USPS Exigency Becomes a Political Toss – and a Punishing Farce

With the sole exception of Sen. Tammy Baldwin (D-WI) swinging for the United States Postal Service ratepayer (you and me), January 2014 was a dismal month for those who advocate direct mail in the marketing mix … and in February, I’m definitely looking for some love. Will we find it?

With the sole exception of Sen. Tammy Baldwin (D-WI) swinging for the United States Postal Service ratepayer (you and me), January 2014 was a dismal month for those who advocate direct mail in the marketing mix … and in February, I’m definitely looking for some love. Will we find it?

First, there was January 26 … the day new postal rates took effect, full-on. “The 6.0 percent postage increase—three times the rate of inflation—will not help the Postal Service shore up its financial base,” said Peggy Hudson, senior vice president, government affairs, Direct Marketing Association, part of a coalition which filed a court appeal to halt the exigency portion of the rate hike, 4.3 percent. “It will simply drive mail from the system, which harms the financial viability of both the Postal Service and its business customers. It is a lose-lose proposition.”

Then, there is an unpalatable compromise brewing in the Senate Homeland Security and Governmental Affairs Committee. (Compromise always deals with some distaste, or else it wouldn’t be a compromise.) On our behalf, Sen. Baldwin was attempting to strip “offensive” Section 301 from the legislation, which would have abandoned the inflation consumer-price-index peg for annual postal rate increases, and replace it with a new CPI+1 percent index—adding potentially 10-percent higher rates over a decade than would happen under existing law.

Last week, one of the primary sponsors of the current postal reform bill—Committee Chairman Sen. Tom Carper (D-DE)—offered a deal: Essentially, Carper would keep the CPI index mailers crave in place but, in return, the exigency (4.3 percent hike) would be included in the baseline for future annual hikes—thereby removing the 2-year limit on the exigency imposed by the Postal Regulatory Commission in its oversight of the rate hike and making the exigency permanent. Further, the PRC’s oversight role on postal rate changes would be kept intact—something the current language of the bill is attempting to strip. Sen. Baldwin asked for a mark-up delay, no doubt to consider the offer with her constituents.

What a farce: An exigency made permanent? Now that’s a paradox—and an audacious one at that. We can see the Postal Service getting much of the would-be CPI+1 back over the next 10 years, assuming there’s no more crises forcing USPS management, the mailing community or both clamoring for another postal reform bill within 10 years’ time.

Is keeping the CPI index so important to us now that we’ll hold our noses on this compromise? A mark-up on the bill—a Committee vote—has been moved to February 6 As of January 31, DMA is still asking its members to weigh in here to get Section 301 tossed.

There is a disturbing pattern here. The Postal Service is our business partner, for sure—and there’s nearly universal support for that partnership across the board. But if it (USPS management, USPS labor, and the both of them) keeps fighting its customers with higher postal rates, and running to Congress with mock exigencies or new rate-setting formulae that undermine fiscal discipline, then the financial reality of that partnership gets sadder by the day. Lose-lose ignites a dying cycle.

Mailers have suffered through recession. Marketers deal with digital migration. They have had to endure cost-cutting, price-cutting and layoffs to make it to 2014—and they’ve relied on invention to survive and thrive. What they have not been able to do is take their customers for granted, by passing along hardships in higher prices.

“Business-like” USPS policy and operations remain marred in politics—exigency is another sadly perfect example.

To Honor Jerry Cerasale and the Contributions He Has Made for Us

Next month will mark a new beginning for Jerry Cerasale, a man whose countless contributions to marketers over the past four decades have served us immensely. After a career of public service and advocacy on behalf of direct marketing, Jerry is about to start a next chapter—more time with his family endeavors on his schedule, not those of Congress, the U.S. Postal Service or the Direct Marketing Association and coalitions in which he has represented us so brilliantly

Next month will mark a new beginning for Jerry Cerasale, a man whose countless contributions to marketers over the past four decades have served us immensely. After a career of public service and advocacy on behalf of direct marketing, Jerry is about to start a next chapter—more time with his family endeavors on his schedule, not those of Congress, the U.S. Postal Service or the Direct Marketing Association and coalitions in which he has represented us so brilliantly.

