Terry Jukes - President of B2B Direct Marketing Intelligence, LLC

Canada is hotter!

Several months ago I blogged about expanding your marketing efforts to Canada. Since then I have helped two B2B catalog marketers refine and expand their Canadian marketing programs. All three have met with great success and I encourage you now to be tested or expanding in Canada. Since I last blogged about the Canadian opportunity the Canadian dollar has risen to more than $1.04. That means Canadian businesses can now buy more than a US dollars worth of goods and services for one Canadian dollar. Seldom in the last thirty years has the Canadian dollar been worth more than the US dollar so your Canadian customers are on a euphoric spending spree south of the border. Believe me, I see Canadians snapping up depressed south Florida real estate every day. They are giddy about the values and what their dollar will now buy. Remember, your Canadian sales should be at least 10% of your US sales, more if you offer a niche product that is hard to find in Canada. If you are not, you are missing out!
So, in cased you missed it, I will re-cap some previous points about why you should expand your mailings in Canada now. I will also add a couple of new points gleaned from the projects I have just completed.

1. The Canadian dollar is at an all time high. Remember in 2009 it was a little more than 80 cents US so it’s up 20-25% in less than three years. Enough said about that.
2. Over the last several years UPS, USPS and Fedex have are providing better, cheaper, faster
3. Canada, being a much smaller country, does not have the product breath and depth of selection that the USA does. "I simply can't find it in Canada" is a phrase commonly heard from Canadian customers. This often translates into a certain level of price insensitivity, particular when the cost of buying the product is much less than the cost of not having the product at all - a common occurrence in B2B catalog sales.
4. Many Canadian businesses have US subsidiaries and US delivery points so make sure you take a look at your sales to border towns as an indication of your Canadian business. If you have disproportionately high sales to the "five border state Bs" (Blaine, Bellingham, Buffalo, Burlington, Bangor) I would suggest that some of that is business coming from Canada.
5. Having Canadian inbound and outbound sales representation is key. Having a US based call center representative who doesn't know Saskatoon from Sudbury is just, err, well, insulting. (I am reminded of the last encounter I had with a telephone rep in India who did not know where Atlanta was.) Even if you ship from the US (which would be wise to start) invest in a Canadian call center or service bureau or at least a Canadian or two in your US call center.
6. My intelligence tells me that Canada is growing, right now, at about twice the rate of the US.

So, maybe it's time to re-look at Canada. Who knows, you might want to take your summer vacation there and do a little market intelligence work!

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221   

Do you callback your web orders?

Most B2B Catalog marketers, including me, think the web is a very good thing. However,I am becoming increasingly convinced that sometimes the web, with all its benefits, shortchanges us.   This happens in a number of "customer experience" areas but the most important one I see is how the web treats a new customer.   Basically, it doesn't ....and therein lies the problem.

In a number of client companies I have recommended that ALL web orders be called back or at least NEW customer web orders be called.   Ideally, this happens within two hours of the order being placed and does not hold up shipping of an order.

In most cases, here's what I see:

1.  The callback confirms the order, thanks the customer, finds the reason for the order or intended application of the purchase.  

2.  The call provides an opportunity to "sell the brand", after all, this is a new customer who probably doesn't know much about your company.

3.  The call provides an opportunity to collect valuable marketing data on the new customer and educate the customer on your benefits and services.

4.  The call moves an internet transaction to a human transaction and we all know that "people buy from people" and not machines.   After the call, ideally, the customers feels that "those are good people, I'll buy from them again".

5.  The chances of getting a second order go up with such calls, particularly, if a thank you note and second order incentive is including in the first shipment.

6.  First time buyers who move to a second purchase are more likely to have a significantly higher LTV.

So, why not structure a test in your organization to see if the ROI on calling new or all web orders is justified.   If you need help, please call me.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221       

 

 

 

Canada is hot!

In case you have not noticed the Canadian economy has held up rather well through the great US recession.  Business north of the border is booming.   More importantly the value of the Canadian dollar is high...currently trading around par with the US dollar.   Canadian consumers and businesses are buying goods and services from the USA at record levels.   One only needs to look at the number of Canadian cars in Florida this winter to realize that.   Canada remember is the USA's largest trading partner and Canada is natural resource (read: oil) rich.   The Canada dollar tends to follow the price of oil.   Have a look at the ten year history  of the Canadian dollar relative to the greenback here:

http://www.xe.com/currencycharts/?from=CAD&to=USD&view=10Y

Did you notice how the value has increased from approx. 80 cents to par in less than two years?    This means that everything in the US is 20% off...including all the goods and services you have to offer.   Also, over the last several years UPS, USPS and Fedex have all gotten better at providing better, cheaper, faster transborder delivery services.   Are you getting your share of this important market?    Well, if your sales to Canada are not approximately 10% of your US sales and/or if your sales to Canada have not grown approx 20% Y/Y in the last year I would say you are lagging.

You may also want to ponder the following:

1.  Canada, being a much smaller country, does not have the product breath and depth of selection that the USA does.   "I simply can't find it in Canada" is a phrase commonly heard from Canadian customers.   This often translates into a certain level of price insensitivity, particular when the cost of buying the product is much less than the cost of not having the product at all.....a common occurrence in B2B.  

2.  Many Canadian businesses have US subsidiaries and US delivery points so make sure you take a look at your sales to border towns as an indication of your Canadian business.   If  you have disproportionately high sales to the "five Bs" (Blaine, Bellingham, Buffalo, Burlington, Bangor) I would suggest that is Canadian business.

3.  Having Canadian inbound and outbound sales representation is key.   Having a US based rep who doesn't know Saskatoon from Sudbury is just insulting.   (I am reminded of the last encounter I had with a telephone rep in India who did not know where Atlanta was.)   Even if you ship from the US (which would be wise) invest in a Canadian call center or service bureau.

