Are you one of the many who think that you can predict customer behavior by demographics (age, income, wealth, location, etc.)?  Sorry to break it to  you… but you’ve been brainwashed!

In years past, demographics were the only data available.  So, everyone learned how to use demographics because there was nothing better.  Just about any marketing textbook you open today will have a chapter on how to use demographic information.  It seems like just about everyone in the marketing  profession has been educated that using demographics is the one and only way to go.

But lo and behold, while providing lift over nothing at all, marketers have found that demographics alone did not work very well.  So, enterprising companies recognized the shortcomings of demographics and have built statistical models that improve the usefulness of demographic data.  And those models work better than demographics alone.  A classic example is Claritas’ Prizm Models.

But that’s still not enough… do you know why?  In many (most?) marketing projects, demographics is not a good predictor of customer behavior. 

Demographics don’t predict behavior

Suppose you are trying to sell coffee.  Your target audience, therefore, is coffee drinkers.  While I am sure you could get a PhD in statistics to identify a demographic segment that is 10% more likely than the average to consume coffee, you’d still be wasting a lot of money if you used that model in your marketing efforts.  After all, not all 35-year-old white males living in New Hampshire (or whatever the high value segment) drink coffee.

There is a better way… Do you want to know what really predicts behavior? 

Behavior predicts behavior!

If someone drank a cup of coffee yesterday, the day before, and every other day, the chances that they will drink a cup of coffee today is pretty darn close to 100%.  I don’t care if that person is black, white, green, or yellow, young or old, rich or poor, east coast, west coast, or no coast — the fact they regularly drink coffee is a far better predictor of drinking more coffee than any demographic data or model you can find. Past behavior is the best predictor of future behavior.

Isn’t that a simple concept?  It’s much simpler to use behavioral data than demographic data.  There’s no requirement for fancy models.  There is no intellectual "leap of faith."  If you want to sell coffee, find coffee drinkers.

So, why have we been brainwashed by demographics?  And why isn’t the use of behavioral data widespread?  Until recently, behavioral data was hard to get.  What little was out there was hard to find.  Not anymore.

Today, there are more than 70,000 mailing lists available to you.  I’ve come to conclude there’s a perfect mailing list for just about any marketing application.  Don’t believe me?  Try finding your perfect list using our mailing lists search tool (http://lists.nextmark.com/).  I think you will be amazed at what you find.

Start using behavioral data today… you will impress your colleagues when you show them you are part of the next generation of marketing!

How much junk does advertising mail generate?  Not as much as you think.

DM News and Pitney Bowes recently conducted a survey of survey on the attitudes of consumers regarding direct mail and the environment.  The results show that consumers greatly overestimate the negative environmental impact of direct mail.

Here’s an excerpt of the story on the results:

"Of the 1,000 Americans age 18 and over who took part in the survey (divided equally between men and women), 48% guessed that advertising mail from US households counted for more than half of the country’s municipal waste. Another 36% said it counted for slightly more than a third of that waste, and 12% of respondents guessed 9%.

"In reality, advertising mail is responsible for just 2% of all municipal waste in the US, according to the Environmental Protection Agency, an answer chosen by only 2% of the respondents.

"Respondents also vastly overestimated the amount of carbon dioxide released in the delivery of advertising mail. When asked to rank seven activities by their carbon dioxide output, respondents chose “Delivering an average of 10 to 11 pieces of transactional mail to your house for a year” as the third-most damaging activity, behind “driving a 2007 automatic, compact, four-door sedan 1,000 miles in one month” and “one year’s electricity usage for a 1992 top-freezer refrigerator with 19 to 21 cubic feet of space.”

"In truth, not only does delivering that quantity of mail produce the least carbon dioxide of all seven activities listed, it produced hardly a fraction of those believed by respondents to be the least harmful"

This evidence points very clearly to the challenge we have as an industry.  Consumers attitudes towards direct marketing and direct mail are extremely negative.  But facts like these show those attitudes are unfounded.  Why is this?  How can we change it?

On June 27, 2003, the U.S. Federal Trade Commission (FTC) opened the National Do Not Call Registry (DNC list) in order to comply with the Do-Not-Call Implementation Act.  This has been a very popular service.  In its first year, more than 62 million telephone numbers were posted to the list.  It now contains more than 145 million numbers.  That’s a very significant percentage of the US Population that don’t want to get bothered by telemarketing calls — there are an estimated 302 million people living in the United States today.

