Spyro Kourtis

on July 26, 2010

category: integrated marketing

President and CEO

3 reasons to start investing in mobile marketing now

I’m currently championing mobile marketing with our clients – and I have several good reasons for doing so, even though early results may not immediately justify my enthusiasm.

Did I say that? I don’t think I’ve ever told anyone to ignore results before!

However, in this case I believe our short-term thinking is likely to get in the way of our long-term profitability. In other words, we may be killing a good idea too soon.

One of our clients invested in a mobile campaign, and while they got a very low cost per call, the close rate wasn’t what they were hoping for. They knew that mail beat mobile in overall cost per sale – and they were ready to abandon their mobile program.

My counsel is to hang on. Don’t bail on this program yet. Here are three reasons why:

1. The medium isn’t fully developed. As people become more accustomed to mobile advertising, it’s a given that they won’t respond as frequently. Every new medium has a curiosity factor. The audience wonders, “Hmm. What’ll happen if I click this?” Once they figure that out, they stop clicking as frequently.

When they stop clicking as frequently, they’ll likely click only when they are truly interested in the product. The quality of response will go up and the cost per sale will go down.

2. You can “own” the space for your product. While marketers lament that mobile doesn’t really scale, the good news is that you can have a huge impact for a small cost – if you start right now. Last year the whole spend on mobile display advertising was about $250 million. This year it’s looking like $313 million. But by 2015 it’s predicted to be $1.2 billion.

This makes jumping in right now a very smart defensive move.

3. Pioneers get the benefit of early learning. If you wait until the mobile medium is mature, you’ll likely be playing catch-up for a very long time. Think of how many things – especially in the digital space – are relatively easy to understand and learn early on and then grow in complexity until it starts to feel like you need a Ph.D. in the specialty in order to succeed.

So that means test everything and keep testing. Test what you’ve already tested – because how people use their mobile devices will continue to change rapidly. Don’t focus in on the winners too soon. Keep it broad.

This is what will lead to long-term success in mobile marketing.

 

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Bob Stack

on July 23, 2010

category: a look into agency life

Director of Estimating

Process or results? Pick both.

Some personality tests would tell you that people tend to either be process-oriented or results-oriented. I find that a little amusing. Around here, we’re process-oriented because we’re results-oriented. But we try to never let our processes get in the way of the results.

I’m a problem-solver by nature. I’ve learned there is no silver bullet or one method or one process that applies to every solution.  We establish procedures but use them as guidelines for the areas that need to be addressed. They aren’t law: Too many unneeded procedures can keep a staff member from fully contributing to the success of the team. 

I believe there is an assumption in the corporate world that printing and mailing work is easy, any monkey can do it. This results in an organization attempting to commoditize the work, break it down to simply numbers and parts and forget there needs to be an experienced person that adapts the process to the specific project ensuring all of the parts work together and proactively evaluates the challenges.

My approach to direct mail production is kind of negative. I look at the project, figure out what can go wrong, what are the challenges. Then I seek to minimize the risks, while thinking about back-up plans and options in case things do become challenges.  It takes a group of people to be successful in direct marketing. You have to have experts in each area, but most important, the team as whole must take ownership and responsibility for the entire project, not just their area of expertise. 

To be successful, each team member needs to appreciate and understand, to varying degrees, what happens before the project comes to them, and how the work they hand off is going to be utilized next. Then they can propose solutions that are truly effective – not just something that fits with the process and facilitates their immediate tasks. 

I think each person should inspect what the previous person provided and anticipate what the next person is going to need to be successful.  I believe in teams and trust. I have to trust my co-workers that they are going to look at my work, challenge me and allow me to challenge them on their work.  I have been successful because I am a risk-taker and push the boundaries. But most important to that success is having a good team of people to work with who understand each other’s strengths and weaknesses.  And maybe even more important than that is a corporate climate and culture that allows diversified approaches to success.

 

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Randy Weiler

on July 13, 2010

category: direct marketing

USPS Logistics Specialist

Postal and Logistics Highlights for July

It’s easy nowadays to forget that, while staying ahead of the digital curve, we still need to know what’s going on in the physical world. Here are a few updates pertinent to marketers from the US Postal Service.

BMC no longer:
The USPS continues the switch in terminology from BMC (Bulk Mail Center) to NDC (Network Distribution Center). The locations and purpose of the facilities generally remains the same; just don’t call them BMCs.

