Ted Grigg's Reflections about Direct Marketing

Direct mail does not support branding as far as most branders would like for good reason according to James Rosenfield in his excellent article entitled “BRAND AND BRANDING, REVISITED YET ONE MORE TIME AGAIN.”

“Big consumer brands are built on television. This is still true in 2004, in spite of ever-multiplying and fragmenting media.

Why is this? Because television is the archetypal right brain hemisphere medium. Television influences the brain by bringing it into a kind of dream time, when images can creep in, more-or-less subliminally, in a nanosecond. That's why intellectually indefensible notions can be communicated persuasively on TV, that drinking beer makes you attractive to the opposite sex, for example.

Direct mail is the archetypal left-brain hemisphere medium. It's verbal and therefore leisurely, the very definition of how the left hemisphere works. (In fact, in order to make direct mail effective in the 21st Century, left hemisphere communications techniques have to be transmuted into right hemisphere techniques as much as possible.”

He goes on to say that branding in direct mail essentially consists of the logo and slogan. And inserting visuals from the TV advertising does nothing to improve response rates.

This does not mean that direct mail elicits no emotional impact. But that the impact comes from story telling and great letter writing. That probably explains why the letter is so critical to direct mail effectiveness.

Have you gone beyond the logo and slogan in your direct mail testing to see if response rates increased with the use of other branding techniques such as a common look to the graphics and television imagery? If so, what were the results?

 
If you would like to read James Rosenfield’s full article, you can view here.

 

For the company, a customer loyalty program strives to retain existing customers and increase the profits they bring with repeat purchases. The customer wants to save money by purchasing from the same company over and over again.

At least that is the primary and growing customer motivation according to a 2007 research study conducted by Forrester Research.

In the report entitled “Building Lasting Customer Loyalty,” Lisa Bradner writes:

“Fifty percent of consumers say that price is more important to them than brand. Retail customers asked to cite why they are loyal to their chosen retailer put price ahead of all other metrics.”

The research indicates that this customer behavior means that they endorse private label products across many categories because they are cheaper than national brands. National brands must work harder to build sufficient trust to counter this movement.

In other words, brands no longer automatically own quality. Product parity reinforces the customer’s attention away from quality concerns to price.

If you’re like me, you have noticed continuing improvement in private label products putting further pressure on brands in virtually all product lines.

My interpretation of this Forrester report: customers sign up for loyalty programs primarily for lower prices.   

So for those companies wanting loyal customers, understand that these customers are trained or naturally inclined to want a share of the profits you get from them for themselves. In the end, the plan requires that both the customer and the company win. The prize? Why money, of course.

But are these truly loyal customers?

We know that competing on price alone has no future. Or does it? Does this mean the eventual death of the brand? What advice do you have for companies as they face this new, sophisticated buyer? How can a company differentiate itself in the face of this reality? How do companies engender true loyalty instead of focusing primarily on price? Is that even possible in today's market place?   

I just came from one of the major mobile phone carriers. Every time I go there, I find myself liking the industry less after each experience.

At least once a week I get a text message from the company asking me to upgrade my phone for free since my contract with them expired. But of course, that means committing to them for yet another two years with a stiff penalty for going to one of their competitors if I agree to get their free or discounted phone.

Let me pay for the phone and then move from carrier to carrier on the fly going with the best and least expensive service. I have no desire to squelch competition with these ridiculous two-year contracts.

In this country, the carriers tell the phone manufacturers what they want for their customers. And the most obnoxious requirement is that these phones WORK ONLY WITH THEIR SERVICE.

This carrier control was complete until Apple entered the scene with the iPhone and made the carrier bend some to their demands. Apple understands what can happen when you give the customer his way.

The iPhone still only works with one cell phone carrier. But the phone can be easily modified by Apple to fit any carrier that uses the same technology as AT&T. All that is required is a modified SIM card that inserts into the innards of the phone.

Many are not buying the iPhone because they do not want to buy services from AT&T. This is depriving Apple of millions of dollars in sales and millions of potential customers from enjoying the best phone available on the market today.

Here is another example of what customers find offensive.

Let’s say that you are already paying $100/month for a certain number of minutes each month. In fact, let’s assume you never even come close to using all of your minutes most months. If you want to use those excess minutes to transfer voice calls, then that’s fine. BUT, if you want to send or receive data instead of voice in the form of an email message, for example, then you have to make another two-year commitment for an ADDITIONAL $40/month for that privilege.

Talk about abusing the customer!

Why are they doing this? Because they can.

When I can, I will drop this service and others like them as quickly as I can say “no thanks.” As time progresses, this irritation is turning from “That’s the way it is” to “How can I help defeat this practice and the organizations behind it?”

