Wrestling the One-Time Buyer Syndrome

Marketers have different names for them. Some marketers call them “One-and-done” customers. Others call them by more innocuous “1-Time Buyers” phrases. The latter is the literal description of what they are. But I call them “problems” — potential or immediate.

Marketers have different names for them. Some marketers call them “One-and-done” customers. Others call them by more innocuous “1-Time Buyers” phrases. The latter is the literal description of what they are. But I call them “problems” — potential or immediate.

Considering how much marketers spend to acquire any new customer, those one-timers pose real challenges. In the metrics-governed marketing world where ROI means everything, they put marketers in the corner from the beginning.

“Great! Someone just walked in, bought and walked out with merchandise! But will we ever recover the acquisition cost from them? We gave them a fat 20% discount just for showing up!”

In the old days — not too long ago, though — marketers used to plan to break even on new customers on their second or third purchase. Now, no one seems to have that kind of patience in the fast lane, where “everything, all the time” is the norm and the consumers are distracted constantly by competing offers and messages. Hence, many retailers put out an ambitious goal of breaking even at “hello.”

The Customer Acquisition and Retention Challenge

That translates into good news for low-cost acquisition channels, like email or Facebook, and bad news for relatively expensive channels, like direct marketing or traditional media. Regardless of channel usage, however, marketers must be smart about both retention and acquisition. In other words, they must stop the bleeding and pump in new blood at the same time.

I often see that one-time buyers make up over 80% of the customer base of a retailer. Even when we go back four to five years and count every transaction, the lowest figure that I’ve seen hovers around 60% or so.

That means, even in an unusually decent case, more than half of new customers do not come back. Pretty scary stuff.

What Marketers Can Do to Retain Customers

If that figure goes over 80%, I recommend starting with a more refined acquisition strategy. Simply because without new blood coming in, there won’t be much to talk about in the near future.

The first thing that I would ask is how aggressive the marketers want to be in terms of channel usage. I’ve seen bold ones who go the multichannel route with varying degrees of cost-friendliness, and conservative ones who would stick only with cheap and measurable channels.

To Retain, Acquire Customers Intelligently

Regardless of the degree of aggressiveness, the first concern is if they have been targeting the “right” prospects.

Years of experience in data and analytics business taught me that not all customers are created equal. You may have multiple pockets (or segments) of vastly different types of customers in your base, starting with the most valuable customers to downright barnacles who are professional bargain-seekers with no chance of being a loyal customer.

Going after the right kind of customers during the acquisition stage will curb the one-time buyer problem.

Whether you want to toss a bunch target samples to Facebook, go to third-party data vendors or join a co-op for modeled prospects, I strongly suggest marketers define the ideal target for them first.

  • When you say “valuable,” what does that really mean?
  • In terms of frequency, is that measured by the number of transactions or days between transactions?
  • In terms of dollars, is that in total customer value or average spending level per transactions?

There are many ways to do it, and what I am suggesting is to try them as many as you can — when it comes to target definitions — and keep testing them. Targeting requires adjustment of the gunsight, with many rounds of practice shots.

One of the tricks I’ve learned while being a vendor all of my life is that you never try one method, one channel or one type of target. Because, if that “one” thing fails, you’ll be fired. Simple as that. But if you try three to four different combinations of target definitions and methodologies, then you have a better fighting chance to stay in the game, thanks to cumulative learning. After all, 1:1 marketing is all about learning from the past endeavors, isn’t it?

Here’s What I Recommend

So, I recommend trying different types of targeting (i.e., target definition of any “look-alike” modeling or simple selects) in different focus areas. For example:

  • Behavioral Targeting: Target after you your audience’s best behavior, however you define them. I would use separate measures, such as transaction frequency and dollar amount, as responsiveness is often inversely related to sheer value (e.g., an infrequent visitor who spends a lot in one transaction).
  • Demographic Targeting: What do those most valuable customers look like? What demographic clusters do they belong to, and what are their key demographic profiles? This type of targeting may not be as precise as behavioral targeting, but basic segmentation often provides a common language among disparate players in the acquisition play, including copywriters who would come up with relevant messages for each segment. Commonly defined clusters also open doors toward new target areas (e.g., targeting Millennials when an existing target base is mostly in older age segments).
  • Regional Targeting: It is not unusual to see a high concentration of customers around physical store locations, even for online traffic. Test in and out of traditional footprints for an effective expansion strategy by channel.
  • Product Targeting: Depending on the product lines, you may be dealing with vastly different customer profiles. Customer profile by high-level product category is important, as it is not a good idea to have a one-size-fits-all type of targeting when you carry distinct lines of products. The average of multiple types of customers is really nothing; there are no such things as “average” customers, when they are separated in dichotomous universes.