Saturday delivery:
The USPS marches forward with its proposal to eliminate Saturday delivery. There is no date set although FY 2011 is currently being mentioned. This proposal is still pending approval. If approved, the intention is only to eliminate delivery, mail processing and transportation would continue. Read more about it here: http://www.usps.com/communications/five-daydelivery/

Did you know?
The Postal Service has different tab requirements for self-mailers and booklets.

Tabs used on self-mailers must be 1 inch in diameter and can be perforated. For booklets, tabs must be 1.5 inches in diameter and cannot be perforated. There are three different types of tabs; clear poly, translucent paper and white paper. Clear poly tabs cost the most and white paper tabs the least. Tab placement requirements vary based on the design of the self-mailer or booklet.

 

 

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Jürgen Stephan

on June 24, 2010

category: direct marketing

Executive Director, New Business Development

Stick to your loyal base and grow with them

I recently talked to the executive team of a prominent financial services organization discussing their plans to upgrade their customer profile from beginner to advanced user.

While seeing higher transaction frequency, higher average dollar values per customer and a higher lifetime customer value seem like obvious goals, this isn’t a gimme. Other competitors want the same thing and the question becomes who’s better equipped to deliver. If some competitors spend four times as much in media and invest heavily in tools for advanced users, that may give them a leg up.

Being a passionate soccer player, I know a thing or two about leveraging one’s strength. If you have an excellent striker on your team, you use him and support him through the wings. If you have a strong defense, you destroy the opponent’s game and rely on a few counterattacks to win the game.

There may actually be nothing wrong with sticking to the beginner segment, following them along the lifecycle as they mature and varying the service offerings to stay their default choice: from first job, to marriage, to first child, to first house, to first college student, to divorce, to retirement planning, etc. Of course, you need to be smart about catching them early on in each stage – or they may fall into the arms of others. Never a dull day in marketing, is there?

You can even use your beginner customers to recommend you through a well-orchestrated referral program and you will become a more meaningful part of their life and network. 

If your industry category is fairly commoditized and highly competitive, growth may come less from adding different kind of customers, but through increasing your sphere of influence from within your core market.  And as long as your target universe is sizeable enough, and the industry category is growing as well, it’s good to carve out a niche that others don’t seem to be that interested in or have less credibility in.

You can always test your way into the advanced user segment, perhaps you may even consider a separate premium brand if you find early success, but be careful not to do a “180” on your core product or service all too quickly.  Rather, stick to your loyal base and grow with them.

 

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Spyro Kourtis

on June 7, 2010

category: miscellaneous

President and CEO

Common sense in a crisis

I’ve been thinking about the BP oil spill – in part because I can’t escape its omnipresence in the news. In fact, this story is so ubiquitous even I was asked  by CNNMoney.com to give a quote about the new apology ad. If you’re interested, you can read my off-the-cuff response here.

Spending $50 million on an apology ad makes no sense to me. Tiger Woods called a press conference. That’s what every scandal-stained politician does, too. This story is enormous. BP would have gotten coverage – without the expense that seems so inappropriate right now. In fact, BP should stop spending money on advertising now.

So what would a good communications strategy be?

1. Certainly an apology is in order – and probably should have happened much sooner.
2. Communicate the plan you have.
3. Communicate that, while you’re optimistic, you have a plan B if plan A doesn’t work.
4. Talk about your timeline.

This approach would help build confidence. Instead of giving your entire communication strategy to the news organizations, BP would take more control.

But, the difficult thing for communicators to deal with is that nothing is going to help this PR disaster until the leak is stopped and the spill is cleaned up.

 

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Carolyn Hansen

on April 21, 2010

category: direct marketing

Vice President/Marketing

5 ideas for customer targeting

Human beings love categorizing. It must be our survival instinct. You see something and you need to know: Friend or foe? Predator or prey? (My dogs get confused on these issues quite a bit. Thank goodness they don’t live in the wild.)

Human beings hate being categorized. When you put people in a box based on age, gender or skin color you’re going to annoy them – at the very least.

That’s the fun of database marketing. It’s a politically correct way to put people in boxes.

Some marketers still don’t realize how powerful this can be. We have an ideal in our heads about sending out one-to-one marketing messages – but that would be impossibly expensive and time-consuming. In reality, we pick out similar people in our database and send a message to the group.

What are good groupings for targeted messages?

