Is direct marketing still relevant in the Internet Age?
In these heady times of digital disruption some marketing pundits and thought leader wannabes say it’s not. Some even declare direct marketing is dead.
How do they arrive at this?
Their assumption is based on a fundamental misunderstanding of what direct marketing is. Digital natives are inclined to dismiss it as old-school marketing practiced by old people sending out junk mail.
They are flat-out wrong.
This much is true: direct marketing has existed as an industry for more than four decades. It was first (and best) defined by Lester Wunderman in a famous speech he gave at MIT in 1967. In that speech he laid out the fundamental principles that define direct marketing as a discipline:
- It is a strategy, not a tactic bound by a single channel
- It creates a direct dialog between buyer and seller
- It builds these dialogs into enduring, profitable relationships
- It is personal, relevant, interactive and measurable
By this definition, it is clear that much of the marketing taking place on the internet today has its genealogy in direct marketing. Multichannel marketing, email marketing, social media marketing, conversion optimization, direct response advertising and content marketing all incorporate many – if not all – of these principles.
You could say the internet is the greatest direct marketing medium ever invented. But you would not be the first. Seth Godin wrote that in 1999 in his book Permission Marketing. It’s as true today as when he wrote it.
That is the topic we dive into in this episode of The Heart of Marketing. To help us along, we invited Scott Hornstein to be our very first interview guest.
Scott is an international speaker, author and marketing consultant with B2P Partners. He has worked with HP, Microsoft, IBM and many others in the technology, finance and manufacturing industries. He is co-author of Opt-In Marketing, published by McGraw-Hill. His published articles have been featured in B2B, AdWeek, DMA Insider and many other business publications. He is a pioneer of the Integrated Direct Marketing™ methodology and an industry expert in direct marketing.
Scott is the consummate “heart marketer,” which makes him the perfect guest for our show. Why? Because his customer relationship methodology emphasizes the humanity in our business relationships. And it seeks to optimize customer experiences, customer retention, and customer lifetime value. These things are all near and dear to The Heart of Marketing.
We are delighted and honored to feature Scott’s insights on direct marketing in the digital world. In this episode you will learn:
- Why content marketing is the new playground for direct marketers
- How social media can be used to get prospects to take meaningful strides towards purchase
- The positive disruptive force of direct mail marketing today
- The key to successfully integrating traditional direct marketing with digital media
- What Scott learned about multichannel marketing from working with Lester Wunderman
- And much more!
029: How to Goose Your Online Results with Direct Marketing
John: Hi friends, thanks for joining us today on Heart of Marketing. I'm John Gregory Olson with my rock hot host Jayme Soulati. Jayme.
Jayme: Hi John. Hi John.
John: Glad to hear you're so chipper today.
Jayme: Yeah for sure.
John: I think I know why.
Jayme: You know why I'm chipper, why am I chipper?
John: Because we have reached another milestone for the Heart of Marketing. Today we're having our very first interview segment.
Jayme: Hooray, give me a soundbyte.
John: Of course.
Jayme: Forget it John. You just are quiet. Yeah. Thank you. I just fired you there. You're supposed to be ready with the soundbyte, ready with the soundbyte, always. John who did you interview?
John: Let me tell you, this idea for this topic started quite a while back as Jayme and I were doing some brainstorming on different topics and Jayme as she sometimes does blurted out and I ...
Jayme: I never blurt.
John: Is direct marketing dead?
Jayme: I never blurt. I never blurt.
John: And of course I bristled because I come from a direct marketing background ... it's interesting.
Jayme: You didn't tell me that. I didn't know you're bristling because of that.
John: Oh yes. I said, well we should talk about it because there's a lot of direct marketing principles at play today in the digital world. You can see it in email marketing, you can see it in conversion optimization and driving response rates and those kinds of things. So I was all ready to prepare a program when I came across Scott Hornstein, an old friend of mine and consultant that I've known for many years and a direct marketing expert. He agreed to come on and talk with us about direct marketing in the digital world and that is what we're going to do today. What we're going to do is we are going to do this little introduction, and we're going to go to Scott, and then we're going to come back at the end and Jayme and I will do a recap in the heart of the matter. So let's go in, all right Jayme?
