By Paula Andruss

As pizza chains go, zpizza International may not be the largest — but it’s working furiously to ensure that its links to its customers are among the strongest in the business.

Hoping to seize on the benefits of repeat customers, the California-based pizza maker recently created an integrated marketing campaign combining direct mail, e-mail and mobile to entice consumers to join its ztribe loyalty club.

Officials at the chain — known for gourmet pizza with unique toppings such as shiitake mushrooms, arugula and pears — say they are building the club today with the long-term goal of doing more business with recruits in the future.

“Our goal is to have 1,000 heavy users — people who order at least twice a month and spend more than $50 — at each of our locations,” says Brandi Babb, zpizza director of training. “If we can identify those people and capture them in our loyalty database, we know that we’re working toward accomplishing that goal of reaching out to customers who are already part of the repeat clientele.”

Don’t ask for business — reward it

The campaign centered around two rounds of mailers sent to consumers living near zpizza’s 86 stores nationwide. (A limited number were available in-store, too.) In the August mailing, 2,800 cards per store were sent out; that number increased to 3,000 cards per store in October.

The mailers contained a pizza-shaped scratch-off area that revealed a code recipients could then text in to the company, along with their e-mail address, to claim a prize.

The pizzeria offered the prize without requiring recipients to make a purchase, and also told them what they had won before asking them to join the club — a smart move, says Christie Nordhielm, associate professor of marketing at the University of Michigan Ross School of Business in Ann Arbor, Mich.

“The wrong way for loyalty programs to work is for the company to emphasize the fact that the reward is contingent on purchase behavior,” she says. “This makes the reward program seem like just another pricing trick. The point is to truly reward loyal behavior and to transform the relationship.”

Why targeting leads to higher ROI

While most of the zpizza prizes consisted of a free item or coupon offering, there also were gift certificates in different denominations and two grand prizes: free pizza for a year in the first round of mailings, and $5,000 in the second round of the campaign.

“The card was the call to action that encouraged people to text in, and once they did that they immediately got a text response back from the company telling them to check their e-mail to see what they had won,” says Susan Goodwin, account executive with BrandStand Group, the agency that executed the program. “That e-mail also prompted them to join the club because it contained a link to the loyalty program.”

She adds that mail let zpizza target a very specific geographic area — no more than three miles outside any given store — and that led to a higher return on investment.

“Direct mail is an efficient method for marketing your brand and message exactly where you want it to go,” Goodwin says. “You can waste a lot of money going to the masses cheaply and then not knowing if you’re getting your message to the people you really want to see it.”

Babb says that, thanks in part to the still-soft economy, the number of mail marketing offers in her industry has increased aggressively. As a result, zpizza wanted to appeal to consumers with something completely new.

“The scratch-incentive card was an opportunity to open the door for something unique that would get people to actually stop and look at it to see if they could possibly win a prize,” Babb says.

How rewards motivate loyalty

Not only did the mailers reach new guests as well as those who’d eaten at zpizza before, they stirred the recipients to action.

The August mailer garnered more than 500 text-in entries and a redemption rate of 1.5 percent. In October, the company received more than 1,400 text entries and a similar redemption rate. (Goodwin says that because not all stores submitted their redeemed coupons to the agency, the actual redemption numbers are likely even higher than that.) In addition, ztribe registration increased by nearly 20 percent compared to the regular sign-up rate.

While the company doesn’t plan to repeat this particular promotion, Babb says that because of its initial success, she expects another loyalty promotion in the near future.

“People were asking questions about the scratch-off and sending us lots of comments about it, which means they were talking about it,” Babb says. “The driving force was to add more members into our loyalty program, and that goal was certainly achieved.”

You might also be interested in:

3 Ways to Enhance Your Loyalty Marketing Program

Finding the Right Balance for Your Media Mix

By Steve Cuno

An international magazine offered three subscription options. Option A: For a modest price, you could have the online edition. Option B: For about twice as much, you could have the printed edition instead. Option C: For the same price as the printed edition alone, you could have both the printed and online edition.

If you think that no fool would choose Option B, you will be pleased to know that no fool is likely to. Yet to accuse Option B of pulling zero response would be inaccurate. According to one test, it more than pulls its weight. Just not in the way you might expect.

Welcome to the wacky world of the decoy offer.

Option B is what behavioral economists call a decoy offer. Rather than attempt to garner sales of its own, Option B’s effect seems to be to draw attention away from the less-costly Option A and convince you that C is a heckuva deal that is not to be missed.

Except, not just in effect. In tests omitting Option B, 68 percent of respondents preferred the lower-priced Option A, with just 32 percent preferring Option C. Adding Option B to the lineup literally turned that result on its head. Now 84 percent chose the higher-priced Option C. No one chose Option B. It appears that Option B played a crucial role of leading people who would normally spend less … to see the value of spending more.

Decoy offers are a form of what behavioral economists call anchoring. The idea is to fix an expectation in customer minds, so that when something better comes along, they can more readily see its value. A simple yet effective test illustrates. Researchers show subjects a printed number. Then they show subjects a product and ask them to estimate its price. People who have been shown higher numbers invariably estimate higher prices. This holds true even when subjects are told not to let the number influence them.

For behavioral economists, decoy offers are merely interesting. For direct marketers, they can be profitable. When direct marketers test a succession of offers, the idea is to learn which one will win the greatest number of customers. By contrast, a decoy can increase total spend among customers you already have. This can be especially useful if you happen to have saturated your market.

One of our corporate clients, for instance, had good reason to believe his customer base was as big as it was going to get. His business was profitable, but he was troubled by how often established customers purchased against their best interest by looking only at price tags. So, we added two higher-priced options alongside his popular, low-priced one. The new options were identical to one another in price, but one was clearly a better value. The result? Most of his customers shifted from the low-price option to the more valuable of the high-priced ones. The lower-value/high-priced option, which was the decoy, had led his customers to weigh value instead of just price.

Our agency recently tested a decoy offer for a retail service industry client who charges by the piece. This client’s internal costs drop significantly for orders of seven pieces or more, so it was worth it to him to offer deep discounts for anything over that quantity. Yet, regardless of volume discounts he’d tried in the past, the average order remained at about five pieces.

We decided to try a decoy offer. Again, the objective wasn’t to attract new customers, but to increase order size among existing ones. We created a direct mail package with three options. (To avoid confusion with the case cited earlier, I’ll label them 1, 2 and 3.) Option 1: Save five percent on orders of up to six pieces. Option 2: Save 20 percent for seven to 12 pieces. Option 3: Save 25 percent on 13 pieces or more.

Astute readers may have picked up on the noticeably greater gap in savings between Options 1 and 2 than between Options 2 and 3. That was intentional. Our client’s data showed that orders of 13 pieces or more were rare. So rare, in fact, that we doubted whether customers even owned 13 pieces. We determined to make the savings for 13 pieces miniscule in comparison to the savings for seven. We hoped that the advantages of bringing in seven pieces would shine by virtue of significant savings over bringing in fewer, and by virtue of its attainability relative to bringing in 13.

The result? For the first time in this client’s experience, 73 percent of orders were for seven pieces or more. Orders for six pieces or less dropped to 27 percent.

Post-analysis revealed a nice bonus surprise. Remember our assumption that few of our client’s customers owned 13 pieces? Dead wrong. Over 25 percent of total orders were for that quantity or more.

Most direct marketers know that an enticing new incentive offer can increase response. But to dramatize the advantage of a deal that is truly in your customer’s best interest, try the powerful decoy offer. You may both increase spend and better serve your customer. And who knows. With careful tracking, you may, like us, just happen upon other useful information you weren’t expecting.

Marketer demand for value spurs First-Class Mail® changes.

By Steve Monteith

With the economy ticking back, marketers are looking for new, creative ways to reach consumers while increasing returns — and they’re demanding more for their dollars.

In response, the U.S. Postal Service® is developing a variety of programs that would bolster our First-Class Mail offering. We’re exploring opportunities that use the newest technology, like the Intelligent Mail® barcode, in combination with pricing incentives. And we’re looking for delivery performance improvements.

Late last year, we rolled out the first-ever First-Class Mail Incentive program, which provided a 20-percent rebate on certain presort pieces. This followed two incentive programs aimed at Standard Mail.® With each program, we’re able to build on what we’ve learned for future programs.

In fact, discussions with industry organizations and customers showed that marketers find value in transpromo mail (transactional mail that includes promotional or educational content), but struggle with extra costs to cover the added weight or a reply envelope. We are looking at ways to promote and encourage the use of transpromo and additional marketing inserts to add value to bills and statements in the First-Class Mail stream.

Another idea under consideration is a product priced between First-Class Mail and Standard Mail. Currently a marketing mailer must choose between First-Class Mail and Standard Mail for their marketing or advertising campaigns. The intent is for a letter product that provides premium service, with optional features from which the mailer can select.

This all is just a glimpse at the marketing mail strategies we’re looking to implement. Our goal is to offer additional products, features and benefits that will further enhance the value of marketing and advertising in the mail.

Many businesses want to use a variety of ways to communicate with consumers, as well as provide choices for consumers to communicate back. As part of a fully integrated campaign, First-Class Mail gives you a targetable, trackable and measurable media channel. It also allows for personalization, detailed product information and a wide range of formats. Plus, its reliability lets you time your mail campaigns with television, radio and other media efforts to create multichannel impressions.

Mail remains a valuable way to reach customers, and a vital component of the messaging mix. And I see the Postal Service™ playing a pivotal role in recognizing and supporting all the options.

— Steve Monteith is manager of Transactions and Correspondence at the United States Postal Service.®

Let sampling campaigns prove the power of your product.

By Burt Rhodes

Sure, good marketers are experts at explaining to consumers the many benefits and advantages of a new product or brand. But convincing those same customers to purchase isn’t always as simple as broadcasting a commercial or aiming e-mails at them.

Sometimes, say experts, winning consumers to a product means letting them try it before they buy it. Sometimes, a brand has to lead by a sample.