For those of us who know Jerry, we know this moment is sweet. He is a gentleman who always seems to know the score on Capitol Hill and elsewhere. Though it may be impossible to know outcomes on public policy debates with any certainty, since his joining the Direct Marketing Association’s government affairs team, we’ve had someone who is able to shape that policy or influence it in a manner that has advanced our professional practice—and to do so with fairness, clarity and a knack for building consensus. In each occasion, importantly, Jerry has also articulated how marketing ultimately serves the needs of customers and consumers, and a well-functioning, competitive and innovative marketplace. All the time, he’s engaged DMA members—and given us opportunities to participate in the lawmaking and policymaking process as citizens and as members of our business community.

Jerry first joined DMA in 1995 as senior vice president, government affairs, and had led the charge of DMA’s contact with the Congress, all federal agencies and state and local governments. There has not been a single issue – postal, privacy, the environment, use taxes, telemarketing, data security, commercial free speech, sweepstakes—where his advice and counsel has not been spot on. Not only has he been our voice before Committees of Congress, he has testified before both the Federal Trade Commission and the Federal Communications Commission on these and other direct marketing matters. We may not win every marketing battle, but Jerry always builds good will, because of his demeanor and respectfulness.

Prior to joining DMA, Jerry was an effective public servant—where he was the deputy general counsel for the Committee on Post Office and Civil Service, United States House of Representatives. He also served for 12 years at the Postal Rate Commission as legal advisor to Chairman Janet Steiger, and also as special assistant to the Commission. He was an attorney advisor to Federal Trade Commission Chairman Steiger in her service there. Prior to the PRC, he was employed in the law department of the Postal Service. Jerry also is a veteran of the U.S. Army, where he served our country from 1970 to 1972. He is a graduate from Wesleyan University (Middletown, CT) and earned a law degree from the University of Virginia School of Law. He is the recipient of the Silver Apple and the Mal Dunn Leadership Award from the New York Direct Marketing Club and a lifetime achievement award from the Continuity Shippers Association—accolades that are prestigious, but only begin to tell the tale of Jerry’s stewardship in our field.

But what I love most about Jerry is his loyalty to wearing “Save the Children” ties as he goes about his professional work—because social responsibility always seems to be part of who he is—and always will be, no matter what his schedule. For that I am truly grateful, “Thank you, Jerry” from all of us.

A Toast to Brand Effervescence!

While Shakespeare said it first, it is easily the lived mantra at omnichannel retailer Boston Proper: “Boldness be my friend.” I recently shared a glass of celebratory bubbly with two smart leaders at Boston Proper—Sheryl Clark, president, and Margaret Moraskie, senior vice president of marketing and e-commerce—after being wowed by my first visit to their new boutique in Boca Raton, Florida.

While Shakespeare said it first, it is easily the lived mantra at omnichannel retailer Boston Proper: “Boldness be my friend.” I recently shared a glass of celebratory bubbly with two smart leaders at Boston Proper—Sheryl Clark, president, and Margaret Moraskie, senior vice president of marketing and e-commerce—after being wowed by my first visit to their new boutique in Boca Raton, Florida.

Having had the honor of working with this brilliant team in the past, I was thrilled to literally walk into their newly reenergized brand experience and see this brand burst into an even bolder stance from their already well-designed and lust-worthy “take me on vacation” Web and catalog pages.

Apparently, so, too, were all their other brand fans. “We had customers standing in line for over two hours for our grand opening. It was a party before the doors even opened!” Clark said. “Our models were mingling with our customers while many of our employees greeted our loyal fans as well. It was wonderful to see the passion our customers feel for us.”

Many words came to mind as I first saw their new rose gold starburst signage upon entering the feminine boutique, whiffed the lovely (and proprietary) scent, then made a beeline to all the “must have” color coordinated outfits and finally stepped into the armoire-accented dressing room with attentive stylists standing by like girlfriends ready to “ooh and ah” and accessorize! A+ words like: audacious, all things feminine, amazing. But one word captured my entire experience: sparkle.

