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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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

Jürgen Stephan

on January 5, 2010

category: direct marketing

Executive Director, New Business Development

Why are they buying?

Just found this quote from Steve Jobs on my recent AMA MarketingPower newsletter.

"It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them."

Darn right, Steve. I would even go a step further. Customers are unpredictable: not only until you show them, but until they buy.

There are more choices with time and money than one can imagine, or handle for that matter. As witnessed throughoutt this holiday shopping season, if you walk into an electronics store with a straight mission to buy a new iPod, you’re golden. If, however, you are looking for any type of music player for a gift and are price conscious, the choices have just increased exponentially. Especially if you walk into an independent retail store or shopping on the worldwide and never-ending Internet.

So now you have seen it all on display or on the Net, and maybe a competent sales person explained it to you. Now what? You buy one, or you go home and defer the purchase until later. Chances are you left the store with product, bag, receipt and a good feeling.

But how did we get here? Well, at the start someone built a good-looking product, invested money in building a brand – like Steve Jobs and team. Perhaps they made a smart and timely offer to make the sale: a discount coupon of 20% that you brought into the store; a secondary product that convinced you of an added value; added points to your loyalty status; or something else stimulating.  Most likely, both  retailer and manufacturer helped you with convincing arguments to purchase the item.

If, however, we asked shoppers in a focus group, they couldn’t tell you what enticed them to buy. They’d make up stuff or take guesses at best. Better to track responses live in action, via item-level coding. It’s amazing what technology is out there already in retail or online, but hardly ever gets used to measure marketing success. Sure – we have seen coupons both printed and digital; barcoding has been used mostly for cost-saving focused supply chain management – and digital screen displays and more intelligent RFID tagging allowing retailers to interface with the end customer wirelessly in store aisles.

Both manufacturers and retailers are interested in faster product turnover, lower inventory cost (you may have noticed empty shelves during this holiday season) and more direct feedback mechanisms with the customer, allowing both to make smarter decisions on matching supply and demand.

As an agency accountable to manage our clients’ marketing spend, we have limited influence on this type of shopping infrastructure. Yet as direct marketers we always like to help push the envelope and zero in on cause and effect. When we do, we really are at our best. And our clients get credit for their effectiveness when asking the CFO for more budget.

Let’s do more of that in 2010 and measure more where the register rings: better, faster and with predictable ROI.

 

Comments:

3/9/2010 at 2:01 p.m.
Delay . . .
I agree with Brian that often multiple messages help push someone to consider buying. For one thing, it can help build some credibility for the advertiser. However, I think companies like Capital One would do better if they did a little better job of data mining -- and even list hygiene! In their heyday, my husband and I would get identical mailings on the same day. That's just wasteful.
>>Carolyn Hansen, Seattle WA3/8/2010 at 2:45 p.m.
delayed ring
agree that monitoring the register is ideal. sometimes, the marketing goes out...and that customer doesn't reply in a given 'window' when an offer is valid or some arbitrary timeframe. sometimes, the register rings not after the first mailing, but after the second, or twentieth (e.g., why Capital One keeps mailing us all). second, it's important to use experimental design to vary offers...and i believe you do this...to figure out the 'optimal' offer to give to a prospect with a certain profile.
>>brian flynn, seattle WA

Jürgen Stephan

on December 15, 2009

category: lead generation

Executive Director, New Business Development

Are you feeling lucky for 2010? Well, are you?

2009 has been a rather depressing year for many marketers. Staff has been cut (maybe yourself, too), budgets have dwindled; what was true yesterday isn’t anymore; and nobody could really give you a straight answer about the prospects. Social media – while highly touted in the media and in hallway conversations – can’t be the answer for everything.

Time to change that: 2010 will be a year of growth and departure. Are you with me?

We’ve been planning an aggressive marketing campaign to our top four vertical markets. Can’t tell you much more about that or I’d have to shoot you.

Our marketing and creative teams have come up with some awesome concepts, very targeted and relevant in content. We will deliver them early in Q1 in a multi-step approach that will prime a year of recovery. Maybe you’ll be even one of the recipients.

Those of us who used 2009 for testing different marketing channels – e-mail, mobile, social – will reap the rewards in the new year. Despite sluggishness in decision-making and shifting targets, I’ve personally been involved in a flood of new business conversations with marketers looking for new resources, significant program improvements and marketing-ROI savvy partners.

So 2010, bring it on!

 

Comments:

12/15/2009 at 1:17 p.m.
I am feeling lucky- Spread the good news
Its funny how people are naturally conditioned to spread bad news faster than the good.. We all need to remember not to get sucked into the daily contagious doom and gloom negativity of economic hard times and look forward to great things to come and be proud we made it through a challenging year that made us all stronger.. We all should feel lucky!!
>>Laura Madel-Hacker Group, Seattle WA

Jürgen Stephan

on February 9, 2009

category: miscellaneous

Executive Director, New Business Development

Specialization vs. broadening out.

