Direct Marketing Meets the Web

ORLANDO, FLA. -- When we think of direct marketing, we often brush it off as little more than Marketing 101. In fact, at the Direct Marketing Conference in Chicago last year, one exhibitor candidly remarked, "Most of these companies are about five years behind." Even so, many companies in the industry tried to run before they could walk -- and inevitably tripped themselves up in the process. Those days may be in the past -- at least according to Yuchun Lee, the chief executive officer of enterprise marketing management provider Unica, who delivered the keynote speech at the Direct Marketing Association (DMA) B-to-B Marketing Conference here this week. Lee's message? By leveraging the power of the Internet, direct marketing could reemerge as "hip" without sacrificing its fundamental strengths. "The current relationship between buyers and sellers is not sustainable," Lee told the audience during his presentation, "The Next Wave: Impact of the Internet on B-to-B Cross-Channel Marketing." Customer satisfaction and vendor perception of satisfaction are facing a disconnect, he said. Therefore, marketers need to take charge of all their channels and go where the consumers are -- and, right now, they're on the Internet. In support of his position, Lee cited a Forrester Research survey on the investment priorities of B2B chief marketing officers: 27 percent of respondents said they intend to increase their Internet- and Web-marketing investments in 2008, by far the number-one response among all marketing categories. Moreover, a recent survey conducted by the Association of National Advertisers reported that 68 percent of B2B and 78 percent of B2C companies increased their online marketing spend from 2006 to 2007. Lee explained the primary motivations for marketing's movement toward the online channel:

• A power shift to the buyer: Empowered with more options, more information, and more channels of communications, the buyer is well equipped to get what she wants. The salesperson merely becomes an advisor rather than someone who has the ability to deliver or withhold information.
• The need for relevancy: Consumers are wary of anything being pushed upon them. "Marketing should be so relevant that it feels like a service," Lee said. In addition, companies need to be prepared to deliver as soon as the consumer is ready.

Just a few years ago, Lee said, the Internet was a static billboard. Today, it's the most interactive tool a marketer has available to gain deeper insight into understanding the consumer. And Lee firmly stated that, in five years, more than 50 percent of consumer data will be captured via the Internet. By looking at marketing through what Lee termed the "service lens," marketers are responsible for being relevant, ready when consumers are ready, persuasive rather than promotional, and prepared to consistently test and measure the quality of their campaigns. The Internet can help marketers to engage in activities to observe customer activity and respond to customer needs:

• Observe account activities;
• use email and Web interaction to nurture leads;
• use segmentation-based insight to personalize Web sites;
• create customer or prospect microsites that are specifically tailored to those audiences and their respective stages in the buying cycle; and
• conduct event-based marketing to see what customers are doing and where they're most likely to go next.

After venturing out onto the Web, marketers must not forget their existing channels. The final "Cross-Channel Paradigm" is crucial as marketers pull together the insight gleaned from offline as well as online channels. Lee noted that while many issues on- and offline are the same, the industry seems to behave as if there were an insurmountable generation gap. To optimize any campaign, marketers must find a way to bring all the data together. Other key contributions of the Internet include the ease-of-use of software-as-a-service, enabling companies to immediately download a marketing program without intensive technology resources. Moreover, the Internet is redefining communication, making it easier for vendors to collaborate with buyers in order to give those buyers exactly what they want. As marketers embrace the Web, Lee also offered a few final warnings:

• SFA ≠ MA: Companies cannot stretch their sales force automation and expect it to satiate the demands of marketing automation -- marketers need their own system of record.
• Best-of-breed is not for everyone: Your company has to be centered on innovation, and will need a robust technology team; and
• Electronic channels aren't free channels: Just because it costs next-to-nothing to send out an email doesn't mean you can blast campaigns. In B2C marketing, Lee said, you have 12 chances before a customer blocks you off forever, which indicates just how valuable each consumer touch point really is.

Related articles: The Envelope, Please: Direct Mail's Not Dead Yet Certain approaches -- such as mass-mailing campaigns -- are nearly on the "endangered list," but when done right, direct mail continues to generate the appropriate response. 13 Reasons People Will Open Your Direct Mail No matter how quickly technology is pushing us toward a digital world, marketers continue to actively rely on direct mail. Feature: Cast a Narrow Net Direct mail and email addresses change, for example, more frequently than marketers expect. Winning the Multichannel Customer The Direct Marketing Association releases new intelligence on acquiring and retaining customers. Market Watch: Database Marketers Mine for Perfect Customer Segmentation The applications of database marketing used in direct mail are being applied to other channels, such as upselling and cross-selling on the Web or in the contact center. Marketers Talk About Targeting Nirvana Future of Information Summit 2006: Panelists discuss segmented marketing, customer influence, and 'the desire to be entertained.' Marketers: Find Your Reach, Reach Your Finds DM Days '06: A deep look into the best and worst ways to develop marketing strategies in the digital world. DM Days: On Marketers and Politicians DM Days '05: Bush's former commerce secretary opines on marketing and suggests that some privacy legislation will be refined over time. The Three Rs at DMA Days DMA05: Keynotes detail the importance of relevancy, responsibility, and results -- all ways for direct marketers to win customer confidence and build trust. CRM 'At the Highest Level' During its first round of product direct mail campaigns, LifeWay Christian Stores saw a 400 percent lift in average response rates with a high of 30 percent on some mailings. What Can Direct Mail Do For Marketers? The U.S. postmaster general speaks about how traditional marketing can enhance the Web and other, more advanced ad mediums. Direct Marketing Trends for 2006 More companies are turning to the Web for targeted marketing efforts. The Most Effective Direct Mail Campaigns Well-targeted mail campaigns are increasing in-store traffic. Don't Trash That Catalog Just Yet It's not surprising that the USPS would publish results emphasizing the importance of direct mail, but independent marketing strategists continue to validate mailings as an important part of a broader customer strategy. Feature: It's Showtime! Direct mail is a key component of entertainment companies' customer initiatives. Feature: The 2003 CRM Elite To overhaul its direct mail process LexisNexis brought the management of its mailing lists in house and turned to its long-term CRM provider SAS to cut costs and improve efficiency. Pitney Bowes to Acquire Group 1 Software "One of the immediate benefits of good customer data is lower marketing direct mail costs," one analyst says. A First-Class Ticket to ROI Using survey data to create more effective direct mail campaigns. A Marketing Marvel With Annuncio Live, Lucent Technologies creates a productive "one-to-one" marketing machine. Marketing Man The DMA said in 1999 that the direct marketing industry would be $1.5 trillion worldwide, of which about $800 billion is in the United states. How Can I Assess the Gaps in My Direct Marketing Capabilities? Organizations can find out which processes are optimal and which have room for growth. What Are Best Practices for Achieving B2B Marketing Loyalty? Marketers who deploy the basics and best practices of direct marketing will be the ones to achieve success in establishing and maintaining long-term, profitable B2B relationships.

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