There are many ways to slice and dice this, but the important thing is to let the ideas fly within reason (i.e., don’t overdo it, either). And at some point, you will run out of options just using RFM segments, so plan to dive into look-alike models; many list vendors and social media publishers offer modeling, either in forms of traditional models or machine learning. But even the most cutting-edge targeting engines won’t work if the target is way off. Attracting barnacles is just one example.

Now Retain Those Customers

Then I would turn the attention to the retention side to curb this one-time buyer problem. But this time, I suggest marketers look at it not just from the segment/targeting point of view, but from the timeline point of view, as well.

Boost Your Clicks With AdWords Sitelink Extensions

If your goal is acquisition, Google’s pay per click AdWords platform has proved for many to be a viable way to increase leads or sales for your business and, depending on your keyword and bids, can be cost-effective.

google adwordsIf your goal is acquisition, Google’s pay per click AdWords platform has proved for many to be a viable way to increase leads or sales for your business and, depending on your keyword and bids, can be cost-effective.

However, if you’re not in the PPC know, then you may not be aware that Google is now allowing up to eight sitelink extensions in paid search ads AND they are interactive, tappable scrolling buttons on mobile devices (vs. text links on desktop).

What does that mean for you?

Quite simply, Google is giving your more opportunity to catch your target audience’s attention with strong, relevant calls to action or other enticing keywords that are clickable; whereby, you can drive traffic to a targeted page.

These extra descriptives can help increase your clickthrough rate, and possibly conversion rate.

Now, some marketers don’t take advantage of this. But I say if you don’t, you’re leaving opportunity on the table!

What You Should Know

  • Including a Sitelink in Your Ad. When you’re creating a new ad, you’ll see prompts to add a new sitelink extension. If you have an existing campaign, but you didn’t take advantage of this feature, you can go back and add it under “All Campaigns,” select the ad you’d like to add the sitelink to, then select “+Extensions” and “+New Sitelink.”
  • Types of Extensions. Here are some top extensions to help drive traffic or clicks:
    • Teasers and Call-Outs. This would be a unique selling proposition that makes you stand out from your competition. Some may include call outs like “free shipping,” “100% guaranteed,” “special offer,”’ “free report” and similar. These sitelinks would then link to a promotional page that speaks more to the teaser and has a goal of getting a conversion.

This would be your physical address if you’re driving traffic to a physical location. This can then link to a directions/map page on your website.

  • Phone Number. This would be if you have the Google “click to call” feature driving traffic to a phone number.
  • Testimonials or Reviews. Some advertisers would put a strong excerpt from a testimonial page or “5 stars” review here, then link to the full reviews page.
  • Call to Action. Another popular tactic is to include calls to action that may answer a question the prospect is looking for, or help them find a solution. Such as “call now,” “get a quote,” “request appointment,” “order now,” “customer favorites,” “top sellers,” “special trial offer,” “on sale now,” etc.
  • Sale and Promotion Extensions. Where you can actually have things like “25% off your entire order” or “last chance sale,” where you can even enter the dates the sale is running in the ad!
  • Combining Lead-gen and Sale in One Ad. Using sitelinks can be a great way to kill two birds with one stone. In your one ad, you can have different sitelinks for different goals. One sitelink term may say something like “free report” and the other may say “top sellers.” One links to a squeeze page to collect an email address (lead generation). The other goes to a sales page to a product going directly for a sale.

Tracking your sitelink performance is easy. When in your AdWords dashboard, just look for clickthrough rate performance under “Acquisition,” “All Traffic,” “Ad Words” and “Sitelinks.” It’s that easy.

According to Google, the mere presence of sitelink extensions may boost clickthrough rate on average by 10 to 20 percent, and for branded terms, 20 to 50 percent.

So what are you waiting for?!

As part of your online marketing mix, if you have a percentage of your time and budget allocated to pay per click (PPC), then testing sitelink extensions in your ad is a MUST.

Good luck.

Customer Value: Narrowcasting vs. Broadcasting

Virtually every brand I’ve met with during the last few months is hungry for new customers. Many organizations are hooked on customer acquisition. That is, in order to hit sales plans for the organization, new customers will be required in large numbers.

Winning Over Consumers: The 4 essential content considerations that drive prospects to choose you over your competitorsVirtually every brand I’ve met with during the last few months is hungry for new customers. The war for the customer is on. For more on growing your customer base, consider reading “Bigger Is Better, How to Scale Up Customer Acquisition Smarter,” an article about how to grow your customer base.