“Product samples are a way of creating excitement,” explains Rico Cipriaso, a corporate marketing veteran who has spearheaded product sampling campaigns for major international beauty brands. “Sending samples is one of the best ways to reproduce a store experience in the customer’s home.”

Indeed, sampling continues to rank among the most effective tactics in the history of direct marketing, in part because of its ability to do what no other medium can: put a physical product in customers’ hands. Moreover, the practice is finding new adherents even in the digital age.

Consequently, while some CMOs struggle to make sense of new media initiatives, many others are enjoying steady success thanks to a rediscovery of the appeal of product sampling and the power of direct mail to get these campaigns to customers.

“Sampling is growing in importance [because] consumers are bombarded with messages,” says Cindy Johnson, who worked as the corporate sampling programs manager for Procter & Gamble before starting her own marketing consultancy. “It’s just really hard to make an impact on consumers today. But people love samples.”

Certainly, sampling allows companies to extend their message. According to figures from the Promotion Marketing Association, product samples reach 70 million households each quarter. A recent PMA poll also found that 75 percent of customers say they have become aware of a product through a sample.

And consumers are acting on this awareness, with many saying that product sampling helps them choose among brands. For instance, 81 percent of consumers said they would try a product after receiving a sample, according to a poll conducted in December by Opinion Research Corp. on behalf of the United States Postal Service.® Moreover, 61 percent of those polled said that sampling a product is the most effective way to get them to try a brand.

“It is the consumer-preferred method of marketing,” Johnson says. “[Consumers] are tuning out the advertising, [but] they love to try new things. That’s why product sampling works.”

Like Cipriaso, Johnson maintains that product sampling is an ideal way to win customers’ faith in a product. “Consumers feel the sample gives them the actual experience of the product,” she says. “They don’t have to risk any investment to be able to try it.”

This is important, continues Johnson, because many consumers are still anxious about the current economy and have become much more discriminating about their purchases. “That’s why sampling is even more successful right now,” she says. “Because they don’t want to invest dollars in new products. So they are relying on that trial experience to tell them whether they are going to like the product or not.”

Brands can get samples to consumers through an assortment of avenues, of course, from event marketing giveaways to newspaper inserts. Direct mail efforts, though, offer one of the surest avenues to reach consumers, say marketers.

Nick Peragine, product sales manager for Georgia-based lighting manufacturer PureSpectrum, says his company recently used mail to send samples of a new energy-efficient light bulb to a wide assortment of B-to-B contacts. “We came to the decision to use direct mail primarily because it was the easiest way to introduce our products to a large number of potential constituents over a broad area — and to be able to get actual samples of our product in their hands.”

Johnson says the precision of mail marketing also gives it an advantage in product sampling campaigns, although she acknowledges that targeting isn’t everything when it comes to sampling. “With sampling, targeting is very important, but there are other elements that go into the return on investment. Like if you’re resampling the same person: I don’t care if you have the right target, if you have poor sample control there’s no point in doing the program.”

And while it’s a natural fit with direct mail, product sampling also can be integrated into larger, multimedia campaigns. In the Opinion Research Corp. poll, 84 percent of respondents said they would be likely to log on to a Web site to receive samples if they received a post card driving them to the site.

“A lot of retailers have sites where you can request a sample,” Johnson notes, pointing out how one grocery chain has blended mail and sampling with digital elements of its marketing mix. “And because consumers are thinking they get the sample through that supermarket, then that’s where they go to find the product if they want to buy it. Consumers link the brand with the retailer.”

Thus, the retailer enjoys the bump up in brand opinion and recognition, she says, while its sampling vendor carries the actual responsibility for distributing the products.

Johnson says these integrated programs also give marketers a chance to learn more about their customers. “A lot of times [after sending a sample], we give them a Web site to register on,” she explains. “We say, ‘Here’s a Web site. We’re collecting information about your sample, giving away a small prize.’ And they will go online and register, and provide us with the feedback that way.”

Likewise, many brands are making use of social media networks in their sampling efforts. It’s becoming increasingly common, for instance, for brands to mail samples of new products to a select list of targets and then watch as those recipients go to Facebook® and other sites to post rave reviews about the samples.

This suggests that product sampling also engenders consumer loyalty, much like frequent flyer programs and other initiatives, Cipriaso says. He notes how quality product samples, despite usually being distributed in small quantities, have a way of getting consumers to come back to certain brands. “After we introduce you to our products, we want to make sure we keep you forever,” he says.
“We also know that the best customers tend to replenish. They buy the same product over and over again because they use it every day and they love it.”

And these customers also present ideal targets for sampling campaigns designed to expand a brand line, says Johnson: “Let’s say you’re already using a shampoo by a particular brand. If that brand is expanding into the antiperspirant and moisturizer categories, the person who already uses another product by that brand may be more receptive to buying the product. Sometimes, giving them a sample will help make that transition happen.”

But for all their enthusiasm about product sampling, Johnson and others don’t hesitate to warn CMOs about taking sampling campaigns too lightly. No marketing strategy is ever easy to execute, Johnson points out, so marketers need to approach sampling as wisely as they would any other tactic. “The famous misconception is that product sampling is easy,” she says. “You really do need to dot your i’s and cross your t’s.”

In the end, though, when done right, product sampling can yield not only invaluable brand exposure, but also solid ROI, richer knowledge about customers and a stronger bond between companies and the people who buy their goods. Put simply, says Cipriaso, “It’s a business case that works.”

A little goes a long way

Consumers love getting something free — even if it’s a tiny bit of something, as evidenced by recent sampling initiatives from these brands.

Texas Pete Hot Sauce

The hot sauce brand recently touted its flavor varieties by offering a limited number of product samples through the social networking site Facebook.® The company planned to distribute its 10,000 samples over a four-week period, but hit that number of requests in just six days. Each sample contained a 1.9-ounce bottle of the consumer’s flavor of choice, a can koozie and a coupon that held a unique bar code to help the company track its redemption rate.

PureSpectrum

When the Georgia-based lighting company needed to distinguish its new 20-watt dimmable compact fluorescent lamp from rival products, a sample campaign was the answer. Test products were mailed to the company’s target audience — the 964 rural electrical co-ops across the United States. The campaign results generated an influx of purchase orders, product sales and requests for quotes.

Splenda

In July, the sweetener brand used sampling to give consumers a first look at its new pocket-sized mist spray and to gather feedback before rollout. Splenda required requesters to become fans of its Facebook page, which let the company better target its key demographic — women 25 and older — through their profiles on the social networking site. More than 16,000 samples were given away in just two weeks.

Living Proof

Free samples flew off the virtual shelves when the beauty brand offered Facebook® users a trial of its No Frizz hair care product. More than 15,000 samples were requested in a 48-hour period. Plus, fan numbers for the product spiked from around 1,000 to more than 7,000 during the promotion, even though consumers weren’t required to become a fan to receive the sample.

New Beauty magazine

Four times a year, the publication’s beauty sampling program, TestTube,™ sends subscribers deluxe-size samples of beauty products along with a booklet detailing the products’ features and benefits. After the first year of the program’s launch, 96 percent of recipients said they purchased a fullprice version of a sample item. The TestTube™ currently has over 20,000 subscribers, and the program continues to grow.

Cablevision Systems

Last fall, the New York–area cable operator brought interactive banner ads to TV that let its nearly 3 million subscribers order product samples from companies, such as Benjamin Moore, with a click of their TV remotes.

Sephora

The retail beauty chain offers consumers up to three free product samples with every online order. Customers select samples during checkout and the trial offerings are mailed with their purchased products.

Lead by a sample

Samples endure as a powerful way to win customers. In December, Opinion Research Corp. surveyed 1,000 consumers on behalf of the USPS® — all of them primarily responsible for sorting their household’s mail.

Here are a few findings:

81% of those surveyed said they will try a product after they receive a free sample.

61% said an actual product sample is the most effective way for a brand to get them to try a product.

65% said they would prefer to have samples mailed to their home.

72% said they would prefer receiving multiple samples in a single sample box.

89% said that an accompanying coupon would increase the value of a mailed sample box.

84% said that they’d likely log onto a Web site and sign up to receive samples if they got a post card from the USPS driving them to the site.

A product sampling expert tells why sampling campaigns may be more effective than ever.

By Pamela Oldham

Cindy Johnson spent more than 15 years at Procter & Gamble, including her tenure as the corporate sampling programs manager. In that time, she worked with nearly all of the P&G products and developed some valuable insights into how and why sampling continues to win over customers.

Johnson, who now consults with top marketers as head of her own firm, Sampling Effectiveness Advisors, sat down with Deliver® recently to share those insights and explain why recent advances in mail samples could make them more formidable than ever.

DELIVER: What makes sampling effective?

CINDY JOHNSON: With over 30,000 different products on the shelf in the average grocery store and with the typical consumer receiving as many as 3,000 advertising messages a day, a sample trial is one of the few ways that guarantees a brand due consideration from its target audience.

DELIVER: Is sampling growing in importance?

JOHNSON: [Today’s consumers] aren’t taking as many risks on a new brand or a new product. They love to try new products, but don’t want to spend $7 or $8 on a new shampoo to see if they like it. So they are relying on product trial experiences to tell them whether they are going to like the product or not. Coupons are nice if you’re going to buy the product anyway. But if you want to reach a new consumer who has never tried your product, the best way is going to be through a sample.

DELIVER: Why are more samples being mailed today?

JOHNSON: Two or three years ago, 80 percent of all purchase decisions were made in store. People were out of the home more often, and brands had to reach people where they were — out having fun or at work, or whatever. But now, because of the economy, 70 percent of purchase decisions are made at home. [Consumers] are making lists, and they’re going through their cupboards and figuring out what they need. Plus, they’re just not going out as much. So brands really have to try to reach the consumer and provide samples at home, where the decisions are being made.

DELIVER: What sampling innovations excite you?