For those of us who like our decisions to be cut and dried, marketing can sometimes be messy. When looking for success models, you can always find counter-examples to your examples.

Should you specialize and "stick to your knitting," like Radio Shack? Or should you broaden your appeal and pursue a more all-things-to-all-people approach, like Amazon.com? Which is feasible? Or credible? Which direction promises sustainable success?

Either approach can work. That’s why consulting with an agency can often be very helpful to an organization. An outside observer with experience in multiple businesses and industry verticals can help you sharpen your focus and broaden your scope.

As an agency, we have to be careful to keep our eyes open, as well. It can be easy to fall into a trap of believing that what worked before -- especially, what worked for another client -- will work again. Each client is different. Each client has its own history, distinct customer base and unique appeal.

That’s the challenge of working with new clients. That’s also what makes it fun.

 

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Jürgen Stephan

on January 16, 2009

category: lead generation

Executive Director, New Business Development

Have you achieved your 2009 sales goals?

It’s a little early to start talking about year-end goals, isn’t it?

For marketers with long sales cycles, however, the year could be considered half over. My team has very likely teed up all the sales we can expect to sign by the end of first quarter. It’s possible a few deals could come in over the transom and surprise us, but most of the signatures we’ll read on new contracts this quarter we already know.

Our marketing plans for the year are, if not set in stone, well thought-through -- and some are already being executed. That’s so that we’ll have leads in the pipeline in Q2 and Q3. And those leads are the only way we’ll meet our sales goals by the end of the year.

Hurry. The end of the year is sneaking up on you.

 

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Jürgen Stephan

on July 15, 2008

category: lead generation

Executive Director, New Business Development

Is less really more in lead generation?

Over the years, I have had many discussions about quality vs. quantity in lead generation. 

Sometimes a prospect will say, "I want fewer, better leads."  Another prospective client will say, "More, more, more!  I need more leads!"

As an agency, we focus on cost per lead in our client work.  Part of the reason is that marketers have much more control over this metric than we have on the cost per sale, tied to longer sales cycle.  Once leads are handed to the sales team, anything can happen -- and, often, does.  That’s why this is typically the metric our client (i.e., the marketing team) is held to.

But we prefer the cost per sale metric -- because that’s really the heart of the matter, isn’t it?

Even if the marketing team loses control of what happens after leads are passed on, they can control the kind of leads they give to sales.  An appealing, though unrelated, offer may get a lot of relatively unqualified leads.  A broader list pull may do the same.  

Some sales teams are happy to work leads that aren’t quite ready to buy yet.  Some sales teams disregard leads that won’t close by the end of the month or quarter. As marketers, we are in the position to dial up the lead quality when the sales team needs fewer, better leads.

If sales and marketing are to be aligned, the marketing team has to have clear direction and agreement -- and deal with it.

Cost per lead is only a proxy. The full picture is in the cost per sale.  And often more is more.

 

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Jürgen Stephan

on July 2, 2008

category: direct marketing

Executive Director, New Business Development

The limits of behavioral targeting

Life is a trade-off.  My dad used to say, ''You can do anything you want.  You just can't do everything you want.''  Saying yes to one thing means saying no to many, many others.  It makes logical sense, but just about everyone still has trouble with it.

EMarketer.com came out with an article that says it all:  behavioral targeting is great, as long as you have the data.  The trade-off is a loss of reach.  Here's a quote:

Chris Kilkes, interactive media manager at Godfrey Q & Partners, said, ''The biggest problem with testing different kinds of behavioral segments is maybe we are only reaching 10,000 people on a specific site, like NYTimes.com. When you are talking about reach and trying to get frequency, that becomes pretty problematic.

''Why do I spend 10 grand on 10,000 people?'' Mr. Kilkes continued. ''Of course you would say, 'Well, that's a richer audience.' That's one of the big challenges for behavioral is you're narrowing your universe so much.''

And that's why online marketers fall back on old-school demographic targeting.  It's just plain easier.  Are you wasting money?  Almost certainly.  But at least it doesn't look like you're spending 10 grand on an audience of 10,000 people.

In my opinion, marketers are only fooling themselves with this kind of thinking.  Yes, you get more reach -- but with the wrong audience.  And when you're ''reaching'' the wrong audience, you're contributing to the clutter and irrelevance that is the enemy of marketing.  Is there a stronger word than ''enemy''?  Whatever that word is, that's what clutter and irrelevance are to your marketing campaigns.

