The USPS and B2B Catalogs – Will postal rates increase?

 

If you run a B2B catalog company, chances are you have been following the continuing saga of the USPS wondering how future postage increases will affect your business.  The short answer is that the magnitude of postage increases in the near future will have a meaningful impact on your business; just how meaningful remains to be seen.

 

Essentially the future of your business model with your key silent partners, USPS, UPS, and/or any other private carriers you work with, depends upon the federal government and energy costs.   Both impact scenarios are not particularly good.

 

Let’s focus on the USPS.  Here are some background facts to ponder.

  • USPS is about $15 billion in debt….and sinking.
  • The USPS has more than 31,000 retail locations, more than Wal-Mart, Starbucks and McDonalds combined.
  • Combine that, its enormous workforce (571,566 full time, unionized employees, making it the country’s second largest civilian employer), and its overall revenue, and that means if it were on the Fortune 500 list, it would be No. 29.
  • Federal law currently prohibits closing of post offices solely on economic grounds. Current plans call for the closing of just short of 4,000 locations only. How business orientated is that?
  • The American Postal Workers Union recently signed a 4.5 year contract with seven un-capped cost of living increases and a 3.5% raise over the contract term. Go figure.
  • They don’t have a ten year plan, not even a five year plan. They appear visionless when compared to other leading postal services around the world. TERRY: THEY ACTUALLY DO HAVE A 10-YEAR PLAN THEY UNVEILED ON MARCH 2, 2010. IS IT A GOOD ONE OR A SOUND ONE? OF COURSE NOT, BUT THEY DO HAVE ONE.
  • First class mail volume, which is the USPS’s most profitable service, is evaporating as consumers get and pay their bills online. The glory days of first class mail are gone and not coming back.
  • Even the US Senate Federal Credit Union recently announced a service charge of $5/month for customers who wanted to continue receiving their monthly paper statements by mail.
  • First class mail is three times as profitable as standard mail, aka “junk mail”. (Read: Your Catalog!)
  • Total mail volume dropped 20% from 2006 to 2010.
  • FedEx and UPS have trounced USPS in express and ground shipping. The market share for each is 32, 53 and 15% respectively.
  • Most western Europe postal services are facing the same market dynamics but they are thriving:
    • Germany runs just 2% of its postal locations having outsourced the balance to other retail establishments.
    • The Finnish postal service sells many in-demand digital mail services as does Sweden/Denmark (PostNord).
    • PostNord’s EBITDA rose 43% last year to $490 million.
    • The profit margins of SingPost, Deutsche Post, PostNord and USPS were 26.25%, 4.89%, 3.6% and -13.58% respectively.
    • Needless to say, there are lots of “role models” around the world on how to fix the problem with the USPS.

 

So, given this time of record federal deficits and national debt, how long do you think the federal coffers will continue to support USPS?  Whatever your answer, I doubt it is more than five years, if that long.

 

What will happen? Short answer: Nobody knows.  What is likely to happen?  Here’s my considered opinion along with the potential impact to your B2B catalog business.

 

  1. Postal locations will shut and/or be outsourced.  This is a good economic move and no big deal to B2B marketers.
  2. First class mail will continue to drop.  This puts more economic pressure on USPS to raise postal rates.
  3. USPS will try to get move aggressive with UPS and FedEx. More competition will help keep rate increases in line.
  4. USPS labor costs and retirement costs are excessive by private industry standards.  Again, more pressure on rate increases.
  5. Saturday delivery will be cut.  Again, no big deal for most of the B2B catalogers that I know.
  6. Rate increases will continue to be higher than the normal inflation rate, as USPS seeks beyond-Consumer Price Index “exigency” increases, based on extreme circumstances. The the USPS situation certainly is extreme. Standard Flats rates (your catalog!) will increase faster.  A very big deal!

 

What should you do?