JOHNSON: There is a new technology developed by First Flavor (FirstFlavor.com) called Peel ’n Taste.® It’s a film sample you put in your mouth that dissolves and gives you the same flavor experience as the product. For beverage brands especially, this will be a good way of sampling because in the past, they’ve really only been able to sample in store or at events [from a can or bottle] and there hasn’t been a good way to reach households. It will significantly reduce the cost and complexity of sampling for them. With this technology, they can actually send a sample through the mail, in a regular letter-sized envelope. Peel ’n Taste® will open up a lot of doors for companies to send samples to consumers.

Cindy Johnson’s tips for a successful sampling campaign

1. Reach your target consumer when and where they are likely to try the sample, now most likely at home.

2. Limit the program to one sample per customer.

3. Use a proven program with an experienced vendor.

4. Measure so you know what to do (or not do) next time. A purchase conversion measurement also lets you determine ROI.

It’s no longer good enough to respond to leads in a day or even hours — response time is now measured in minutes.

By David Rosendahl

How much does a quick turnaround on leads really impact ROI? A comprehensive lead response management survey from MIT and InsideSales.com tells us that the odds are 21 times greater of qualifying a Web-based lead if it’s responded to in five minutes vs. 30 minutes.

But it’s not just about quickly getting a prospective customer to pick up the phone while his or her interest is piqued. You also have to engage the individual in a meaningful and relevant discussion within moments of browsing your Web site, landing pages or microsites.

Thanks to the latest real-time data software, the information you need to do just that is at your fingertips. Every generated lead can include additional details about the individual’s interest, the pages they’ve previously viewed and the marketing that drove them online, such as a direct mail piece with a personalized URL.

The ability to provide a fast and meaningful response is only one benefit of the new technology. Monitoring data in real time also allows you to test, track and tweak performance as it unfolds. Rather than waiting until the end of the campaign, you can spot trouble areas and make improvements on the fly.

As an added bonus — because some elements of a realtime, cross-media campaign can be modified as they unfold — things don’t have to be “perfect” in order to launch a campaign. This lets marketing managers create campaigns that become more streamlined and increasingly more effective as time goes on.

Real-time data helped us convert prospects to customers at a recent event. We held a gathering for our user community, friends and the press at the PRINT 09 trade show in Chicago. Two hours before it began, our marketing team reviewed the latest RSVP figures — pulled in real time from the campaign dashboard. Noting the frantic nature of the show, we decided to send a text message to all who had responded, reminding them of the event, location and time.

This approach worked extremely well for us, as the event yielded more new clients than any previous year. In this economic environment, taking advantage of real-time data proved instrumental in maximizing our ROI, and it can do the same for you.

David Rosendahl is co-founder and executive vice president of client services for MindFireInc. (mindfireinc.com), which links offline marketing channels with the Internet.

We reveal four marketing trends likely to get hotter in 2010 – and show you how they can work for brands of any size.

By Anne Stuart

With the direct marketing industry in the grip of a series of upheavals, from the digital revolution to the economic meltdown, figuring out what’s coming next is becoming progressively more difficult. Creating effective strategies based on these expectations is the toughest part of all.

And so, faced with one new challenge after another — from increasing costs for production and materials to rising environmental concerns among consumers — marketers have intensified their push to get ahead of the industry curve. This has led to a massive scramble to determine where the most significant industry trends for next year will emerge.

To help, Deliver® sat down with experts from around the country to attempt to divine what’s in store for direct in 2010. While a number of potential trends were discussed, there were four key areas — targeting, measurement, channel integration and prospecting among baby boomers — that kept coming up as likely hot spots for growth and innovation.

As a result, we decided to take a closer look at these four fields and what possibilities they hold for marketers in the coming year.

1. Targeting

If there’s a one-word formula for marketing success next year, it’s “precision,” industry leaders say. Traditionally, of course, the trend has been toward amassing as much information as possible about prospect and customer groups, then bombarding them with offers. But that approach is no longer viable.

According to a recent Winterberry Group report, the organizations struggling hardest are those that have depended most heavily on “batch blast”–style mailings — that is, using the mail as a saturation tool with little or no regard for rich personalization or the particular needs of the individual recipient.

Liz Miller, CMO Council vice president of programs and operations, sums up the trend: “We’re moving away from saying, ‘I want to connect with women who are 34 to 54’ to ‘I want to connect with that particular woman.’”

Such customized approaches are already possible, but to date, have typically included only recipients’ names and, in some cases, their locations. But, Miller says, continuing advancements in database management and variable data printing (VDP) have industry experts predicting more robust personalization techniques in 2010.

Backroads, an active- and adventure-travel company, is already learning the value of tightly focused personalization, especially for generating repeat business. The organization uses automated marketing engine technology from Nimblefish to mail thousands of postcards to past customers that contain not only personalized messages but also photos of regions recipients have traveled to in the past. “The message might say, ‘Barbara, remember Yellowstone in May 2002? Have another memorable trip — and here are three options,’” says Massimo Prioreschi, vice president of sales and marketing for the Berkeley, Calif., company.

Miller says these kinds of highly tailored mail pieces offer a good glimpse of the direction that targeting will continue to take in 2010. “That’s going beyond just putting one person’s name on a piece of paper,” she adds. “It’s saying, ‘We want to give you everything that’s relevant to you right now.’”

2. Measurement/Analysis

While the need to tally ROI has always been essential to marketers, they are more pressed to prove that their campaigns are impacting consumers and generating revenue.

Experts predict that, as measurement tools become more precise, how brands measure the return on their investment is likely to become more complicated. They will have to pay attention to a broader range of data, and companies will have to work even harder to make sure that other parts of the organization operate in conjunction with the marketing department.

The CMO Council’s Miller recommends organizations extend their ROI measurement to the entire marketing supply chain. “Don’t focus on the return at the expense of managing investment costs,” she says. “Map, track, measure and put a dollar amount on everything you do.”

She adds that marketers also will have to improve customer experience, mostly by learning to better mine data. Businesses like Harrah’s Entertainment — owners of 54 casino and hotel properties worldwide — know the value of the detailed data their programs generate. The company’s mail-driven loyalty program, for instance, has allowed its marketers to collect and analyze data on how often program participants visit their properties, how much members contribute to overall gaming revenue and what games of chance they prefer, among other things.

In-depth analysis of members’ behavior lets Harrah’s construct more effective messages, says David Norton, senior vice president and CMO for Harrah’s. “If we know a player has been to past slot tournaments, we’ll make sure he or she gets invited to the next one,” he adds. “If they’ve never come to a mid-week event, we exclude them from mailings about mid-week events because, obviously, they’re not going to respond.”

3. Integration

In 2010, improved integration of channels, such as e-mail, direct mail, billboards and TV, will become more of a focal point for even the most reluctant marketers. “That’s always been a goal, but the economy has made it imperative,” CMO Council’s Miller says.

And even though the past two years brought plenty of dire speculation about — and even premature eulogies for — the future of print marketing, the people who keep an eye on these things insist that traditional channels like direct mail will continue to earn their place at the marketing table in 2010.

“The favorite thing to say in 2008 was that, in 2009, print would be dead because everybody was going to e-mail,” Miller recalls. “That didn’t happen. Actually, both modes of communication took a hit during the past year.”

For that reason, most marketers have found that online channels demonstrate greater value as a complement to direct mail applications, reinforcing the value of integrated programs, according to the Winterberry Group.

Backroads’ Prioreschi says that postcard mailers his company sends also drive recipients to a personalized Web site with several highly targeted offers. “If someone went to Yellowstone, Alaska and Glacier National Park, we know there’s a definite pattern there indicating he or she is a mountain wilderness person,” he adds. Thus, the personalized site might include offers for upcoming trips to the Canadian Rockies or Himalayas, complete with slideshows and videos.

Prioreschi says integration is working well. During one campaign, sales were 50 percent higher among people who received a postcard and clicked through to a personalized site than those who just visited the site on their own.

4. Prospecting

Since World War II, the 18 to 25 age range has been the sweet spot of American marketing. “There was a good reason for that,” says Dr. Ken Dychtwald, founder and CEO of Age Wave, a San Francisco research and consulting firm that specializes in helping companies market to older customers. “Young people historically represented an area of growth because of their willingness to try new things. They were still forming their brand preferences. The idea was that if you captured their hearts at that stage, you had them for life.”

And, of course, the postwar baby boom filled the sweet spot with tens of millions of potential young targets for marketers. Although the baby boomers have since aged, marketing experts say that, in many ways, they still represent a marketing sweet spot for industry innovators. Consequently, many in the industry are predicting a renewed focus on baby boomers in the coming year.

“People should be swooning over the baby boomers as they move out of youth and into middle age,” Dychtwald says. “This is an age group that has traditionally been sidelined, but we’re going to see growth in sectors catering to them.

“Reinvention is normal for this generation,” Dychtwald continues.
“They change careers many more times than their moms and dads did.
They’re willing to try new things. So if you think you can rest on your laurels — if you think you’ve got them for life — you’re wrong. Today, everybody at every stage of life is open to marketing.”

In courting boomers, he says, marketers also are reacting to another growing trend in marketing: the end of brand loyalty and the return to brand experimentation. People are more willing to try new brands than ever — and those over 50 years old are particularly open to these new messages, Dychtwald says. “They’re more likely than any other group to read and respond to catalogs and direct mail pieces,” he adds, citing research from the Direct Marketing Association. “They enjoy reading a good catalog and leafing through their mail looking for deals. Good pitches attract their attention. It’s a mistake not to take direct marketing seriously for mature populations — and the time to start is right now.”

Of course, the same could also be said about any of the other trends marketers are expecting to get bigger in 2010.

By Steve Cuno

Not long ago, a company could launch an advertising campaign solely because an entity known as “Corporate” had set aside a budget for it — and many companies did just this. As for objectives? Pish-posh. As long as people remembered the ads or the board of directors liked them or the viral video was downloaded like crazy, everyone assumed the campaign was working.