Boston Proper is a brand that sparkles. From the leaders who wear the clothes “like no one else” in and out of the office, to the designers who create the clothes with always the proper embellishments, to the photographers whose shoots transport their customers to exotic destinations where they imagine themselves in those clothes, to the stylists who only want to help make their customers shine with just the right outfit—the internal team of Boston Proper brand ambassadors infuse sparkle in all they do. Their brand effervescence is a competitive differentiator. It’s worth toasting!

I know Clark speaks on behalf of her entire team when she says, “There is nothing more exciting than the journey we are on. To meet our existing customers, deliver them a revolutionary boutique experience and welcome new customers to the brand has been truly unforgettable. We are having fun every day, making the Boston Proper experience, in every channel truly unforgettable—one customer at a time.”

Does your brand sparkle? What are you doing that deserves a toast? Is boldness your friend? What brand barriers might be holding you back? Why not spend some time thinking about ways to add a little bubbly to your brand experience?

Attribution and the ‘Mail Moment’ in the Multichannel Mix

At its Sept. 13 meeting, the Direct Marketing Club of New York hosted an engaging panel discussion regarding the use of direct mail in a multichannel world, and the panelists included representatives from Citigroup, Gerber Life and The Agency Inside Harte-Hanks. … Hearing from two financial service brands, and an agency that services brands in several markets, packed the house. I’m not sure if it was the topic or the brands who spoke, or both, that was the draw—but the information imparted prompted lots of audience interest and questions.

At its Sept. 13 meeting, the Direct Marketing Club of New York (DMCNY) hosted an engaging panel discussion regarding the use of direct mail in a multichannel world, and the panelists included representatives from Citigroup, Gerber Life and The Agency Inside Harte-Hanks.

The representatives included Linda Gharib, senior vice president, digital marketing, for Citi’s Global Consumer Marketing & Internet division; David Rosenbluth, vice president, marketing, Gerber Life Insurance Company; and, from the agency side, panel moderator Pam Haas, who is both vice president, sales, for agency services at Harte-Hanks (and first vice president for DMCNY), and Michele Fitzpatrick, senior vice president, strategy and insight, The Agency Inside Harte-Hanks.

Hearing from two financial service brands, and an agency that services brands in several markets (tech, consumer package goods, automotive, insurance, pharma and more), packed the house. I’m not sure if it was the topic or the brands who spoke, or both, that was the draw—but the information imparted prompted lots of audience interest and questions.

First, customer acquisition—at least in the financial services area—still appears to be very dependent on mail. At Gerber, Rosenbluth said, as many as a third of new business policies are still generated by direct mail, even as the brand is “omni-channel”—digital (including web site, search, display ads, email), direct-response television, as well as direct mail. For Citi, the brand is positioned No. 2 in the nation by Target Marketing in its “Top 50 Mailers” ranking for 2012 (which is ranked by overall revenue, not mail volume), Gharib said, solidifying its importance in both acquisition and retention.

Fitzpatrick agreed, noting that in financial services, where marketing is modeled most precisely for risk and performance, direct mail remains an acquisition workhorse, particularly on new product launches. For automotive and pharma verticals, however, where as much as 80 percent of transactions are researched anonymously beforehand online, digital media is used for hand-raising, and direct mail may be then used to deliver a brochure of other information in a highly segmented way to close the deal. “Consumer preferences [for media] are situational,” Fitzpatrick said.

Who gets credit for attribution, when a multichannel communications mix produces a desired response? At Citi, Gharib said, such discussions are a “work in progress,” where the final interaction point currently gets the credit, whether that is chat, direct mail, email or some triggered communication. Adding to the multichannel attribution discussion is the mix of advertising purposes—some are pure branding messages, while others are intended to elicit a response, but both may compel or influence customer behavior in some discernible (or indiscernible) manner. Hence, there is complexity in the attribution discussion.

Yes, indeed, says Rosenbluth, where “allowances” are given for each channel in regard to the brand’s most importance metric to manage: total costs to convert a policy. Currently, “last touch” gets the attribution on response, but the policy conversion metric is the bigger-picture measurement, where everyone gets to take some credit.