Many organizations are hooked on customer acquisition. That is, in order to hit sales plans for the organization, new customers will be required in large numbers. It’s about as easy to kick “acquisition addiction” as it is to kick any other addiction for most brands. Try going without coffee suddenly, and see how your head feels. It’s not very different from reducing a business’s dependence on customer acquisition as a means of achieving revenue and profit targets.

Organizations that need ever larger numbers of new customers to achieve growth goals eventually will find the cost of acquiring incremental net new customers can become prohibitive. [Editor’s note: See “Wells Fargo Fiasco.”]

Broadcast vs. Narrowcast

The traditional model for advertising and customer acquisition has essentially been a broadcast approach, reaching a large audience that is generally descriptive of the customer a brand believes to be a fit. Contrast this with what is sometimes described as a “narrowcasting” strategy. Narrowcasting utilizes customer intelligence to understand a great number of discrete dimensions that a consumer possesses and can leverage statistical methods to validate the accuracy and predictiveness of targeting customers through these methods.

The chart below, depicting the value of customers acquired through traditional broadcast capabilities upfront and over time, helps illustrate why “broadcast” strategies for customer acquisition alone aren’t enough.

Mike Ferranti chart

Broadcast Acquisition Strategies Lack Focus on Customer Value

Large numbers of customers have been acquired in a trailing 13-month window – lots of them. The challenge is this cohort of customers has been acquired without adequate consideration of the right target.

Consider the fact that the target customer value of average or better customers is around $500. In the example above, the marketer has acquired a large number of customers who are lagging in their economic contribution to the business. While the customer acquisition metrics may look good, this was a large campaign and produced several hundreds of thousands of customers over its duration – the average value of those customers is quite low, indeed.

Low Customer Value Manifests Itself, Even If Acquisition Volume Is High

When sales targets are rising, it becomes harder to justify the high cost of customer acquisition if the customers previously acquired are underperforming. This leads to a very common bind marketers are placed in. The only way to “make the number” is to acquire more and more customers.

The most competitive and high quality businesses steadily acquire and have a robust customer base whose economic contribution is materially higher. Consequently, profits are higher, and we have a fundamentally better business.

Oftentimes, “broadcast” advertising approaches define the target with a single criteria like age, income or geography. This can be effective, especially when the media is bought on a good value. However, “effective” is almost always defined as “number of customers acquired.” This, of course, is a reasonable way to judge the performance of the marketing – at least by traditional standards.

There is another way to measure the success of the campaign that is only just beginning to be understood by many traditional “broadcast” marketers: customer value. The chart above shows that this cohort of acquired customers had relatively low economic value.

Root Causes of Low Customer Value

What are the causes of low value? It would be fair to start with the ongoing marketing and relationship with the customer. Bad service could keep customers from returning. Poor quality could lead to excessive returns. Over-promotion could drive down value. Getting the message and frequency wrong could lead to underperformance of the cohort. All viable reasons for lower value that need to be rationally and methodically ruled out prior to looking elsewhere.

Therefore, if operational issues are not clear – either through organizational KPI tracking, or simply by monitoring Twitter – then a marketing professional needs to start looking at three things.

  • The Target (& Media)
  • The Offer (& Message)
  • The Creative

Given the target is historically responsible for up to 70 percent of the success of advertising, this is the first place a professional data-driven marketer would look.

Target Definition Defines the Customer You Acquire, and It Drives Customer Value.

A fact that is often overlooked is that target definition means not just focusing efforts and advertising spent on consumers who are most likely to convert and become customers, but it also defines what kind of customers they have the potential to become.

In conversations with CMOs, we often discuss “the target customer” or the “ideal customer” they wish to introduce their brand to. The descriptions, of course, vary by the brand and the product. Those target definitions are often more qualitative in nature. In fact, only about 30 percent of CMOs we engage with regularity are focused on using hard data to define their customer base. While these are helpful and create a vocabulary for discussing and defining who the customer is, those primarily qualitative descriptors are often sculpted to align with media descriptors that make targeting “big and simple.”

“While simplifying is good business, when simplicity masks underlying business model challenges, a deeper look will ultimately be required, if not forced on the organization.”

While we would not refute a place for those descriptors of a valued consumer, they do fall short of true target definition. Ideally, the process of defining the customer who a brand wishes to pursue must begin with a thorough inventory of the customers it already has, and a substantial enhancement of those customer records – which provides vibrant metrics on affluence, age, ethnography, urbanicity, purchasing behaviors, credit history, geo- and demographics, net worth, income, online purchasing, offline purchasing and potentially a great deal more.

