PRESIDENT'S CORNER The theme of our conference was the continuing development of multichannel business and its implications for our future. Virtually every catalog company has a website store open 24/7 and increasing numbers of web-based businesses use postal mail to prospect and reactivate. Nothing is pure. Bill Nicolai, senior partner at LENSER, pointed out that in reality channels have merged into a complex, integrated experience for our customers. I came away from our Summit both energized and challenged. It is clear that we all must “run faster” to just keep up. The complexity of our jobs increases exponentially. The upside of all this for those of us who meet the challenge is success over those who do not. So, put the date of our next Summit—September 24-26, 2008—in your date book. It is your chance to learn and keep ahead of your competitors. Read more insightsFEATURE ARTICLE CASE STUDY CIRCULATION TIP CREATIVE TIP multichannel TIP LENSER CLIENT SUMMIT HIGHLIGHTS “I had a great time—professionally, intellectually, and personally—at the LENSER Summit. The 2007 LENSER Client Summit got right down to business Wednesday afternoon... Read on for details. EMPLOYEE SPOTLIGHT—MONICA MAGAÑA AFFILIATE FOCUS—LENSER SUMMIT AFFILIATE SPONSORS
PRESIDENT'S CORNER Last week we hosted the annual LENSER Client Summit here in San Rafael, with over 140 of our clients, service providers, and friends in attendance. It was an exhausting and exhilarating three days packed with valuable speakers and networking events. I wish to thank all those who attended but especially those service providers who served as sponsors. Special thanks go to our gold sponsors: Abacus, I-Behavior, and NextAction. During my opening remarks, I noted how our gold sponsors, these three cooperative databases, allowed the catalog industry to move from first generation circulation—simply mailing lists—to second generation circulation management. In the 1990s they changed the way we all do circulation management, providing a large universe of new names and tools. The cooperatives have been the cornerstone of LENSER’s advanced circulation management practices, allowing more precise targeting of mailings to those most likely to buy. Their success has truly been our success. The theme of our conference was the continuing development of multichannel business and its implications for our future. Virtually every catalog company has a website store open 24/7 and increasing numbers of web-based businesses use postal mail to prospect and reactivate. Nothing is pure. Bill Nicolai, senior partner at LENSER, pointed out that in reality channels have merged into a complex, integrated experience for our customers. Just as the cooperative databases moved us to second generation circulation management, the internet is demanding entirely new circulation strategy and new techniques—what I referred to in my opening remarks as “third generation circulation management.” Based on both channel of order and channel of origination, customers behave very differently and deserve different types and a different number of contacts. While matchbacks have become routine methods of evaluating response, it is becoming clear that for multichannel businesses, matchbacks alone do not adequately measure the ROI of catalog mailings. More advanced techniques are required. I came away from our Summit both energized and challenged. It is clear that we all must “run faster” to just keep up. The complexity of our jobs increases exponentially. The upside of all this for those of us who meet the challenge is success over those who do not. So, put the date of our next Summit—September 24-26, 2008—in your date book. It is your chance to learn, keep ahead of your competitors, and meet with old friends and new colleagues.FEATURE ARTICLE Great marketing professionals have lots of experience, and they get that experience by occasionally making mistakes. In the dim recesses of the past, mistakes have been made and witnessed by LENSER partners and marketing managers. Here are some of those tales of woe. Names of the people and firms involved have been changed to protect the guilty. The case of the Schmoe mailing: Mailer X once updated their customer database, which ran parallel to the accounting database. Unfortunately, somebody in accounting had plugged an empty field with the name “Joe Schmoe.” When the update was made, the wrong field was selected for the last name and hundreds of thousands of catalogs were sent out—to Jane Schmoe, Mary Schmoe, Tom Schmoe, etc. Contrary to conventional wisdom, this gave the mailer an 8% lift in $/book compared to those mailed with the correct name. Most of that lift came from the one-time buyers, who saw over a 200% increase! Of course, we don’t recommend deliberately making changes such as this one, as it could backfire and lead to depressed response. But it does point up both the marketing power of the inkjet area and the potential for data to become destructive. Lesson learned: Proof a file sample from the service bureau during the merge process, as well as samples from the inkjet simulations. Right address, but not everyone lives here: A mailer that uses individual name de-duplication rather than “house holding” for one of their best-performing outside lists failed to notice that the outside list file of one of their best lists, one that usually had 40% duplication, had none. This had been caused by a data processing error that shifted the individual names by one record and attached the wrong name to each address. No one noticed and both the right names and all the wrong names at duplicate addresses were mailed. Lesson learned: Watch for consistency in the merge/purge output match rates from one job to the next. They shouldn’t change dramatically. If they do, something serious is amiss. Nice photo, but that’s not our product: The sample photographed had the label of a competitor. The art