DM 101: A Small Business Primer

Yesterday, Target Marketing hosted a webinar called “Direct Marketing on a Shoestring Budget.” I was honored to be a speaker, along with Cyndie Shaffstall of Spider Trainers. Considering all the resources available for DM information, I was completely surprised when I learned that over 1,000 people registered. During the live event, we were deluged with questions and there wasn’t enough time to answer them all, so I thought I’d dedicate this blog to trying to cover a few DM strategies that might make your marketing life a little easier

Yesterday, Target Marketing hosted a webinar called “Direct Marketing on a Shoestring Budget.” I was honored to be a speaker, along with Cyndie Shaffstall, of Spider Trainers.

Considering all the resources available for DM information, I was completely surprised when I learned that over 1,000 people registered. During the live event, we were deluged with questions and there wasn’t enough time to answer them all, so I thought I’d dedicate this blog to trying to cover a few DM strategies that might make your marketing life a little easier.

There’s not enough room on this page to cover everything I’d like to say, but based on the questions, here are my top five pieces of direct marketing advice:

1. Before You Begin Any Marketing Program, Decide Where You’re Going
Start with your company’s business objectives (Grow revenue? I certainly hope so!), and work backwards.

There are really two key marketing strategies to achieving this objective: Retain existing customers (i.e. retain existing sources of revenue), and add new customers. Duh. But retaining existing customers should include measurable marketing objectives like increasing average order size, increasing number of transactions per customer, and increasing frequency of purchases. Marketing to cold prospects might include metrics like increasing the number of qualified leads into the sales pipeline, or driving more traffic to your web store. Depending on your objective, different marketing strategies and tactics will be utilized.

2. Know Who Your Existing Customers Are
If you can’t profile them by the data you collect, you can append data from a reliable third-party data provider—and many of them offer analytic services so you can get a good handle on your buyer profiles.

Another option is to think about your product/service and how you might market it differently if you knew your customers better. For example, if you knew your customers had toddlers, would that drive a different set of messages than, say, parents of teens? Do a survey and ask your customers to share key information with you. (An incentive to fill out a SHORT survey often works; make sure you only ask questions you can use the insights from in future marketing efforts.)

On the B-to-B side, do your customers tend to come from a handful of industries only? Then you have a better chance of selling to more customers in those industries than in a brand new industry. Knowledge is power, so it’s difficult to plan and execute successful marketing efforts if you don’t understand your customer base.

Don’t forget about taking a deeper dive into your data to find your “best” customers. Chances are 20 percent of your base is driving 80 percent of your revenue. Better know who they are—and fast—so you can make plans to protect and incent them to stay loyal.

3. Clean Up Your Act Before You Try to Make More Friends
Since most customers will visit your website first, make sure it’s optimized for site visitors … and for smart phone users (yes, the future is NOW). On the B-to-B side, you better have your LinkedIn profile updated with a professional picture and solid bio, because, yes, people do judge a book by its cover.

4. Choose the Right Media Channels
This is probably the hardest one to get right. Do magazine ads work? Yes, if your audience reads a particular publication. Does cold prospecting work? No. End of statement. Does direct mail work? Yes, if you spend time identifying who your best customers are, profiling them, then overlaying that profile on a list to find look-alikes, and you combine a meaningful offer in an appropriate format. There are lots and lots of nuances in direct mail, and most folks get it wrong. So how do you make the right media decisions? If you know who your best customers are, find out where they congregate—that’s where you want to have a presence.

In the B-to-B world, this can be made a little easier as business people get together at industry events, join industry associations, read industry publications, etc., etc. It’s a little easier to figure out ways to get your message in front of them.

In the B-to-C world, you need to be much more analytical. Go back to the profile of your best customers. What do they have in common? In what context would your product/service appeal to them? Instead of trying to “interrupt” their behavior by placing an ad where they’re not even thinking about your solution, try to place your ad in an appropriate context. For example, if you’re a nonprofit trying to reach high net-worth prospects for charitable giving, use your PR skills to try and get a story placed about your efforts. Then, purchase banner ads on the publication’s site so they run next to the article about you—or place an ad within their publication when the article runs. Use Google Analytics and AdWords to understand the most popular search terms for products/services like yours. See what your competitors are doing and figure out how you can differentiate yourself with your message.

5. Format Matters
I’m often asked if postcards work. Or is a #10 package better than a self mailer. And what about Three-Dimensional packages—are they worth it? The answer is yes, yes and yes … but here are a few things to consider:

  • Postcards work best when you have a single, simple message to convey. Keep it short, sharp and to the point.
  • Self-mailers work better if you need a little more real estate to tell your story. Plus, they can be quite “promotional” in nature, so they’re not taken as serious communication.
  • Envelope packages work best if you have a more complex message. A letter (with subheads, please, as we’re all scanners of content), order form, brochure and business reply envelope (yes, they still work like a charm), can all work if your audience is older. (Here’s a hint: Not everybody wants to go to your web site, fill out a form and give you a credit card number if they can check a box on your form, add a check and mail it back to you on your dime.)
  • 3D packages can work like gangbusters if the item inside is engaging and makes sense as it relates to your brand/message. Inexpensive tchotchkes don’t usually work very well—they don’t garner attention and they don’t make your brand look smart.

Net-net, marketing is a skill. And, considering you will invest to get financial gain for your business, you really shouldn’t try to do it without professional help.

Updating Your Marketing Database

It’s amazing how quickly things go obsolete these days. For those of us in the business of customer data, times and technologies have changed along with the times. Some has to do with the advent of new technologies; some of it has to do with changing expectations. Let’s take a look at how the landscape has changed and what it means for marketers.