Keeping It Simple: Target the Customers Who Have Greater Potential Value

It’s not enough to have a great story about the “broadcast market” we wish to identify customers from. Today, marketers would do well to more narrowly (thus “narrowcasting”) define not only the customer, but the most valuable customer. In our experience, the minority of marketers have a shared definition of the customer and of the most valuable customer across the organization.

To achieve this, we can determine customer data attributes that are predictive of customer value. Under this strategy, we go beyond trial (conversion) but begin with the end in mind … acquiring customers who have the greatest potential to become more frequent and more loyal customers in the first place.

This is entirely feasible with the right data set and a modeling exercise against the highest value segment of the current customer base.

Once this “narrowcast” target is formally defined by attributes that are most predictive of their future buying behavior and spending proclivity, we can begin to define the advertising and marketing that would have the greatest effect on the brand.

Saturation Marketing to the Highest Value Targets

While many brands are still struggling to implement and execute true “narrowcast” advertising, there is ample opportunity this approach affords them. Consider the impact of acquiring a base of customers statistically more likely to spend more, and purchase more often. Not only because they possess the means or discretionary income, but possess other necessary factors to actually spend in the category, and do so more vigorously.

Profit per customer goes up dramatically when you weed out those more likely to buy once and then stop at the trial stage of a customer relationship – and instead acquire more customers with all of the necessary attributes to become “best customers.”

A Direct Approach to Brand Investment: Narrowcasting

Given that a narrowcast approach can help a brand be selective in cultivating the customer base that transforms the value of the business and enables marketers to produce more predictable sales, the challenge in some organizations is finding the budget to do this – as it’s not a traditional budget item. Remember at one point, search marketing wasn’t either.

For brands looking to grow smarter and more reliably, one solution that can work is to allocate a portion of the “branding” budget to delivering awareness-generating messages – with a reasonable call to action, to stimulate trial, not in a broadly targeted group (“banded income” is a typical criteria) but on a predictive basis. Models can help in selecting the target and matching back to postal, email addresses and display targeting cookies. It can produce a rich, immersive campaign, focused only on the individuals who a brand in your category really must reach and convert to perform at a high level.

Consider the impact it can have on customer value.

Mike Ferranti chart two

Note, in the above, the customer count is a LOT lower than the broadcast approach. This new approach does not replace, for example, national television in terms of reach. However, we note the rather overt shift between customer value from the first chart. This is what may be expected of narrowcast campaigns that have been intelligently constructed and tested.

This is a different view and brings some of the techniques from programmatic advertising, database marketing and predictive analytics to bear on the customer acquisition challenge. But the results can be impressive, and marketers will ultimately make the majority of their advertising decisions through a more “narrow” or focused lens as the technology grinds forward in efficiency.
To be sure, many firms are already executing these strategies today. These firms are building competitive advantages through a more robust, valuable and loyal customer base who will endure for many years into the future.

Customer Value: Narrowcasting vs. Broadcasting

The traditional model for customer acquisition has essentially been a broadcast approach, reaching a large audience generally descriptive of the customer base. Contrast this with what is sometimes described as “narrowcasting.”

Virtually every brand we’ve met with in the last few months is hungry for new customers: The war for the customer is on. For more on growing your customer base, consider reading “Bigger is Better: How to Scale Up Customer Acquisition Smarter,” which is an article we published recently about how to grow your customer base.

Many organizations are hooked on customer acquisition. That is, in order to hit sales plans for the organization, new customers will be required in large numbers. It’s about as easy to kick the “acquisition addiction” as it is to kick any other for most brands. Try going without coffee suddenly, and see how your head feels. It’s not very different from reducing a business’s dependence on customer acquisition as a means to achieving revenue and profit targets.

Organizations that need ever larger numbers of new customers to achieve growth goals eventually will find the cost of acquiring incremental net new customers can become prohibitive.

Broadcast vs. Narrowcast
The traditional model for advertising and customer acquisition has essentially been a broadcast approach, reaching a large audience that is generally descriptive of the customer who a brand believes to be a fit. Contrast this with what is sometimes described as a “narrowcasting” strategy. Narrowcasting uses customer intelligence to understand a great number of discrete dimensions that a consumer possesses and can leverage statistical methods to validate the accuracy and predictiveness of targeting customers through these methods.