department airbrushed out the label and cut in the image of the correct one. The next person in the process selected the original photo and it got printed in the catalog. Imagine the situation if L.L. Bean were to prominently feature a product with a Lands’ End label (not the companies involved). The lawyers actually got called on this one. Lesson learned: Actually look at the images being proofed, not just the colors. You mean we can actually mail our customers? During the initial review of a client, the LENSER team discovered that there was a standing instruction at the merge/purge supplier to use the DMA “Do not mail” pander file to suppress customer records, not just outside names. As a result, the company was losing 2% of its sales, worth about one full point on the bottom line. Are you 100% sure you aren’t doing this, too? Lesson learned: Regularly review and update your data procedures. A case of winning the war and then losing the battle. It took seven years, but the client company grew and took over a significant specialty market. With superior pricing, better service, and sharp marketing, they gradually took all the business away from the well-entrenched larger firm. The company they beat out finally threw in the towel and decided to liquidate all the merchandise which was not only featured in their catalog, but in several hundred big box stores. The next six months were hell, because the beaten company liquidated all their store merchandise to the direct mail channel at discounts of 60% off retail. Lesson learned: Be careful what you wish for… Not the friendly service they called for. We’ve heard more than one report of a mailer failing to proof the 800# and accidentally publishing the number of a sex line. That really did work to give our room an improved look. A high-ticket home improvement cataloger selected, rather than suppressed, the nine-digit zips of prisons and found out what happens when you mail catalogs to felons who have other people’s credit card numbers, access to phones, and lots of time on their hands. Lesson learned: Go over the merge instructions with a fine-toothed comb. The marketing worked so well that that we didn’t get any orders: Another company had an urgent need to increase lagging sales around a key holiday. The carefully timed additional contacts stressed the order-taking function in their system so much that no one could log on during the busiest time of the year. Lesson learned: Load testing is key. Examine the downstream effect of additional orders on inventory and fulfillment systems. If there is a common theme to all these true stories, it is that we need to always take a careful look at what we are actually doing. The marketing tools we use are powerful. Harnessing the automatic repetition of the efficient processing available means that one little mistake can get amplified to very significant proportions. So my advice comes down to two very simple principles: 1) Think carefully about what you are actually doing when you give instructions to execute marketing programs. 2) Don’t pick up a package by the string—i.e., always use a method that provides redundancy, rather than relying on just one key element working correctly.CASE STUDY Our initial concerns are address integrity and maximum deliverability. We are all painfully aware of the cost to print and mail catalogs. The processes that are available in a merge-purge environment are very different for residential, business, educational, and government addresses. If one’s customer file consists of more than one address type, yet the company is performing a single address hygiene process, it is safe to assume that catalogs are not getting delivered in the most efficient manner. And at today’s paper and postage costs—ouch! Even if the circulation numbers are small, one should consider the different address types separately. The same applies for list services, response matchbacks and other data processing. As the circulation numbers increase, consider the offers. Consumers and businesses demand separate contact strategies, as well as relevant content and messaging. Customer behavior is extremely different in the context of a purchasing decision centered on business operations. The “one size fits all” concept simply does not work here. What are the main differences between residential consumers and business buyers of any type? First and foremost is the motivation for making a purchase. Individual consumers buy more spontaneously, either for themselves, their household, or for friends and family. There might also be an occasion or tradition at play. Holidays and weddings are obvious examples; others include birthdays, gift-giving, or maybe to just a “personal spending spree” to pamper ones self. Business buyers, however, have clear buying cycles driven by operational needs that, oftentimes, repeat themselves. These buying decisions are often planned and require the approval of one or more key decision makers within the organization. What to do? First, separate customers found at residential addresses from those at institutional addresses (e.g., large businesses, small businesses, schools and other education-related entities, and governmental sites). Also, consider buyers at residential addresses who are buying for business operations – these are typically referred to as SOHOs (small office, home office addresses). Second, if these two categories exist on the house file in significant percentages, consider adopting separate circulation and merge-purge practices for each group. It would not be a bad idea, either, to consider working with a service bureau that specializes in business-to-business or hybrid merge purges—LENSER works with several, and we would be more than happy to recommend them. Be sure to keep these differences in mind both for data processing and your offer proposition if, in fact, your company is a hybrid.CIRCULATION TIP One of our