 

  1. If you’re not already a member, the best investment you can make right now is to join American Catalog Mailers Association. Other than yourself, this four-year-old organization is just about the only friend catalogers have in Washington. In a very short time, it’s existing members have achieved a remarkable 22X ROI on their dues investment. So join now, pay your dues, and reap the benefits ACMA (catalogmailers.org) has to offer.
  2. Regardless of the yearly announced rate increase, I would budget on an average of 7-10% postage increase per year for the next five years.  Increases will not be predictable or sane. Some years will be lower, some years will be excruciatingly higher. Remember, postage costs in the US, just like gasoline costs, are a relative bargain when compared to other countries.  But they only have one way to go – UP! And they will go up, but not as high as they could go if ACMA weren’t actively fighting for catalogers’ future.
  3. Continue to “test and invest” in alternative prospecting tactics.
    1. Online prospecting – SEM, PPC, web re-marketing, email , blogging and online video to name a few. Getting your fair share from organic search is one of the biggest opportunities I often see.
    2. Alternative media – inserts, trade ads, sponsorships, etc.
    3. Telephone – if you’re not doing so already, test telephone prospecting to your most responsive prospect mail lists.
    4. Assess the competitor express and ground shipping options between UPS, USPS and FedEx.  Giving all your business to one carrier isn’t your best option.
    5. Know what your contingency plan is for a year where we get another 20% increase in postage costs.  No smart operator should be caught surprised!
    6. Take advantage of prospecting incentives or additional summer sales or QR code or any other discounts the USPS offers; expect that you will not get much lead time on such opportunities.

 

If you have other suggestions, comments, ideas, questions or just need help, I’d be happy to talk with you!

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Measuring ROI on B2B Marketing Activity in a Multi-Channel Environment.

Measuring ROI on B2B marketing activity in a multi-channel environment.

 Most B2B marketers today struggle to measure and allocate expense and return to various marketing efforts.   The interrelationships between sales and marketing activity like direct mail, email and telephone sales, for example, are complex and confusing.   It’s tough to know true cause and effect when dealing with multiple communications activities to both customers and prospects.

Here are a few “best practice” suggestions.

  1. Where possible, make sure all the activity you undertake has a built in tracking mechanism or “source code” so that you can directly track as much as possible.  This may be accomplished by using unique 800 numbers, pre-coded fax order forms, unique URLs or landing pages.   Most B2B marketers can directly track 30-60% of their orders these days but the trend is downward.
  2. Conduct  “match back” data processing of sites/individuals and orders/sales to marketing activities such as mailings, email campaigns or telephone contacts.   Merit Direct (www.meritdirect.com) has the best B2B match back logic and software, check them out.  You will have to establish allocation rules that will reflect  your assumptions about which activity had the most impact on delivering the customer/order.  For example, if you mailed a catalog within the last month and sent an email within the last week and the customer ordered something from the catalog and from the email you may wish to give the catalog 75% of the credit (for promoting the item ordered) but the email 25% credit for, theoretically, reminding the customer they needed to order.   Yes, these rules are somewhat arbitrary but hopefully intuitively better than no allocation rules at all or giving 100% credit to the last activity regardless.
  3. Make sure you examine your online order to see which ones came from proprietary or branded search terms and which came from non-branded terms.   If the customer did a Google search on your brand name you can hardly give your web team (and investment) credit for the full value of that order.   Most B2B merchants take the majority (i.e. > 50%) of their orders online today but their offline marketing activity still “makes”, instigates or creates the demand in the majority of cases.
  4. Make sure you are looking at recency, frequency and monetary at both the site (discrete geographical address) and the name/individual level and comparing changes to your marketing programs.  In B2B the site creates the need/demand and the individual is usually just the order processor.   Individuals also come and go but site need/demand remains and you should measure your ability to maintain and grow that revenue year over year.
  5. Provide your customers an explanation of why the source code you are asking for is important and what’s in it for them.  Also, test giving them incentives like special pricing, advance sale notice and added services.   Properly train, incentivize and monitor your customer service reps also to collect the tracking information and monitor them for success.
  6. While you do you best to track and allocate at the order level never forget to monitor the “big picture” first.   Track total mailings, e-mailings, and phone calls monthly and quarterly and compare that to overall trends in revenue and new site and name acquisition.  It helps to have the big picture relationships in your mind before you go granular with tracking of specific programs and codes.
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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6 Things Every Direct Marketer Should Know About SEO

6 things every direct marketer should know about SEO

I make my living by advising B2B catalog companies on all sorts of issues.  One of the areas that most are struggling with these days is just how to manage and allocate their investments in online versus offline marketing.   Most are spending handsome sums in each area but are less than perfect when it comes to assessing just what activity generated what customer or order.    Most are enamored with the latest technology advance and drunk with the possibilities of unlimited email, SEM. PPC and social marketing.

The issue gets particularly cloudy when looking at online orders so I wanted to provide some general guidance to all who may be struggling in this area.

So, here are six things I think you should know.

1.    If you are like most, you may be taking >50% of your orders online in today’s environment but that does not mean you are making those orders online.   More often than not, more that 70% of the business you take online is actually generated by your offline mailing or telesales activities.