Jayme: Let's do it.
John: Today I am delighted to introduce our very first interview segment on the Heart of Marketing with our guest Scott Hornstein. Let me tell you a little bit about Scott before we put him on hot seat here. Scott Hornstein is an international author, speaker, and marketing consultant with B2P Partners. He's worked with IBM, Siemens, Microsoft, HP, AT&T and many others spanning the technology, finance, manufacturing and hospitality industries. His customer relationship methodology emphasizes the humanity in our business relationships and it seeks to optimize customer experiences, customer retention, and customer lifetime value. Scott is also co-author of Opt-In Marketing published by McGraw-Hill and his articles have been featured in Adweek, B2B, DMA Insider, Brandweek and many other business publications. He regularly teaches at area universities as well as for the Association of National Advertisers. Scott, welcome.
Scott: John, thank you very much. That was such a good introduction I was wondering if you might do it before we sit down at the dinner table.
John: Sure I should probably practice a little bit more though just to smooth it out.
Scott: No, I think that was just fine and I can just see my wife's face when you show up first and introduce me.
John: Hopefully she'll stand and applaud. Just like at the dinner table, right?
Scott: Or just like with my children.
John: Yeah, right. I'd like to add a little personal note to my introduction here before we start rolling with Scott, and that is that I've known Scott for a long time and I count Scott as one of my most influential mentors in my marketing career. We go back to, we first met in the late '90s, I won't go any more specific than that Scott.
Scott: I was a very young man at that point.
John: And I was just a baby marketer too. But I was working over at Thomson Reuters in the marketing area and Scott came in and did some consulting work with us. That's how we first met. And when that consulting gig was over we just stayed friends and stayed in touched all these years since then. It's really a pleasure to have you here Scott. I'm so grateful that you could join us.
Scott: Feeling is mutual.
John: Wonderful. We're here to talk about, now that that the love fest is over, we are here to talk about direct marketing today as it relates to the digital world. And Scott, you've got quite a background in the direct marketing world. Even more than me, which is nice for me to be able to say -- that I know somebody who has been in the business longer than me. But let me start out with some basics. The first question to lay the groundwork for our listeners and that is: what is direct marketing? What does it mean for today's marketer and while you're answering that question is it still relevant?
Scott: In reverse order, I think it's very relevant. Direct marketing to me is a strategy and not a tactic. Certainly we do... there's a knee jerk that direct marketing is direct mail but really it's not a medium it's a way of thinking, it's a way of approaching the market place. Basically what it says is that when you deploy your marketing budget, you should do it in ways that are both measurable and accountable. Now not everything's going to fit under that. If you want to go and support the little league, I'm all for it. That is neither measurable nor accountable. The other thing is that it really teaches me is to keep the focus on your customer. So again, not a tactic but a strategy and a way of looking at business and I think it's very, very relevant today.
John: I do too. I'm glad to hear you say that because as a long time direct marketer myself I feel like there are a lot of misconceptions about the discipline and even more so today with the newer generation of marketers coming in that only know digital, they only know social media and they don't even understand the roots of direct marketing and how much those roots of direct marketing are really a part of what's going on in the digital world.
Scott: It certainly is John. You're absolutely right and I think that it's an undercurrent in everything that's going on right now that everybody wants to measure. Well, excuse me, not everybody wants to measure everything but you...
John: But everybody should, right?
