Direct Marketers Join The New Elite
Sydney Morning Herald
Thursday April 6, 2000
Suddenly direct marketing has become respectable. The direct marketing executive, or ``customer relationship manager" (CRM) as they must now be called, is the new force in adland. Thanks to the Internet's power to penetrate the habits and tastes of every consumer, the CRM has been duly anointed as the driver and interpreter of the new technology.
Witness the events at George Patterson Bates, one of Australia's oldest and, in the nicest possible way, crustiest advertising agencies. Its corridors are lined with canvases depicting dead directors. Yet beneath their furrowed brows a direct marketing juggernaut is taking shape. Patts is about to unveil an Internet marketing unit that will harness the humble e-mail in ways hitherto undreamt of west of San Jose.
``The Internet is a Lamborghini, but we're all treating it like the car boot where we dump our golf clubs," says Douglas Nicol, Patts's head of direct and interactive marketing. In his view, Australian direct marketing firms haven't even touched the gearbox of this wondrous machine.
Nicol speaks of the vaulting possibilities of ``permission e-mails" electronic mail carefully filleted to suit the customer's interests.
So you like fishing? Then perhaps you won't mind a few angler-related e-mails. You're a line-dancing instructor who breeds Pekingese dogs?Splendid: you'll be happy to receive an e-mail sponsored by the Kentucky Line Dancers Club and Small Dog Breeders Association.
In America, PostMasterDirect.com has pioneered the idea of adapting e-mails to customers' wishes to the relief of thousands of consumers oppressed by a deluge of unsolicited drivel (or spam).
PostMasterDirect was the first to see the chilling truth: the customer hates spam not because it is unsolicited, but because it is irrelevant. Therein lay its real offence: spam failed to appeal to the customer's vanity, covetousness, lusts and fears. Imagine the horror of a Pekingese breeder in receipt of an e-mail about Afghans.
``Of all the unknown mail that is sent out, 30 per cent is never even opened or read it's just deleted," says Nicol a damning statistic for the legions of electronic cold callers.
Nor is he enamoured with site advertisements: ``They have their place, but their effectiveness is declining."
Patts's new unit intends to offer clients the full package of direct services: Internet-based, telephone and traditional direct mail. It stresses the importance of not doing things that will irritate the customer a healthy, if belated, discovery for most direct marketers.
The firm's goal, on the other hand, is to establish a ``relationship" with the customer before dispatching the sales pitch finding out their habits and desires.
Nicol explains that e-commerce sites should do four things. They should perform the basic service to near-perfection, in terms of delivery and cost; they should ``add value" by giving buyers extra information (for example, wine reviews at a wine site, gardening tips at a gardening site); they should remove superfluous extras which the customer ignores; and they should keep the irritation factor to a minimum. This means not sending a daily e-mail simply because the technology makes it possible.
Michael Kiely, of Boomerang, an integrated marketing consultant that counts Toyota and Australia Post among its clients, is equally aghast at the possibilities of e-marketing. He speaks of the importance of ``enrolling" the customer. He advises, with admirable restraint: ``You enrol the customer first and get them to agree to be contacted from time to time. The last thing you do is cold e-mail them, cold fax them or cold call them."
Or drop in on them? In America, you might be poking around a site when a box pops up cooing, ``Hi! My name's Cindi! Can I be of help? I see you like our twin-set Tupperware." In this case, ``audience-friendly" e-mails can be more annoying and intrusive than irrelevant cold calls.
Nonetheless, customer relationship managers seem as amazed as everyone by their overnight elevation. Their salary packages are soaring. There's no more jaundiced talk about ``junk mail"; no contemptuous smirks from the old guard about home drops of pizza vouchers. The CRMs will not be fobbed off as spivs with a shrink-wrapped sales pitch, spun out like hitmen when all else fails. He, and increasingly she, is the unsung hero(ine) of the ``new economy".
Not only that: CRMs are polite, rather nice people. They have to be or at the click of a mouse, the customer will dump them. Some of my best friends are customer relationship managers.
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Deloitte Touche Tohmatsu's latest Internet profit report (out yesterday) is a stark reminder of the squeeze on the profits of Australia's leading Net stocks. Of 19 Internet companies surveyed, only five reached their 12-month forecast and only one, Melbourne IT, reported a significant profit ($1.02 million against a forecast $688,000). Deloitte concludes that the ``old economy tigers" will soon snap up the faltering Net stocks.
In Europe, the ancient regime has already struck back. Tesco, an old British supermarket chain, was recently named the world's fastest-growing Internet company in a survey by Novell and the London School of Economics. The survey, ignored here (possibly because no Australian company rated a mention), offers a fascinating glimpse of where real power lies in the ``new economy": with big, old-fashioned, trusted companies that see the Net as another promotional tool for their big, trusted brands.
© 2000 Sydney Morning Herald