Alas, the good old days of such ego-indulgent marketing are endangered to the point of near-extinction. (As you undoubtedly have heard, we are in the midst of a recession.) Now, more than ever, your marketing has to justify itself.

It’s certainly no secret that, in a recession, that dreaded group of executives known collectively as Those Who Allocate Budgets (or TWABs) turn a skeptical eye on programs that consume money without demonstrating a direct contribution to the bottom line. This leaves traditional brand advertising particularly vulnerable, since the link between recall scores, likeability, downloads and awards is, at best, inferred. Even claims that sales increased during a campaign are not immune from skepticism, since surges can result from other factors.

If you work in a branding agency, the word for this development might be “disconcerting.” But if you happen to be a direct marketer or the client of one, that word should be “opportunity.”

DIRECT IS ITS OWN BEST DEFENSE

Direct response is, after all, the only form of advertising with built-in, empirical proof of its contribution to the bottom line. Good direct marketers need never resort to inferential rhetoric to justify their existence. At any given moment, they can plop under the noses of the most penurious TWABs a spreadsheet that shows if a direct marketing program is earning its keep, and by how much. There is no wiggle room, no weaseling. No other advertising discipline can do that. In an economy in which every dime counts, direct response is the dream of obsessive-compulsive TWABs everywhere.

But, to paraphrase Shakespeare, here’s the rub: We cannot assume that all TWABs understand the advantages of direct response marketing. These days, there is a real danger that your friendly neighborhood CFO will decide that all marketing and advertising, direct response included, is the proverbial bathwater — and, worse, that there never really was a baby in the first place. Thus we may find ourselves summarily discarded without having so much as stuck a tentative toe in the tub.

We may be in part to blame. Half of the direct marketer’s historical challenge has been to get clients to consider that maybe, just maybe, awards, popularity and recall scores are not all they’re cracked up to be. Since there’s nothing quite like a shortage of funds to make clients figure out such things for themselves, the economy may have taken over that fight for us. It’s just as well. A recent study cited by the New England Skeptical Society shows that, a few weeks after the fact, most people erringly recall a debunked myth as having been confirmed. If so, it’s possible that in trying to debunk advertising myths, we have in fact been reinforcing them.

GOING WITH WHAT WORKS

I shudder to think. Especially since we could have put that effort into the other half of our challenge — namely, that of establishing direct response as the desirable, profitable alternative that actually works. Even here, it is ironic how often direct marketers ignore their own advice by selling the features of direct response rather than its benefits. To wit: We brag that direct response is built on tested and proven methods, yet we often stop short of saying what tested and proven methods do for the client (produce revenue); we say that direct response is accountable, but fail to drive home what that accountability demonstrates (that we’re producing revenue); we say that direct response allows for ongoing adjustment and improvement, but forget to point out what ongoing adjustment and improvement do for the client (produce ever-increasing revenue).

But right now we have a renewed chance to sell direct response in glowing, positive terms. Business decision makers know that besides cutting expenses, they must also find new ways to produce revenue. Given that that is exactly what direct response marketing does, this is our opportunity. It’s not too late to seize it by doing a more effective job of selling direct response marketing. And since the economy has largely relieved us of having to point out the drawbacks of traditional advertising, we can devote more copy than ever to the positive aspects of our craft.

These times do not demand doing away with marketing. They demand marketing that pays its way. Only direct response can demonstrate that it does. If anyone should have the moxie to convince clients (and TWABs) of this, it should be direct marketers.

After all, how good are we?

Steve Cuno heads the RESPONSE Agency in Salt Lake City. He is the author of the book Prove It Before You Promote It: How to Take the Guesswork Out of Marketing and is a popular convention speaker for the Direct Marketing Association, the American Marketing Association, the James Randi Educational Foundation and others. He can be reached at Steve@ResponseAgency.com.

By Steve Cuno

Never invite me to a cocktail party. Since a customary icebreaker is to feign interest in what the person you just met does for a living, you would place each of your guests at risk of having to hear me rhapsodize, ad infinitum, about the virtues of direct mail as a medium for selling.

But today I’m going to rhapsodize about another, lesser-known way to profit from direct mail. Besides being useful for selling goods and services, direct mail is a powerful instrument for peering deep inside the mind of a customer.

Too often, researchers assume that asking people questions is a good way to find out how they’ll act. Nonsense. People cannot predict how they’ll react to your marketing, but that doesn’t keep them from giving you their best guess, and meaning it. Well-meaning respondents have assured researchers that they would buy yogurt named after a chic magazine, frozen meals named after a toothpaste, underwear named after a disposable pen logo, children’s clothing named after a hamburger chain and aspirin named after a menthol salve. Each of these products flopped.

And just as human reactions can be unpredictable, human behavior changes when people know someone is watching. If you don’t believe me, consider any personal habit you indulge in private that you wouldn’t in public. (If you won’t own up to one, consider the habits of someone you don’t like.)

As a research tool, direct response mail eliminates both problems. Respondents don’t try to predict their behavior; they simply act. And since results are privately tallied from afar, no one is influenced by the idea that someone is “watching.”

You needn’t limit direct mail testing to the mail order business, particularly in stressful economic times when you need to get the most from your marketing investment. You can use direct mail to address larger strategic questions. Here are three examples:

• Defining a point-of-purchase strategy. For years, a popular monthly digest that depended on point-of-purchase sales featured only a table of contents on its cover, with a few titles in large type at the top. Featuring the right titles was crucial to point-of-purchase sales. How did the publication know which titles to showcase? Here’s the secret. By mail, it offered to send respondents any three articles from an offering of 20, free. Then it would feature the three most-requested articles on the next cover.

• Gauging brand strength. One of my agency’s clients, a national brand in its own right, had been acquired by a larger national brand. A debate soon emerged: Should the smaller brand retain its identity or take on the identity of the parent company? We divided a representative sample of the market into three groups. Over a few months, we sent each group a series of direct mail offers. One group’s mail featured the larger company’s brand, another group’s featured the smaller company’s brand, and, as a control, the final group’s featured a local company’s brand. Otherwise, the direct mail for all groups was identical. When we counted resultant sales, we found that changing the offer impacted response a good deal, but that changing the brand made no difference. At this point, both sides of the debate had to face the unhappy — but important — possibility that their brand wasn’t as powerful as they’d supposed. (Note: This was not a test of brand power in general. But if you dare, a test like this can provide a valuable reality check.)

• Finding the most compelling claim. One late, great marketing expert related the story of how he was working on a newspaper campaign to promote a food product. He had narrowed his choices to two overall claims: One had to do with providing good nutrition for the family; the other with receiving praise for serving a tasty meal. In focus groups, moms (the target in those days) overwhelming endorsed the nutrition theme. Ever wary, the marketer ran a direct mail test. The theme focusing on praise produced far more orders. The marketing dumped the nutrition idea and successfully rolled out the campaign based on winning praise.

Try it yourself. Even if — heaven forbid — direct mail doesn’t figure into your regular media plan, perhaps you should make room for it in your research plan.

In many cases, you can use direct mail far more effectively, and for less cost, than other research methods to test a proposed, nondirect-response campaign. Divide a representative mailing list of your market into groups. Mail each group a different approach. Include a postpaid Business Reply Card and offer an incentive to those who mail it back. Use the same incentive in all the approaches, but discretely code the reply cards so that you’ll know which approach it accompanied. The approach that generates the most replies is most likely to succeed in the mass media.

It really is that simple. Therefore, expect your research firm to say it isn’t.

At cocktail parties, people who work for research firms avoid me the most.

Steve Cuno heads the RESPONSE Agency in Salt Lake City. He is the author of the book Prove It Before You Promote It: How to Take the Guesswork Out of Marketing and a popular convention speaker for the Direct Marketing Association, the American Marketing Association, the James Randi Educational Foundation and others. He can be reached at Steve@ResponseAgency.com.

By Steve Cuno

Quick! Name a car introduced in 1958 that was a commercial failure.

Most people, including those born years later, can answer the question without a hint. (Like, say, it was named after the company founder’s son, and it sort of rhymes with “pretzel”).

Fifty years after its ignominious withdrawal from the market, the car still enjoys top-of-mind awareness. Amazing as that may be, I find this even more stunning: Many marketers still wrongly equate top-of-mind awareness with advertising success. They have allowed the metrics of reach to usurp the metrics of sales.

Consider how many ad agencies brag about “getting your name out there,” “getting noticed,” and the “number of people who remember your product.” If such are the standards of success, then the next advertising awards competition should honor the Pretzel Automobile campaign with a medal for “lifetime achievement.”

Originally, advertising was held to the same standard as salespeople were. Indeed, advertising was invented to stand in for, or extend the reach of, salespeople. The salesperson’s job description hasn’t changed much in 200 years, but advertising’s has. Salespeople who fail to produce sales are summarily dismissed, no matter how many positive impressions they leave behind. Yet advertising is often deemed “successful” based solely on the number of people who are exposed to it or remember it.

Where the problem started

Just how, and when, did marketers become so enamored of the metrics of reach? A clue exists in the origins of advertising agencies themselves. Early ad agencies didn’t sell creative services. They were agents who brokered pages in publications. Needing a metric for pricing, publications began counting subscribers and pass-along readers, and charged advertisers by the thousand. (Later, broadcast stations would measure audience size per time segment, and Web sites would count clicks and views.) By the time agencies added creative services to their offering, number-of-persons-reached had already become an accepted standard.

The standard persists today, and in at least some cases has outlived its usefulness, as an example from early 2009 illustrates. A well-known fast food chain, knowing that sales of its fish sandwich tend to rise during Lent, wanted to boost this year’s sales in that season even higher. Its ad agency produced a video starring a plaque-mounted singing fish that had attained a modest cult following in the 1990s. The agency uploaded the video in hopes it would go viral — and it did. The spot garnered a million hits in four weeks, drew 4,000 members to an online fan site and inspired a host of parodies. The client, agency and trade press hail the video as a success. Yet amid the hoopla, there has been no mention of the video’s effect on fish sandwich sales — which happens to have been the original objective.