Scott: Yes but if you measure, you have that uncomfortable feeling of, "Oh God are those the results that I achieved?" I think though that there is a sense that direct marketing is associated with things of the past, that direct marketing is direct mail and that it is old people and dinosaurs who engage in this. However the basics of things like email marketing or content marketing or social media are all rooted in direct marketing. Direct marketing really started for me, well I learned it from Lester Wunderman who was or is one of the greatest marketing thinkers that I've ever encountered. His ability to think abstractly and put things together … just amazing. Really brilliant, wonderful to behold. But he really emphasized that what we want to do is to form a bond with the customer and to get them to take meaningful action. And by meaningful action I don't mean a ‘like’ where there's really an imbalance. There isn't something for everyone but a way to raise their consciousness about the value of your product or service, and to get you to take meaningful action on the purchase path to that product or service.
John: That's good. Now you had a chance to work directly with Lester over the years, didn't you?
Scott: I did. I did.
John: Tell us about that. He's one of my heroes, so I'd love to hear this.
Scott: My first encounter with Lester Wunderman was when I was working, I had just started with Columbia House. I was their Marketing Manager and that was a negative option club, if you will, for records and tapes and was famous for ‘here are 107 records and tapes that you can have for one penny’. At one marketing retreat we were wondering how to get greater participation. And in those days there was lots of money around, we were making a lot of money and so we were also thinking about getting on TV. Lester said, "Let's use TV to bring our customers in, to give them something of extra value and push them further on the path towards purchase." So we did a television commercial featuring Dick Clark who with all the records and tapes behind him, said into the camera that "You the audience are just about to receive an offer from Colombia House where you can get these 10 records or tapes for a penny if you join. But I'm here to tell you that on this application form there's a gold box, it's just a gold box here it is and if you write in that gold box an extra record, one that you might want, we will send you that too." So he's combining media. He 's giving folks something of the extra value in exchange for an early purchase.
John: He's also making it much more interactive too.
Scott: The interactivity is crucial to get people to take meaningful action and when I say measurable and accountable I'm talking that we measure those big steps. Yes we measured the baby steps too, and it is right and proper that in things like social media that we are measuring ‘likes’. But there's no meaningful exchange of value within a ‘like’, where there is if you write inside that gold box and send it back to us.
John: Right, that's more of a direct commitment.
Scott: It is. It is.
John: I didn't realize that you are a part of that. That's a historic marketing story. You read about it in the books, people talking about the gold box that Lester Wunderman launched and I didn't realize, Scott, that you were a part of that team at that time.
Scott: I was part of that team. I was fortunate to be the youngest member of the management team that was invited to a retreat in southern California, a marketing retreat where we did nothing for three, four days but kicked these ideas around and of course, being the junior member everybody worked for three, four days and then went off to dinner. And then I stayed there and worked the rest of the night to get ready for the next day. It was really a seminal experience for me. I remember after everybody left just feeling overwhelmed by everything that it happened and going out to Taco Bell and having the best meal of my life.
John: What a great story. And the other thing too, that maybe you're too humble to say, but that gold box campaign for Colombia records was huge in terms of what it did to drive response and drive revenue for the company.
Scott: It was and it was also pioneering in the notion of combining media, of integrating media to gain a greater quantity and quality of response because people really do not learn effectively from one medium. They learn most effectively from a combination of media. Is it that you get the offer in the mail and see the TV add? Yeah.
John: It leads me to a question that I was planning to ask you and that is well, first a statement. You are among the pioneers of integrated direct marketing. When we were working with you at Thomson Reuters, we brought you in to consult with us on how to implement the integrated direct marketing methodology. So I have to ask you, how do we go about integrating direct marketing with digital? We've got mobile and we've got the Web and how does all that work today?
