Direct Marketing as Strategy

A 20-Year Retrospective, and 20 Years into the Future

Published in Direct Marketing Magazine

 

Twenty years ago, I had never heard the term “direct marketing,” and candidly, never thought of it as a career. But in April 1978, only one month before my graduation from Fort Hays State University, in Hays, Kansas, I had the privilege of attending a Direct Marketing Collegiate Institute sponsored by the Direct Marketing Educational Foundation (DMEF).

 

It was a career-changing experience. My mind was opened after five days at the DMEF Collegiate Institute. Since then, the scope of direct marketing has evolved profoundly, and there has been marked evolution in how direct marketing is viewed by a diverse group of marketing organizations.

 

The change has been gradual, but the 20-year milestone of my introduction to direct marketing, and an invitation from the DMEF to speak to a Direct Marketing Seminar for Graduate Students in February (1998) in Los Angeles, created an opportune time to examine the changes and reflect not only about the past 20 years, but gaze into the future about what the next 20 years may bring.

 

The program outline from my Collegiate Institute in 1978 and the program outline from the Graduate Student Seminar in 1998 are revealing about how direct marketing has evolved. The profound change can be summarized in a single word: strategy. Direct marketing has become a strategy for marketing companies of all types. For years, direct marketing was tactically focused. And indeed, if the tactics aren’t right the strategy will fail. Today, the successful marketers are those who use direct marketing as a strategic method of marketing and who also understand every direct marketing tactic and rule.

 

1978 Collegiate Program Compared to the 1998 Program

Twenty years ago about the only place the direct marketing was being taught was by the then named Direct Mail/Marketing Educational Foundation. In the early 1980s, the name was changed to the Direct Marketing Educational Foundation.

 

The presentation titles made by 1978’s direct marketing pioneers are telling about where direct marketing was at that time. And credit must be given to those leaders who inspired so many of us to make direct marketing our career of choice. The leaders of the 1978 program included Paul Sampson, who chaired Collegiate Institutes for about 20 years before retiring a couple of years ago, Elliot Abrams, Steve Allen, Bob DeLay, Dick Hodgson, Pete Hoke, Roy Ljungren, Mike Manzari, Bob Stone, and John Yeck. John had been the guiding light of the Direct Marketing Educational Foundation since it was established in 1965.

 

The speech titles in 1978 included:

1. What Is Direct Mail?
2. Direct Mail ... Fact and Mythology
3. Research By Mail
4. Major Trends in the Medium Today & Seven Cardinal Principles for Direct Mail Success
5. Effectively Using Direct Mail In Industrial Advertising
6. The World of Catalogues
7. The Multi-Media Marriage
8. The World of Production
9. Envelopes, Letters and Other Forms of Direct Mail
10. Mailing Lists and the List Broker
11. Mailing Lists and the List Compiler
12. Developing Effective Offers and Propositions
13. What You Should Know About Testing
14. Creativity in Copywriting How to Compel Action from Prospects, Sweepstakes, 3-Dimensional Formats, and Other Unusual Techniques Direct Mail Town Hall ... What Lies Ahead?

 

The 1998 Program

Compare and contrast the 1978 program with the 1998 program and you can quickly see how our world of direct marketing has changed and grown as strategy. Today’s topics included:

• Database Marketing
• Internet Direct Marketing
• Entrepreneurial Direct Marketing
• Creative
• Business-to-Business
• Non-Traditional Direct Marketer
• Catalogs
• Circulation Strategies
• Retail Strategies
• Privacy

 

Direct marketing has earned a strategic place in today’s marketing mix. Multinational companies to entrepreneurs, catalogers to retailers, packaged goods to manufacturing, and more employ direct marketing as strategy.

 

In the words of Dorothy from the Wizard Of Oz: “Toto, I don’t think we’re in Kansas anymore.”

 

Direct marketing is embraced by multitudes of companies as strategy with a triumvirate of applications: First, sell direct to the end-user without any intermediary channel of distribution. Second, generate leads for sales organizations, and third create traffic in retail stores. And as one considers the many elements of direct marketing’s strategic lure, it’s worthwhile to review the strategies of each element.

1. Database Marketing. Twenty years ago, the word “database” probably wasn’t uttered in a Collegiate Institute class. There were mailing lists which were computerized and Census data could be used to better understand targeting on a neighborhood level. But today it’s possible for every marketing organization to take what was once a simple rolodex with sales receipts, and energize it into a tool that can define a business’ model and strategy. Take for example a long-time client of mine, The Dow Chemical Company. Who would think of Dow, a commodity chemicals company, as a database marketer? In some businesses they are indeed database marketers, creating detailed information about customers, and prospective customers, through detailed qualification processes that focus on marketing to the needs of customers, or what they call needs-based segmentation marketing communications strategy. And with the marketing database, we have developed communications that use customized selling messages based on the prospective customer’s need. Smart database marketing is clearly a strategy that may indeed be the initiative that allowed direct marketing to spring from being viewed as a tactic to a strategy.
   
