Last week I answered a call from one of my favorite retail clients. My friendly greeting was answered with “I have a vision that keeps turning into a nightmare.” No “hello, how are you?” or “Cold enough for you” chitchat in this call. She was clearly on a mission.

I suggested that we start with the vision. Her vision was an integrated organization where everything from marketing to fulfillment worked together. Customers and prospects could move easily from one channel to another finding what they need or want along the way. Their social media efforts would ease the way for their catalog and email campaigns.

She knew the benefits; we’d been discussing them for months. She knew the urgency because I’d been nagging encouraging her to get started. She knew the risks of inaction. Her competition was already gaining market share. She wanted to start the process but there was a problem.

She had too many channels and departments operating as silos.

Every time they started planning the integration, the details overwhelmed them. They left the meetings with more questions than answers:

How do we make our legacy systems work with new marketing tools?

Who is in charge?

Who should be involved?

How deep should the integration go?

How do we divide responsibilities?

What happens when…?

What’s a reasonable timeline?

How do we measure success?

Where do we start?

The last question is easy to answer. You start where you are and build from there. The rest will be answered as you go.

Channel integration is a process.

The first step is to identify your two strongest silo channels. They are the ones that need to be integrated first. (Remember the 80/20 rule?) Document the areas where lack of integration is a known problem. Create benchmarks before you start resolving issues.

Improvements in one area always highlight challenges in another. This is an opportunity. Treat it as such. It is easy to get overwhelmed by the continuous flow of new challenges. If you begin with benchmarks, and update them regularly, you’ll see progress (and new opportunities.)

Break your large, overwhelming tasks into bite size mini-projects that can be completed in 1 – 5 days. Your goal is to move forward one step at a time.

Recognize that sometimes you have to backtrack or detour to move forward.

If you take it slow and steady, missteps carry little risk. Avoid the temptation to look for the latest and greatest turnkey solution. It costs a lot of money and time while rarely delivering significant results.

Don’t forget the other channels while you’re integrating your best ones. Start capturing social media user id’s now. It’ll make integration and measurement easier down the road.

Get started today for a better tomorrow. Holiday 2010 is just around the corner.

Related posts:

1. Leveraging Cross Channel Resources to Reduce Costs
2. Just 1 Thing: Strategically Leverage Your Channels for the Best ROI
3. Whose Sale is it Anyway? Giving Credit to the Right Channel.

Have you sat in one of those meetings where everyone is trying to claim credit for the latest bump in sales? If so, you know all of the arguments about how some channels brand while others sell. It is a circular debate without an easy answer.

This is a hot topic because most company budgets allocations are weighted by the revenue generated by the channel. More sales credited to a marketing effort equals more money for the department. This creates a departmental feeding frenzy since everyone wants their piece of the pie.

It begins with a competitive attitude towards other channels and departments, continues with undermining of marketing efforts, and ends with poor management decisions. The competition between revenue sources will continue as long as the budget is allocated by revenue credits.

The results can be devastating.

About ten years ago, management at catalog companies started comparing channels based on cost and revenue. They found that their catalog costs were escalating while sales were declining. Their website costs were holding steady while sales were increasing. It seemed obvious that their customers were changing channels. Visions of increased profits danced in their heads as they reduced catalog circulation.

The preliminary results were positive. There was a small drop in sales but an increase in profitability since costs were significantly reduced. Then, the unimaginable happened. Sales started declining at a tremendous rate. It turned out that people were shopping from the catalog and buying online.

If you treat your marketing channels as self sustaining islands, you miss the benefits of multichannel leverage. Channels work together to reduce buying resistance and increase motivation. Where the order is placed may not have anything to do with the motivation to buy.

Realistically, there has to be a way to determine how to distribute marketing dollars.

The revenue model can work if the sales are credited by the channel’s contribution. To do this, you have to know exactly how your channels work together. It begins with knowing what each channel provides:

Social media opens doors. It introduces your company to prospects and improves relationships with customers. Tracking sales back to social media is virtually impossible. Even so, you need a social media presence that works with your other channels to create trust and build relationships.

E-commerce serves a dual purpose. It generates revenue and reduces costs. A percentage of your customers will find you online and place their orders. The rest will make their choices from your stores or catalog and place their orders online. Crediting your website with all of the orders placed online creates inaccurate information and poor management decisions.

Direct marketing via catalogs and direct mail is a multifaceted channel. It introduces your company and products through prospecting, generates interest and revenue, and drives traffic to other channels. It is also expensive increasing the temptation to reduce circulation to save money.

Stores are currently a revenue generating channel. They could also be traffic generators if they provided kiosks for customers to go online to place orders. Doing so increases product depth and availability.

The $64,000 question is “how do your channels work together to build trust, generate revenue, and keep customers coming back?” It doesn’t matter how your industry leaders or competitors’ channels work together. Your unique combination is your only concern.

Answering the question requires a complete understanding of your customers’ movement from awareness to first order to long-term buyer. When you know how your customers move in and around your channels, then you begin the process of correctly allocating revenue.

There’s no absolute numbers in revenue credit.