2.  You want to look closely at your top producing keywords – those that give you traffic and orders.   Separate them and their performances into branded and non-branded terms.  It would not be unusual to have more than half of your top ten key words be branded terms like your company name or the name of your lead product.

Recognize that when someone searches on your branded, proprietary term they are most likely being motivated to do so by your mail or sales phone call.

3.  When someone searches and ends up on a results page they have the option of clicking your organic listing or, possibly,  your paid listing.   Again, a click on a paid listing here is not 100% because you spent the money on PPC advertising.   Make sure you track these types of PPC responses and allocate only a portion of the results to your PPC spend.

4.   In the world of SEO ranking counts.   Position one ranking gets about 51% of the click-through, position two 28% and position three 19%.  It gets very ugly after that so position 1,2,3 is the only place to be.   Measure where you are ranking on each important search term.

5.  I like to remind catalog mailers than nothing ever happens online until somebody; somewhere sits down in front of a computer with intention.   “Catalog Interuptus” is a condition that generates the awareness, need and motivation to sit at the computer and buy.   Chances are this condition is still creating greater than two thirds of your sales.

6.  Finally, remember that what you call your products is not necessarily what your customers and potential customers call them.   Your web content should be in line with what your customers are searching for .   For examples, say you sell conference name badges.  You may call them “name badges” but your customers are searching for “conference badges”  If so, you will miss each other in search engine results.   Conduct SEO research that tells you how many people are searching for what each month.  It just may open your eyes to the online potential you have.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221   

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Do you callback your web orders?

Most B2B Catalog marketers, including me, think the web is a very good thing. However, I am becoming increasingly convinced that sometimes the web, with all its benefits, shortchanges us.   This happens in a number of “customer experience” areas but the most important one I see is how the web treats a new customer.   Basically, it doesn’t ….and therein lies the problem.

In a number of client companies I have recommended that ALL web orders be called back or at least NEW customer web orders be called.   Ideally, this happens within two hours of the order being placed and does not hold up shipping of an order.

In most cases, here’s what I see:

1.  The callback confirms the order, thanks the customer, finds the reason for the order or intended application of the purchase.

2.  The call provides an opportunity to “sell the brand”, after all, this is a new customer who probably doesn’t know much about your company.

3.  The call provides an opportunity to collect valuable marketing data on the new customer and educate the customer on your benefits and services.

4.  The call moves an internet transaction to a human transaction and we all know that “people buy from people” and not machines.   After the call, ideally, the customers feels that “those are good people, I’ll buy from them again”.

5.  The chances of getting a second order go up with such calls, particularly, if a thank you note and second order incentive is including in the first shipment.

6.  First time buyers who move to a second purchase are more likely to have a significantly higher LTV.

So, why not structure a test in your organization to see if the ROI on calling new or all web orders is justified.   If you need help, please call me.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221

Terry Jukes

CEO and Founder

On Skype: “terryjukes”

tjukes@b2bdmi.com

Mobile: (954)383-5221

B2B Direct Marketing Intelligence, LLC.
2871 NE 26th Court,
Fort Lauderdale, FL 33306

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Canada is hotter!

Several months ago I blogged about expanding your marketing efforts to Canada. Since then I have helped two B2B catalog marketers refine and expand their Canadian marketing programs. All three have met with great success and I encourage you now to be tested or expanding in Canada. Since I last blogged about the Canadian opportunity the Canadian dollar has risen to more than $1.04. That means Canadian businesses can now buy more than a US dollars worth of goods and services for one Canadian dollar. Seldom in the last thirty years has the Canadian dollar been worth more than the US dollar so your Canadian customers are on a euphoric spending spree south of the border. Believe me, I see Canadians snapping up depressed south Florida real estate every day. They are giddy about the values and what their dollar will now buy. Remember, your Canadian sales should be at least 10% of your US sales, more if you offer a niche product that is hard to find in Canada. If you are not, you are missing out!
So, in cased you missed it, I will re-cap some previous points about why you should expand your mailings in Canada now. I will also add a couple of new points gleaned from the projects I have just completed.