Let’s be honest here. Companies should make money, but not unfairly. Once the customer feels he is being taken to the cleaners, you have transformed him from a friend to an active enemy.

Imagine this story I experienced recently.

I got a call from a printer who wanted some input on a direct mail package he was producing. His client had just completed a mailing and was concerned about why his 100,000-package mailing was not performing better.

In a nutshell, this package consisted of a #10 envelope package containing a trifold response device that served as a self-assembled reply envelope. The respondent would enclose the payment into this reply envelope.

The target consisted of past customers. Historically, this type of mailing had not worked in the past. In fact, this client had not found success with any mailing for the last couple of years no matter what list segment he selected.

The printer had suggested using a self-gluing response form saving the client nearly 20% on the mailing. This was an excellent recommendation for another reason besides cost savings. The piece mailed required that the respondent use a strip of tape he had to find on his own to construct the reply envelope. Whereas the printer’s less expensive option would have provided peel-off glue strips to construct the reply form.

But the company’s internal creative team opted for the more expensive format even though their internal direct marketer warned them that this format would depress response. They were more concerned about the look and feel of the package than the response rate.  

No wonder this company’s direct marketing programs were not working!

This creative group overruled the marketing team, as always, and decided to use the heavier, nicer stock that did not allow the self-gluing process. This same internal creative team also insisted that all direct mail envelopes always look the same regardless of the offer or list segment. The company’s creative team consists of non-direct marketing creative people who came from the school of branding for branding’s sake.

As a side note, that is one of the reasons why I am writing the series in my blog on identifying qualified direct marketing talent. General advertisers should not attempt to create direct response messages.

Their first devotion is to the brand, treating it as the goal rather than a strategy. Direct marketers want to respect the brand, but their interpretation is that the brand must support the bottom line.

I can already see the prospect getting this mailing. They have received this same package --- or at least what looks like the same package --- many times over the years. They make the logical leap that this is the same offer from the company they dropped before. The envelopes are never opened because they always look the same. The package goes directly to the trash.

There is an Einstein saying that applies to this thought process.

“Insanity: doing the same thing
over and over again
and expecting different results.“

In my view, the problem here is a misunderstanding of what the brand is about. Branding is a strategy and not an objective. Branding serves and supports the objective. That objective is to make money for the organization.

So interpreting the application of the brand so rigidly that it costs the company legitimate sales makes no sense.

How do we support the brand without sacrificing sales? In fact, should that even be an issue? Is branding totally dependent on making everything look the same? Why does the letter, for example, need to follow the font rules making it look more like a brochure than a letter? Yet this occurs daily in the direct marketing world. How do you maintain the proper balance so branding and the direct marketing message work synergistically to increase sales?

 

I recently sent a note to the President of one of my favorite advertising agencies. I congratulated him for his fabulous white paper expounding the positioning and branding services offered by his team.

It was clear, interesting, compelling and hopefully all of his clients and prospects will take the time to read it.

Even the agency’s process for helping clients with identifying their positioning strengths deserves commendation.

Many clients do not understand the fine line between positioning and the brand. Understanding this will save many from unsuccessful marketing programs.

But I did ask him these questions.

The white paper talks about the aim of branding. It says that the branding goal is to build awareness of the client's product
allowing consumers to differentiate the client's products from the other options out there. Did he think that branding and awareness building were actually strategies for improving the client's bottom line? In other words, isn't the aim for all of this deep thinking to find a way to help the client make more money now and over the long term?

If that is so, how are branders evaluating the strategy as it applies to the goal? How do they quantify the financial contributions of positioning and subsequent branding activity?

The direct marketing, sales promotion, public relations and general advertising strategies are converging with the impact of multi-channel marketing. And great brands definitely improve the response rates of direct response programs. But how do we go about assigning credit for these various activities?

I would like to ask you, the readers of this blog, to give me your answers to the same questions. I will then compose an article for a national magazine within our industry and quote your name if the idea originates from you (with your permission, of course).

These words did not come from me, but from Ian French, President and Executive Director of Northern Lights Direct Response Television. His article entitled “Don’t lose branding” was published in DM News’ 2007 issue of Essential Guide to Direct Response Television.

As the actors used to say on the old westerns, “Them’s are fightin words” for most direct marketers. Why? Because we know that the branding message and the direct response offer cannot both maintain the starring role and still succeed in the market place.

I will never forget the extent to which branders push their agenda on direct marketers often crippling otherwise strong direct marketing campaigns.

