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Posts Tagged ‘direct marketing’

This count is sucking your blood

Friday, March 6th, 2009

See the Hi-def version of "This count is sucking your blood" on Vimeo.

There’s a count that’s sucking your blood. No, it’s not Count Dracula. I’m talking about mailing list counts. Slow counts are sucking the lifeblood out of your direct marketing programs.

When prospecting for new customers with direct marketing, you generally need to rent mailing lists. But you don’t usually rent the whole list. You order the subset of the list that matches your target audience.

For example, when ordering from a list of doctors, you might select the subset of doctors that are brain surgeons practicing in New Hampshire.  So the question is… How many names meet your criteria?

To get this count, somebody has to run a database query to get the answer to your question.

Time for a pop quiz: How long does it take to get the count?

  • 2 milliseconds
  • 2 seconds
  • 2 minutes
  • 2 hours
  • 2 days
  • 2 weeks

Believe it or not, 2 days is the industry standard.  I know what you are thinking… “No way! It only takes 2 seconds to run that simple query!” You’d be right about that.  But this was a trick question. I didn’t ask you how long it takes to run the query. Instead, I asked how long it takes to get your answer.

So why does it take 2 days to get your answer?  The slow turnaround is a result of a series 0f delays in the process… So let’s review the process

  1. First, the mailer asks the broker for a count.  It sits in the broker’s inbox or voice mail for an hour or two.
  2. Then the broker reviews and refines the request and forwards it to the list manager.  The request again sits for an hour or two.
  3. The list manager forwards this to their counts person. This person may be on staff or at a service bureau.  Again this request sits in a queue for a couple of hours before it gets serviced.
  4. The counts person then configures the query
  5. runs the count
  6. and sends the result back to the list manager. This process only takes a couple of minutes. But again the answer sits in the list manager’s inbox for a couple of hours.
  7. The list manager then reviews the results for accuracy.  In many cases, the count is off and we have to rerun with different criteria.  However, let’s assume this is acceptable and so it gets forwarded on to the list broker.  Again this sits in the list broker’s queue for a couple of hours.
  8. The list broker then has to review and incorporate the count result into their recommendation along with the counts from all the other lists in their recommendation.  The chance that at least one of these counts is delayed is very high.
  9. Then finally, the broker sends the counts with the recommendations back to the mailer. 

With all the delays and hiccups, this process typically takes two days!

Why is this process so slow? It’s disconnected from the workflow. It’s a low priority because nobody makes any money running counts. It’s error-prone, time-consuming, and disruptive. It’s just very difficult to manage.

What do slow counts cost you?

It drives up your personnel expenses. The slow service makes you look bad and forces hasty decisions. Those bad decisions hurt the performance of your direct marketing campaigns which lowers your revenue which, in turn, lowers your return on marketing investment. All of this combined reduces the demand for your services, which puts you into a viscous cycle of lower profits and reduced service.

What’s missing is infrastructure.

What’s missing is a bridge between the data card and the data. Data cards are central to the daily workflow of list brokers and list managers.  They use data cards all day every day to get their job done. If we bridge the gap between data cards and the data, then we will dramatically streamline the workflow

Consider the data card. If we add a counts button to the data card, then it would enable buyers to request counts electronically in a consistent way.

And because the count requests are electronic they can be handled efficiently and tracked automatically.  In most cases, the query can be run automatically once approved.

The result of this technology is a dramatically streamlined process that cuts turnaround time to hours, minutes, or even seconds!

This simple act of streamlining counts has many benefits. It will drive down your personnel expenses. The fast service makes you look good and enables better decisions. Those good decisions will improve the performance of your direct marketing campaigns which increases your revenue which, in turn, increases your return on marketing investment. All of this combined increases the demand for your services which now puts you into a virtuous cycle of higher profits and improved service.

This technology isn’t some far off pipe dream.

NextMark Select is the name of this technology… and it’s very real. And it will soon be available to you. Stay tuned.

Are you going postal? You should be… (Winterberry Group)

Wednesday, March 4th, 2009

The Winterberry Group has just released a white paper reporting the first decline in direct mail spending in recorded history starting in 1945. The white paper, entitled A Channel in Transformation: Vertical Market Trends in Direct Mail 2009, is the New York-based consulting firm’s fifth annual study of trends in direct mail media. It stresses the importance of the trends away from "mass" and towards "targeted" direct mail programs:

"Squarely impacted by the “triple assault” of the recession, rising postage rates and growing marketer preference for low-cost digital communications, total U.S. direct mail spending declined sharply in 2008—falling 3.0 percent—and was accompanied by an even more significant cutback in mail volume"

[…]

"The accelerating shift from “mass” to “targeted” direct mail programs has been enabled by an increasingly powerful array of marketing automation technologies, many of which are making their way into the toolsets of marketers both large and small."