It is true that a video cannot generate sales without garnering viewers. Equally true, lots of viewers may lead to lots of sales. May. But to assume as much is naive. History brims with widely recognized, well-remembered campaigns that failed to sell. To name a few: a stomach remedy campaign (think spicy meatballs), a failed new cola formula, a beer that whimsically defined what was manly, an intrusive duck, a fast food spokes-Chihuahua, a lying car salesman and a white mustache. All of these campaigns, I might add, were highly decorated at advertising awards shows.

Why low awareness doesn’t always hurt

As high awareness doesn’t ensure sales success, low awareness doesn’t preclude it. While direct response marketers know that they could reach the masses via the U.S. mail, they resist the urge. Instead, they harness the power of direct mail to ferret out people who are likely to want what’s for sale. Thus, despite a lack of ubiquity on the world stage, direct mail marketers strike gold selling steaks, books, music, computers, kitchen tools, hardware, clothing, heavy equipment, pens, stationery, shoes, intimate apparel, medical supplies, coffins, appliances, motor vehicles, sports equipment, build-it-yourself kits — in fact, just about anything you can name. Not one of these marketers can tell you how many people remember their direct mail. But they can tell you how many orders the last mailing produced.

They can also provide a host of other useful, hard data generally unavailable to those who execute pure awareness marketing. This includes predictive results, cost-per-sale, profitability per individual customer, detailed customer profiles and buying patterns, most-profitable items, best mail dates, winning incentive offers, most-compelling headline, most-persuasive copy, which colors and layouts work best, effectiveness of direct mail contents by the individual piece, strategic value, and more. None of this information is inferred or theoretical. It is grounded by sales and money in the bank.

The metrics of reach have their uses, but they can also lull the unwary into a false sense of security. Top-of-mind awareness is only a success if your goal is top-of-mind awareness. If your goal is sales, perhaps you should measure that instead.

Steve Cuno heads the RESPONSE Agency in Salt Lake City. He is the author of the book Prove It Before You Promote It: How to Take the Guesswork Out of Marketing and a popular convention speaker for the Direct Marketing Association, the American Marketing Association, the James Randi Educational Foundation and others. He can be reached at Steve@ResponseAgency.com.

By Steve Cuno

Sometimes intuition serves us well. When it warns us to step away from a snake making a rattling sound, to keep our distance from the edge of a cliff, or not to eat something that smells rotten, I have to concede its value.

But experiencing too many right intuitive hunches in a row has its down side. It can lead us to believe that our first reactions are always right. In marketing, where people don’t always act the way you might expect, too much reliance on intuition can lead you to sabotage your own results.

The intuition wars

Veterans of what I like to call “intuition wars” know what I mean. For soldiers yet to visit that particular front, here’s an example: When a respected private college asked my agency to recruit MBA students, an intuition war erupted the moment we presented them with a classic direct mail package. According to the college representatives’ collective intuition, no one would read a four-page sales letter; the copy style was too … too … “marketing-y”; and, given the cost and value of an MBA, a $25 gift incentive would not lure, but insult, intelligent candidates.

Hopefully, I needn’t defend to you the value of long copy, compelling language and a strong incentive offer. But I had to defend it to them. At that moment, more than a hundred years of proven direct response tactics went up against the intuition of an entire college faculty, including marketing and advertising professors. Who were we to argue with all of those PhDs?

But argue we did. We convinced the client to let the four-page letter stand — “marketing-y” style and all — and to test the gift offer by sending it to half of the mailing list. In the end, the version with the gift offer produced eight times as many applicants as the version without. Moreover, this was the college’s most successful mailing ever. To its credit, college administration continued mailing the winning version (albeit grudgingly). In return for a modest investment in printing and postage — and for suspending intuition long enough to count results — the college enrolled millions of dollars’ worth of tuition-paying students.

Five tips for unleashing your marketing

Had the college’s collective intuition prevailed, the result would have been an unwittingly sabotaged campaign. This suggests some important lessons for all of us:

1. Be cautious of hunches. I realize that this advice flies in the face of what some apostles of New Age thinking preach. But the fact is, marketers who rely on their gut alone take an unwise risk. Consider the professor from a noted university who “knew” that there was no demand for an overnight delivery service, or the business machines leader who “knew” there was no value in personal computers. If you believe that your intuition is always right, it’s more likely you have simply failed to note the misfires.

2. Beware your comfort zone. Classic direct mail techniques are often the antithesis of popular advertising, and can make newcomers uncomfortable. But it’s important to remember that established direct mail practices became established by proving their worth, not by retreating to comfort zones. So rather than ask, “Is the headline cheesy?” — whatever “cheesy” means — ask, “Is this the kind of headline that experience shows tends to work?” If the answer is yes, tell your comfort zone that you’ll be staying someplace else for a while.

3. Trust what works for other direct marketers. When I was new to this business, I correctly surmised that what direct marketers repeatedly mail must have been working. I imitated what I saw — upbeat copy, short paragraphs, engaging leads, a killer PS, double-indented paragraphs, underlining, and strong calls to action — and response grew. Today, libraries and bookstores abound with publications revealing what works in direct mail. Study and imitate the winners.

4. Conduct your own tests. Proven techniques notwithstanding, every case is unique. What’s the best way to present your product? What incentive will motivate the most response? Which headline and layout work best? These are not questions of opinion, but of discovery. Embrace classic direct mail strategies, but test and measure the particulars.

5. Trust results. I still cringe when I recall a client for whom we tested three direct mail approaches. When his favorite lost, he declared the test invalid. “I know my customers,” he said. “They like what I like.” On the contrary, he didn’t, and they didn’t. Don’t decide what works. Let your customers show you.

Intuitive hunches are part of being human. While they often serve to keep us safe in a natural environment, they can sabotage us in the not-so-natural marketplace. You are wise to heed your intuition when it advises against petting a rabid coyote. But when it tells you that proven direct mail methods are unprofessional and will not work, I suggest politely overruling it.

Steve Cuno heads the RESPONSE Agency in Salt Lake City. He is the author of the book Prove It Before You Promote It: How to Take the Guesswork Out of Marketing and is a popular convention speaker for the Direct Marketing Association, the American Marketing Association, the James Randi Educational Foundation and others. He can be reached at Steve@ResponseAgency.com.

By Samar Farah

Many companies have been thrown off course by the recession. Possibly that’s because they’re forgetting that, no matter how bad things get, we’ve been through all of this before. Other companies have more of a longitudinal perspective and can fall back on institutional memory and a reassuring sense of how the company has managed through previous downturns.

Of course, there’s no simple formula to brand longevity. But many marketers agree that the difference between iconic brands that succumb to an economic downturn and those that survive is the ability to maintain a long-term outlook and strategy. What sets apart such long-lasting, iconic brands as AT&T, Ringling Bros. and Barnum & Bailey Circus and AAA is their conviction to stay the course, irrespective of marketplace turmoil. Among them, these companies have more than 250 years of longevity, which has meant surviving countless up-and-down business cycles, partly because they didn’t cower in the corner waiting for the storm to pass.

In other words: Don’t hit the panic button. A company that panics right now is likely to take desperate measures that can hurt the brand’s identity. “A lot of companies are going overboard with frequent sales and advertising cuts,” says Michal Ann Strahilevitz, associate professor of marketing at Golden Gate University. These steps might sound like a good idea in the short-term, she says, but drastic reductions in advertising expenditures can hurt brand awareness. Strahilevitz says that marketers want their brand to be top of mind within their category and warns that “if your target audience doesn’t hear about you for awhile, they start to forget you and you may see this reflected in future sales.” As for offering products and services at previously unthinkable discounts, Strahilevitz says, “This can obviously be great for a quick spike in sales. However, because many consumers see price as an indication of quality, offering frequent deep discounts could affect your brand image. Prices paid today also influence consumers’ expectations about future prices, and that in turn means that today’s deep discount may end up eroding your future profit margins.”

To help you ensure that your company will be around for the long haul, we’ve amassed some sage advice from long-standing brands that have survived past downturns. Here, then, are their rules for making it through the storm.

Don’t cut spending

Ironic as it may seem, a recession is the worst possible time to make wholesale cuts to your marketing spend. That’s how Jeff Meyer feels. Meyer is a senior vice president at Feld Entertainment, an organization that includes the Ringling Bros. Circus. “Advertising continues to be of great importance for us,” he says. “We can’t cut back in today’s economy.” In many markets, he says, “we’re holding flat, and in opportunistic markets we’re actually spending more.”

One of the most important parts of Meyer’s efforts is direct mail. “We’re using mail now for the simple reason that the return on investment is measurable,” he says. “We know what we’re gonna get when we send out direct mail.” When Feld recently handled “Disney’s High School Musical: The Ice Tour,” Meyer tested the waters with a mail piece to his core customers. “The response to that mailing dictated how much money we spent on our advertising mix for the remainder of that engagement.”

For Meyer, what sets mail apart in any economy is its tangible nature, its ability to bring the events that Feld promotes to life. Which makes it more likely that one of the recipients will want to hold onto the piece, even tack it up on the fridge or a bulletin board. “There’s nothing more that we’d like,” says Meyer, “than to have a piece of our direct mail with a poster foldout on a child’s wall from one year to the next, and then replace it with a new one when our next show comes to town next year.”

Differentiate yourself from the competition

During the recessions of the early ’90s, the early 2000s and today, AAA’s brand strategy has remained the same: to strengthen the brand’s identity as a member-driven organization that stands for trust and safety. Rather than slashing its marketing budget or competing for members with price cuts, the organization looks for ways to remind its target audience of the AAA brand value. “In any recession, we just continue to do what we do best,” says Darlene Entringer, director of membership and brand marketing at AAA’s national office in Heathrow, Fla.