Fitzpatrick pointed to recent Forrester research where “fractional attribution”—first touch, mid-touch and last-touch on the path to purchase share credit—and “engagement” is modeled, rather than response (alone). Every brand should undertake a channel impact study to determine, as best it can, the impact of incremental sales as a result of a multichannel customer experience, while also researching receiver reaction research. Clearly, direct mail, email, chat and other channels can be both or either “conversation starters” and “conversation extenders,” but analytics is the only way to know the role of the channel for any given customer.

“There’s credibility in paper,” Gharib remarked, “that helps with both the brand and its consideration.” Where email is cluttered, direct mail largely is not.

At Gerber, Rosenbluth, there really is no brand spend, all market spending is intended to produce engagement.

Fitzpatrick sees almost all “below the line” spending getting a branding blend—branding and direct marketing have come together. All the panelists agreed: it’s really about the consumer experience across channels, and having a database that enables customer recognition and a full customer view. Having tons of data is not enough—it’s having technology and processes in place for customer data integration and analytics to create smart engagement rules.

The verdict? Direct mail is and will remain a vital part of the media mix—because it’s an anchor in the consumer’s experience and brand consideration mix. As digital gets more clutter, boy that mailbox is looking pretty.

Making a Green Claim: (Not) Waiting for the FTC Green Guides

Direct marketers and mailers making environmental claims have a number of resources available to them to help make such statements meaningful to consumers. The most important of those to U.S. marketers are the Federal Trade Commission’s Green Guides—officially titled “Guide for the Use of Environmental Marketing Claims”—which were enacted in 1992, and updated in 1996 and 1998. In 2007, the FTC initiated a new effort to update the Green Guides once again—and here we are in 2012 still waiting for this next edition.

Direct marketers and mailers making environmental claims have a number of resources available to them to help make such statements meaningful to consumers. The most important of those to U.S. marketers are the Federal Trade Commission’s Green Guides—officially titled “Guide for the Use of Environmental Marketing Claims”—which were enacted in 1992, and updated in 1996 and 1998. In 2007, the FTC initiated a new effort to update the Green Guides once again—and here we are in 2012 still waiting for this next edition.

The Green Guides, as currently written, give insight into use of such specific claims as biodegradable, compostable, recyclable, recycled content and ozone safe. While they are “guides,” they are enforceable. The FTC can and has brought forth cases where marketers’ claims did not measure up to the examples that pepper the Green Guides throughout.

In a recent Direct Marketing Association Compliance Series Webinar (February 14), DMA’s Jerry Cerasale, senior vice president of government affairs, said there is no indication that the Green Guides‘ updates—promised some time ago—will be published shortly, or what might be holding them up. If there are differences of opinions among government scientists about certain claims or terminology, or if FTC staff have unresolved policy questions related to potentially new Green Guides content, the truth is we really just don’t know. However, the current iteration of the Green Guides certainly does give us good direction, which I’ll enumerate here.

First, as with any marketing claim—green or not—each claim must be “truthful,” “clear” and “substantiated.” Many of my colleagues know that “go green—go digital” claims many banks, utilities and financial service companies print on monthly statements are a pet peeve of mine. While I have no issue with persuading customers to switch to electronic statements, for those customers who want to, I do have a big problem with couching the digital migration as an environmental choice. Chances are the brand has made no effort to document the net environmental benefits of doing so. Just supposing that an e-statement “saves trees” is not substantiated, or, if there is an attempt to do so, it is largely based on spurious associations with deforestation, something that is not happening in North America. While I’m not a lawyer, I would be very wary about making such claims statements on a brand’s envelopes because of the FTC’s substantiation expectation.

Second, when making a marketing claim—on a mail piece, on packaging, on a product—it must be clear what the claim pertains to, as in the mail piece itself, the packaging itself or the product itself. For example, making a “recyclable” claim might be seen as deceptive if the packaging is recyclable, but the product it protects is not. Thus, be very clear with labels as to what the claim applies.