Keycodes are used by direct marketers to identify the order source. They used to be an effective tool for measuring promotions and attributing revenue to the correct marketing effort. They have lost some of their usefulness because promotional codes are readily available on the Internet. If you attribute your sales based solely on the codes provided by your customers, you may be overstating the value.

Crediting the right channel is best done with several analytic tools. For example, if you have a special sale, create a different keycode for each channel and customer type. After the sale is complete, run a matchback analysis to verify that the orders were placed by the people who received the promotion. Most likely, you will find unverifiable orders because people share bargains with friends, family, and sometimes the world.

The more unverifiable orders the better! Well, maybe not…

Unverifiable orders come from your recipients sharing your promotion information with friends, family, and discount code websites. If the new customers are from your target market and become valuable acquisitions, everything is great. But, if they are hit-&-run buyers, they can cost you far more than they contribute. If you aren’t monitoring your acquisition and retention, you may be over-marketing to new customers.

Before you celebrate the success of any campaign, filter out the unverifiable orders. It makes your marketing analytics more accurate. You can see how each channel and customer segment responded to your offer. If the promotion is profitable without the extra orders, then it is a viable promotion to your customers and goes into the “let’s do this again later” file. If not, then you need to rethink sending it to your customers.

After you’ve correctly measured the response for the promotion, identify the sources of the unverifiable orders. Search the Internet for the code to see if it appears on discount sites. If not, your customers probably shared the information with friends and family. Matching the code to the segmentation shows which group is sharing. If you are receiving valuable new customers, encourage all of your customers to share more.

Attributing revenue to the right source is challenging. One blog post isn’t nearly enough to cover all the nuances. Hopefully this one will start you down the path of better reporting and blending of channels so you will receive the maximum return on your marketing investment.

How are you currently allocating revenue?

Related posts:

1. Leveraging Cross Channel Resources to Reduce Costs
2. Why Social Media Won’t Work as a Silo Marketing Channel
3. Telling Your Story Using Direct Marketing & Social Media

Welcome to the match of the decade – Social Media vs. Direct Marketing. Around the globe people are choosing sides, anticipating that one will overcome the other. Let’s take a moment to review their features:

In one corner, we have Social Media, a young, agile, and engaging contender.

He’s been taking the circuit by storm. His ability to sweep the globe with your marketing message at minimal cost is particularly appealing. Then, there is that one-to-one contact with your customers and prospects. Having Social Media on your side turns your company into the corner store. You can chat with your customers and really get to know them.

Unfortunately, there is a dark side. Social Media is fickle. He’s there helping you one minute and the next, he’s alienating customers. Social Media is very unforgiving. One faux pas can undo years of brand building.

And, he is high maintenance. He demands continuous attention. Without it, he forgets you and everything you’ve contributed to his growth. Your message is like a bolt of lightning: one flash and it’s gone.

In the other corner, we have Direct Marketing, an established, proven, and measurable contender.

He’s been around so long the new guys keep saying, “I thought he was dead.” He isn’t dead, he’s working quietly in the background filling coffers and building loyalty. And, he has that long tail that keeps orders coming in months after the first strike. Let’s not forget how measurable he is. Almost every aspect of Direct Marketing can be tested and measured so you can maximize your return.

Direct Marketing has a dark side, too. If you are into instant gratification, he is not for you. It takes time to plan and implement one of his programs. And, then more time to see the return. He is expensive, too. Upfront costs can be prohibitive for start-ups and newcomers.

Before you place your bets, consider this:

What would happen if we could get Social Media and Direct Marketing to work together? Wouldn’t they be a great tag team? Just think about how it could be:

• Direct Marketing could invite your customers to join your network. When they arrive, Social Media could personally welcome them.
• Social Media could create anticipation by telling customers when Direct Marketing is sending new information.
• Direct Marketing and Social Media could work together to provide 5 Star customer service.

I don’t know about you, but I’m betting on the DM/SM team. Together they infinitely expand their individual potential.

Related posts:

1. Finding the Best Social Media & Direct Marketing Strategy for Your Company
2. Why it’s Hard to Sell Social Media to Direct Marketing Management
3. Telling Your Story Using Direct Marketing & Social Media

Before you aim that revolver at me and start shooting, you should know that I love direct marketing. My career began in the direct mail industry. It was love at first sight and I’ve never looked back. Of course back then we proudly called ourselves catalogers or direct mailers. Things have changed.

Today, catalogs and direct mail have been marked for extinction. Surveys show that businesses are reducing their budgets for traditional marketing and expanding into new media. While some of the surveys may be self-serving, one fact remains: the way we communicate with our customers is changing.

On the surface, we seem to get it.

We have changed our name to multichannel marketers and dabbled in some of the new media. If a rose by any other name is still a rose, then a cataloger by any other name is still a cataloger. We don’t need a name change, we need a paradigm shift.