1. The Canadian dollar is at an all time high. Remember in 2009 it was a little more than 80 cents US so it’s up 20-25% in less than three years. Enough said about that.
2. Over the last several years UPS, USPS and Fedex have are providing better, cheaper, faster
3. Canada, being a much smaller country, does not have the product breath and depth of selection that the USA does. “I simply can’t find it in Canada” is a phrase commonly heard from Canadian customers. This often translates into a certain level of price insensitivity, particular when the cost of buying the product is much less than the cost of not having the product at all – a common occurrence in B2B catalog sales.
4. Many Canadian businesses have US subsidiaries and US delivery points so make sure you take a look at your sales to border towns as an indication of your Canadian business. If you have disproportionately high sales to the “five border state Bs” (Blaine, Bellingham, Buffalo, Burlington, Bangor) I would suggest that some of that is business coming from Canada.
5. Having Canadian inbound and outbound sales representation is key. Having a US based call center representative who doesn’t know Saskatoon from Sudbury is just, err, well, insulting. (I am reminded of the last encounter I had with a telephone rep in India who did not know where Atlanta was.) Even if you ship from the US (which would be wise to start) invest in a Canadian call center or service bureau or at least a Canadian or two in your US call center.
6. My intelligence tells me that Canada is growing, right now, at about twice the rate of the US.

So, maybe it’s time to re-look at Canada. Who knows, you might want to take your summer vacation there and do a little market intelligence work!

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Canada is hot!

In case you have not noticed the Canadian economy has held up rather well through the great US recession.  Business north of the border is booming.   More importantly the value of the Canadian dollar is high…currently trading around par with the US dollar.   Canadian consumers and businesses are buying goods and services from the USA at record levels.   One only needs to look at the number of Canadian cars in Florida this winter to realize that.   Canada remember is the USA's largest trading partner and Canada is natural resource (read: oil) rich.   The Canada dollar tends to follow the price of oil.   Have a look at the ten year history  of the Canadian dollar relative to the greenback here:

http://www.xe.com/currencycharts/?from=CAD&to=USD&view=10Y

Did you notice how the value has increased from approx. 80 cents to par in less than two years?    This means that everything in the US is 20% off…including all the goods and services you have to offer.   Also, over the last several years UPS, USPS and Fedex have all gotten better at providing better, cheaper, faster transborder delivery services.   Are you getting your share of this important market?    Well, if your sales to Canada are not approximately 10% of your US sales and/or if your sales to Canada have not grown approx 20% Y/Y in the last year I would say you are lagging.

You may also want to ponder the following:

1.  Canada, being a much smaller country, does not have the product breath and depth of selection that the USA does.   "I simply can't find it in Canada" is a phrase commonly heard from Canadian customers.   This often translates into a certain level of price insensitivity, particular when the cost of buying the product is much less than the cost of not having the product at all…..a common occurrence in B2B.  

2.  Many Canadian businesses have US subsidiaries and US delivery points so make sure you take a look at your sales to border towns as an indication of your Canadian business.   If  you have disproportionately high sales to the "five Bs" (Blaine, Bellingham, Buffalo, Burlington, Bangor) I would suggest that is Canadian business.

3.  Having Canadian inbound and outbound sales representation is key.   Having a US based rep who doesn't know Saskatoon from Sudbury is just insulting.   (I am reminded of the last encounter I had with a telephone rep in India who did not know where Atlanta was.)   Even if you ship from the US (which would be wise) invest in a Canadian call center or service bureau.

4.  My intelligence tells me that Canada is growing, right now, at about twice the rate of the US.

So, maybe it's time to re-look at Canada.   Who knows, you might want to take your summer vacation there and do a little market intelligence work!

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

 

 

 

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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UK catalogers entering the USA…..really?

I have just returned from ECMOD 2010 in London, the annual gathering of UK/European direct marketers.    While there, I gave a presentation on “Managing Multi-Channel Metrics” a hot topic these days.   Many struggle with how to do it effectively.   Email me for a copy of the presentation if you like or visit my website, www.b2bdmi.com.

While at ECMOD I met several catalogers who have recently entered the USA successfully.   It is not something I hear everyday so I was intrigued by the discussion.   Especially when they did it at a time when US catalogers are struggling.   I was also wondering how such seemingly small direct marketing companies could successfully sell in the USA and fulfill from the UK.   In a word, the key to their success was, quite simple, unique product and it reminded me, once again, of one of the most important basics of our industry…..unique, hard to find, exclusive products.   I am sure as you read this that most of you will groan and say “We know that!”  but my conversations with these UK catalogers revealed that they worship unique product.  In the US, we just know it.  They worship it at the alter of product.   There is a difference.    It reminded me once again that “we are what we sell” and that if we don’t have something different, something new, something ever exciting and cool, something benefit laden and cost effective, something worth talking about….we will die.    It is good to remember this when our response rates and sales per page start falling.   Could it be that our products are boring, common, irrelevant and just plain “nothing special”.    For all the time you spend in your organization figuring out how to integrate the relentless wave of new technologies I would suggest you balance that management energy by finding something better to sell.   Good B2B organizations seem to spend more than half their time developing new things to sell and less than half their time figuring out just how to go about selling them.   Just a thought.  Where does your company stand on its real committment to develop new product?

