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Last month, I blogged on "Why do politicians ignore the do not call list?" that proposed that politicians should follow the do not call list and have truth in caller ID.

I know now more than ever this is the right thing to do.

I live in New Hampshire and tomorrow is our vote in the democratic primary — it’s the first in the nation (by state law, by the way) and is very influential because of its bellwether position.  With that influence and the results from last week’s Iowa caucus, all the campaigns are now doing a full court press on New Hampshire’s citizens, like myself.

Over this past weekend, my phone was ringing off the hook.  I would guess it rang at least once every 30 minutes, which is unusual (no teenagers in my house).  I was reluctant to answer any call because they were most likely political endorsements that I did not want to hear.  There was no way to tell for sure because the calls came through as caller ID "New Hampshire 603-000-0000" or "Virginia" or "Info Systems" or some other deceiving text.  But I was 99% sure they were political call and they never left a message.  The only message I got was a really odd one "[loud voice] George W. Bush [long pause then weasel voice] This has been a paid political announcement." 

Somebody should put a stop to all of this.  It’s just wrong.

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!

In tough economic times, it’s tempting to cut back or eliminate prospecting.  Getting new customers is often very expensive in the short term.  Prospecting campaigns often yield a short-term loss.  The finance department will look at this loss and say, "stop doing that."

But they would be very wrong.

Getting new customers is the lifeblood of your business.  They are the source of your future revenues and profits.  Without new customers, your business will die.

Case in point, Red Envelope just announced their earnings for the quarter ended July 1, 2007.  They reported a net loss of $3.6 million for the first quarter compared with a loss of $900,000 in the prior year and net revenue of $24.5 million versus $26.9 million is the same period last year.  What happened?  According to John Pound, their executive chairman:

"We expected to be in a revenue downdraft this quarter, with resulting bottom line losses. This was a result of reduced prospecting late last year and early this year, which resulted in a weakened customer file."

It sounds like he saw it coming.  But it only proves the results of cutting back prospecting.  Don’t fall into this trap if you can avoid it.  If you are not growing, you are dying.

I am at a cocktail party meeting someone new and she asks, "so… what do you do for work?" (to determine if I am qualified to join her social network).  I explain that I run a company called NextMark that builds software for direct marketing and we focus on helping businesses to find good mailing lists.  Her reaction is as if she just bit into the sourest lemon ever and exclaims, "Oh, so you’re the reason I get all that crap in my mailbox!" (and she is thinking: no, this guy will definitely NOT be admitted to my social network).

It’s interesting, everyone has that same visceral reaction to direct marketing: bad, bad, BAD!

What most people don’t realize is that direct marketers hate junk mail, too.  Think about it… It probably costs them $2.50 to print and send that catalog to you.  When you toss that catalog in the recycle bin without looking at it, it’s a big waste of their money.  You are not the only one who is upset by junk mail.

On the other hand, someone else receives that very same catalog and they are delighted by it.  So, delighted, in fact, that they order $300 of stuff.  It’s exactly what they were looking for, it fits perfectly, and the quality is top notch.  They placed their order from the comfort of home at 10:30 pm and did not burn the time and fuel to go to the retail store.  Plus, free shipping and no sales tax.  And it was on sale. So happy.

This same catalog was junk mail to one and a treasure to another.  What’s the difference?  Relevance.

Finding relevance is the big challenge of every cataloger and every direct marketer.  Relevance is matching the right offer to the right person in the right way at the right time.  When they find relevance, happiness for you and profitability for them.  When they don’t, junk mail for you and losses for them.

NextMark’s goal is to help businesses to reach their market. Junk mail is failure.  Relevance is success.  We help our clients to find relevance.

So, I explain to my new friend, our goal is to eliminate junk mail from your mailbox and to replace that with the stuff you want.  My new friend’s face now turns serious and she says, "I run this business and could really use your service…"

The other day, I came across a mailing list that could literally save your ass.  According to the data card for the Peaceful Valley Donkey Rescue mailing list:

"Donkey’s (sic) in today’s society are misunderstood and poorly treated. Peaceful Valley Donkey Rescue provides a safe and loving environment for neglected, abused, and unwanted donkeys. It is their mission to educate the public on the history, usefulness, treatment, proper care, and personality of these wonderful creatures."

The Peaceful Valley Donkey Rescue mailing list is a perfect illustration of how precise mailing lists are these days.  Can you think of a better way to reach a group of donkey lovers?

This is just one example of more 70,000 targeted mailing lists available.  I am constantly amazed by the variety of lists and have come to conclude there is a perfect list for everyone. But the sad truth is most marketers don’t know about all these great lists.

Why is this sad? Because 40% of the success of every marketing campaign depends on the list. If you send your promotion to the wrong people, it gets tagged as spam or junk mail and promptly discarded.  It’s a waste of your time and money to send to the wrong people.  It’s frustrating to them when you fill their mailbox with stuff they don’t want.

I’ll let you in on a little secret… great lists are not hard to find if you have the right resources.  You can hire a list broker (which I highly recommend).  You can also use a mailing list search tool. 

Whether you are saving donkeys or simply trying to improve the results of your direct marketing campaigns, you owe it to yourself to learn more about mailing lists.