2. Internet Direct Marketing. Pete Hoke, Chairman of Direct Marketing Magazine, wrote for many years about how electronic systems would link us as a worldwide community and become a powerful selling vehicle. During my class in 1978, Pete was truly a visionary. Who would have dreamed, for example, that we could send rolls of film to a photo finishing organization in Austin, Texas, and within hours of receipt find our pictures posted to our email address. That’s exactly what my client Skrudland Photo, under it’s brand Signature Color, does for thousands of its customers. Within minutes, you can email pictures of a newborn child to family and friends around the globe. It’s a perfect marriage of direct marketing, technology, and commerce.
   
3. Entrepreneurial Direct Marketing. Some of direct marketing’s greatest companies began on the kitchen tables of their founders. A great thrill today for me is contributing as a partner with start-up companies who begin as nothing more than a vision or dream. Of course, the difference today is that finance costs and finding funds are not for the faint heart or unpersistent soul. But some do make it.
   
4. Creative. Twenty years gone by and use of direct marketing use by a myriad of organizations have also changed the face of direct marketing creative. While it’s usually the media and offer that influence one’s success, the tie-breaker is often the creative. Here, I suggest that timeless principles taught by many of direct marketing’s greats be adhered to for true success. I’m reminded of when a general advertising agency called me in to look at the direct mail package a client of theirs tested with poor results. The agency was about to lose the account. After making significant changes to make it a direct response oriented package, it was retested with great success. The agency kept the account and learned there may be room to occasionally break the rules, but reinventing the wheel can be very costly.
5. Business-to-Business. Twenty years ago my class instructor referred to the massive area of business-to-business as industrial advertising. With the cost of a personal sales call estimated to be over $300 today, and the number of calls required to close a sale, it’s no wonder b-to-b is growing exponentially year after year. Advanced Cleaning Systems, a Dow unit, took a hard look at the costs of sales people, and through a strategically targeted direct marketing program, calculated the average annual savings on sales calls to be over $200,000 by using direct marketing as a strategy to generate qualified leads.
6. Non-Traditional Direct Marketer. Who would have thought that a manufacturer of clothes selling to retail stores would someday find the need to find a complimentary distribution strategy to the store environment? That’s what happened to Williamson-Dickie, maker of Dickies brand clothes. In 1991, my client tested their first catalog. And instead of mailing it to prospect lists, its distribution has been limited to only those who request a catalog by seeing it offered via the toll-free number on back of inspection stickers in every garment Dickies manufacturers. The catalog is a strategic tool, promoting to customers the wide variety of clothing made by Dickies such as hard-to-find sizes and colors, and the convenience of ordering direct from the manufacturer. Today the catalog is a strategic marketing and new product test vehicle to Williamson-Dickie, and its innovative and courageous solution to the problem of customer prospecting won the 1994 Henry Hoke Award given by Direct Marketing magazine.
   
7. Catalogs. Another application of direct marketing as a strategy for member services and merchandise sales comes from SPEBSQSA, Inc., otherwise known as the Society for the Preservation and Encouragement of Barber Shop Quartet Singing in America. SPEBSQSA is not a direct marketing company. They are a non-profit organization made up of about 35,000 men in the U.S., including myself, who love to sing. Their catalog is a strategic method of communicating with members, selling apparel, music, gifts, as well as tools to build the membership levels of its hundreds of chapters nationwide.
   
8. Circulation Strategies. What’s keeps the heartbeat going for many direct marketing companies are sound circulation strategies that ensure a company will maintain its profitability. In an environment where millions of pieces of mail are dropped monthly, vital circulation planning is a strategic focus. For client U.S. Marketing, a provider of turnkey direct mail for bank credit card issuers, circulation plans which integrate a proper balance of frequency and new offers to a massive house file and rented names is a vital focus of day-to-day business strategy.
   
9. Retail Strategies. In a nation that is over-stored, the fittest survive knowing their best customers. As retail store customers, we receive birthday greetings, discount offers, private sale notices and much more. As a strategy to drive store traffic, direct marketing delivers customers when they are needed. Loyalty, or frequent buyer programs, like the Hallmark Gold Crown Program or Neiman Marcus InCircle program, encourage repeat business.
   
10. Privacy. We must address the growing concern of privacy among our customers and prospective customers. Self-regulation among direct marketers hasn’t been consistent, forcing the Direct Marketing Association to impose rules on its members regarding use of a customer’s name. The Internet changes our world of privacy in ways we have yet to imagine. Privacy may be our greatest strategic challenge as we look forward the next twenty years, to 2018.

 

The Year 2018

So what else will change in our world by 2018? That question was posed to this year’s crop of graduate students from schools around the country. This is what they said:

• Linked Technology, Easier, Faster and Cheaper. Computers, televisions, cars, home appliances and more will become nothing more than a simple extension of our lives.
• Personalization. In our technology world, personalization will be standard. But again the issue of privacy takes center stage.
• The Bar Raised for Education. Once upon a time, a high school diploma was standard to make it in the world. Then it was a Bachelor’s degree. Today it’s a Master’s Degree (an understandable bias coming from graduate students). Tomorrow they think the bar will be raised and doctorate degrees will be the norm. Certainly, as technology becomes an increasing part of our lives, education will be all-important.

 

They also recognize our world will be more culturally diverse and choices are likely to grow. And hopefully, after a few days in the DMEF Graduate Program, these college students will recognize the strategic place for direct marketing and become excellent stewards of a message we’ve known for years.