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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The power and importance of mail

OK, Summer’s over…back to serious work! I wanted to post a few facts about the power and importance of direct mail. In today’s world of “web hysteria” I think it is important to remember what really drives most, if not all, B2B catalog businesses. In the spirit of full disclosure, much of this information comes courtesy of our friends with mailing related businesses like USPS and Pitney Bowes. Nonetheless, facts are facts. BTW, if you don’t have a good working relationship with your USPS rep, you are missing out on good information and advice.

Ponder these facts and studies: (and read my conclusions at the end!)
1. Public Television stations have reversed their decline in acquiring new donors through direct mail campaigns. Finding from a study analyzing 700 campaigns representing 34 million pieces mailed:
• $295.32 was raised per thousand pieces mailed in 2009, up 16.3% from 2008.
• Average gift was $42.10 up from $41.64.
2. R2integrated news release, Marketers Indicate Social Media Important, Most Not Profiting, Many Still Learning, April 14, 2010.
• 54% thought social media was innovative and invaluable to their business
• 65% said their companies had not increased revenue or profited using social media.
• When it comes to using social media, 53% of respondents stated they were “still learning” or “behind the curve.”
3. USPS Household Diary Study–Direct Mail, August 2009
• 79% of all households read or scan the advertising mail sent to their home
• 31% of households made a purchase as a result of ad mail received
• 48% of households read catalogs
• 28% of homes read credit card advertising
4. ExactTarget, 2009 Channel Preference Study, accessed November 3, 2009
• For young and old, direct mail directly influenced the purchase of an item or a service more than any other channel
• 76% of Internet users said they were directly influenced by direct mail; 67% were influenced by TV; email 58%
• 75% of 25-34 year-olds have made a purchase as a result of direct mail.
• 62% of 18-24 year olds purchased due to direct mail.
• 55% of teens were direct mail influenced.
5. Adweek Media/Harris Poll, Which Ad Medium Helps Bargain Hunters Most?, January 18, 2010
• Print outscored other media for ads that would help a person find bargains
• 23% said newspaper and magazine ads helped them find bargains; Online ads scored 18%; direct mail/catalogs 12%; TV 11%.
• 34% said that the type of ad makes no difference.
6. ATG’s Cross-Channel Commerce: The Consumer View report, March 2010
• 78% of consumers are using multiple channels to research, shop, and ultimately completetheir purchase
• 78% use catalogs to browse and discover new products and services.
• 60% make a purchase via catalogs 4 times a year or more. 13% are using mobile devices to make purchase 4 times a year.
• Consumers browse and research online, then make the purchase in the store–39% went to the store to touch/feel the products; 36% visited the store to compare brands; 22% visited the store because they needed the product immediately
7. Outsell’s Annual Advertising and Marketing Study, March 2010
• 72% said multiple formats together were extremely or somewhat effective – Unica, State of Marketing 2010 Survey, March 2010
• 75% of marketers with an online presence make use of the online data they collect—customer interest, intent, behavior–when making their online and offline marketing decisions.
• 74% use web data to complement their email marketing offers
• 58% of marketers apply data collected online towards their direct mail marketing offers
• 46% use onsite personalized web offers based on integrating web data.

OK, here’s my take:
1. In today’s multi-channel world choice of media is never an either/or question. In fact, I see mail first, phone second and web third when it comes to driving (i.e. creating orders and new customers, not to be confused with “taking”) B2B business.
2. The mail and phone have “interruption power”. They intrude and must be responded to in one way or another. In the online world, nothing….absolutely nothing happens until a prospective customer sits in front of a computer. Think about it.
3. Online marketing and media are gaining an ever growing share of marketing spend at technology delivers new and different ways to find, talk to and service customers. It is spectacular growth but still a relatively small fraction of most marketing budgets in B2B catalog businesses. It will continue to grow faster and be a more important part of the mix as we apply our DNA “test and rollout” methodologies.
4. In a B2B catalog business, nothing (so far!) in online marketing is as important as managing your customer circulation effectively using RFMCP – recency, frequency, monetary, channel and product.
5. There is a world of online buyers out there. You will get your largest share of those buyers using a multi-channel approach….not any single approach.
6. As always….watch the balance. The balance between where you focus and where you get your results. I see too many marketing teams spending too much time on internet projects while neglecting the basics of the business. I also see too many companies making risky decisions about online marketing investments in the belief that it will TOTALLY overtake their mail or phone programs in the near future. Some are even stopping all their prospect mail, cutting customer circulation and reducing their telesales staff. While there are always exceptions, I believe this to be dangerous territory for most B2B catalog marketers….unless they are totally changing their business model along with such changes.