The chart below, depicting the value of customers acquired through traditional broadcast capabilities upfront and over time helps illustrate why “broadcast” strategies for customer acquisition alone aren’t enough.

Research for Mike Ferranti blog

Broadcast Acquisition Strategies Lack Focus on Customer Value
Large numbers of customers have been acquired in a trailing 13-month window – lots of them. The challenge is this cohort of customers has been acquired without adequate consideration of the right target.

Consider the fact that the target customer value of average or better customers is around $500. In the example above, the marketer has acquired a large number of customers who are lagging in their economic contribution to the business. While the customer acquisition metrics may look good, this was a large campaign and produced several hundreds of thousands of customers over its duration – the average value of those customers is quite low indeed.

Low Customer Value Manifests Itself, Even if Acquisition Volume Is High
When sales targets are rising, it becomes harder to justify the high cost of customer acquisition if the customers previously acquired are underperforming. This leads to a very common bind marketers are placed in. The only way to “make the number” is to acquire more and more.

The most competitive and high quality businesses steadily acquire and have a robust customer base whose economic contribution is materially higher. Consequently, profits are higher, and we have a fundamentally better business.

Oftentimes, “broadcast” advertising approaches define the target with a single criteria like age, income or geography. This can be effective, especially when the media is bought at a good value. However, “effective” is almost always defined as “number of customers acquired.” This of course is a reasonable way to judge the performance of the marketing – at least by traditional standards.

There is another way to measure the success of the campaign that is only just beginning to be understood by many traditional “broadcast” marketers: customer value. The chart above shows that this cohort of acquired customers had relatively low economic value.

Root Causes of Low Customer Value
What are the causes of low value? It would be fair to start with the ongoing marketing and relationship with the customer. Bad service could keep customers from returning. Poor quality could lead to excessive returns. Over-promotion could drive down value. Getting the message and frequency wrong could lead to underperformance of the cohort. These are all viable reasons for lower value that need to be rationally and methodically ruled out prior to looking elsewhere.

Therefore, if operational issues are not clear – either through organizational KPI tracking, or simply by monitoring Twitter — then a marketing professional needs to start looking at three things.

  1. The Target (and Media)
  2. The Offer (and Message)
  3. The Creative

Given the target is historically responsible for up to 70 percent of the success of advertising, this is the first place a professional data-driven marketer would look.

Target Definition Defines the Customer You Acquire, and It Drives Customer Value.
A fact that is often overlooked is that target definition means not just focusing efforts and advertising spent on consumers who are most likely to convert and become customers, but it also defines what kind of customers they have the potential to become.

In conversations with CMOs, we often discuss “the target customer” or the “ideal customer” they wish to introduce their brand to. The descriptions of course vary by the brand and the product. Those target definitions are often more qualitative in nature. In fact, only about 30 percent of CMO’s we engage with regularly are focused on using hard data to define their customer base. While these are helpful and create a vocabulary for discussing and defining who the customer is, those primarily qualitative descriptors are often sculpted to align with media descriptors that make targeting “big and simple.”

“While simplifying is good business, when simplicity masks underlying business model challenges, a deeper look will ultimately be required, if not forced on the organization.”

While we would not refute a place for those descriptors of a valued consumer, they do fall short of true target definition. Ideally, the process of defining the customer who a brand wishes to pursue must begin with a thorough inventory of the customers it already has, and a substantial enhancement of those customer records which provides vibrant metrics on affluence, age, ethnographic, urbanicity, purchasing behaviors, credit history, geo- and demo-graphics, net worth, income, online purchasing, offline purchasing and potentially a great deal more.

13 Ways Direct Mail Works Best

Direct mail can be a very powerful marketing tool. When executed correctly you can see a great return on your investment. Usually we focus on what not to do since there are so many pitfalls with direct mail.

Direct mail testDirect mail can be a very powerful marketing tool. When executed correctly you can see a great return on your investment. Usually we focus on what not to do since there are so many pitfalls with direct mail.

However, this time we will show you how and when direct mail works best. This is not a guide on what format your direct mail should be in, such as postcards versus letters, but instead about ways to use direct mail that work best.