Next, we need to ensure claims are not overstated. For example, growing the amount of recycled content “by 50 percent” would be seen as deceptive if the content were to nudge from 2 percent to 3 percent. Similarly, making a “biodegradable” claim is highly suspect when an item destined to today’s air-tight and water-tight landfills largely stays there inert—it’s only biodegradable when it’s a piece of litter exposed to sunlight and the elements, hardly the intended end of life. Stating some item is “eco-safe” would be seen to be deceptive if there is no proof, or if it refers to one attribute of a product or item, as opposed to the product or item overall.

The term “recycled content” is important to consider because the FTC does not count material in the manufacturing process that is normally reused, and thus never first discarded as waste. Only if the material is recovered from the waste stream and reused may it be considered “recycled.” There are “pre-consumer,” “post-industrial” and “post-consumer” forms of recycled content, but in all cases, these types of labeled recycled content must be recovered from waste. Thus, it’s common to see recycled-content papers with labels such as “made with 100-percent recovered fiber, with 20-percent post-consumer content.”

Finally, though not part of the Green Guides, the FTC in a staff opinion gave the Direct Marketing Association and direct marketers the go-ahead to enable “recyclable” and “recycle please” messages on catalogs and direct mail pieces. That distinction in 2006 was important. Prior to the opinion, that type of label was not permissible, because even though mail or catalogs technically were recyclable, less than two-thirds of the nation’s households had local access to recycling collection programs for this material. Thus, it would be seen as deceptive if local facilities were non-existent. Even the qualified “recyclable where local facilities exist” would be seen as deceptive without having the two-thirds threshold in place first. Thankfully, we’ve met that threshold and now can implement consumer education programs such as DMA’s “Recycle Please” logo initiative (launched in 2007).

While we’ve seen a draft for public comment of the next Green Guides, the final draft is—as of this date—yet to come. Therefore, it’s probably not wise to guess as to what will be in the next version, or what will be left out. (To visit the October 2010 draft, go here: http://www.ftc.gov/bcp/edu/microsites/energy/about_guides.shtml )

As a communicator, I also have at least one other “green claims” resource—an organization called TerraChoice, now part of Underwriters Laboratory, which actually consults (or has consulted) with the FTC and the Canadian Standards Association, as well as many Fortune 500 brands. Its Web site, www.sinsofgreenwashing.org, documents seven “sins” of environmental marketing claims, sins such as hidden tradeoffs and no proof. In its most recent 2010 report, only 5 percent of consumer product claims were found to be “sin free,” which truth-be-told was an improvement over 2009!

Between the current edition of the FTC Green Guides, TerraChoice, and the DMA’s own Guidelines for Ethical Business Practice, direct marketers don’t have to wait around for the FTC to (finally) issue its next Green Guides rendition to make an honest, truthful environmental marketing claim. With Earth Day around the corner, just do some diligence to be sin-free and stop saying “Go Green, Go Digital”!

Helpful Links:

An Opportunity to Learn From Leading Retailers

What do cross-channel retailers like to do best (besides make money)? Share their stories and insights with their peers so they can learn from one another. Well, eM+C’s sister publication, Retail Online Integration, is giving those retailers a great platform to share their thoughts with its Retail Marketing Virtual Conference & Expo – Fall 2011, which is taking place next Tuesday, Sept. 27.

What do cross-channel retailers like to do best (besides make money)? Share their stories and insights with their peers so they can learn from one another.

Well, eM+C’s sister publication, Retail Online Integration, is giving those retailers a great platform to share their thoughts with its Retail Marketing Virtual Conference & Expo – Fall 2011, which is taking place next Tuesday, Sept. 27.

If you’re a retailer, you don’t want to miss out on this free, informative one-day virtual event. The opening keynote, E-Commerce Retail Roundtable: Holiday Best Practices, featuring Peter Cobb , co-founder and senior vice president of eBags.comOpens in a new window; Jack Kiefer , founder, president and CEO of BabyAge.comOpens in a new window; and Andy Hoar , an analyst at Forrester ResearchOpens in a new window, will provide listeners with tips to make the 2011 holiday season their best one yet.

Best practices that will be discussed include:

  • how to ensure your website is prepared for the holiday rush of traffic;
  • updating fulfillment processes to meet growing demand; and
  • last-minute social media and email marketing tips.