Are you struggling with the balance between your offline and online marketing investments?   Are you having trouble measuring the effectiveness/ROI of each.  Please call me.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Are you becoming a virtual company?

As I look back over the last five years and forward to the next five I see a clear trend in our industry.  More and more companies are going virtual.    Now, become you assuming what that means let me share the observation that there are many different kinds of “virtual”.   Here are some examples.

 

  1. A company that has “at home” inbound customer service reps, either their own or a third party.
  2. A company that has several employees who work remotely. This usually occurs with a good employee…or desirable new hire…..who can not re-locate for any number of reasons.
  3. A company that has outsourced a major part of their business because they have realized that they are not experts in that area. Software development, fulfillment, call center, human resources, light manufacturing/assembly are just a few such areas.
  4. An ecommerce pure play company who has chosen from the beginning to outsource everything. (I believe this is more a function of the fact the company was born when all the needed outsourcing services were already developed.)
  5. A company that has realized the dangers of being too insular and needs outside input or vendor input in various operation areas to deliver continuous improvement.

It is important to note that becoming virtual is a continuum, not a zero sum game.   You never become 100% virtual, nor are you 0% virtual.  Everyone is on the continuumn.

Some of the typical reasons for not outsourcing functions include loss of control/understanding, risk caused by vendor failure, vendor staff turnover, trust, etc.    (This is somewhat ironic as very often most of these issues are present when a company decides to perform all functions internally.)   On the other side of this issue are, I believe, more enlightened companies who realize they can not be expert at everything and they need to focus on only the critical differentiators like product and brand development.  More importantly, they realize that many areas of their business have become too complicated, too sophisticated, too technology laden for them to underwrite the cost of what it takes to become and remain leading edge.  They realize they must perform these functions co-operatively with others (other customers of their vendor) in order to keep costs in check, learn, advance and remain competitive.   After all, is it reasonable to believe that you can be leading edge in all areas of your business?   Is it reasonable to believe your employees won’t get isolated, myopic or stale in their non-critical functions?   It is worth a hard look in the mirror on this one and at least a look at what others in your category are doing.   I believe we will continue to march towards the virtual company.  We will be pushed by our internal failures and shortcomings and pulled by the success and new virtual business model of many ecommerce pure plays.   No matter what side of this fence you are on, I would welcome a conversation.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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Posted in Catalog Marketing, Catalog Operations, E-commerce systems | Tagged , , , , , , , , | Leave a comment

Is your ecommerce solution performing up to your expectations?

I have been working with several companies recently who have been struggling to get their ecommerce results up to par. Most have been using entry level ecommerce solutions and/or developing their own solution in house. They are frustrated when they hear the better results of other B2B multi-channel marketers. While all businesses are unique, I do see some trends that have emerged between those that lead and those that lag in online peformance. Here is what I see in the leaders.
1. They have extremely good measurement and metrics and can answer just about any question I throw at them.
2. They keenly track their organic search results from keywords and traffic to conversion, AOV and LTV.
3. They are getting about half their total organic search visitors from non-proprietary search terms. The other half comes from branded company or product terms.
4. Organic search is now driving about half their total site traffic.
5. The gap between online and offline AOV is narrowing each year as online up-sell, cross-sell and customer service improve.
6. Retention of buyers online (those that come back and make a second purchase) is increasing substantially.
7. They have multiple "feedback loops" to keep them up to date with what their customers are thinking, doing, feeling.
8. They sites are a collaborative effort using leading edge partners/suppliers and their technologies to keep their sites at the leading edge in key areas – SEO, usability, site search, product display, etc.
9. They have the integration between their front end web solution and their backend OMS and fullfillment systems working seamlessly.
10. They are thinking about tomorrow's needs today, leading not playing "catch up". They are busy testing social marketing and mobile commerce programs now.
So, I guess the question is, how is your company doing in this critical area?

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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