Here are the best ways to use direct mail:

  1. Generate traffic to a location, a website or event: When you want to direct customers/prospects to a store, event or online location, direct mail is a great way to do that.
  2. Generate sales leads: You can target and reach qualified and interested leads easily with direct mail.
  3. Counter a competitive offer: Reaching out to customers and prospects that have received an offer from a competitor with and even better offer through direct mail gives you a chance to acquire the sale without the competitor knowing about your offer. Unlike online offers direct mail has some secrecy to it.
  4. Customer loyalty: Reaching out with direct mail to customers with special offers and giveaways is a great way to reward your customers.
  5. Customer acquisition or referrals: Include these in your direct mail as a way for your message to be passed on to friends and colleagues. Providing a recommendation to others is a powerful selling tool.
  6. Improve customer service: Sending a thank you note to your customers is a great way to make people feel appreciated.
  7. Cross sell or upsell: With variable data printing you can mention other things you offer that they may be interested in based on what they have already purchased. This can give you a great ROI boost.
  8. Announcements: Since direct mail it taken seriously it is a great way to get important information out to people quickly.
  9. Augmenting other media efforts: Direct mail ties in with so many other channels like email, web, social media, mobile, and so much more…
  10. Improving sales efficiency: Sending out direct mail that helps to qualify and clarify people before you sell to them is extremely important.
  11. Catalog, custom publications or newsletters: Each of these types of direct mail give you the ability to showcase new information or offers to the people most likely to buy from them.
  12. Combining mailings with other companies: Think value added or coupons for this option. Co-branded mailings work well when each brand has the same target audience.
  13. Building brand awareness: Direct mail is the most trusted form of marketing so using it to strengthen your brand is important. Remember the more they know your brand the more they buy from you.

Direct mail is more effective now than ever before. With less volume in mail boxes and ways to integrate direct mail with online and mobile content, there is now a bigger ROI for you to go after. When used as part of a multichannel campaign direct mail can significantly enhance your response.

Out of the 13 methods listed above what two could you start to use better right away? When you take the time to focus on what your customers and prospects need, you can better target your offers to meet them. Be the offer in their mail box that they could not wait to respond to!

Direct Mail Can Fill Your Marketing Bathtub

Direct mail is very effective for prospecting thru follow-up. Many times marketers get caught up in the rush to use digital channels to the exclusion of direct mail. They forget how strong, good direct mail can be.

Most people are familiar with the bathtub theory of marketing, but let me just give a short overview before we start. Your business is the bathtub, it has cracks and leaks (customers leave, or go out of business). Your acquisition programs are the faucets that help to fill the tub with water (new customers). Some customers stay and make more purchases, some don’t need you very often, and then some leak out and move on. When people liked other tubs (your competitors) better, they leaked out and moved on. The trick to keep the bathtub filled is to keep the faucets going and plug as many leaks as possible.

This process focuses not only on acquiring new customers, but on keeping the ones you already have too. That is the real key to maintaining and growing. Direct mail is perfect for this. Direct mail is very effective for prospecting thru follow-up. Many times marketers get caught up in the rush to use digital channels to the exclusion of direct mail. They forget how strong, good direct mail can be. You need a constant flow of marketing to keep filling your tub. Whether you are a B-to-B company or a B-to-C one you need to continue to market effectively.

Now you can’t fill your tub with just anyone. You need to find the right people who need your business. The right people are the ones who need what you offer, can afford what you offer and have a history of using businesses such as yours. Direct mail can be a very powerful marketing tool for finding these people. When executed correctly you can see a great return on your investment. Creating targeted mailing lists is easy compared with other channels. A highly targeted list fills up your tub quickly. Once you have them in your tub, direct mail will help you with client retention too. This keeps the leaks in check.

These days in marketing, it’s all about the list. We gather more and more information on our customers and prospects so that we can better target our message. That is one of the great advantages of direct mail. There are many choices in mailing lists and with so much information out there about people, filtering the lists into segments for messaging is easy. You can even do this when you don’t know much about your customers. You can run a profiling tool on your data which can append psychographics as well as demographics. This will help you to find more people like your customers.

So, now that you have your tub, you have your faucets on full flow and your leaks are stopped up as much as possible, your direct mail marketing will keep this pattern for you. You cannot stop the process of acquiring new customers and keeping the existing ones. Your direct mail will be the valve that your faucet needs to keep the water flowing.

3rd Pick in the 2013 Marketing Cloud Acquisition Draft Is …

Tick-tock. Tick-tock. Gosh, it is almost getting boring around here waiting to see where the next selection will go. Salesforce grabbing up ExactTarget with the first selection was the first big surprise. Not so much the ExactTarget side, because there had been rumors for some time that ET was on the market.

Tick-tock. Tick-tock. Gosh, it is almost getting boring around here waiting to see where the next selection will go.