clients has recently conducted an analysis of prospecting names by the number of times a name had been marketed to in the past. We were able to see, through an iterative matchback process, response rates from those who were seeing the offer for the 1st time, 3rd time, 8th time, and so on. The variance was surprisingly small. Why? I posit two reasons: 1) this mailer is fiercely vigilant about merchandising their catalog and improving their brand image, meaning that the customer did not simply see the same catalog and same products over and over again, and 2) it is challenging, at best, to predict precisely when a consumer is ready to make a purchase in a given category. The next logical step in validating these findings would be a test in the mail. The analysis described above is worthy of consideration by any retailer with the means to perform it. Ultimately, however, proving the value of a prospecting non-response file requires isolating the names and investing in a small but readable test in the mail.CREATIVE TIP This kind of event is not unheard of in any business where sales are taking place. In the food industry, scares of hormone-ridden meats, mad cow disease, E. coli bacteria, trans fats and more have caused consumers to put the brakes on in a hurry. While many don’t recall the Tylenol scare, we all remember the “finger in the chili” scam that wreaked havoc for an upstanding and honest fast food franchise, Wendy’s. Basically, this kind of thing can happen to any of us—and it’s up to us to be ready to think on our feet, have a solid PR firm ready to handle problems with honesty and grace, and consider new ways to sell our product that will release the logjam. For those companies that cater to customers who are homeowners, the aforementioned housing downturn can be a real killer. And that’s why it’s time for all of us to start thinking creatively about how to sell our products. I’m inspired in this case by the housing market crash of the 80s. Many of those reading this would not remember, but at one point in the early to mid-1980s, home interest rates were up to 17.5%. That is not a typographical error! Makes you grateful for the rates we have now, even if they’re not at their lowest. If anything can freeze a housing market it’s an interest rate like that. But people got creative, and so did marketers. For example, home buyers discovered that they could assume mortgages at lower-than-prime rates and homeowners trying to sell realized that by carrying those lower interest mortgages, they could make money on interest while selling their home. By the seller carrying a large second mortgage for the buyer of the house, it made it possible for everyone to get what they wanted—and for the home to be sold. In terms of marketing, this was when home improvement and home furniture/accessories companies who were smart not only survived, but thrived. The messaging took on a very different story about home improvement. Instead of “Fix up your home to sell it,” or “Got something broken? Fix it now! “, they spoke to the homeowner who wished they could sell, but could not. The effective message by these smart marketers was, “You’ve decided to stay in your home awhile longer. Since you’re staying, why not freshen up your home with [new blinds, new furniture, new carpet, etc.]?” The consumer in the commercials and print advertising would follow up with: “So glad we made these changes! We feel like we’re in a whole new house!” By putting a positive spin on the turn of events that caused these homeowners to be ‘stuck’ in their current house, the messaging enabled them to visualize a fun project, a ‘fresh new home,’ and a feeling that they were adding value to their home for the future when they would be able to sell it after all. While this may not appear to be relevant to your product, think on this: the other product category that traditionally does well in times of economic downturn is cosmetics. The companies who encourage a woman to indulge herself are big winners when they do it in a way that makes the woman feel she’s giving herself a little bit of luxury during a difficult time…but they say it in such a way that they avoid mentioning the difficult time, and merely emphasize the luxury they provide. Say it as ‘affordable luxury’ or ‘a well-deserved treat’—it all translates into a ringing cash register.multichannel TIP If you have retail stores, however, you might want to reconsider your use of a zip model. Your direct mail catalog will act as a retail store driver if you make sure you are not suppressing your housefile from zips within a 25-50 mile radius of your store. The mileage radius can vary depending on your market and the geography of your store location. You can also boost prospecting efforts to your retail stores by ordering specific lists with a zip model unique to each retail store location, again using zips within a 25-50 mile radius. This is a great way to use up exchange balances from marginal lists, too! If using zip modeling as a prospecting boost, be prepared for small gross universes since you’re only targeting very specific geographic areas. Also, be sure to leave your broker plenty of time to get counts from list managers using your zip models. The LENSER Analytics Team can assist with building a zip model from your housefile and can help with identifying possible retail store locations. LENSER CLIENT SUMMIT HIGHLIGHTS “I had a great time—professionally, intellectually, and personally—at the LENSER Summit. The 2007 LENSER Client Summit got right down to business Wednesday afternoon with four Intensive Tracks—Database (Powering Advanced Customer and Prospect Contact Management Wednesday evening was just a bit breezy bayside in John & Marcia Lenser’s backyard where over 100 clients and guests, sponsors and staff gathered for an informal barbecue, but the hospitality was warm and the view of San Francisco Bay was fabulous.
