Are You An Ostrich Or An Eagle?
The Italian Philosopher, Umberto Eco, in his book Serendipities, tells the story of Marco Polo finding a rhinoceros and believing it to be a unicorn, since he had heard of the fictitious unicorn and never heard of a rhinoceros. The problem is that most people in marketing behave like Marco Polo when it comes to accepting new ideas and are much happier following accepted wisdom than discovering new horizons.
You could argue that they are risk averse or like ostriches and bury their heads in the sand when under attack from something they are not familiar with. Where in fact the successful manager soars like an eagle and with pinpoint vision picks out their prey.
When the editor asked me to make some predictions for the direct marketing industry in the months and years ahead I immediately thought about some of the fantastic opportunities that new technology and changing lifestyles would bring to us. But then I paused and considered what I believe to be the truth, which is that managers, ostrich like, will try to use new technology to satisfy the needs and demands of their current problems, rather than harness them in new ways to win customers and grow business.
Take a look at online marketing. For most organisations this is just an extension of what they are doing in the bricks and mortar world. They have a web presence and have added an email address to the snail mail address and phone number they have in their customer database. Then because it is cheaper to send email messages than direct mail communications and because they get a response more quickly, they concentrate online rather than integrate online with other media. This is both foolish and short-sighted, ignoring the essential fact that all of the time, or some of the time, many customers would prefer to receive a letter than an email and even if they didn't, by varying the type of communication a business can create a better dialogue with their customers and extend and develop the relationship with them - which is why we are in business for after all.
In the past decade $80 billion was spent on software in and around the customer CRM process. But do we have any better understanding of customers? I think not. $80 billion would have been better spent on getting marketing managers out of their offices and visiting their customers for a cup of coffee and a chat so that they had a better idea of what they wanted and how to communicate with them in the future. I say this from the experience of learning more about customers from talking to them as they placed orders on the phone, visiting them to deliver competition prizes and various other person-to-person communications, than any time spent looking at spread sheets or market research.
Actually, perhaps I denigrate marketing managers too much. It's their bosses, the board directors that need to meet the customers so that they understand them and then set strategies for the organisation that concentrates on enhancing the customer experience rather than cost cutting programs designed to deliver short-term shareholder benefit.
But given that $80 billion has been spent on software, there must be so much data out there that the time has come for investment in analytics and automated intelligent communications.
Improved analytical capabilities are needed to segment targeted markets more effectively. To execute effective target marketing campaigns companies need to personalise their messaging as much as possible - not just the name and address, the content as well. This is especially true for email campaigns where prospects and customers can filter messages out forever if they feel they are being spammed.
On the automated intelligent communications front, expect to see tools that help create individualised portals for customers and prospects. Gareth Holmes, a UK expert on Search Engine Optimisation and web presence told me that by the end of 2006 I could expect to see home pages that gave the option to visit a version of a website targeted at males or females. This makes a great deal of sense since the use of language; imagery and right and left-brain activity is markedly different between the sexes.
I also expect that data gathered from web visits will be integrated into CRM systems.
We are all becoming accustomed to the fact that viewers are increasingly switching on their computer screens instead of their TV's. This is having dramatic effects on media spend. Online advertising in the UK rose 73% during 2005, taking ad revenues to $2bn - overtaking media such as consumer and business magazines, radio, posters and cinema. And with better segmentation of online viewers, this is bound to increase.
According to Simon Davis, Managing Director of MarketDeveloper a hosted CRM provider, this is all bad news for suppliers of services in the traditional direct marketing arena. Their services are not as sexy as those providing online services and are increasingly being commoditised putting suppliers to the industry such as mail houses, printers, list suppliers, etc. under heavy pricing pressure.
He also expects to see acceleration in the acceptance of hosted CRM systems. The UK is two years behind the US but companies such as Salesforce, NetSuite and his own MarketDeveloper are now getting real traction.
Simon thoughtfully adds that management will continue to exert pressure on direct marketing teams to justify their work through measurable ROI. This is not just about breaking even on recruiting a customer, or an individual mailing; but showing that the entire direct marketing activity including all costs and overheads actually does make a profit. Improved analytics will help towards this measurement and even though we have always known that this is what direct marketing was all about, we have often turned a blind eye to some of the costs or pulled the wool over the eyes of our bosses or clients!
But predictions rarely come true. I'd like to predict that we will do more testing of offers, creative propositions, headlines and copy, just like I did when I first entered the industry. But as each year passes we seem to do less and less of it and put at risk customers, relationships, profits and growth.
I'd like to think that one of the many organisations that have my mobile phone number could do something useful with it. They have data about me, but this has never been used to send me a message while I was shopping in a high street or drinking in a pub, making me a special offer.
I'd like to think that radio frequency identification (RFID) will soon make queuing at supermarket checkouts a thing of the past by automatically scanning my purchases and enabling payment authorisation. Better still, being greeted at the supermarket with my trolley already filled with the items they know I regularly buy leaving me to enjoy the rest of my shopping experience.
Unfortunately, I expect that too many managers will bury their heads in the sand and ignore the opportunities in our brave new digital and data driven world. I hope you won't be one of them and instead grow wings and soar like an eagle.