Thus, recent marketing efforts — like new smartphone applications that list AAA member discounts and an information-based campaign called AAA Seniors — reaffirm trust and safety as core brand values. They also promote additional long-term AAA goals like differentiating the brand in the marketplace, enhancing its relevance to consumers and diversifying its use of media.

As robust as AAA is right now, Entringer doesn’t mind pointing out that “AAA is starting to experience more competition than we’ve had to face in 107 years.” Some of the benefits AAA offers members, such as emergency roadside service, are becoming commoditized. Given the current economic climate, another brand might decide to shelve the task of differentiating itself — which is likely to tax marketing budgets in the short term — and focus instead on maintaining the bottom line. But for Entringer, differentiation is a priority these days.

In early 2009, AAA unveiled a new mobile phone application called AAA Discounts. The software allows smartphone users to identify nearby locations, such as restaurants and hotels, that honor AAA discounts. There have been nearly 350,000 downloads, and AAA clubs have just begun promoting the new product. Entringer is excited about the response so far and equally happy that the new product satisfies key long-term AAA branding goals. There are plenty of companies that offer roadside service, but few organizations can deliver the combination of services and products that AAA is continually building, says Entringer. The brand is setting itself apart from the competition by offering members the unique package of products and services.

Know your customer — even better

Pursuing long-term goals doesn’t mean ignoring current trends. One of AAA’s long-term goals is to enhance its relevance to members, and on some level that means responding to what’s happening now. “You want to take the issue of the day — what’s going on nationally — and bring it down to the individual. How is it affecting them at home?” says Yolanda Cade, managing director, AAA Public Relations. Marketers tend to scrimp on consumer relationships during tight financial times, mistakenly assuming that they can intuit what consumers are thinking. In the long term, this can weaken a brand’s relationship with its customers.

That’s a mistake that AAA is determined to avoid. The brand had a strong tradition of conducting focus groups prior to developing a new campaign. But at the start of 2008, when AAA was at the front end of a new campaign called AAA Seniors — targeting aging drivers — it decided to beef up its research practices. At a time when many brands might take a more fiscally conservative approach, AAA invested in additional layers of research, such as national polling and media audits, in order to better pinpoint members’ concerns and priorities.

What emerged from AAA’s research was that individuals who look after an elderly mother or father or aunt or uncle want to know more about how to broach the subject when driving becomes unsafe, as well as alternative modes of transportation that are available for the elderly in their cities and towns. The result is a AAA microsite that features in-depth information about when it’s time to have a chat with an elderly parent or grandparent about driving and how to negotiate those delicate conversations. The site also offers information about local public transportation options that would help elderly drivers avoid navigating poor road conditions on their own.

After establishing a pilot site in Phoenix and Miami, AAA launches the site nationally this July, targeting both seniors and caregivers. Cade says regional AAA clubs will have the option of using the campaign creative in a number of ways, including as direct mail flyers to reach seniors.

Shift dollars to the most effective channels

Again, cutting your marketing spend across the board could be disastrous, but that doesn’t mean you can’t make changes. John Nordberg, AVP of creative services for B-to-B at AT&T, says that his company relies on rigorous testing to make sure that the media mix, and the particular offers, are performing optimally for the company. “During tough times, you don’t want to cut your marketing activities,” he says. “You just need to be a little bit smarter about them.”

For example, Nordberg recently oversaw a campaign to win back customers who had defected to other services. “We mailed them a piece within a certain number of days or weeks after they had left us,” he says. “And we put a special offer in front of them to entice them to come back.” Nordberg employed a range of offers and a varied array of mail pieces. “We’ve done several different iterations of the win-back pieces,” he says. “Everything from postcards to self mailers to #10 envelopes.”

Based on the results, Nordberg and his staff have shifted their efforts to the pieces and offers that performed best. “We’re trying to create this learning database so that we can go back and say, ‘OK, what worked best for an offer that looks like this?’” he says. “You can run a campaign like that in five to 10 weeks, so you can run several of those campaigns every year. After each campaign, you sit down and evaluate what worked best so you can make adjustments and be back in the market with another creative piece within just a few weeks.”

The folks at AAA also adjust their media tactics during a recession. AAA regional clubs have their own marketing budgets and are responsible for promoting campaigns at the local level. “In better economic times, our club spends a larger portion of their budget on ‘brand marketing,’ or soft marketing,” says Alexandra Morehouse, senior vice president of brand experience for AAA of Northern California. The goal of this kind of marketing is strictly to boost awareness, typically through mass media advertising that builds an emotional connection but doesn’t necessarily offer a quantifiable return on marketing.

But when there’s pressure to conserve budgets during a recession, AAA of Northern California shifts dollars away from soft marketing in television and radio channels to direct response marketing. “During all three recent downturns we switched spend and emphasis to direct response media,” says Morehouse.

In the recession of the early ’90s, this meant more marketing dollars went to channels like direct mail and direct response TV. The recessions that have followed — the downturn of 2001 and today — have seen a steady increase in Internet-based direct response marketing at the Northern California club. Still, despite this increase, Morehouse says that “our highest-performing and most consistent channel is still direct mail.”

Ultimately, what distinguishes companies like AT&T, AAA and Feld Entertainment from the brands that fall victim to desperate, recession-driven measures is a combination of forward-thinking strategy and a commitment to proven best practices. And that combination will make it a lot more likely that these brands will remain part of the economic landscape for a long time to come.

Visit www.delivermagazine.com for our “Rising Above the Recession” Web series on marketing in tough times, which includes more on how AT&T and Feld Entertainment have survived economic downturns.

By Paula Andruss

Few businesspeople dispute the importance of consumer research to a marketing plan, but rare indeed is the industry leader that chooses to reposition an entire brand based on a study.

However, office-supply giant OfficeMax is poised to do just that.

Driven by new research on customers’ shopping experiences and expectations, the Illinois-based retailer has launched a comprehensive marketing and brand repositioning effort aimed primarily at the company’s newly defined target audience: women.

The national campaign — titled “Life is Beautiful, Work Can Be Too™” — was crafted in response to recent OfficeMax findings that showed that women either control or influence the vast majority of office-product purchases in the retail and B-to-B arenas. As a result, in a marketing world still reluctant to trust statistical measurements to drive campaigns, OfficeMax is proving that a data-driven approach can yield new strategies (and perhaps huge dividends) for brands willing to trust the numbers.

“Our research findings helped us forge a new perspective on the role women play,” says Ryan Vero, OfficeMax executive vice-president and chief merchandising officer. “This is not an exclusionary approach, but a focus that allows us to concentrate on a key audience while still attracting and serving all.”

The campaign is designed to offer women creative, intimate shopping experiences and new private-label product lines. The decision to focus more on women shoppers stems from wide-ranging research the company conducted a few years ago that showed that women either directly control or exert significant influence over about 85 percent of purchases in retail and business-to-business channels.

Prior to the study, the company was like other industry peers, in that they tend to market to a much broader, much less defined audience of business customers, says Vero.

But after looking at traditional market research -– and, more critically, at responses from an OfficeMax-sponsored survey of 5,000 women customers — the retailer decided to reconsider its focus. As part of this change, the company launched in December its “Life is Beautiful, Work Can Be Too” campaign, which is designed to combat the stereotype of the workplace as dull. “An estimated 80 million Americans work in drab cubicles,” he says. “Workers are starved for inspiration and need new outlets of expression. The ‘Life is Beautiful, Work Can Be Too’ campaign is intended to provide inspiration and counter negative work stereotypes.”

A major component of the campaign is an overhaul of the company’s branded Maxi Catalog, which has been revamped into a stylish, magazine-like publication that features a black, glossy cover, sleek photography, tabbed stickers to mark items of interest and flower-and-vine graphics that tie back to the advertising campaign. Seven versions of the Maxi Catalog went out to more than one million B2B and B2C targets. And page count in the publication was beefed up from 1,000 to 1,100. “Our catalog is modern, stylish and beautiful, featuring attractive photography, elegant layouts and recognizable tools like tabbed stickers,” boasts Vero. “We designed it to present our products and services in a way that will resonate with our women customers.” Vero says this was also driven by data, as the OfficeMax study of women consumers showed that they craved more creative shopping experiences, even within the pages of the catalog.

If you don’t alter the way you do business, you risk not being around long enough to have to worry about it.

By: Gwen Moran

No one needs to tell you that the economy is struggling. As a marketer, you’re more keenly aware of the challenges in today’s marketplace than anyone. But while most of your peers are responding to this economic downturn by slashing budgets (and praying for the storm to pass), some are taking a slightly different approach, asserting that every situation — no matter how seemingly dire — holds opportunity.

Jack Trout, founder of Trout & Partners in Old Greenwich, Conn., couldn’t agree more. “Marketers who pull out now are missing a tremendous opportunity,” says Trout, also the co-author of numerous seminal books on marketing, including Positioning: The Battle for Your Mind. “Without as much advertising out there, the noise level has dropped off, giving you more maneuvering room because not everybody is yelling at the same time.”

But if cutbacks are inevitable, make sure they’re not across the board, says Russell Winer, marketing department chair at the Stern School of Business at New York University. “Keep an eye on what your competitors are spending and make sure your voice share stays the same,” he adds.

The best approach for scaling back is to examine each line of spending, looking for patterns and cutting non-essential outlays that don’t produce results. Preserve resources for the functions and activities that directly support sales and can be measured for their effectiveness in bringing in new customers, such as coded offers, online activities and other forms of direct marketing.

And while there are no silver bullets to get customers to flock to your business, here’s a look at tactics that work for most companies:

Don’t cut price — add value. Success begins with a solid value message, but that doesn’t mean cutting your prices. “Price reductions cause serious problems when times get better,” Trout says. “You’re saying your value story is price. That’s a hard story because your competitors can mark down stuff as fast as you. It’s the road to wrack and ruin.” Instead, he says, work on building brand loyalty by communicating more and showing customers you understand the pain of the recession.