That's why no one pays attention to your relevant advertising -- because there's so much irrelevance out there.  That's why click-through rates have dropped drastically since the beginning of banner ads.  That's why response rates to every other form of direct marketing have declined. People can't like or feel good about watching twelve irrelevant commercials for every ten minutes of television.  They hate it.  And they prove it by getting DVRs and fast-forwarding every chance they get.

Let's not try to do everything anymore.  Let's do the right thing and only market to the audience that could possibly be interested in our products or services.

 

 

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Jürgen Stephan

on March 28, 2008

category: direct marketing

Executive Director, New Business Development

Aligning marketing and sales

In many organizations, sales and marketing report to the same executive leader or are even in the same department, but they rarely seem to be on the same team. When things aren't going as smoothly as desired, the finger-pointing begins.

"Sales just doesn't care about maintaining our standards on branding or lead generation."

"Marketing couldn't sell their way out of a paper bag."

One of the most effective ways to start selling more for your company is to get both organizations on the same page.

I have my bias. Even though sales quota typically trumps, I think it is the responsibility of marketing to drive towards alignment. The marketing team needs to take the first step. If you've never been in sales, you'll have a tough time getting any credibility until you start listening to what they tell you. If it's been awhile since you've sold, you'll also have a bit of an uphill battle.

Here's a good place to start:

This should take you in a positive direction. When something you've done for sales starts getting results, you'll have built a winning team. And top executive are happier, as marketing spendings are better targeted and more predictable in outcome.

 

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Jürgen Stephan

on January 3, 2008

category: direct marketing

Executive Director, New Business Development

An energizing start to the New Year.

This morning we started with a strategy session that really inspired me. About twice a week the company's executives get together for a Strategy Council meeting that focuses on one of our clients or prospects.

This time we got a number of other account people involved to share what's working with their clients — so that we could use that information on behalf of a specific client who's looking for high-performance ideas. Not just based on a hunch, but based on market test data.

The room was packed and the energy level was high as account managers and executives talked about current best practices and new marketing ideas that have promise. Ideas for data segmentation strategies flew. New media opportunities captured the spotlight. It's really amazing how much is going on in the world of direct response marketing, and how having many clients, can add to a larger aggregated knowledge base of best practices. Both for consumer and business markets.

This is what makes working for an agency so great. We learn what works (and what doesn't) and see how our best practices apply in new situations. It gave me new ideas that I'm hoping to present soon.
 

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Jürgen Stephan

on November 19, 2007

category: integrated marketing

Executive Director, New Business Development

Long Live the ROI!

Marketing folks used to be the big spenders in the company and always got the evil eye from the CFO. Not any longer! These days, marketing spending is getting more and more measurable, and is driving the company's top line and making cost effective choices at the same time.

The online revolution has brought upon us precise ways of measurement from the early buying cycle of prospects to the final stages of buying – the old AIDA model comes to mind, i.e. attention, interest, demand, action. The closer alignment of campaign management systems (CMS) and customer relationship management systems (CRM) has provided powerful tools for marketers to attract new customers and retain old ones before they walk off to the competitor. The marketing lead pipeline and sales lead pipeline are becoming increasingly correlated.

Both consumer and B2B marketers have come up with pretty sophisticated systems and models of how to track the continuum from prospect to customer status for pre-, during, and post-sale scenarios and know how much money to spend along the way.

The essence of direct (response) marketing has lived and maintained that concept for many years: spending money during acquisition / lead generation phase wisely, building up a prospect database to nurture over time, and leveraging a customer marketing database that spawns cross sell and up sell activities.

Many marketers are achieving uplifts in performance by 10-20% or more, while utilizing both offline and online marketing activities in an integrated manner. Take this scenario for example: I get an e-mail from a company x about a product or service y that is followed by a direct mail piece,
which is consistent with the message and has some relevant calls to action, I might just pick up the phone or go on the landing page the company x has set up for me. Oh look, they even have my name on there – they must be pretty serious! At least they're professional. Maybe I'm not ready this time, but perhaps at one of the next e-mail rounds I will be. If I fit company x's profile I will eventually buy.

These days it's not unreasonable for the CFO to ask the head of Marketing for a 10:1 return on investment, i.e. sales achieved over marketing spending. Depending on business category and average selling price that number may fluctuate. Regardless, it's good to familiarize yourself on the new tools and sharpen some older marketing tools for maximum effectiveness.

Vive Le ROI!
 

Comments:

12/8/2007 at 11:47 a.m.
ROI
You and Brian Gilbert must have gone to lunch together and discussed the miserable state of ROI measurement. I mentioned in Brian’s Bog that “You Gotta Wanna,” and regardless of how many seminars there are on ROI probably only 10% of the marketing mangers (and maybe less agencies), have the courage to measure what they manage. We’re getting some articles on the Resources Section of the Sales Lead Management Association that addresses this. I hope we have more contributions in the coming months
>>James Obermayer, Orange CA