You could argue that they are risk averse or like ostriches and bury their heads in the sand when under attack from something they are not familiar with. Where in fact the successful manager soars like an eagle and with pinpoint vision picks out their prey.
When the editor asked me to make some predictions for the direct marketing industry in the months and years ahead I immediately thought about some of the fantastic opportunities that new technology and changing lifestyles would bring to us. But then I paused and considered what I believe to be the truth, which is that managers, ostrich like, will try to use new technology to satisfy the needs and demands of their current problems, rather than harness them in new ways to win customers and grow business.
Take a look at online marketing. For most organisations this is just an extension of what they are doing in the bricks and mortar world. They have a web presence and have added an email address to the snail mail address and phone number they have in their customer database. Then because it is cheaper to send email messages than direct mail communications and because they get a response more quickly, they concentrate online rather than integrate online with other media. This is both foolish and short-sighted, ignoring the essential fact that all of the time, or some of the time, many customers would prefer to receive a letter than an email and even if they didn't, by varying the type of communication a business can create a better dialogue with their customers and extend and develop the relationship with them - which is why we are in business for after all.
$80 BILLION ON SOFTWARE - BETTER SPENT ON COFFEE!
In the past decade $80 billion was spent on software in and around the customer CRM process. But do we have any better understanding of customers? I think not. $80 billion would have been better spent on getting marketing managers out of their offices and visiting their customers for a cup of coffee and a chat so that they had a better idea of what they wanted and how to communicate with them in the future. I say this from the experience of learning more about customers from talking to them as they placed orders on the phone, visiting them to deliver competition prizes and various other person-to-person communications, than any time spent looking at spread sheets or market research.
Actually, perhaps I denigrate marketing managers too much. It's their bosses, the board directors that need to meet the customers so that they understand them and then set strategies for the organisation that concentrates on enhancing the customer experience rather than cost cutting programs designed to deliver short-term shareholder benefit.
But given that $80 billion has been spent on software, there must be so much data out there that the time has come for investment in analytics and automated intelligent communications.
Improved analytical capabilities are needed to segment targeted markets more effectively. To execute effective target marketing campaigns companies need to personalise their messaging as much as possible - not just the name and address, the content as well. This is especially true for email campaigns where prospects and customers can filter messages out forever if they feel they are being spammed.
DIFFERENT WEBSITES FOR MEN & WOMEN
On the automated intelligent communications front, expect to see tools that help create individualised portals for customers and prospects. Gareth Holmes, a UK expert on Search Engine Optimisation and web presence told me that by the end of 2006 I could expect to see home pages that gave the option to visit a version of a website targeted at males or females. This makes a great deal of sense since the use of language; imagery and right and left-brain activity is markedly different between the sexes.
I also expect that data gathered from web visits will be integrated into CRM systems.
We are all becoming accustomed to the fact that viewers are increasingly switching on their computer screens instead of their TV's. This is having dramatic effects on media spend. Online advertising in the UK rose 73% during 2005, taking ad revenues to $2bn - overtaking media such as consumer and business magazines, radio, posters and cinema. And with better segmentation of online viewers, this is bound to increase.
According to Simon Davis, Managing Director of MarketDeveloper a hosted CRM provider, this is all bad news for suppliers of services in the traditional direct marketing arena. Their services are not as sexy as those providing online services and are increasingly being commoditised putting suppliers to the industry such as mail houses, printers, list suppliers, etc. under heavy pricing pressure.
He also expects to see acceleration in the acceptance of hosted CRM systems. The UK is two years behind the US but companies such as Salesforce, NetSuite and his own MarketDeveloper are now getting real traction.
Simon thoughtfully adds that management will continue to exert pressure on direct marketing teams to justify their work through measurable ROI. This is not just about breaking even on recruiting a customer, or an individual mailing; but showing that the entire direct marketing activity including all costs and overheads actually does make a profit. Improved analytics will help towards this measurement and even though we have always known that this is what direct marketing was all about, we have often turned a blind eye to some of the costs or pulled the wool over the eyes of our bosses or clients!
WHAT I'D REALLY LIKE TO HAPPEN
But predictions rarely come true. I'd like to predict that we will do more testing of offers, creative propositions, headlines and copy, just like I did when I first entered the industry. But as each year passes we seem to do less and less of it and put at risk customers, relationships, profits and growth.
I'd like to think that one of the many organisations that have my mobile phone number could do something useful with it. They have data about me, but this has never been used to send me a message while I was shopping in a high street or drinking in a pub, making me a special offer.
I'd like to think that radio frequency identification (RFID) will soon make queuing at supermarket checkouts a thing of the past by automatically scanning my purchases and enabling payment authorisation. Better still, being greeted at the supermarket with my trolley already filled with the items they know I regularly buy leaving me to enjoy the rest of my shopping experience.
Unfortunately, I expect that too many managers will bury their heads in the sand and ignore the opportunities in our brave new digital and data driven world. I hope you won't be one of them and instead grow wings and soar like an eagle.
posted by Ian at 11:19
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