After John Lenser’s opening remarks
The bad news: You can expect a postal rate hike by next summer. And the good news? It’s likely that the rate-making process will follow the Postal Reform Bill’s new rules, meaning the increase will be subject to inflationary levels. Where catalogers make or lose money “will depend on your ability to change and adjust to the new postal changes and rules,” Del Polito said. “You have to stay on top of the latest requirements and developments.” LENSER’s Michelle Houston & Mike Stahulak of ACG-CompuTech reviewed several of these requirements, along with mitigation strategies, in “Clean, Cut, and Replace.” If postal puts you to sleep, Ken Burke of MarketLive certainly did not with his “Evolution of the Internet Shopping Experience over the Next Five Years.” It’s tough to follow a dynamo like Ken Burke, but kudos to LENSER’s own Michelle Farabaugh with a to-the-point presentation on “Getting Ready for Your Core Season on the Internet” Right after a buffet luncheon in the Affiliate Solution Room—a venue for showcasing our affiliate sponsors and providing a friendly forum for clients to ask about services they may need—Mitch Siegler led a lively panel with graduates of the “School of Hard Knocks and Lessons Learned,” Al Bessin was up next for a full session and received excellent marks with a very practical presentation on “Understanding the Impact of Demand Generation Across Multiple Channels.” Everyone was rewarded for a long, hard day of learning with a lively and lovely dinner at the historic Corinthian Yacht Club in Tiburon, overlooking San Francisco Bay with the city skyline on the horizon.
Friday morning came early with a brief look into LENSER Senior Partner and industry guru Bill Nicolai’s crystal ball with “Evolution of the Direct-to-Consumer Industry, 2008 and Beyond.”
Our final panel was “Let’s Go Green Together” (Part 1 To wrap up the Summit, LENSER was fortunate enough to be able to host Marin County’s own Dr. John Gray, author of Men Are from Mars, Women Are from Venus and quite literally tons of other best-selling books on relationships and the differences between men and women—including biochemical differences! Dr. Gray’s talk was funny, lively, and very informative on many levels. The take-away? Men need more dopamine, women need more serotonin! For those attendees who still hadn’t gotten enough “lenserizing,” there were two fun activities Friday afternoon to choose from—the 2nd Annual LENSER Golf Scramble: and the 1st Annual LENSER Bike Ride:
Mother Nature again favored us and the weather was stellar! Another quote we heard from a client who attended summing up the whole thing: “The LENSER Summit really is an impressive event—way more useful to me than other conferences!” To see more 2007 Summit photos, click here.EMPLOYEE SPOTLIGHT—MONICA MAGAÑA Through diligent education and taking a proactive stance in learning as much as she could from her co-workers, Monica was promoted last year and is now LENSER’s Office Manager. For Monica, the appeal of working her way up and learning the ins and outs of running an office pays huge dividends and has motivated her in her college work. Monica says, “Gaining hands-on experience here at LENSER has been so eye-opening for me and my career choice that I have changed my major.” Along with this nearly full-time job, Monica is attending College of Marin, working toward an Associate Degree and hoping to graduate with a Business Degree within the next four years. Having Monica as our Office Manager allows the LENSER staff to focus on the business at hand without worrying about any office function. As John Lenser notes, “It is such an honor to walk through the doors everyday and be greeted by Monica’s warmth and contagious, positive attitude.” And for Monica, working at LENSER is just as big a blessing. “The staff is very bright and it thrills me just to have conversations with my colleagues. The culture is what makes LENSER so special.” One would think that working and going to school full-time would mean no time for anything else, but not for Monica. She enjoys helping underprivileged children and most recently has volunteered for DD Wink, a non-profit organization that helps parents buy used school uniforms for their children. She also encourages high school students to create resumés and enroll in college. She says, “I am always trying to make a difference in people's lives and hope to one day create a volunteer center for those in need of mentorship and a place where they can be guided.” Now you understand why we feel that Monica is the most valuable player at LENSER! To learn more about Monica, please visit he bio.AFFILIATE FOCUS—LENSER SUMMIT AFFILIATE SPONSORS AFMS Logistics