Scott: Today things are a lot more individual. In other words every one of us is atomized, we've dug ourselves into our own little hole. We hold our phone in our hands as if it is a remote control for life. Each of us creates a ‘network of me’. These are the messages that I will allow in, these are media that I will not allow in. So to successfully integrate, what we have to do is to learn what is the behavior of our target market. How exactly do they learn and this may be down to the individual. In today's market place I see the greatest application of this in B2B because in B2C right now we seem to have been lulled by the notion of "big data." Now if anybody ever actually gets to big data I will be surprised, but it gives us the impression especially in B2C that we are fishing on the shores of Lake Abundant. That we all have to do is to bait our hook, throw it into the water and eventually we're going to catch something. B2B is a much different arena because it just isn't that way. You have to fight much harder for every sale. There are much fewer prospects out there and so I think that the implications of direct marketing and how it interacts, how it acts as the strategy behind the deployment of these other media it becomes that much more critical.
John: Interesting. I've spent some time trying to crack the code on that myself, looking at all of the elements to digital that we have to try to wrap our head around and trying to figure out the ways that we integrate the media, the message and those kinds of things and it's just mind boggling.
Scott: Well, I'll give you an example. We just completed a large research assignment which had us interviewing CEOs across the planet. One of the things that we spoke to them about is this learning behavior, how do new ideas penetrate because it's really the secret desire of all of us that we say in B2B if we can only get in front of the CEO that the heavens would open up and we’re fine for the rest of our lives. The learning that I want to share with you right now is that they had very specific people who they trust and that's the way they get information to them. Let me be specific. One of them is, is to bubble it up through the organization. Many of these chief executives task their assistant with a lot of the primary research. Also, there are different departments that are laboratories for new ideas, engineering, being one of them. This is one of the ways of getting ideas to these chief executives. They learn through their peer groups and one of the ways that they really don't learn is by a headlong assault by continually knocking on the door and saying if I can only knock louder and speak a little bit louder that they can hear me. So therefore for each one of these, these individuals who... let me re-state. It's not the CEO who is making the entire purchase decision. There are others involved, and learning their behavior of how they get information is also critical to people in engineering, the people in purchasing, your subject matter experts, it's a holistic approach rather than a frontal assault.
John: So have you come across any examples or any ways that you've integrated traditional direct marketing with digital?
Scott: Yeah, as a matter of fact. I did an interesting test with a client. They sell professional liability insurance and there's probably a duller topic but I don't have...
John: Are you sure?
Scott: I'm not that sure at all. We were selling to accountants and it's usually the last thing in the world they want to hear as well. But we're making an offer to this list and it was going to be emailed followed by outbound to some of our customers to alert them to this special offer, there was an inbound function it's on the web and we're taking every advantage of every digital means we could and we decided just for the heck of it, let's try sending out an over-sized post card -- that's called direct mail -- to a segment of these decision makers just to see what happens. Our objective was to boost up the response to the email campaign to create some awareness. We released the mail on a Thursday afternoon and we were going to release the email on Monday afternoon. We came in to the office on Monday morning and found that fully 5% of the audience had taken the URL from the postcard, keyed it in because, guys this is direct mail, there's no hyperlinks.
John: It's all manual.
Scott: Yeah, yeah I'm sorry. But they had keyed in this long URL and 5% responded, where most campaigns if you get 0.5% responding, that's great. Yes there are many ways to do this to take the new and what is perceived as the old and put them together and one remark on what is perceived as old... I mean we may shrink from the thought of actual ink and actual paper but it is disruptive to some of these executives and I'm talking B2B right now. ‘Wow, I got a letter. I got a letter that isn't a bill.’
John: Yeah, isn't it something that we've come full circle now to where getting a piece of mail is a novelty.
Scott: It's not going to work in every situation. If you sent a letter to either of my daughters it would probably be three to four years before they realize that they had mail. But in the case of business and certain kinds of executives it is disruptive. It breaks through the clutter of all of the emails and we've almost successfully killed the email channel for prospecting. John, when was the last time you responded to an unsolicited email?
John: Never. Never, it drives me nuts.
Scott: There we go, and of course because it's cheap client say, the first thing out of their mouth is ‘I want to send it to the CEO and let's use email because it's cheap.’ Well, doesn't...
John: Like the CEO actually goes through his own emails anyways, right? Probably it's his admin that that does that for him.