But there was a loophole…

When the registry was first developed, there was some concern about its accuracy as people change phone numbers.  For example, one person registers a phone number with the DNC registry then drops the phone number and it gets reassigned to someone else who ends up on the registry despite not registering.  Instead of keeping track of drops, the lawmakers in Washington decided it would be better to force everyone to re-register every 5 years.  Fortunately, as the first 5 year anniversary is fast approaching, the FTC came to its senses and recommended to make the DNC registration permanent.  Everyone, including the American Teleservices Association and the Direct Marketing Association, supported this change.  According to the DM News:

“The public has voiced its strong support for the registry and the DMA wants to help consumers make informed decisions on how they can be contacted by businesses selling valuable products and services,” Jerry Cerasale, SVP of government affairs at the DMA said in a statement.

So, now the DNC list is permanent, but there’s still another big loophole with the law…

Do you wonder why you get calls from politicians even though you are on the do not call list?  It’s especially apparent now with the presidential primaries and elections approaching.  It’s because the lawmakers in Washington conveniently excluded political organizations from having to honor the do not call list.  In other words, this is a law they imposed on everyone else except themselves.  That’s just not right.  They should abide by the same laws as everyone else.

The Citizens for Civil Discourse have an ongoing effort to "take back control of the political discussion" and are urging candidates to take the "Do Not Contact Pledge"

I agree with their efforts.  I am a strong proponent of the democratic process, but I want to be able to gather information to make my voting decisions my way. I don’t want to be called.

However, I don’t think any one candidate can feasibly take this pledge when their opponents have not because it would put them at a disadvantage.  Instead, we need to expand the law to cover politicians, too.

Additionally, the law needs to force politicians to follow "truth in caller ID." I think the candidates know most people don’t want their calls because they are resorting to some dishonest tactics.  I have caller ID at home, as I am sure many of you do, and would not knowingly answer a political call.  However, through dishonesty, they are getting through to me. For example, last night I got a call from a "WIRELESS CALLER" with a number from my home area code (603).  Thinking it was a friend, I picked up the call only to find it was a campaigner from the Mitt Romney campaign.  He went right into his spiel, but I cut him off quickly.

I’ve seen this behavior from all the other candidates, too, and it’s unfair to single out Mitt Romney.  But that call is fresh in my mind and it was really annoying.  Here’s my proposed solution:

1. Politicians should have to abide by the do not call list
2. When they make calls, the caller ID should be truthful — for example, the caller ID should display "Mitt Romney Campaign" or something like that.

Politicians should employ responsible marketing tactics, follow the same rules as everyone else, and set an example for the rest of us. What do you think?

What’s your first thought when you hear the word "marketing"?  What about "direct marketing"? 

Those of us in the trade probably think of various techniques we use to sell products and services, get donations, votes, etc.  However, those outside the trade have a very negative reaction to "marketing" and "direct marketing" — they think it’s evil !

How did direct marketing get such a bad reputation? 

Look at your email inbox or your spam folder and you will find the answer.  Look at all that junk!  To a lesser extent, open your mailbox and look at all that mail you that goes straight to the recycle bin (you recycle, right?).  And all those unwanted faxes and phone calls.

It’s a waste of time to have to deal with and discard all that junk.  We are bombarded with this junk all day every day and we are sick and tired of it.  So, it’s no wonder that people think "evil" when they hear "direct marketing"?

But is direct marketing really evil?

At its core, direct marketing is a process of matching products and services with people who need them.  When done right — it’s delightful.  For example, Amazon does a fantastic job of making recommendations.  Every so often, I get an email announcing a new book they think I would be interested in.  You know what?  They are right most of the time and I would have never heard of that book (nor bought it) otherwise.  I get new knowledge and they get revenue.

It’s the people using direct marketing that decide whether it’s good or bad.  Direct marketing can be very good for the merchant and the buyer when done right.  Everyone’s better off when direct marketing is used responsibly.

I think everyone knows this.  Other than a minority of low-lifes, everyone wants to do the right thing and use direct marketing responsibly.  So, why don’t they all do the right thing?  I believe it’s because it’s just too hard today to do it right.  It’s really hard to find the people that need your service.  It’s really hard to reach them in the right way.  The knowhow and the tools are not available or accessible.

At NextMark, we’re trying to change that. Our mission is to help you "reach your market" and are bringing you innovative new tools, such as the mailing lists search tool.  We want to make it easy for you to do the right thing and use responsible direct marketing. 

We are trying to spread the word. Please help us create the next generation of marketing!