Management Group specializes in helping companies negotiate world class, market-competitive contracts with your small parcel and freight forwarder carriers. AFMS draws its knowledge and experience from a staff comprised largely of former Vice Presidents and Senior Managers from FedEx, UPS, DHL, the USPS and other major carriers of the industry. Catalog Vision brings 45 years of experience providing database management, data and data processing services to both business and consumer direct marketers. Our clients are integrated multichannel direct marketers who utilize our TotalVision suite of services to maximize ROI by reducing promotion expenses, improving response performance, and building stronger customer relationships. Certona provides a hosted solution called Resonance® for automated, real-time behavioral targeting and personalization for ecommerce sites. We Adapt the Web Site to the Individual SM. Resonance delivers automated, real-time product, content, and promotional offers via multiple channels – web, email, call center, and RSS. Certona's service can be rapidly implemented; no hardware or software requirements or back-end integration. Channel Intelligence (CI) web-initiated commerce solutions make it easy for online shoppers to find and buy products whether they start at retailer sites, manufacturer sites or shopping sites. Using a series of data optimization techniques CI significantly improves the quality of product data and the placement of products on the Internet. CognitiveDATA is a marketing technology company with over 300 clients using its’ advanced data accuracy and enhancement technologies. The company’s innovation drives increased response rates above and beyond typical data processes and have been adopted by some of the largest direct marketers in the country. Inc. 500 recently named the company the 208th fastest growing private company in the U.S. Computech Direct is a traditional service bureau with a full suite of processing capabilities with an emphasis on Catalog customers servicing since 1990. Specializing in innovative solutions including merge purge, data hygiene, database systems, multichannel analytics, to just name a few… but it is this client partnership philosophy that we value most, and that gives us an edge on the competition. Creative Automation is a full service direct marketing organization that provides complete marketing services from list processing and database management to production solutions. We are a customer focused, privately held company that responds quickly and professionally to customer needs. Creative Automation can help you transform technology into real-world business solutions. Data Management Associate’s MACH 2K is software for the multichannel marketplace including catalog, internet and retail point of sale. The fast, flexible, order processing provides a competitive advantage. The comprehensive sales analysis, purchasing and inventory control reduces costs. Expert installation, training and support provided by industry veterans. Partial Client List: Montessori Services, Exclusively Weddings, and Revival Animal Health. DHL Global Mail, the single source worldwide delivery network designed to meet your domestic & international mail and parcel needs. Custom solutions, value-added services and the secure, reliable distribution of direct mail, residential parcels, international business mail and parcels, catalogs and publications both nationwide and worldwide. DMinSite builds and delivers a suite of e-commerce, search and email solutions that have helped our clients grow web sales at a rate that's more than double the industry average for four years in a row. DMinSite's Mercury 6.0 software offers e-retailers an enterprise class, feature-rich web selling platform. Epsilon (formerly Abacus) offers the most-balanced solution of data-driven marketing services in the industry, all under one roof. Unique data sources. Robust marketing technologies. Award-winning agency services. Plus advanced marketing analytics to optimize your process and maximize response. Our Abacus Consumer Cooperative database comprises more than 5 billion transactions across over 100 million US households – a collection of remarkable depth, range, and quality to help leading brands drive results. Graphic Communications is the largest paper and printing broker in the U.S., placing 1.5 million tons of paper and managing over $150 million in print services annually. Our relationships with over 25 of the world’s best mills and 20 of the foremost printers along with our knowledge means the best value, right product and world class service for our clients. Gruppo, Levey & Co. (GLC) is a leading independent investment banking firm, founded in 1992 