[…]

“The dramatic events of the last few years have come home to roost for direct mail. Postal shocks, environmental pressure, recession, media consumption shifts and enhanced targeting tools have brought about an end to the ‘batch-blast’ era of direct mail,” said Bruce Biegel, Winterberry Group’s senior managing director. “In the face of exceptionally challenging conditions, it is apparent that mailers have shifted their focus to lower-volume, more targeted and higher-value campaigns, with traffic generation to the store, Web and call center being the primary objective. In turn, this shift is generating a realignment of the supplier community and the marketing operations process—opening the door for more and better integrated marketing over the next several years.”

A Channel in Transformation: Vertical Market Trends in Direct Mail is available for complimentary download via the Research page of Winterberry Group’s Web site, located at http://www.winterberrygroup.com/research/.

So what are these automation technologies that will enable you to survive and thrive in this scary new world?

First, consider the fact that your choice of mailing lists is a very significant factor in the outcome of every direct marketing program. Experts attribute more than 40% of the success of direct marketing to your choice of mailing lists:

40-percent-lists

As Winterberry reported, it's even more important than ever to be targeted in your marketing. Direct mail is one of the few channels that enables this level of precision.

Good news!… in the last few years, there's been innovations in technology that can help you find better mailing lists. A great example is NextMark's Mailing Lists Search Tool.

And the best part? It's free.

Access to this information and technology used to be hidden behind passwords and high user fees. Now, thanks to Marketing Freeconomics, you get it for free.

Now is a great time to be in the mail. There's less noise and competition. There's better tools. If you do a good job with your targeting, you will be positioned for growth. Start today by finding some great mailing lists!

First contact: data cards meet data

Tuesday, March 3rd, 2009

NextMark reached a big milestone today. We've successfully connected a data card with the underlying mailing list data:

data cards meet data

Why is this a big deal?

First, this technology will transform a process that takes up to 48 hours to complete into one that only takes a couple of seconds. Besides the dramatic improvement in turnaround time, there are lots of other benefits that will enable more effective and efficient marketing programs.

Second, we are not just connecting one data card to one list. This is a test of a platform that will potentially connect all 60,000+ data cards to the underlying lists in a super-secure and reliable way. Now, that's the really cool part.

This is not yet generally available, but soon will be. The development team is cranking. This new technology is slated for release in the second quarter 2009.

Stay tuned… more to come!

Are you paying too much for that mailing list?

Friday, January 9th, 2009

SearchIn a recent interview by Jim Emerson of Direct Magazine, Wayne Romisher of List Strategies Inc. cites marked up mailing list prices as an ethical concern in the direct marketing industry:

"Roimisher notes another big issue involves smooth operators who'll markup list prices in excess of the rates published on data cards. But that's an easy one to check up on using NextMark, SRDS and other directory sources."

Wayne is right: it's very easy to verify prices. Especially, with NextMark's mailing lists search tool. It gives you free access to a comprehensive directory of information (including pricing and counts) on postal mailing lists, email lists, telephone lists, package insert programs, and more. No registration is required, either. Check it out!

The Benefits of the Direct Marketing Operating System

Tuesday, December 2nd, 2008

In a previous post, I illustrated the need for a direct marketing operating system ("DMOS"). In this post, I'll further explain the benefits of a direct marketing operating system and how the use of NextMark's DMOS facilitates the federation of direct marketing services.

The benefits of electronic commerce can be achieved without using DMOS. Marketing service consumers ("buyers") can interact directly with marketing service providers. However, the problem with this scenario is the number of connections required between buyers and providers which forces the constant "reinvention of the wheel" by both the buyers and providers.

Buyers and providers conducting electronic commerce directly with each other

As shown in the diagram above, each buyer has to establish a separate connection with each marketing service provider. Likewise, each provider has to establish a connection with each buyer. For example, in the case of 1,000 buyers and 100 providers, 100,000 separate connections would have to be established!

These connections are not trivial. Connecting to a web service is not much work. However, establishing a business class connection that is secure and reliable is quite significant.

The alternative to the cobbled together "point to point" approach mentioned above is the use of DMOS to facilitate communications between the buyers and providers.

Electronic commerce with the Direct Marketing Operating System

Buyers need only one connection with DMOS to access all services available through DMOS. Likewise, marketing service providers need only one connection to DMOS to enable all DMOS buyers to utilize their service.

In essence, DMOS makes it easy for buyers and suppliers to conduct business.

But DMOS is much more than a matchmaking service. It provides the infrastructure that makes it possible to conduct secure and reliable business electronically.

