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:
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?