It’s amazing how quickly things go obsolete these days. For those of us in the business of customer data, times and technologies have changed along with the times. Some has to do with the advent of new technologies; some of it has to do with changing expectations. Let’s take a look at how the landscape has changed and what it means for marketers.

For marketing departments, maintaining updating customer data has always been a major headache. One way to update data is by relying on sales team members to make the updates themselves as they go about their jobs. For lack of a better term, let’s call this method internal crowd-sourcing, and there are two reasons why it has its limitations.

The first reason is technology. Typically, customer data is stored in a data hub or data warehouse, which is usually a home-grown and oftentimes proprietary database built using one of many popular database architectures. Customer databases tend to be proprietary because each organization sells different products and services, to different types of firms, and consequently collects different data points. Additionally, customer databases are usually grown organically over many years, and as a result tend to contain disparate information, often collected from different sources during different timeframes, of varying degrees of accuracy.

It’s one thing having data stored in a data warehouse somewhere. It’s quite another altogether to give salespeople access to a portal where the edits can be made—that’s been the real challenge. The database essentially needs to be integrated with or housed in some kind of tool, such as an enterprise resource planning (ERP) software or customer relationship management (CRM) software that gives sales teams some capability to update customer records on the fly with front-end read/write/edit capabilities.

Cloud-based CRM technology (such as SalesForce.com) has grown by leaps and bounds in recent years to fill this gap. Unlike purpose-built customer databases, however, out-of-the-box cloud-based CRM tools are developed for a mass market, and without customizations contain only a limited set of standard data fields plus a finite set of “custom fields.” Without heavy customizations, in other words, data stored in a cloud-based CRM solution only contains a subset of a company’s customer data file, and is typically only used by salespeople and customer service reps. Moreover, data in the CRM is usually not connected to that of other business units like marketing or finance divisions who require a more complete data set to do their job.

The second challenge to internal crowd-sourcing has more to do with the very nature of salespeople themselves. Anyone who has worked in marketing knows firsthand that it’s a monumental challenge to get salespeople to update contact records on a regular basis—or do anything else, for that matter, that doesn’t involve generating revenue or commissions.

Not surprisingly, this gives marketers fits. Good luck sending our effective (and hopefully highly personalized) CRM campaigns if customer records are either out of date or flat out wrong. Anyone who has used Salesforce.com has seen that “Stay in Touch” function, which gives salespeople an easy and relatively painless method for scrubbing contact data by sending out an email to contacts in the database inviting them to “update” their contact details. The main problem with this tool is that it necessitates a correct email address in the first place.

Assuming your salespeople are diligently updating data in the CRM, another issue with this approach is it essentially limits your data updates to whatever the sales team happens to know or glean from each customer. It assumes, in other words, that your people are asking the right questions in the first place. If your salesperson does not ask a customer how many employees they have globally or at a particular location, it won’t get entered into the CRM. Nor, for that matter, will data on recent mergers and acquisitions or financial statements—unless your sales team is extremely inquisitive and is speaking with the right people in your customers’ organizations.

The other way to update customer data is to rely on a third-party data provider to do it for you—to cleanse, correct, append and replace the data on a regular basis. This process usually involves taking the entire database, uploading it to an FTP site somewhere. The database is then grabbed by the third party, who then works their magic on the file—comparing it against a central database that is presumably updated quite regularly—and then returning the file so it can be resubmitted and merged back into the database on the data hub or residing in the CRM.

Because this process involves technology, has a lot of moving parts and involves several steps, it’s generally set up as an automated process and allowed to run on a schedule. Moreover, because the process involves overwriting an entire database (even though it is automated) it requires having IT staff around to supervise the process in a best-case scenario, or jump in if something goes wrong and it blows up completely. Not surprisingly, because we’re dealing with large files, multiple stakeholders and room for technology meltdowns, most marketers tend to shy away from running a batch update more than once per month. Some even run them quarterly. Needless to say, given the current pace of change many feel that’s not frequent enough.

It’s interesting to note that not very long ago, sending database updates quarterly via FTP file dump was seen as state-of-the-art. Not any longer, you see, FTP is soooo 2005. What’s replaced FTP is what we call a “transactional” database update system. Unlike an FTP set-up, which requires physically transferring a file from one server and onto another, transactional data updates rely on an Application Programming Interface, or API, to get the data from one system to another.

For those of you unfamiliar with the term, an API is a pre-established set of rules that different software programs can use to communicate with each other. An apt analogy might be the way a User Interface (UI) facilitates interaction between humans and computers. Using an API, data can be updated in real time, either on a record-by-record basis or in bulk. If a Company A wants to update a record in their CRM with fresh data from Company B, for instance, all they need to do is transmit a unique identifier for the record in question over to Company B, who will then return the updated information to Company A using the API.

Perhaps the best part of the transactional update architecture is that it can be set up to connect with the data pretty much anywhere it resides—in a cloud-based CRM solution or on a purpose built data warehouse sitting in your data center. For those using a cloud-based solution, a huge advantage of this architecture is that once a data provider builds hooks into popular CRM solutions, there are usually no additional costs for integration and transactional updates can be initiated in bulk by the CRM administrator, or on a transaction-by-transaction basis by salespeople themselves. It’s quite literally plug and play.

For those with an on-site data hub, integrating with the transactional data provider is usually pretty straightforward as well, because most APIs not only rely on standard Web technology, but also come equipped with easy-to-follow API keys and instructions. Setting the integration, in other words, can usually be implemented by a small team in a short timeframe and for a surprisingly small budget. And once it’s set up, it will pretty much run on its own. Problem solved.