1. New customers. People love you most when they first come across your wonderful product. Now’s the time to ask them to refer their friends to you.
2. Customers who’ve bought from you in the past 30-90 days. For most consumer products (except annual subscriptions or very expensive purchases), the longer it has been since purchase, the less likely that customer will ever buy from you again.
3. Customers who spend a lot with you. They deserve special treatment. Make sure you know who’s in this group.
4. Customers who bought product A and, because of that, are likely to buy product B. Retailers are often brilliant at cross-selling. Look at Amazon – they have it down to a science.
5. Prospects going through a life change. Marriage, births, divorce, moving to a new city – these are spending triggers for many, many products.

These are the broadest of categories. Depending on the size of your database and complexity of your product offering, there can be thousands of ways to slice up the data and achieve significant results.

It’s really up to your imagination to see the interesting ways your customers fall into patterns.

 

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Tom Reid

on April 6, 2010

category: direct marketing

Chief Healthcare Marketing Strategist

Boomers and Medicare marketing – hype vs. reality

Medicare marketing specialists are clearing their throats, revving their engines and getting ready to get ready for the influx of Boomers  who will be turning 65 starting in 2011. We have heard all the speculation about Boomers’ attitudes, their hopes and dreams, their innermost insecurities and their dedication to their grandchildren.

What’s implied in all of these articles and blog posts is that, because the quantity of Medicare-eligible people is about to expand, a huge shift in strategy is called for.

I don’t deny that marketers may need to be aware of some generational differences. But the differences between someone born in 1944 vs. 1946 are not nearly as great as many marketing pundits want us to believe. There’s no secret sauce that will make a Boomer respond at a significantly higher rate than the people who have been aging in to Medicare for the past year or two.

Marketing strategy for Medicare should evolve, not wipe the slate clean. It would be suicidal to start from scratch because demographers have labeled your new audience “Boomers.”

This means, if print advertising has given you a satisfactory cost per lead last year, don’t drop it for a completely digital campaign this year.

On the other hand, if you’re not thinking about social media when 46% of online Boomers maintain a social network profile, you’re going to be left in the dust. Maybe not this year, maybe not next. But soon.

Medicare marketing has always been about engaging content and smart targeting within the over-65 audience. That has not and will not change. Boomers will not retire all at once. Some Boomers are much healthier than others. These are the more salient issues for marketers than their status as a large group born in the same cohort.

We need to treat this group more like the individuals they are, as far as possible, and less like a massive market waiting to be exploited.

 

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Carolyn Hansen

on March 26, 2010

category: integrated marketing

Vice President/Marketing

Measurement isn't everything

If someone in this blog says “measurement isn’t everything,” you may be expecting the next phrase to be “it’s the only thing.” Or maybe that’s just me. I grew up in Wisconsin, where Vince Lombardi’s famous quotes were tattooed inside our eyelids.

I mean it. Measuring your campaigns isn’t everything. But it’s the way you’ll know whether everything else is done right. If you run track or swim, a stopwatch won’t make you better at what you do. It just tells you whether you’re doing better or worse than in the past. The data you get from your stopwatch can tell you whether your coach is giving you helpful advice – if , of course, you’re following the advice.

Lots of people in marketing and advertising dislike being measured.

• They say it impinges on their creativity.
• They say measurement is single-dimensional and branding is so much more than just selling things.
• They say measurement stifles risk-taking.

There is some truth in each of those statements.

When you have a particular goal in mind, to be successful, you need to become fairly single-minded about reaching that goal. For example, if you want to lose weight, you can’t be as “creative” in your eating habits as you might want to be. If you want a promotion, your goal stifles your ability to be as lackadaisical at work as you might want to be. So, yes, goals and measurement may have an impact on your freedom.

Yes, branding is about more than just selling. But selling the product is the single biggest brand impact possible. No matter how many lovely commercials you may see about a Lexus, owning a Lexus will have the highest impact on your brand perception.

And measurement may indeed stifle risk-taking. Marketers who measure results are more likely to slip into the tried-and-true than those who value creativity above all else. On the other hand, success brings more possibility for experimentation than failure. Too many failures and you’re out of time and budget. If you know what works and do it, you live to try again another day.

So, measurement isn’t everything in marketing. But it sure influences a lot of things.

 

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Spyro Kourtis

on March 23, 2010

category: miscellaneous

President and CEO

Win-win agency compensation

A new Ad Age opinion piece, “Why Ad Agencies Need to Embrace Value-Based Compensation,” suggests that agencies should be “compensated above their basic costs if they achieve or exceed results as measured by agreed-upon metrics.”