That’s what your prospects’ minds are focusing on right now, adds Jay Conrad Levinson of the “Guerrilla Marketing” franchise. “Explaining what your business is doing to help customers weather difficult economic times — providing high quality products or services that last longer or somehow save them time or money, for example — can create a stronger bond during the recession,” he says.

Guarantees and messages that emphasize why buying your brand is insurance against making money-wasting bad decisions are particularly effective. “If people feel you don’t know what’s going on with them, or how tough they have it, they’re not going to be inclined to buy much from you,” Levinson says.

Beef up your return per customer. Keeping an existing customer is one-sixth the cost of landing a new one, says Levinson, who advocates expanding the return on your current customer base. Two key ways to do this are to enlarge transaction size and sell more frequently to your customer base. For the former, look for ways that give customers an incentive to buy more without simply cutting prices across the board, like gift-with-purchase offers or loyalty-based benefits programs.

Hyatt Hotels & Resorts has used the economic downturn as an opportunity to rethink its 9 million–member frequent-guest program, Hyatt Gold Passport. “So much of what goes on in loyalty marketing is about customer loyalty to a company,” says Jeff Zidell, vice president for the Hyatt Gold Passport program. “We turned that upside down and thought about our loyalty to the customer.”

The revamped program provides new benefits for all members, but particularly those at the top two levels. Hyatt announced the enhancements in April and May during its six-week “The Big Welcome” promotion, during which 30,000 Hyatt Gold Passport members worldwide could win a free one-night stay at a Hyatt property by entering a sweepstakes at a special Web site. Winners were chosen randomly each Monday during the promotion. The free-night credit was immediately applied to their Hyatt Gold Passport accounts.

The promotion included ads in major newspapers worldwide, postcards at hotel front desks and announcements sent to Hyatt Gold Passport members with their regular statements. Hyatt also placed several short videos online, urging viewers to visit “The Big Welcome” site to enter the sweepstakes.

It’s too early to provide hard ROI figures, but Zidell says Hyatt saw a jump in paid bookings during the campaign. “Several hundred free nights have been used by winners, with several hundred additional paid nights booked by those same customers,” he adds. Meanwhile, Hyatt is already planning its next set of Hyatt Gold Passport enhancements.

Integrate your efforts. Approach outreach in a more holistic way, using more than just one vehicle. Liz Miller, vice president of programs and operations at the CMO Council, sees a trend toward direct mail with personalized URLs for customized offers and information. “There is a distinct move to use direct mail to drive deeper engagement online,” she says.

Savings Bank Life Insurance of Massachusetts (SBLI), which has policyholders in 40 states, relies heavily on an integrated marketing approach. “Direct mail drives a lot of our new leads,” says Rose Cahill, vice president and director of marketing for the Woburn, Mass.–based company. “But it’s a combined approach that makes our efforts more effective.”

SBLI currently mails 500,000 to 1 million letters almost every month. In reaction to the recession, SBLI has stepped up mailings to “responders” — prospects who have responded to past offers but who haven’t yet made a purchase. The correspondence typically invites recipients to inquire about life insurance through mail-in coupons, a toll-free number or a dedicated landing page. Visitors can obtain a rate quote, enter their phone numbers for an agent callback or research insurance at SBLI’s online Learning Center.

The center includes an interactive “insurance needs calculator” and Webcasts featuring free financial advice. “People are looking for value,” says Cahill, who estimates that about half the mail-generated leads respond through the Web site. “They’re shopping around more, and it’s taking them longer to make decisions. So the more content and education you can provide, the better.”

SBLI also is reaching out to existing policyholders more frequently. The company recently sent letters to 30,000 customers, encouraging them to upgrade their coverage. It’s changed the tone of its correspondence, too. “Our messaging has gotten more serious and a lot less promotional,” Cahill says.

The most successful outreach effort? A letter to all SBLI customers from the company’s CFO talking about the importance of insuring your family and the financial strength and security of the company. The message was meant to reassure customers skittish about their expenditures and investments.

Whatever your approach, the one thing to remember is that times will get better. Use this time to stay true to your image, build market share and position your brand to be stronger in the turnaround. “Marketers can make enormous contributions to their companies right now,” Trout says. “But they have to have the courage to look at what needs to be done and stand up and do it.”

A recent joint survey by the United States Postal Service® and Advertising Age magazine of 1,185 subscribers from agencies, advertisers and media companies finds two out of three respondents have smaller budgets this year.

By: Steve Cuno

Don’t look now, but budget cutters are greedily eyeing your department. And, in lean times, there is nothing quite like a marketing budget to set off their inner Pavlovian bell.

Good luck reasoning with them. You can try explaining that marketing creates sales, and that cutting back in a slow economy is like reducing insulin when a patient’s diabetes worsens. It’s a fair analogy but, in a recession, an analogy is no match for a red pen.

It’s tempting to dismiss undeterred budget cutters as myopic. But maybe there’s a deeper reason behind their seeming ruthlessness. Maybe they don’t believe that marketing pays.

Their skepticism may not be completely unwarranted. A good deal of today’s marketing reporting is based on indirect indicators, like recall, awareness, points, share, surveys, Web hits, tweets, awards, etc. Yet marketing campaigns scoring high in these areas routinely fail. Take awareness as an example. Can you name the fast food chain that featured a spokes-Chihuahua? (Extra credit if you recite the Spanish tagline.) Sales plummeted during the campaign, which was retired three years ago, yet people still have no trouble recalling it.

Admit it. If you controlled the purse strings, you wouldn’t settle for indirect evidence, either.

If you can prove that sales went up during your campaign, good for you. But since sales can rise and fall for reasons other than marketing, sales alone are also an indirect indicator. Consider firearms marketers in the United States, whose sales surged in early 2009. It would be difficult to know how much credit goes to marketing efforts, and how much goes to rumors of impending gun control legislation.

Clearly, fending off budget cutters requires a better argument than “Everyone knows marketing sells,” and also better than “Sales are up.” You’re going to need incontrovertible evidence that your marketing produces a positive Return On Investment. And you’re going to have to prove that the positive ROI would not have occurred on its own.

Thank goodness for direct response marketing. Effective direct response marketing comes with its own bulletproof, empirical evidence. Thus, a properly managed direct response program can stand you on solid ground before the fiercest budget cutter. Here are some tips for building such a program, and for ensuring that the ground under you remains firm:

1. Stay up on what works. Know what other direct marketers are testing and learning. Develop a peer network for sharing information. Read direct response books and periodicals. Then, when a budget cutter asks why you use envelopes even though self-mailers are cheaper, you’ll have an empirical leg to stand on.

2. Test before you bet the farm. Before risking all on a direct mail package, test variations on representative samples of your mailing list. Roll out the version that sells the most at the lowest cost.

3. Test after betting the farm, too. Once you have a winning direct mail package, keep testing variations in small quantities. You may stumble upon a new approach that works even better.

Why ROI isn’t always the best (or only) yardstick to measure marketing program success.

By: David Shoenfeld

As marketers increasingly spend their dollars on a range of digital marketing strategies, they typically defend their stance with simple claims of the Web’s superior return on investment. High-tech channels, they insist, are proven effective by the ratio of generated revenue versus the low cost of using them. Traditional channels such as mail, they think, can’t compete at those attractive cost levels.

Practically speaking, it’s time to think about what we mean by “results” before we talk about what channels can deliver. Most marketers’ goals often go much deeper than what simple ROI on, say, an e-mail campaign might suggest. And if CMOs or CEOs aren’t mindful, over-reliance on simple ROI as a singular measure of effectiveness can lead to assumptions about the effectiveness of a channel or a campaign that are simply wrong.

Marketers should think much more broadly, moving beyond just ROI to retain a laser-like focus on the overall marketing objective: Are you engaging and connecting with the marketplace to create customer leads? Generate new business? Changing attitudes or behavior? It is the return on such objectives — the ROO, if you will — that may be the true gauge of how marketing is serving you.

Consider how one large Kentucky hospital rethought its marketing objectives and its over-reliance on digital communications to craft a mail-driven, multi-channel campaign that boosted revenue and scored big against deeper marketing aims.

Traditionally, hospitals strive to increase revenue by bolstering physician referrals. If just one doctor directs a patient to a particular hospital, that referral could represent thousands of dollars in medical facility revenue. As a result, many hospital marketers thought it was enough to simply reach out to doctors by e-mail for referrals. The low cost of the e-mail blasts combined with the potential value of even a single referral promises a juicy ROI.

But one referral meant little to an operation of the Kentucky hospital’s size. Its business objectives demanded deeper relationships with a larger base of potential patients, which meant more comprehensive and substantive communications. So they developed a multi-channel campaign centered around direct mail to physicians and area residents, and buttressed the mailings with
TV ads and sponsored lectures.

Why wasn’t e-mail enough? Well, the behaviors the hospital marketers needed to stimulate required deeper conversations with consumers. The mail program accomplished just that. The hospital depended on the “show, share, and pass-along” qualities of mail to reach and connect with a larger group of individuals whose influence, recommendations and opinions help a sick loved one make intelligent choices on where to seek care.

As a result of the integrated campaign, the hospital enjoyed strong consumer response. Outreach to the hospital call center skyrocketed. And revenue grew far beyond their forecasts.

As this example shows, achieving meaningful objectives through real engagement with consumers can depend on strategic factors that don’t stem from a number on an ROI spreadsheet.

Unfortunately, the lure of technology tempts many marketers to take narrow and short-term views because they believe that digital channels can deliver customers and revenues at lower costs based on various representations of their
ROI. But can they really scale in terms of impacting behavior to achieve desired changes?

Sure, direct mail “ruled” because, for many years, it was the only medium that could be measured. Now, e-mail targeting and list-gathering efforts have improved enough to represent a fairly strong ROI. But does an ROI value by itself mean these new channels really outperform the proven veteran and deliver the impact brands need — or does it lull marketers into a false sense of confidence?