to provide merger and acquisition advisory services to direct marketers and marketing services providers. GLC provides sell-side and acquisition transaction services; raises growth capital and debt financing; and advises on recapitalizations and corporate reorganizations. Horah Division/PGI Companies - We DON'T print catalogs. Our clients get the benefit of working with a printer/mailer that specializes in direct mail. Our client's projects go out without a hitch. Direct mail packages are different then catalogs and we'll help you produce direct mail that brings in the response you're looking for. I-Behavior - To help you reach your business goals, we offer customized and competitively priced products and services that will improve the targeting of your prospects, retain customers, enhance customer loyalty, cross-sell products and services, and reactivate past customers. At I-Behavior, we’re more than a catalog co-op. We’re the premier behavioral targeting firm with a consumer-centric view across all channels. Born out of a concept developed in 2004, I-Behavior launched its online subsidiary, aCerno, in 2005. The company, which already has over 350 clients, uses non-personally identifiable shopping and purchasing behavior to provide highly targeted advertising and locate new online customers for its clients. Litle & Co. is a leading provider of payment management services to direct marketing and e-commerce merchants. We think like direct marketers, commit to service excellence for them, and we leverage technology, data and analysis to safeguard the bottom-line and grow the top-line of direct-to-consumer businesses operating in the complicated world of Card-Not-Present commerce. Founded in 2001, Litle & Co. is on the Inc. 500, Inc. magazine’s roster of America’s fastest growing private companies. The Card is Not Present. But we Are. Litle & Co. MarketLive, Inc. provides the most effective online retail software solution available today. MarketLive offers an extensible e-commerce application platform combined with Intelligent Selling®, an essential online selling methodology that increases acquisition, conversion and retention. The MarketLive platform drives online retail sales growth for some of the most successful retail sites, including Frontgate, Intermix, Keds and Trek. MeritDirect is the largest Business-to-Business List Brokerage & List Management Company in the World. Size gives us unsurpassed knowledge of the marketplace, proprietary database & analysis products, and affords our clients with the best service teams available. Individual brokerage teams and a passionate “do what is best for the client” culture, insure that no MeritDirect client ever feels like a small fish in a big pond. NextAction Corporation is a leading provider of cooperative data solutions for retailers who want to identify new, relevant and lucrative market segments. Over 1,200 member companies leverage the most robust, comprehensive product-level database solutions to accurately target the most profitable group of next customers with a proven affinity to tailored offers. Oco Inc. provides essential business visibility, delivering one integrated set of actionable reports and KPIs from multiple data sources to any user in just six weeks. Oco’s comprehensive solution dramatically reduces the timeframe, cost and risk of traditional business intelligence implementations with deployment on a fixed-cost, fixed-time basis and a money-back guarantee. Prosodie Commerce provides user friendly tools to improve online merchandizing, marketing and the customer experience to ensure that our clients will increase online revenue. In addition, Prosodie Commerce is offered as an on-demand solution to accelerate time to market while reducing operational costs. The Prosodie Commerce hosted eCommerce platform solutions powers successful multichannel merchants such as Mikasa, Yves Rocher, Vivre, Imaginova, and Salton. SysIQ provides a full range of ecommerce solutions, from site development to hosting and site management. We take a customized approach to site design, functionality and affordable on-demand use of technology to optimize site traffic and sales conversions. Our site development is based on understanding your customer personas, your market, your brand and your offerings. We deliver a complete, cost-effective, smart ecommerce solution–for you. TMS Call Center delivers service to every one of our customers, as if they were the only Customer! Open 24 X 7 to make every customer contact a positive experience with live Agents. Orders, Catalog Request, Messages, and Customer Service are delivered on Client’s Web Site or the TMS Desktop. NEWS BRIEF
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