Salesforce grabbing up ExactTarget with the first selection was the first big surprise. Not so much the ExactTarget side, because there had been rumors for some time that ET was on the market. The surprise was more about Salesforce jumping into the fray. Oh, they definitely needed this acquisition or one like it. For all the great tools that Salesforce has for gathering, organizing, prioritizing and listening to your contacts and gathering data, what they have never had is a robust and efficient way to segment and actually reach those valuable contacts. ExactTarget gives them that one big missing capability through the ET campaign management platform, along with many fresh concepts and ideas in social opportunities.

The other gem in what Salesforce picked up in this acquisition, and what likely drove the total price of ExactTarget so high, is ET’s recent purchase of Pardot to strengthen their own marketing automation growth plans. Even the Salesforce CEO gushed about the inclusion of Pardot in his Twitter post around the purchase, thrilled that the transaction included: “The fastest-growing marketing automation and lead nurturing company for Salesforce users.”

But that price. Wow—$2.5 billion. Worth it? Yes, most likely, in the long term. But in the short term, it is a real drain on the cash flow for Salesforce; probably severely limiting other expansion plans or possibilities. It seems painful enough that now, just a month later, they have had to take out a $300 million loan to carry the cost. I have to believe that Salesforce is certain that the long-term cross-sell and integration possibilities for both companies will make it all worthwhile.

Then a few weeks later, an even bigger shock when Adobe slips in to scoop up Neolane. Another big matchup that fits the overall strategy needs of both organizations. While I hadn’t heard of any open shopping of Neolane, it makes sense that they would be eventually in the crosshairs of a larger enterprise. A strong set of campaign management tools, a top-line roster of satisfied clients, a steady string of industry honors and awards during the last four or five years, and continuous innovation of the product line toward achieving “visionary” ranking across three separate areas in Gartner’s “Magic Quadrant” reports and named a “leader” in Forrester’s “Wave” report. There was a whole lot of upside potential waiting there for the right suitor. Like Salesforce just a little earlier and Oracle in 2012, before the Eloqua acquisition, Adobe was the big man on campus in its primary business, but has stumbled about in efforts to build a suite of contact management and execution tools that would translate to the market segments outside of its solid base of agency clients drawn in by its creative leadership. Neolane will certainly be able do that and bring powerful new strategic offerings to the Adobe table.

So the 2013 first- and second-round picks have been completed. Where do the prognosticators think the next two or three picks will fall? Silverpop, which had also flirted with Salesforce in the past, seems primed. But who trades up to get them? SAS maybe? Or are they completely satisfied with their own marketing automation tool? They might jump in to keep up with the Joneses in finding a way to up the game on their existing marketing automation capabilities. Or maybe SAS goes for top-gun Marketo, which is always talked about in merger potential conversations, but never seems to work out the final details of a deal. How about Microsoft? Do they take their time, because they had the last move in 2012 when they picked up Marketing Pilot, or do they decide to make the bigger splash with one of the big dog free agents—either before SAS moves, or will they wait for one of the other choices? There are plenty of potentially available independents out there ready and willing to be courted. And there is never a shortage of companies looking to add a ready-to-serve subsidiary to their arsenal.

So who do you think will be the next CRM/Marketing Automation data darlings to join forces toward World Marketing Domination? Take a guess, email it to me, and I will dig up a special prize for the first one—or ones—to get it right.

4 Hot Topics From eTail

Here are four hot topics in cross-channel retailing that are being discussed at eTail 2011 in Palm Desert, Calif. this week:

Here are four hot topics in cross-channel retailing that are being discussed at eTail 2011 in Palm Desert, Calif. this week:

1. Customer acquisition is back in vogue. OK, customer acquisition is nothing new for retailers. But after a few sluggish quarters, retailers are back to spending money on ways to find more customers. Both traditional and innovative acquisition trends were discussed in the following session: Developing a Long-Term Sustainable Mix of Acquisition and Retention Channels.

Traditional channels work best for Musicnotes.com, according to Bill Aicher, the e-tailer’s web director, as well as a panelist at the session. Paid and natural search, affiliate channels, and word-of mouth are the acquisition marketing techniques his company relies on. Testing is important too. “We test a lot of programs, and if we can get a 2 percent or higher response rate, we consider it successful and put more money into it,” Aicher said.

Search engine optimization is a leading acquisition tool for Motorcycle Superstore, said Erick Barney, vice president of marketing for the online retailer and another speaker at the session. “While search has been around for such a long time, I still think of it as a channel that’s progressing,” he said. “There’s so much more we as an industry need to learn about it.”

An innovative customer acquisition technique was raised by panelist Sara Ezrin, senior director of strategic services at Experian CheetahMail. It focuses on the growing use of iPads in retail stores. “Salespeople in retail establishments are using iPads more and more in-store to collect email addresses and other contact information from customers,” she said.

