Alternative marketing thinking

Some companies will go right around a negative customer situation and turn it positive. Kuwait has no residential mail system, so marketing via direct channels poses a challenge. But one company saw this as an opportunity to connect with customers in unique ways. Gulf Bank knows that almost all its banking customers in Kuwait use ATMs, so it created a personalized marketing strategy to communicate via the machines. (Specifics here in the issue of 1to1 Weekly ). Another bank, HSBC Mexico, also does something similar at its ATMs. The important thing here is that Gulf Bank took what looked like a roadblock to customer service and interaction, and created an entirely new marketing channel. And unlike most direct mail, it’s a channel that customers actually pay attention to. A little creative thinking about the customer experience and business objectives goes a long way.

Measurability, interactivity, customization, segmentation, some of the terms that we see being associated with new media marketing. And if you have ever looked in the dictionary of direct marketing, chances are these words would have been looked up the most by the practitioners of the trade.

For the uninitiated excited about the future of marketing, let’s take you on a tour into gardens of direct marketing. Two of the tenets of the DM business, that have become the foundation on which digital marketing is built on are measurability and interactivity. Who saw the communication, was the communication looked at. Did someone click it; spend time with it and finally what happened. What was the ROI of the piece of creative.

Customisation and segmentation. Now there’s nothing much to explain here, but anyways. When you search anything in Google, “ballbearing manufacturers”, you end up with a bunch of paid for ads that don’t show up when you search for “rollerbearing manufacturers”. Direct marketing has been using such techniques for decades that web and new media marketers have come in and co-opted.

Technology Marketer’s dilemma. One of the issues that is facing new media and technology marketers is that they have little or no understanding of brands, branding and brand strategy. While these people understand new technologies like nobody else, what is missing is their understanding of brand building and the process around it. Brand managers and marketers see this as a serious problem and are hence reluctant to give pure technology marketers a larger role in their marketing and brand building activities. Direct marketers have never had this problem, as they have honed their skills by working closely with researchers, brand managers and CMOs and hence are ready to partner them with ideas that flow off new technology. The only thing that is missing in the consummation of this marriage is the shortage of understanding of how technology works in the minds of DM professionals. And that is a big, big problem.

Technology, noise compounds problems. Any marketer who has been evaluating technology marketing solutions has often felt overwhelmed by the choices that are available out there : banners, microsites, email, blogs, streaming video, podcasts, vodcasts, widgets, mashups, SMS - that list is endless. The person who had to pick between radio, print, TV and outdoor, all distinct and simple to understand media was now being inundated with options and all of them being delivered through the same interface.

Direct marketing. The road ahead. The future is bright for DM professionals who work closely with technologists. While the DM strategists will not need to write code, they will need to understand how new technologies work and how they can make a difference in marketing. There is a great opportunity for people who can help make sense out of all the confusion that abounds around new technologies, delivery platforms, devices and tools. People who first understand the tenets of branding and brand management, have experience in creating engaging interactive that can be measured and then delivered seamlessly across media mostly will be the ones who will make their mark in the future.

Reports from UK suggest that direct marketing seems to be the worst hit in the time of the downturn. “Direct marketing budgets have seen the largest fall in eight years in the first three months of 2008, according to the Bellwether report, the quarterly measure of health of the marketing industry.” . Wonder if all this talk of green marketing is having an impact.

American congressmen are pushing for a law that would limit how much behavioral targeting online aggregators like Google, Yahoo and Microsoft can do. From The New York Times.

A recent report from Forrester says that ninety-seven percent of consumers in the US use email. The figures many not be so high in India, but the usage is close to the same among those belonging to the top SECs. Even though email adoption rates are so high is it being used right? Seventy-seven percent of respondents to the Forrester survey say they receive too many email offers. Seventy-two percent delete most email advertising without reading it, and only five percent buy things advertised through email promotions. According to Stephanie Miller, vice president of strategic services at email service provider Return Path the problem is a lack of long-term customer strategy. “Many marketers think of email as a broadcast channel, not as a way to connect with individuals.” When integrated with data like CRM, POS, and Web analytics, email can leverage customer data to have a real dialogue, but very few marketers actually do it. There are some very good insights on how companies could use email better in this two part series from 1to1 weekly. Read them here and here.

With consumers becoming more conscious of the environment, Direct Marketing faces hurdles when consumers opt for paperless catalogs, e-statements, mobile banking and many others. So how can direct marketers be sure that their emails will not be trashed or text messages deleted? Should the focus then move to using the data that we have wisely to give customers vital pieces of information that they will not do away with, or resorting to other forms of personalized marketing than direct mail? Forrester report shows exactly how green Direct Marketing is today, in a survery that you can participate and access here.

Just like Do Not Call (DNC) lists and Do Not Spam legislations, the direct marketing industry in the US is fighting attempts by the Government to bring in a Do Not Mail legislation. Read more from DMA. Also look up the DMA Choice website that aims at educating the world about taking a stand.

The ever pertinent Bankwatch has an interesting post on why banks need to become friends of their customers to stay relevant in an age of social networking. He sees three drivers that make it the perfect time to deliver the next level of banking experience. Attention crash, with more demands on our time we have little or no time to the things we used to do, the way we used to. The coming of mobile applications (like Twitter for micro blogging). 2.0 technology, the static web, we all know is moving to deliver all kinds of connected possibilities. Banks need to care because they are losing people’s attention. As financial services fragment and are re-positioned and offered by many, the lure of the one-stop branch is just not a lure any more. Opinions and views of banks (and everything else) are shaped online today. When we refine that idea, the opinion source has to be within the blogging/social space. Banks have to be where their customers are. The branch must come to the customer. Earlier post in the iContract newsletter, Friending is the new advertising.

New York Times recently ran a story on its front pages on the wicked ways of database marketers. One of a series of investigative pieces that looks at the problems faced by a growing number of older people in the US, The Times worked undercover to expose the devious ways database companies segregate and manage data about people. The story detailed how InfoUSA customer data was twisted into customer segments such as “Elderly Opportunity Seekers,” “Suffering Seniors,” or “Oldies But Goodies.” InfoUSA has posted a rebuttal on their site that claims that the article is based on files that are part of a case that was investigated and closed three years ago.

Forrester Marketing has a take on why Direct Marketing companies need to change. “The future of the direct marketing agency isn’t direct marketing. Unless direct marketing agencies begin to acquire or adopt database marketing capabilities and advanced analytics expertise, they will start to see serious erosion in their business, as database marketing service providers that successfully marry customer insight, creative, and program management discipline will quite simply eat their lunch”. Which is when they come to Merkle, the third largest database marketing agency in the US according to Adage, buying up CFM Direct. In a world where the marketing discipline becomes increasingly complex, sophisticated marketers are recognizing the need to marry deep customer knowledge and analytics with traditional creative competencies and this is where the marriage of data, strategy and creative will become important. Peter Kim Analyst at Forrester sums up the merger, “Marketers should look for teams that employ a Left Brain planning philosophy along with jaw-dropping creative skills”. Elsewhere, Adliterate has a piece that looks as DM and its new creative focussed avatar. And DMA USA, on how direct marketing is propping up a slowing down US economy.