Direct Marketing Operating System (DMOS) services

The responsibilities of DMOS include:

  • Directory– provides a registry of services available through DMOS
  • Authentication – validates the identity of parties involved with a transaction protecting against impersonation
  • Authorization – restricts access to services to protect against unauthorized access
  • Confidentiality – ensures that requests and data are delivered confidentially through encryption to protect against eavesdropping
  • Orchestration – coordinates the workflow of many tasks in a business process to avoid omissions and errors
  • Message Delivery – guarantees the delivery of messages and data are delivered to ensure that no critical information is lost in transmission
  • Transformation – transforms requests or data into the format required by the marketing service provider performing the task
  • Monitoring – monitors the availability and performance of services to ensure high availability
  • Integrity – ensures that requests or data is not tampered with in transmission
  • Non-repudiation – provides assurance that an agreement or service request cannot later be denied by the parties involved
  • Auditing – keeps a log of service activity to provide insight and accountability of the service
  • And more…

Without DMOS, you would have to implement all of these services yourself or be exposed to significant security and service risks. This implementation requires a monumental amount of work. The implementation is so big that it often makes projects like this not feasible. This is probably why we've not seen much electronic commerce in the field of direct marketing.

With NextMark DMOS, you get all of these services by simply connecting to DMOS. So, you can focus on your business. Service providers focus on service delivery. Buyers focus on their marketing campaigns (and not technology).

Federation of Direct Marketing Services

Tuesday, November 25th, 2008

As discussed in "Needed: Direct Marketing Operating System", the direct marketing channel is currently lacking an systems infrastructure. We're striving for a solution with the DMOS platform. When it's available, DMOS will make it easy for direct marketers to purchase direct marketing services from a variety of vendors. It will also be easy for direct marketing service providers to provide their services through DMOS.

Some examples of direct marketing services are mailing lists, merge/purge, data modelingCASS address standardization, printing, and email delivery. Examples of direct marketing service providers are list brokers, list managers, service bureaus, and printers.

Direct marketing service providers will be able to publish the availability of their services through the DMOS directory – a structured and searchable directory organized by service categories. Think of this as a turbo-charged version of the yellow pages specifically tuned for the direct marketing channel.

What is the relationship between DMOS and the service providers? I believe that "federation" is a term that aptly describes the relationship. According to the Concise Oxford Dictionary, a federation is

"a system of government in which several states form a unity but remain independent in internal affairs"

Although not typically used in describing relationships between businesses, I believe the concept of federation is appropriate here.

The DMOS platform will unify direct marketing services. It will enable buyers to find and procure direct marketing services. It will enable vendors to deliver their services through a common platform. DMOS will provide some "governance" to ensure that the marketplace runs smoothly. Some examples are user authentication, security, directory services, service monitoring, integrity, confidentiality, etc.

However, each marketing service provider will "remain independent in internal affairs." They will be completely responsible for the delivery of their services. DMOS will help buyers to find and request a vendor's services, but the vendor will be responsible to negotiate and fulfill the buyer's needs.

This federation relationship reminds me of a shopping mall. The mall owner is responsible for the security and infrastructure. On behalf of the buyers, the mall owner will ensure a safe and easy place to conduct business. Each seller is responsible for running their own store.

From a business perspective, the concept of forming federations has been around since the first bazaar was established centuries ago. Electronic marketplaces are relatively new, but recent advances in computer technology have made them feasible for even small businesses. Other more complicated industries, such as manufacturing and travel, have implemented federated marketplaces.

I believe that an electronic marketplace for direct marketing is feasible because of the highly electronic nature of the business. Unlike most other industries, almost every aspect of the direct marketing process can be performed electronically. All that's needed is some "glue" to combine and orchestrate all of these electronic processes.

It's about time direct marketing had a federated marketplace. Don't you agree?

Needed: Direct Marketing Operating System

Wednesday, November 19th, 2008

Direct marketing is perhaps the most powerful form of marketing available today. The Direct Marketing Association states that "each dollar spent on direct marketing yields, on average, a return on investment of $11.69, versus ROI of $5.24 from non-direct marketing expenditures" in its 2008 Power of Direct Marketing report.

Need more proof? Look no further that Barack Obama's recent presidential campaign. His successful campaign "rewrote politics" because he tactically outmaneuvered his opponents by reaching voters quickly and directly through direct marketing — particularly through postal mail, email, and texting — instead of slowly and indirectly through mass media.

This direct marketing is powerful stuff. Why doesn't every organization use it to reach their market? Because it is difficult and expensive. It's a complex manual process known only to industry insiders.

To illustrate how complex direct marketing can be, here's a diagram of the process to obtain a single mailing list:

List-order-process

There are 36 manual steps to this process! Now imagine that you are running a campaign where you are renting 10 outside lists, merging them with a house file extract, printing 200,000 pieces, putting these addresses on them, and putting them into the mail. That's hundreds of manual steps! And a lot of delays and opportunities for mistakes.

