Required Reading: The Next Step in Opt-in Marketing

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Don't be bullied by CAN-SPAM and Do-Not-Call legislation, says Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing (McGraw-Hill). According to authors Ernan Roman and Scott Hornstein, it's time for marketers to stop being pushed around and start taking action. Introducing the Consensual Marketing Opt-in Process (CMO) methodology, this book details the seven steps that can save marketers from missing opportunities to make that essential customer connection. CRM
magazine spoke with coauthor Hornstein to find out more. CRM magazine: How will legislation like CAN-SPAM and Do Not Call affect marketers over the next few years? Scott Hornstein: I really think that things in marketing are in a sorry state of affairs when consumers feel they need federal legislation to protect them from predatory marketers. According to Yankelovich research, 61 percent of consumers feel that the amount of advertising is out of control, and 65 percent feel bombarded by marketing messages. I think that this is a very clear message: We have to admit that our current marketing practices are not working. Marketers can go down the same road and learn to cope with these ever-tightening barriers, or we can change to an opt-in model. With the current process...the burden is on the consumer to say, "Stop. I've had enough." With the [opt-in] process, the burden is on the marketer to engage customers in meaningful, interactive dialogue that provides value over time and nourishes the relationship. CRM: How can marketers benefit from recent legislation? Hornstein: We need to embrace these restrictions and figure out how we can do more with less. Customers are telling us they find marketing to be intrusive and irritating, so the best advice is to take the marketing paradigm and move to a higher road. Instead of flogging customers until they buy or opt out, let's reexamine how we value the customer, and embrace and invest in the relationship with our best customers. [Opt-in] stimulates customers to participate in a dialogue where they define their unique needs, requirements, and preferences. The results are remarkable--Hewlett Packard, for example, has seen marketing waste cut by 50 percent or more, and their program results have improved by three times or more. CRM: How should companies balance investments in their different types of customers? Hornstein: I think that we're upside down. Marketing funds are scarce, and we're on a short-term treadmill. Therefore, our investment is primarily in prospecting, which is yielding a low ROI. We've got to turn out more numbers until we make quota. I'm going to suggest we devote the bulk of market investment to our best customers and start to leverage customer satisfaction, retention, and lifetime value. An article in a recent issue of the Harvard Business Review said that a 5 percent increase in customer loyalty can boost profits by 25 to 85 percent--that's a remarkable number. If we create an opt-in consensual relationship, we are investing in a value-added ongoing stream of communications. IBM, for example, tested the opt-in concept and achieved, in its pilot, an 80 percent increase in sales and a 75 percent reduction in marketing waste. CRM: How can marketers optimize their customer data? Hornstein: First, the majority of the data on file should be customer-generated--let's get away from inference, and go straight to the source: customers. Second, organize the database based on the ability to respond to customer needs and requirements. Every time I say that, I feel like what's going through everyone's mind is: "Let's get every piece of information we ever wanted." No. It means simplicity. The job of the database is to drive the most efficient allocation of resources. In some corporations the quest for information approaches bloodlust, and then they can't analyze their information, and it collapses on its own weight. Only collect what you can use. Finally, [remember that] the customer sees one company, not one department here and one there. Everyone's got to have access to the same dynamic record. Other Page Turners
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