To get a full picture of the impact of your marketing, start with a clear sense of your true objectives — before setting out to reach any of them. Doing so ensures that no single measure supersedes others and that the only gauge worth using is the percentage of that objective captured. This means that you’re not just worrying about dollars earned vs. dollars spent, but also about your performance in meeting other key goals.

Yes, return on investment can be a decent tool for some matters, but ROO — Return on Objective — is a more inclusive measurement. And direct mail, unlike any other medium, can offer a great return on objective.

Your ROO isn’t just about how much you make; it’s about what you build. Still, in today’s tough economic climate, marketers are so convinced that they need a hard number to prove marketing success that they easily fall back onto ROI. But you don’t need just any numbers — you’ve got to have the right ones.

David Shoenfeld is senior vice president of mailing services at the United States Postal Service.®

Once torn between “old” Media and new, Marketers are learning that both work best when working together

By: Samar Farah

At first glance, Papa John’s Pizza would seem to be your traditional brand: a mass-market product with a mass-market audience and a mass-media approach to marketing. But when it comes to measuring this approach, the company is anything but traditional.

Rather, Papa John’s has benefited from a complex, high-tech measurement strategy, blending the massive reach of old media with the robust metrics and real-time data of new media - an approach that signals a new path to gauging ROI among direct marketers.

To maximize its broadcast data, the chain developed TV ads that conclude with call-to-action phrases and direct viewers to the Papa John’s Web site. Software used by Baltimore-based MGH, the pizza maker’s top local-market media buyer, enables media buyers to evaluate and revise buys on a daily basis to yield the most efficient and effective schedules. The metrics are the same as always for TV spots: ratings points and cost per points. However, the difference is that the integration of traditional media and the Web allows MGH to revise and substitute spots based on daily ratings.

Papa John’s mixed-media measurement efforts began shortly after MGH began subscribing to Nielsen’s SIGMA data service. SIGMA tags TV spots with an electronic code, allowing media buyers to closely monitor their ad spots daily to see when and where ads air and which versions are being broadcast. In the past, this sort of data was generated monthly and left to media reps. “We call it ‘managing our buys real-time,’” explains Mike Skandalis, associate media director at MGH, which has also been increasing spending on Internet ads for Papa John’s.

Undeniably, as media channels become more integrated, more marketers are rejecting a world that pits new media against old and leaves them stranded somewhere in between. Instead, they’re searching for more integrated solutions, applying what they’ve learned from new media to improve old channels and using old media to further buttress the new. And, as in the case of Papa John’s, brands are happily leaving the dichotomy between old and new on the cutting-room floor.

It’s a combination that continues to attract proponents. “You can look at stand-alone old media and stand-alone new media and argue that [the latter] is more measurable,” says Eric Schwartzman, managing director of Schwartzman & Associates Inc., a Los Angeles PR firm. “I’m more a proponent of combining bricks and clicks than comparing the old and the new.”

The online promise
The trend has been driven by a number of factors, including the ability to measure old media better and, according to marketing executive Nelson Pratt, an increased skepticism about the oft-touted virtues of the Internet. “The sophisticated algorithms behind [popular sites and search engines] and other commercial spaces - they were just that: algorithms that no one on my side knew enough to work with and question,” recalls Pratt, vice president of brand strategy at health insurance carrier Regence. “Because transactional cost was so low, people assumed they were reaching a more targeted audience, but not nearly as targeted as [had been] claimed.”

Further, says Pratt, the rich vein of consumer information that the
Web seemed to offer was often found to be untrustworthy: “Unfortunately, with any database where the record is maintained by an individual with no audit, you need to be skeptical about how much you can trust the information as a marketer.”

But he points out that problems also stem from some marketers’ failure to tune in to the right metrics, like new customers or incremental revenue. Too often, marketers are overly concerned with data points like clicks per minute and page visits. “Because the Internet is so infinitely measurable, many marketers have focused on measuring the wrong things, metrics that are interesting but not helping a company achieve its goals,” says David Meerman Scott, author of The New Rules of Marketing & PR. Scott urges marketers to link campaigns back to the company’s overall goals, whether it’s a regional sales increase or a boost in the online conversion rate.

Stand tall, direct marketers: Your time has come.

After years of being kept “below the line,” out of the proverbial front office and VIP suites, direct finally got its ticket to the big game.

Why? Because the owners and managers of marketing have finally come around to your way of thinking. The trade press has been full of news lately about the changes that media of various kinds are making so they can demonstrate measurable results.

Yes, it’s true: Traditional media are finally getting the importance of ROI for their advertiser clients, something that direct marketers have always been adept at doing. Oddly enough, you have your digital colleagues to thank for most of this. By demonstrating how effectively a brand can track and measure the impact of its marketing, digital technology has helped push accountability in advertising.

So we witness the outdoor industry working on a program for 2008 that will provide traffic counts and track eye movements as people drive past billboards. And television, which has long tracked its numbers through logs kept by a few viewers, is ramping up its investment so that it can translate those numbers into product purchases.

What they don’t yet understand, though, is that it’s not so much what we do, but the way we do it. At its heart, direct marketing is about testing and measurement and using the results to improve the next round of execution. ROI isn’t a bell or whistle for direct; it’s the very rationale for the medium.

In a world of client-driven need to demonstrate ROI, direct fits the bill. Whether print or digital, we can be confident we’ll be around for a long time to come.

Our Top Picks grand prize winner shows us the meaning of customization

Last year, an innovative direct marketing campaign got really personal with thousands of administrative assistants. So personal, that 20 percent of them let the mailer treat them to a cup of coffee. In fact, the latte-loving direct mail recipients sent Montage Graphics to the top of a heap of contestants vying for first place in the first annual Deliver® “Top Picks” contest.

In a recent issue, Deliver asked its readers to submit their best work to undergo the scrutiny of our discerning judges. We pored through the entries and chose the cream of the crop. The prize was to have their campaigns featured in an upcoming issue of Deliver, and … well … this is that issue.

Partnering with Boise, Idaho, direct marketing agency Oliver Russell, Montage Graphics, a one-to-one marketing services firm in Fort Collins, Colo., produced a beautifully designed, highly personalized and incredibly successful campaign for a high-profile technology company’s imaging and printing group.

The mailer, which achieved an impressive response rate, displayed an overflowing, frothy latte. But what made it stand out was that each of the 14,000 mailers was unique: The recipient’s first name was spelled out, on the latte’s foam, in chocolate sprinkles. Not only did people respond to the mailer, they loved it so much that they kept it and displayed it on their walls.

What Montage created was a state-of-the-art version of personalized marketing - a trend that’s gaining ground quickly in direct marketing circles as businesses prove that personalization not only works, it’s also getting more practical as advances in printing and database technology make it easier and cheaper to do.

The impetus for the campaign came from Montage’s client’s desire to get more information on the office-equipment-purchasing responsibilities of administrative assistants. To explore whether admins actually possess purchasing power for printers and supplies, the company wanted to get these employees to answer a brief survey. In the past, conventional DM campaigns had limited success in getting recipients to reply to a call for survey respondents, so the company knew it would have to try something unique to get the information it needed.

The solution: Make personalization work to its fullest. Using some savvy database programming and a printing technology by Montage Graphics called “PhotoText,” it’s possible to personalize creative to a very high degree - for instance, spelling out a recipient’s name in a photo of leaves on a lawn or cookies in a box. So when it came time to lead this campaign, Oliver Russell project manager Kristy Stanaway thought of Montage Graphics.

As an incentive, the client was willing to give away $10 coffee cards to each survey respondent. Using the coffee card as their inspiration, the team - Stanaway and Montage Graphics owner Toby Gadd - dreamed up the idea of PhotoTexting the recipient’s first name in a photo of a latte brimming with froth. “We went through a number of images trying to find the most scrumptious cup of coffee we could,” Stanaway says.

In an age replete with digital strategies, The Container Store looks for results terra firma

By: Samar Farah

They sell empty spice vials, wall-to-wall closet shelving and every imaginable household repository in between. Their image is trendy but affordable, contemporary but practical. And their internet business is growing at a rate of 30 percent a year. Yet even with its inherent appeal among busy, stuff-addled hipsters, the container store has a very traditinal marketing strategy.

It goes something like this: Do what it takes to get customers into the store, where they can interact with an expert staff.

That “what it takes” turns out to be a decidedly traditional mix of billboards, occasional newspaper advertising, a substantial dose of public relations and a heaping helping of direct mail. In fact, the vast majority of The Container Store’s advertising and marketing budget is devoted to direct mail. According to Audrey Robertson, director of public relations, The Container Store produces more than 50 distinct mail pieces a year.

At a time when many brands are focused - fixated, even - on enticing consumers to their Web sites, why would a successful national retailer turn itself into a micropublisher of catalogues and a champion of good old-fashioned face-to-face sales?

“At The Container Store, we sell the hard stuff, not the stuff that sells itself,” says Robertson. “It takes interaction with highly trained employees to come up with the right solution of organization for the customer.”

In fact, the array of goods and services that don’t “sell themselves” online is more vast and numbered than many marketers had prophesied in the heady first years of Internet sales. It’s a list that includes everyday goods like groceries and more high-end products such as automobiles.

Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania who studies consumer-shopping habits, says even the most pessimistic forecasts of online grocery shopping posited 10 years ago proved to be too optimistic. Fader says that, for certain products, consumers may be hardwired to see them, touch them and then contact a sales representative. Then again, it may be that a decade was not enough time to overhaul decades of consumer shopping habits. Web sites may need to see the passage of another generation before they emerge as dominant profit centers for certain consumer brands.

For now, though, many retailers have had to recalibrate their approach to Web sites and recommit themselves to brick-and-mortar sales. Web sites today are a “competitive necessity” for most retailers, according to Fader, but not the sales juggernauts that some envisioned a decade ago. “It’s like an awning over a store,” Fader says. “You need it, but how much does it really do?”