This is an interesting approach – and my own agency is open to it. Yet it’s almost as full of pitfalls as the current compensation approach.

Most agencies and clients aren’t very adept at measurement. My agency specializes in testing and measuring marketing results – and, believe me, it ain’t easy. When compensation is at stake, people will find ways to game the system. We trust our clients and I’m sure they trust us, but when it comes time for giving out credit for results, we don’t want to have a financial axe to grind.

On the other hand, conventional agency practices are painfully inefficient for the advertiser. The two groups start out with goals, get agreement on how many FTEs that will take, come to a blended rate and – voila! – they have a retainer agreement. If the agency takes more time to do something than was planned, they may bill the client more. They will rarely bill less if they are more efficient. If the client looks like it will not reach the goals, they usually must pay a several-month penalty on the retainer to release the agency.

Hacker Group has always used a different model. We call it our “fixed-bid approach.” When a client comes to us with their goals, we determine how much it will cost to reach those goals and set a budget. If it takes more time or expense to get things done than we budgeted, we don’t charge any more to the client. This includes all outside expenses. We are responsible for tightly managing all outside expenses, so our compensation is tied to how efficiently we buy things.

If the client’s goals aren’t met, they can release us without penalty. In other words, Hacker Group is willing to accept more risk in the deal than most agencies are.

And another difference: We depend on the results to drive our strategy, but we don’t usually depend on it for compensation.

That way, if the client doesn’t reach their goal, they may still continue to use us because we beat past performance. Perhaps the goal wasn’t reasonable. That’s okay. We learned something and we can move on with our relationship intact. However, if it makes sense, and we can agree on the metrics, it’s easy to incorporate an additional performance-based incentive bonus to our fixed-bid model.

We believe this is one of the fairest methods of compensation. The client isn’t stuck with all the risk. No one needs to argue about the details or what was within our control and what was not. Win-win.

 

Comments:

5/11/2010 at 9:42 p.m.
Impressive
I really admire your “fixed-bid approach.” As you mentioned, it's risky, but it shows prospective clients that you're truly confident in your abilities as an agency.
>>Kim, Bellevue WA

Jürgen Stephan

on February 22, 2010

category: a look into agency life

Executive Director, New Business Development

Do business partnerships make sense?

Everyone has their own agenda. When we get offers to partner with someone via cold call, e-mail or at a networking event, we ask a lot of questions: Does this product/service benefit me? Do I need to give up something? How can I trust that person? Are they reliable? Will they compete with me? Will they taint my client relationship?

Truth of the matter is: nobody can do it all. If you have a successful business, it’s probably based on something you’re good at and have found a way to make money doing. But sometimes, opportunities are larger than what you can deliver.

Case in point – we’re a direct marketing agency and are sticking to our core capabilities focused on ROI-based marketing programs that drive leads and sales for our clients.  All too often, we run into brand assignments with the goal to increase brand awareness for a product or service. While tempting, that doesn’t fit our expertise and business model. The same goes for e-commerce websites, for which there are specialty shops that are really good at that. Better than we are.

In order to be successful, you need to be able to say NO. And when the opportunity arises, find a suitable partner to fill in the gaps and start integrating your work with them. This requires transparency, top-level commitment, willingness to give something up and plenty of extra effort to integrate people and processes well.  Depending on the assignment, you may choose an embedded team relationship on the premises of either partner or a working relationship based on scheduled travel for planning and review meetings.

The benefits: You increase your capabilities; your team participates in interesting, often more complicated assignments and thus can refine its skill sets and enrich your service portfolio.

We just won a major account this way within the last week and out-competed a few pure-play shop and other partnerships, as well. The integrated story, the experience level on both sides and the passion among our agency partnership resonated well with the client and now we’re fulfilling on that trust.

Partnerships do make sense! Watch out for your new opportunity.

 

Comments:

3/9/2010 at 11:53 a.m.
Partnerships
Other than the two dozen certified production partners that we work on an ongoing bases for print, laser and lettershop, fulfillment, etc. we have also formed relationships with general ad agencies whose clients have a need for direct marketing best practices. If we receive a branding assignments ourselves, then we'll redirect it to those partners. Each party stays true to its core expertise. Feel free to e-mail me for a specific case or request.
>>Jurgen Stephan, Seattle WA3/8/2010 at 2:35 p.m.
who are your partners?
agree that no firm can 'do it all' who are the partners you use regularly, and what areas of expertise do they cover?
>>brian flynn, seattle WA