Scott: Not surprisingly we find that many CEOs do not go through their own email.
John: There's no time for it. You mentioned Scott, I'm sorry were you going to say something else?
Scott: No, no, go ahead please.
John: You had mentioned earlier, you made a reference to content marketing and social media marketing. I'm just curious what your take is on how direct marketing compares and what strategies make direct more effective or less effective than content marketing for example. Any thoughts on that?
Scott: Yeah, just making a note so I remember to address both. Content marketing maybe one of the closest things to what we used to conceive of as direct marketing and I think it is absolutely the new playground for this. Within B2B we know that maybe 70% of the purchase consideration journey takes place outside of our ability to engage directly with our prospect and the way that we try to influence them along this journey is through content marketing. However we've taken the view that as it for instance, I was talking to somebody in the industry and they said, "Oh yeah, over here this is our content factory," pointing to a couple of people slaving over there. Well, ‘factory’ is kind of impersonal isn't it?
Scott: But this whole matter of giving you information that's pertinent to you, that moves you along the purchase journey, the consideration journey, is very personal. So we're missing the boat there. What we're doing is to try to cater to the masses by saying well I don't really know who is going to go here and what they want. These people are looking for the needle and we're giving them the haystack. I think we can be much more effective if we go back to that strategy or not go back to but incorporate that strategy that said our focus is on the person. We want to get them to take meaningful strides, meaningful and measurable strides towards engagement, towards purchase. Now I think that social has really got a strong role to play here and I want to give you one very, very good example and this is from a company that is a client up in Toronto, they do back-up and recovery software and they are courageous marketers. Through them I learned about a site that really just caters to the engineers within their target companies. So these engineers, these programmers are influencers to the purchase process but through a social media site that caters specifically to them that allows them to converse, that allows people to come in and give presentations to them on things that are pertinent. This is a wonderful way of bringing your value to the people who are very, very important influencers in this purchase process.
John: You're done?
Scott: Yeah. I think so. I was going off... I took a wink there.
John: No that's okay. [laughing] I was just waiting to see if you're going to elaborate on that, but you took a breath there. So Scott, thank you for taking time with us here. I think before we wrap up though, I want to give you the chance to leave the listeners with any final thoughts about direct marketing in the digital age, things to remember that are most critical, whatever you want to sign off with.
Scott: Yeah I do, and I'm going to make it specific to be B2B because that's where I'm spending my time right now, that's where I think it's really interesting. No matter what the technology is, B2B always was and always will be a personal sell. We must use the media in that vein.
John: Excellent take away, Scott. Again, I want to thank you. This is great that you could come and share your insights and your knowledge and years of experience with our listeners. Is there any chance we might be able to get you to come back again sometime and talk with us?
Scott: John, this is big fun.
John: Okay great. I had fun too. It's fun for me because I get to ask the questions and I don't have to talk too much. So you can't beat that for a job.
Scott: And it's pretty good for me too, just ask my wife.
John: Okay. Alright. Hey friends stay with us. I'll be back with Jayme on the other side.
John: And we're back, Jayme what did you think of Scott? Anything that he threw out there from the interview that really caught your attention?
Jayme: I'll tell you what before I give you my two cents actually with me it's always 25 cents right, John?
John: It is a buck and a quarter.
Jayme: I know. What I love about people like Scott is the fact that he's got such an amazing background, a plethora. A plethora of experience and breadth of knowledge and I'm not making fun.
John: You've been playing with your thesaurus again.
Jayme: It's the only word I know. Plethora. I’ve got a story about that word. One day I'll tell you. But no, Scott is an amazing expert and obviously he's been around the block. Even though you told me he's very young in his interview and you were just a baby John when you guys met.
John: I was.