2. Social commerce getting mixed reviews. The concept of social commerce — i.e., using social networks in the context of e-commerce — has also been a hot topic at the show. Some e-tailers were on the hunt for Facebook developers who could help them create Facebook stores. Payvment, a Facebook shopping platform, seemed to have a crowd at its booth consistently. In general, however, retailers are approaching this concept cautiously.

Consider Tony Bartel, president of video game retailer GameStop, who spoke at a session titled Navigating the Retail Rapids. Bartel said that while GameStop does have a Facebook store, most of the company’s e-commerce transactions take place on Gamestop.com. “We have a lot of interaction with our 1.8 million Facebook followers,” he said, “but we’ve found that when they want to buy something they go to our website.”

Bartel wasn’t quite sure why that’s the case. “Maybe it’s because there are only a few items for sale in our Facebook store, and we don’t have all the bells and whistles there,” he said. “But we’ve been testing the concept for two months now, and will continue to do so.”

3. Retargeting marketing programs are picking up speed. Retargeting, a marketing technique that enables retailers to reach consumers who have visited their sites by serving ads to them post-visit on other content sites across the web, was a heavily discussed subject at the show. Most retailers here believe the tactic is effective because enabling consumers to receive multiple marketing messages from them means their brand can be top of mind.

4. E-commerce media is on the rise.
E-commerce media, a form of online media that allows retailers to target shoppers with product-specifc ads on their sites, was another popular theme. HookLogic, a company that creates product and media placements on e-commerce sites, announced that Shoebuy.com will be using its services to offer premium brand and product placements from its partners within its online store.

DiJiPOP, a company that offers “digital shelf space solutions,” announced that Wal-Mart Canada has selected it to power the digital shelf space monetization efforts of its Walmart.ca online property. The solution will allow Wal-Mart Canada to offer premium placement to its vendor partners, creating a new high-margin revenue stream. Just as a vendor pays a retailer for prime shelf space in-store to stimulate sales, the acquisition of optimal digital shelf space achieves the same goal.

Melissa Campanelli’s The View From Here: What the IBM/Coremetrics Deal Means for Marketers

Arguably the biggest news of the week in the online marketing world was the announcement that IBM, the granddaddy of technology companies, will acquire Coremetrics, a leader in web analytics software.

Arguably the biggest news of the week in the online marketing world was the announcement that IBM, the granddaddy of technology companies, will acquire Coremetrics, a leader in web analytics software.

The acquisition will enable Big Blue to help its customers gain intelligence into social networks and online media sources through a cloud-based delivery model. Then, they can incorporate this insight into their processes to create smarter, more effective marketing campaigns.

“With this acquisition, we are extending our capabilities to give clients greater insight about customer behavior and sentiment about products and services, and give true foresight into their future buying patterns,” said Craig Hayman, general manager, IBM WebSphere, in a press release.

This isn’t the first time a large technology company catering to enterprises has purchsed a web analytic company in an effort to expand their online marketing offerings. A few years ago, Google bought Urchin, for example. And last year Adobe bought Omniture.

But what does this all mean for marketers? For one, it validates the growing importance of digital channels and online marketing.

“Less than a year after the acquisition of Omniture by Adobe, IBM’s announcement today represents overwhelming testimony to the value of online marketing technology as a core piece of an enterprise strategy,” said Alex Yoder, CEO of Webtrends, a Coremtrics competitor. “In today’s world, the growing importance of data-driven decision making is not a luxury, but a minimum requirement to competing in today’s markets. Businesses, governments and nonprofits all realize that facts and insight let them point their innovation and resources in the proper direction.”

While Yoder went on to say that Webtrends leads the market in open standards and detailed customer information — and that his company has seen a 51 percent increase in new business bookings year over year — he added that it will be interesting to see how the acquisition “ultimately impacts enterprises looking to understand data across the multiple digital channels that comprise today’s marketing landscape.”

Responsys, a partner of Coremetrics, said in a prepared statement that the web analytics firm has taken an innovative approach to managing and leveraging the vast amounts of online customer data that today’s companies generate, and that “IBM, as the largest business technology company in the world, is sending a strong message that these capabilities must be considered part of the core ‘stack’ required to be successful in an increasingly digital world.”

Responsys went on to say that this acquisition is “raising the bar” for the industry by helping make advanced online data and marketing solutions a central and established aspect of running a business.

What do you think about the acquisition? Let me know by posting a comment below.