With all this complexity, it's a wonder we get any mail out at all. But we do and that's a testament to the hard work and diligence of the vendors serving the direct marketing channel.

However, it's expensive.

All this manual work drives up the cost of delivering a direct marketing program. As a result, the direct marketing channel is only open to those organizations willing to make a very significant investment. Vendors can't afford to service micro-campaigns. It's relatively the same amount of work to send one million pieces as it is to send one thousand pieces.

The reason all this work has to be done manually is because the industry has no infrastructure. The direct marketing process is effectively held together with "bubble gum and bailing wire" – disparate systems, spreadsheets, phone calls, emails, faxes, re-keying orders, etc.

What's needed is a Direct Marketing Operating System.

Direct Marketing Operating System (or "DMOS") is the name we've been using here at NextMark for the last eight years to denote the technology infrastructure that will facilitate the direct marketing process. There are lots of good reasons for the complexity of this process: approvals, privacy and security of data, etc. That intrinsic complexity will remain. What will change is the amount of effort and time required to deliver a direct marketing campaign.

The technology needed for this technology infrastructure is available and proven: web services, xml, service oriented architecture, etc. It just needs to be applied to the direct marketing process. That's what DMOS is all about.

DMOS will enable direct marketing service providers with an easy way to promote their services and integrate their services with the rest of the process. Vendors will operate more profitably than ever before because orders will be delivered electronically and serviced efficiently with button clicks rather than manual re-keying.

DMOS will make it easy for organizations to utilize direct marketing services. Using direct marketing services in a campaign will be about as easy as filling your shopping cart on Amazon.com or your favorite website. You won't need to know about all the supply chain logistics to place your order. And you won't have to wait a long time to get the results.

Don't worry — all the checks and balances will be in place (in fact, improved) and there will be more need than ever for trusted advisors (i.e. consultants, list brokers, list managers, agencies). This is not about disintermediation. It's about integration.

The benefits? The immediate benefit is faster, easier, and more profitable direct marketing. The longer-term benefit is the opening of the direct marketing channel to all organizations big or small. Direct marketing will be more approachable. As a result, the industry could more than triple in size – that's big!

Do you agree that the industry needs an infrastructure? What can we do to deliver it?

Target Marketing Reports on NextMark Intelligence

Friday, July 18th, 2008

NextMark revealed new list research behaviors this month in the July 2008 issue of Target Marketing magazine in an article titled "The Rise of Direct Marketing Freeconomics". According to their data card, the magazine has more than 45,000 active subscribers, insight on marketing strategies and tactics to improve their ability to sell through direct mail, telemarketing, and space advertising. Target_marketingMany of these readers are also marketing service providers who provide mailing lists, data, custom research, and statistical modeling services for their clients.

In the July 2008 issue, NextMark presents a case for the value of free competitive market intelligence that can be gathered online via list research portals. These tools are most commonly used to find mailing listspurchase mailing lists, and promote mailing lists – but there's more! List universe sizes, segment counts, hotlines, trends, pricing, selections and highly correlated lists are provided for more than 60,000 list titles. Now that's valuable information — especially if you don't have access to a paid list research application. We've seen exponential growth in the use of these online tools, and the fact that they're free makes them even more attractive sources of competitive information for direct marketers. If you want to promote your list owners' data cards, then this is the place to be!

Fed Credit Plan – Dow Dope or False Hope?

Thursday, March 13th, 2008

The DJIA posted its biggest gain in five years Tuesday, noted Matt Krantz of USA Today in his March 12, 2008 article titled Stocks soar as central banks act; Dow back above 12K”. This move was obviously praised by investors, due to the respective gains of $600 billion in shareholder value in a single day! Furthermore, it eases the burden on the credit market by enabling the exchange of mortgages and bonds for government securities. That in itself is not a bad thing, because investment is discouraged when the reins are held too tight. But looks can be deceiving when the Fed interferes.

Take a step back, look at all of the spikes during the past six months, overlay a simple linear regression line, and give yourself a taste for where we could be heading. Djia_image Always put short-term gains in the context of macroeconomic trends (see graph). A true market reversal will take more than the shifting of risk from commercial to government institutions. It will require fiscal accountability at all levels, corporately and individually, and it includes all of us in the direct marketing community. Direct marketing is famous for surviving the tough times because it’s measurable. We are great at doing the response analysis for our clients, but let's never forget the importance of measuring our own internal ROI for list advertising.

In contrast to best practices for direct marketing, many list managers and list owners spend millions (in aggregate) on mailing list advertising programs that are unmeasurable, and even more on labor and resource intensive order processing systems. Far to much of our contribution margins are wasted on redundant tasks that add little or no value to the new customer acquisition process. Here's the good news. Unlike the current macroeconomic trends, these direct marketing habits can be overcome quickly, and with lasting benefits.