Jayme: So, here's the thing that... here's two pieces of take away that I want to throw out and you could probably summarize more. Direct marketing is a strategy and not a tactic which I find fascinating. So I'd like to hear more about how that's a strategy versus... and then does everything integrate under direct marketing like digital, is the question? And then I love this one, the email channel is pretty much dead. People are probably spending tons of time and effort collecting those emails and sending those out to people unsolicited and nobody's responding.
John: Yeah, my take away from that part of the discussion with Scott is that email marketing that is cold calling-related for lead generation, that approach to email marketing is going to be dead because that's basically spam. I wouldn't rule out all the email marketing as being dead. I think it's still important for developing relationships with your customers who have OPTED IN to do that.
Jayme: That's true. That is like the opt-in, those who've opted in are viable for your list. Absolutely. John, one thing that he did say that I also found very fascinating as a take away is that in the B2B world because people have been trying to combine B2C to B2P for years now and I guess...
John: Don't forget H2H.
Jayme: Oh, for sure. And in your introduction of Scott you said that he was a B2P marketer or with a company called B2P?
John: Yes that's the name of their consultancy.
Jayme: Okay, there you go. So they're business to people, so in his comment though, he said that for the B2B folks it will always be a personal sell and that's what makes B2B work is that personal engagement versus the cold call or the email, unsolicited email or something.
John: Yeah, it's still human and you're still marketing to other humans and there are some differences, but when you get right down to the essence of it -- that is the heart of it. Jayme, see what I did there?
Jayme: Tap, tap, pat, pat.
John: My takeaways for the heart of the matter from what Scott shared with us and just to encapsulate some of his ideas: In the digital world we see a lot of direct marketing principles happening every day and like you said Jayme, direct marketing is a strategy, it's not a tactic, and it's not bound by a single channel. It used to be thought of as strictly direct mail, in the mail channel. But Lester Wunderman, we spent some time talking about Lester in the interview too, he is the man who defined direct marketing and literally launched that industry. And when he defined what direct marketing is, a lot of the things that he defined it as are what we are doing today in the digital realm. For example he said that ... this was in 1967 when he made a famous speech at MIT where he described his vision for direct marketing … he said, not only is it a strategy and not a tactic but, it creates a direct dialogue between the buyer and the seller, which we have going on today online so much more and that it builds those dialogues into enduring relationships.
Jayme: That's amazing. John, did you ask the question of Scott, the difference between direct marketing and digital marketing?
John: I didn't pose that directly to him if you will. I see that much of what's happening with digital media has direct marketing principles woven into it. I guess here's how I would have approached that question, Jayme. Digital is a channel that has direct marketing principles going on. And when Lester Wunderman first conceived of direct marketing, the world was a lot smaller place. You had print advertising, you had mail, and later on in his career we had 800-number telemarketing. Those were the primary channels and at that time he wrote in his book called Being Direct, he wrote this very forward thinking comment. He said, “I was certain that consumer-initiated advertising was going to work in the future as more interactive media became available.” So he saw the potential for these concepts to really explode.
Jayme: Like social media.
John: Exactly, social, email, websites everything. The other quote that I want to share with you that ties it all together with how direct marketing is linked to digital marketing is something that Seth Godin said in his book, Permission Marketing. He wrote it in 1999 (great book that is still relevant today). At that time I was a hardcore direct marketer, so this caught my attention when I read this in his book. He said, "The internet is the purest form of direct marketing ever invented."
John: And I thought, wow. That's so cool. Anyways, those are some of the takeaways I got from speaking with Scott that I think helped to answer that question: direct marketing, no it's not dead. It's alive and well on the internet and it's just taking new forms and finding new ways to interact directly with your customers and your prospects.
Jayme: As in everything it's called disruption. If you don't change you fail, and innovate to change to succeed to grow. I appreciate so much that Scott joined us today for The Heart of Marketing and John, great job with the interview. Thank you.
John: Thank you. I think that wraps up our show for today, don't you?
Jayme: Absolutely. Go be rock hot guys, thanks for listening.
John: Till next time, remember: go for the heart, you won't go for wrong.
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