  Studies have shown that consumers like doing business with companies that are "green" but this is not high in the decision-making process and they are not willing to pay more for "green" products.

A great example of this dilemma came from Brian McGovern at Timberland who described his problem of sourcing rubber for their boots: (1) Timberland is very committed to environmental sustainability (2) traditional rubber for boots is not good for the environment (3) eco-friendly rubber generally does not perform as well as traditional rubber (4) eco-friendly rubber costs more than traditional rubber. 

Consumers are not willing to pay more for an inferior product to save the environment. So, Timberland is investing research into increasing the quality and reducing the cost of eco-friendly rubber.  In the meantime, what should Timberland do?  That’s the challenge with many sustainability decisions.

But the "elephant in the room" was junk mail.

With so many catalogers, printers, and paper suppliers at the conference, I’m not surprised this topic was treated lightly. If we had a group of environmental activists in the room, I am sure their number one issue would be the amount of paper being wasted by the industry.

How do catalogers like junk mail?  They hate it, too.  By definition, junk mail is mail that you don’t want to get.  It’s recycled before being read.  That’s bad for the environment and bad for business because those catalogs are not cheap.

Some catalogers are are addressing this problem by reducing paper resource requirements and by using eco-friendly paper.  Reducing paper weight saves paper and delivery costs, but has a negative impact on sales because the recipient of the "flimsy" catalog assumes the products and services are also flimsy.  Eco-friendly paper alternatives cost more, such as FSC certified paper, and may also have a negative effect on sales — a double whammy of increasing costs and decreasing revenue.  Although helpful, optimizing paper is no "silver bullet" for business and environmental sustainability.

There’s a better way to reduce junk mail… only send catalogs to people who want to get them! 

That’s a lot easier said than done.  But it’s worth the effort because studies show that 40% of the success of every direct marketing campaign is contingent on the mailing list.

Some forward-thinking catalogers are enabling their current customers to choose how they receive mail: what catalogs they get and how often they get them.  It’s a challenge to implement, but the result is happier (more loyal?) customers and less waste. 

This helps to solve the problem with current customers, but what about prospective customers? Prospecting campaigns typically have a much lower response rate than house file mailings.  So, there’s a lot more paper wasted in prospecting.

Catalogers typically rent mailing lists for prospecting.  The old school approach is to "carpet bomb" the market by sending catalogs to anybody who remotely resembles a customer.  But with rising costs and waning tolerance of junk mail, that’s a certain recipe for failure.

The new school approach is to be smarter about who to mail.  List brokers can make a tremendous difference in choosing lists that will work well.  Also, there are new mailing list research tools that make finding targeted lists a lot easier.  You can make a huge difference in response by making the effort to get better lists.

Like efficient lighting, efficient mailing through better targeting is great for business and environmental sustainability.  But unlike efficient lighting, efficient mailing has no big up front costs and you don’t have to wait a long time for payback.  Now, that’s a real "no brainer."

Every year about this time I go into a depression.  No, I don’t have seasonal affective disorder.  The source of my discontent is placing orders for the DMA Annual Conference.  The prices for everything at the DMA show are through the roof.  It’s agonizing to hit the submit button on these orders knowing full well it’s a complete rip-off. And there’s not much I can do about it because, in most cases, there is no viable alternative.

How much of a rip-off is the DMA show? Are all conferences like this?

As a hobby, I run a fishing reports web site called Hooked-in — which, by the way, is AWESOME!!!  Anyway… in January, I rented a booth at the Yankee Sportsman’s Classic to show off the Hooked-in website. This experience gave me a good benchmark for comparison.  Below is a chart comparing a modest setup at the DMA show to the Yankee Sportman’s Classic ("YSC"):

$595 for 3 days of bad wifi access (256kbps – I did not know it came that slow)?!  I can get worldwide wifi access for a whole year for less than that ($227.40 through Boingo). A "real" internet connection from the DMA show goes for $1,195 — clearly the economics of bandwidth have not reached the exhibit hall.  $143.85 to borrow a soiled chair for 3 days?  It’s cheaper to buy a new one. Compare that to $1 at the YSC. I’m sitting here shaking my head as I read this chart. Ridiculous isn’t it? 

By the way, to be as fair as possible to the DMA, I used their "early-bird" rates in all cases.  Otherwise, the comparison would have been worse.

Finally, I should mention that I continue to support the DMA, its initiatives, and am proud to be a member. I hope this criticism helps to bring about change that strengthens the organization and its membership.

Am I a curmudgeon by calling this out?  I’ve been called a curmudgeon before. But it seems to me the DMA should make the show more affordable to vendors (and attendees).  What’s your perspective on the cost to exhibit at the DMA conference?

As we prepare for the Labor Day weekend, I am reminded of how hard people in the list business are working these days.  It’s getting harder every day to make a buck in the business.  Clients are demanding more service while order sizes are declining.

Don’t despair!  Every industry shift holds great opportunity for those who capitalize on the changes.

The current demand trend is away from clerical services and towards consultative services.  In the past, a list company could make a lot of money simply acting as an order taker.  You will lose your shirt with that attitude today.  Now you need to be a strategic consultant to your client whether you are a list broker or a list manager.

Here’s some good news: consultants get paid a lot more than clerks!

The problem is that many firms are having difficulty moving from clerks to consultants. The reason is they are handcuffed by old technology and old processes that require a lot of manpower, time, and attention.  Those firms devote a large percentage of their staff hours to clerical duties and don’t have anything left for true consulting.  The only way to break away from this is to step back and think, "There’s got to be a better way.  Do we really have to scurry around like that?"

Yes, there is a better way. 

Technologies exist today that enable you to streamline list research, order entry, order transmission, finance, and just about every other aspect of a list business. In fact, it’s NextMark‘s mission is to provide these solutions. We want to streamline your back-room operations.

Once freed from clerical duties, you can focus your time and attention on serving the needs of your client.  Acting as a strategic consultant.  Helping them grow their business.  You will have more job satisfaction knowing your efforts are appreciated and — best of all — you will make more money!

Give yourself a Labor Day gift: get the tools you need to move you and your company from clerks to consultants!