The closing keynote, The Future of Retail Shopping With Augmented Reality, Mobile and Social Media, will discus strategies for integrating these emerging technologies into your marketing mix to help increase conversions and sales.

Other information-packed sessions include the following:

  • At Your Service: E-Commerce Customer Service Trends
  • Social Marketing and Commerce Retail Case Studies
  • Cutting Through the Mobile Marketing and Mobile Commerce Clutter
  • Winning Customer Acquisition Tactics for Cross-Channel Retailers
  • Customer Retention Best Practices

View the most up-to-date agenda here. In addition to the great lineup of sessions we’ve put together, you’ll have the ability to network with other attendees via live chats and social networking, as well as download resources and giveaways. To register for this free event, click hereOpens in a new window.

Hope to “see” you there!

What’s On a Retail CMO’s To-Do List?

Focusing on their customers and setting the right expectations for their CEO when it comes to marketing plans are just two of the many priorities chief marketing officers at retail companies are putting on their to-do lists for the remainder of 2011.

Focusing on their customers and setting the right expectations for their CEO when it comes to marketing plans are just two of the many priorities chief marketing officers at retail companies are putting on their to-do lists for the remainder of 2011.

This information was gleaned from a session titled “CMO/SVP Panel: Uncovering a CMO’s To-Do List” at eTail 2011 in Boston this week. Kevin Conway, global director of consumer brands at Savvis; Matt Corey, chief marketing officer of Golfsmith; Lou Weiss, chief marketing officer of The Vitamin Shoppe; Bill Wood, vice president and chief information officer at Brookstone; and Jim Wright, senior vice president of e-commerce and customer marketing at Express, discussed their remainder-of-2011 goals and priorities.

“We’re focused on four specific pillars right now,” said Express’ Wright. “Driving e-commerce, growing the international side of our business, improving our brand for existing stores and opening more stores across the U.S.”

In addition, Wright said he’s focusing on how to integrate the Express brand across channels, optimizing return on investment from marketing programs, and understanding how Express customers shop in-store and applying that information to mobile applications.

“The customer has more control than ever before,” Wright said. “We have to conduct focus groups, ask them what they want from their experience with us, then make those changes.”

Most of the time, Express customers want their shopping experience to be like what they get on Amazon.com. The good news is that “they’re willing to get that experience if they give a little,” Wright said.

Focusing on the customer is also at the top of Brookstone’s Bill Wood’s to-do list. “If we understand our customers better, we’ll understand how to speak with them,” he said. “Two-way communication is important.”

In addition, Brookstone has “eight to 10 initiatives on our plate right now for our website, including video,” Wood said.

For Matt Corey of Golfsmith, setting the right customer expectations about the brand’s marketing plans is top of mind. “All CEOs today are asking their CMOs, ‘What’s the value of a customer on Facebook?’ We just say we’re going to test it, measure it and then decide.”

When discussing marketing programs with your CEO, use “Peter Rabbitt English,” Corey said. This is his term for using basic, plain speech with them. “Don’t use terms they don’t understand. Instead, tell a story.”

Of course, focusing on the customer is also key for Golfsmith. “We have a great online community called the 19th Hole that we turn to all the time for insight,” Corey said. “We ask them about anything from brand messaging to store experiences to taglines. What do they like? What don’t they like?”

What’s more, Corey added, “these types of communities are cool and cost effective. We’re spending less than $75,000 for an entire year to find out what our customers want. That’s a lot less than the cost of small focus groups.”

For Vitamin Shoppe’s Lou Weiss, his primary focus is on the brand’s already successful loyalty program.

“Now we’re trying to figure out how to evolve our loyalty program by integrating it with our social programs, stores and website,” Weiss said.

Another focus? Growing The Vitamin Shoppe’s marketing team. “We’re looking for experts in interactive and social marketing,” he told the audience.

For Kevin Conway of Savvis, his current focus is on cloud computing. “We’re working with several software vendors on putting their applications in our cloud,” he said. “Once in the cloud, the applications can be turned on and off easily to accelerate your business.”

What are some of your 2011 end-of-year priorities? Let me know by posting a comment below.