There is a world of opportunity waiting for us and we are letting others leave us behind. The basis tenets of direct marketing provide a perfect foundation for capitalizing on the new channels that are appearing daily. We know how to attract customers with eye-catching graphics and hypnotizing copy. We know how to engage people with stories about our history, products, and services. And, we know how to deliver on the promise quickly, efficiently, accurately, and profitably. So, why are we not leading the pack in social media and mobile technology?

I kept watching and waiting for a brave soul to step up with a call to arms.

Since no one appeared, I’m accepting the challenge. Here is your call to action. Stop shooting yourself in the foot and take your appointed position as leader of the new marketing world. To get you started, here are 5 ways direct marketers shoot themselves in the foot:

1. By thinking that decreased response rates are due to the economy. Yes, the economy is challenging, but it isn’t the only reason your customers aren’t buying. They have a global market to shop. Before you cry, “loyalty is dead”, ask yourself if you do anything to inspire loyalty. Sending 100’s of emails promoting one sale after another doesn’t inspire loyalty. Anticipating your customers’ needs and fulfilling them does.
2. By dismissing social networking as a passing fad. Yeah, MySpace seemed to rocket to the top of the charts and then fall over the edge but that doesn’t mean that the concept is dead. It isn’t. Every second, people are chatting online about companies and products. There are stories to be told. Are you standing by while your competition engages your customers? Or, are you going to share your story with the world?
3. By believing that interruption marketing works in social media. The social media world is about telling your story while helping others. It seems that when companies that thrived with traditional marketing jump into the network, they post one sale or promotion after another. This approach may work with your existing customers, but it won’t attract or engage new ones. Your company has a unique culture and history. Tell us about it. We need to see your human side.
4. By expecting the business model that built your business to grow it. There comes a time when companies have to evolve to remain successful. In the past, the evolution was from entrepreneurial to structured management. It was charted territory so you could follow the path forged by others. Our world is different now. There isn’t one way to success. You have to create the model that works best for your customers, employees, and company. It is simultaneously scary and invigorating. I know you can do it. Start now.
5. By maintaining silo management of marketing and operations. The push and pull relationship between marketing and operations has a long history. It is time to end it. Where the customer is concerned, there isn’t a break between marketing and operations. It is one. The best marketing is fulfilling the promise to the customer. If you aren’t working together as a team, you will fail. It is time to integrate departments, divisions, and channels into one seamless customer experience.

I wish that I could tell you that making these changes is easy. It’s not. It requires planning, moving out of your comfort zone, and perseverance. You have a choice. If you choose to change, your future is bright. If you don’t, then not so much.

The good news is that direct marketing is not dead (contrary to the opinions of new media advocates.) It is evolving. When the leaders of our industry flex their minds, we will have new business models that include the best of direct mail, catalogs, email, social media, and emerging channels. I can’t wait. How about you?

Related posts:

1. Social Media vs. Direct Marketing: Place Your Bets Now
2. Telling Your Story Using Direct Marketing & Social Media
3. Why Companies Don’t Participate in Social Media

It has always bothered me that a 3% response rate is considered successful in direct mail prospecting. I know all of the arguments. (”It’s part of the acquisition costs. We’ll make it up with the next mailing.” “The breakeven is low, so a lower response is profitable.” And, my personal favorite, “It’s how things are done in the mail order industry.”)

I’ve even been known to offer a little justification myself. But there is an indisputable fact: a 3% response rate equals 97% failure. For those of you uninitiated in the mail order industry, this rate is only acceptable when you are prospecting. Even so, it is a scary number.

The reason I adapted to the status quo was that I couldn’t find a better way. It doesn’t matter how much data you have, it is impossible to select prospects with a high rate of accuracy. This is due to individual preferences that only appear when you get to know someone very well.

My sisters and I are a perfect example.

There are four of us. We look so much alike that people who know us sometimes get confused. We grew up in the same house with the same parents and attended the same schools. Our similarities end there. While we may shop from the same catalog, our styles are very different and we may be buying for our parents. If you rent names from that catalog, odds are that we don’t have an interest in your product.

This is why the 3% response rate for rental prospecting is acceptable. Too many unknowns prevent better targeting. But, everything changes when the prospect is acquired by inquiry. Instead of blasting your way into the prospects mailbox, you are invited. Your recipient has indicated an interest in your offerings and is more likely to buy.

Social media is a game changer.

It provides a venue for communicating with customers and prospects on a one to one basis. If you actively participate with a consistent and inviting voice, relationships are started or enhanced before the catalog is in the mail.

There is so much about your company and brand that is unknown to outsiders. Your history, philosophy, and item development information is often confined to internal documentation. While some is proprietary, the rest is your story to be shared with the world.

Your company’s story is what differentiates your business from the competition. Lower prices, better quality, and unique features can be easily copied and enhanced. The character of your company, not so much.

Social media offers a venue for telling your story one tweet, post, and video at a time. Use it wisely to attract prospects and engage customers. The relationships built here improve direct mail response rates and strengthen your business. So, give your friends a shout out. Maybe they’ll pass it on.

Related posts:

1. Why Direct Mail Still Works in a Social Media World
2. Telling Your Story Using Direct Marketing & Social Media
3. Why Social Media Matters to Direct Marketers