Freaking Marketing

It's the Data, Stupid

I launched Freaking Marketing in January 2006 to help direct marketers get past the usual bullshit and do kickass work.

Over the past 199 posts we've talked about a good chunk of the Big Stuff: research, positioning, concepting, offers, segmentation, and too many other topics to list.

But there's really just one variable that consistently makes or breaks direct marketing campaigns, and that's data.

When I was a kid in this business, a mentor shared this maxim: send a so-so presentation to a great list and you may turn a profit, but send a great presentation to a shit list and you're automatically dead.

At the end of the day, direct marketing is largely a mathematical exercise.

Yes, marketing will always be a business of ideas. And one idea can transform a business or an industry. But ... you'll never accomplish much if you don't efficiently connect with your targets.

You need to find more customers like your best customers, extract the waste from productive list segments, and leverage your knowledge of the customer base. That's direct marketing.

I know some of you haven't been doing predictive modeling and customer profiling because of the upfront cost. Even if the short-term ROI is huge, some employers simply won't pop for it if it costs real money.

Here's something even those irrational bosses will love. Nancy Arter and Suzanne Obermire of RRW Consulting are now offering B2B and B2C marketers customer profiling services for as low as 500 bucks.

Disclosure: I love what these women are doing. In fact, they're new Mothers of Invention partners.

By the way: RRW stands for Red Red Wine.   

The "One Strike and You're Out" Direct Marketing Rule

Pretend you're the new Marketing VP of Amalgamated Corporation. In month one you develop a plan with a set of essential direct marketing experiments slated to run over your first six months.

Several weeks later, your first test hits the streets. It's not a complete flop, but the response rate is below expectations. You're disappointed, but with a whole set of other tests in the queue, you're not overly concerned. And besides, you designed your test strategy expecting that a percentage would fail and the value of winners would more than compensate for the cost of losers.

But your boss, the CEO, sees things differently. He calls you from his car one afternoon and says you "aren't producing results." Then he drops the bomb: you're being replaced after less than eight weeks on the job.

Of course, this unfair client-side nightmare is highly unlikely. But guess what? This sort of thing happens to direct marketing agencies each year. It's even happened to our shop.

Most of the time we get a good outcome on the first project. But not always. For one thing, we contribute only a fraction of the variables. And as an old boss used to say, if we were successful every time out, no one could afford us.

Clients who give agencies the shaft after one project should consider how they'd feel if they lost their job after just one project. (See the Golden Rule.) What do you think?

When it Comes to CLV, B-to-B Direct Marketers are MIA

Over the past few days, some well-respected direct marketing bloggers have engaged in a friendly debate on customer lifetime value (CLV). To date, contributors have included Adelino de Almeida, Jim Novo, and Ron Shevlin.

Too bad more business-to-business direct marketing managers aren't interested in this subject.

Early on, I was taught the only way to really know how much to pay to acquire a customer is to understand what one is ultimately worth.

Simple, right? So, what do direct marketing agencies often hear from b-to-b marketing managers who sell complex, high-value products with lengthy sales cycles, just a few weeks after a new campaign hits?

"That didn't get us very much."

Mom-and-pop businesses know way more about customer lifetime value than many of the bigger business-to-business direct marketing groups. What can we do to bring more of 'em around?

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Spinning Gold into Straw: Making Winning Direct Marketing Campaigns Look like Losers

Here are ridiculously simple ways to grossly understate direct marketing results:

1. Create insanely lofty goals. (See the launch of Inside Sports, a magazine that quickly had several hundred thousand subscribers but was deemed a failure.)

2. Make decisions based on the profit/loss of the test with all test costs included -- without taking into account the projected P/L of the rollout. (A $20,000 fee for a new direct mail package may whack the bottom line of the test but be almost immaterial on a 1,000,000-piece rollout.)

3. Stop glancing at the results spreadsheet after only a small percentage of expected conversions are in. (If most customers convert months after responding, why stop looking at the spreadsheet after just one month? We've converted clients years after an initial lead arrived at our direct marketing agency.)

Old saying: Torture statistics long enough and they'll confess to anything.