One client, for example, insisted that we typeset all direct response letters in the same required fonts as the brochure. Visually, the letter was difficult to read and no longer looked like a letter. I responded by asking them if the administrative assistant typeset the letters from the CEO to customers. The answer, of course, was no.

In another, we had to use a branding headline burying the offer as a subhead.

To what extent do we enforce the concept that all advertisements must look and feel the same as the branding messages regardless of the objectives? What is the primary objective of the campaign? If we know nothing else about successful messaging, we know that trying to get an advertisement to do too much is a formula for failure.

There is little room for playing around with irrelevant phrases that do not work hard to drive response. And as always, the graphics must maintain the tone and brand look, but must also bend to what works in generating sales.

Clearly, the offer and other messaging elements must remain consistent with the brand. But to many branders, any semblance to making a sale with the advertising causes them to go into convulsions. It’s almost as if “selling” were somehow beneath their lofty branding strategy.

To be fair to Ian French, he did confirm the need to tame the branding beast.

“The final step is to integrate the brand into a DRTV campaign without sacrificing the response power of the medium.”

But therein lies the challenge. Other than a tag line with logo and appropriate tone and feel, any direct response format will feel foreign to branders who are used to very short copy, a lot of white space and a lack of specifics.

The author further states that we should “avoid the common mistake of separating the branding from the selling.” In my view, this statement implies that the branding objective is something other than selling. In other words, branding is not selling.

It sounds like there is dissonance right there. I thought that the branding’s reason-for-being was to sell?

What is your take on this issue of blending the brand with direct response messaging? How does that work? We know that the feel of direct response advertising in any medium will be different simply on the basis that direct response is copy heavy and leads with the offer. How do we keep the branding message from interfering with the selling power of direct response?

 

Right now, the markets are in turmoil due to the instability in housing. So in the Advertising Section of today’s Issue of the New York Times, the lead article talks about brand marketers switching gears from easy-money themes to financial strength and stability.

Here’s an example from a New York Life print ad.

“Financial strength
Integrity.
Humanity.

And the highest rating
from all four major
rating agencies.”

Two senior brand-marketing executives from the Omnicom Group believed this move in the industry was “reactive” and “groveling.” But the most telling statement from one of them was that the advertisements were “self-indulgent” because they were talking about themselves instead of the customer.

Don Peppers, a professional direct marketer and founding partner of Peppers & Rogers, makes it even clearer. “The more self-interested you are, the less I’m willing to trust you.”

Do you agree with these statements? If so, what should the financial companies communicate?

Here we are maybe a couple of months or so after the introduction of the revolutionary iPhone and Apple drops the low-end model and dramatically reduces the price for the high-end iPhone. Apple reduced the cost by $200 from $600 to $400. That’s even $100 less than the low-end model used to cost.

Based on the Apple blogs and various investment groups, this was an unprecedented move. Apple normally reduces pricing long after the introduction or maintains the price add adds more features. This is essentially part of their branding strategy to keep the quality image high in consumers’ minds.

Most conclude that this move will undoubtedly increase sales substantially. But at what cost?

Apparently, the investment community agrees that the move will reduce Apple’s profitability. The stock dropped by about $7/share after the price reduction announcement.

Many who bought the units early on will really be annoyed by this decision. Consumers may think twice about buying future Mac products during their first three to six months of introduction. This purchase delay syndrome could work against future Apple innovations according to some.

Surely Apple understood these risks. And they probably figure that with higher sales volumes that they can make up the profits through both greater sales volume combined with a reduction in production costs. Or perhaps they were concerned about the one million iPhones sales by the end of September pronouncement to keep their commitment to shareholders?

By now, you know what I think about putting more emphasis on shareholders and less on customers. Always keep your eye firmly on the customer while keeping your field of view on all stakeholders by 360 degrees.

What do you think this decision will do to Apple long term? What can direct marketers learn from this unfolding event? Does increasing profits and sales volume ALWAYS achieve the desired results for the company?

Even if you've worked in the direct marketing field for just a short time, you know that branding and direct marketing strategies  do not always live in harmony. When developing creative work, this conflict reveals itself openly. Why do you suppose this struggle exists? How can we position the product appropriately and still generate sales now?

It never fails. General agency professionals and clients who spend their careers building brands go limp when it comes time to ask for the order. It’s almost as if the call to action that is needed to get a reasonable response rate from the target audience somehow demeans the brand.

Let’s remain clear. A strong brand and quality image do a lot to generate higher response rates for direct marketers. But in my experience, a strong brand without sales support will deny the sales the organization deserves.

Perhaps you have a different view of why solid offers make keepers-of-the-brand uneasy. Are there more effective ways to get people to act instead of just appreciate your brand positioning?