4.  My intelligence tells me that Canada is growing, right now, at about twice the rate of the US.

So, maybe it's time to re-look at Canada.   Who knows, you might want to take your summer vacation there and do a little market intelligence work!

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

 

 

 

 

The Chinese versus US education system

Diane Sawyer of ABC News did a particularily interesting segment tonight on education in China. Here are some of the things she reported.

1. The USA has dropped from #1 in the world to #12 in the world in the number of per capita college graduates.
2. China this year will graduate four times as many college grads as the US.
3. Chinese grade school students spend 41 more days a year in the classroom and have 30% more instruction hours per year than US students.
4. The Chinese education system is rigorous and learning is by memorization. The American system is creative, original and inventive....thank goodness!

Something to think about!

 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221             

UK catalogers entering the USA.....really?

I have just returned from ECMOD 2010 in London, the annual gathering of UK/European direct marketers.    While there, I gave a presentation on "Managing Multi-Channel Metrics" a hot topic these days.   Many struggle with how to do it effectively.   Email me for a copy of the presentation if you like or visit my website, www.b2bdmi.com.

While at ECMOD I met several catalogers who have recently entered the USA successfully.   It is not something I hear everyday so I was intrigued by the discussion.   Especially when they did it at a time when US catalogers are struggling.   I was also wondering how such seemingly small direct marketing companies could successfully sell in the USA and fulfill from the UK.   In a word, the key to their success was, quite simple, unique product and it reminded me, once again, of one of the most important basics of our industry.....unique, hard to find, exclusive products.   I am sure as you read this that most of you will groan and say "We know that!"  but my conversations with these UK catalogers revealed that they worship unique product.  In the US, we just know it.  They worship it at the alter of product.   There is a difference.    It reminded me once again that "we are what we sell" and that if we don't have something different, something new, something ever exciting and cool, something benefit laden and cost effective, something worth talking about....we will die.    It is good to remember this when our response rates and sales per page start falling.   Could it be that our products are boring, common, irrelevant and just plain "nothing special".    For all the time you spend in your organization figuring out how to integrate the relentless wave of new technologies I would suggest you balance that management energy by finding something better to sell.   Good B2B organizations seem to spend more than half their time developing new things to sell and less than half their time figuring out just how to go about selling them.   Just a thought.  Where does your company stand on its real committment to develop new product? 

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

The power and importance of mail

OK, Summer's over...back to serious work! I wanted to post a few facts about the power and importance of direct mail. In today's world of "web hysteria" I think it is important to remember what really drives most, if not all, B2B catalog businesses. In the spirit of full disclosure, much of this information comes courtesy of our friends with mailing related businesses like USPS and Pitney Bowes. Nonetheless, facts are facts. BTW, if you don't have a good working relationship with your USPS rep, you are missing out on good information and advice.

Ponder these facts and studies: (and read my conclusions at the end!)
1. Public Television stations have reversed their decline in acquiring new donors through direct mail campaigns. Finding from a study analyzing 700 campaigns representing 34 million pieces mailed:
• $295.32 was raised per thousand pieces mailed in 2009, up 16.3% from 2008.
• Average gift was $42.10 up from $41.64.
2. R2integrated news release, Marketers Indicate Social Media Important, Most Not Profiting, Many Still Learning, April 14, 2010.
• 54% thought social media was innovative and invaluable to their business
• 65% said their companies had not increased revenue or profited using social media.
• When it comes to using social media, 53% of respondents stated they were “still learning” or “behind the curve."
3. USPS Household Diary Study--Direct Mail, August 2009
• 79% of all households read or scan the advertising mail sent to their home
• 31% of households made a purchase as a result of ad mail received
• 48% of households read catalogs
• 28% of homes read credit card advertising
4. ExactTarget, 2009 Channel Preference Study, accessed November 3, 2009
• For young and old, direct mail directly influenced the purchase of an item or a service more than any other channel
• 76% of Internet users said they were directly influenced by direct mail; 67% were influenced by TV; email 58%
• 75% of 25-34 year-olds have made a purchase as a result of direct mail.
• 62% of 18-24 year olds purchased due to direct mail.
• 55% of teens were direct mail influenced.
5. Adweek Media/Harris Poll, Which Ad Medium Helps Bargain Hunters Most?, January 18, 2010
• Print outscored other media for ads that would help a person find bargains
• 23% said newspaper and magazine ads helped them find bargains; Online ads scored 18%; direct mail/catalogs 12%; TV 11%.
• 34% said that the type of ad makes no difference.
6. ATG's Cross-Channel Commerce: The Consumer View report, March 2010
• 78% of consumers are using multiple channels to research, shop, and ultimately completetheir purchase
• 78% use catalogs to browse and discover new products and services.
• 60% make a purchase via catalogs 4 times a year or more. 13% are using mobile devices to make purchase 4 times a year.
• Consumers browse and research online, then make the purchase in the store--39% went to the store to touch/feel the products; 36% visited the store to compare brands; 22% visited the store because they needed the product immediately
7. Outsell’s Annual Advertising and Marketing Study, March 2010
• 72% said multiple formats together were extremely or somewhat effective - Unica, State of Marketing 2010 Survey, March 2010
• 75% of marketers with an online presence make use of the online data they collect—customer interest, intent, behavior--when making their online and offline marketing decisions.
• 74% use web data to complement their email marketing offers
• 58% of marketers apply data collected online towards their direct mail marketing offers
• 46% use onsite personalized web offers based on integrating web data.

OK, here’s my take:
1. In today’s multi-channel world choice of media is never an either/or question. In fact, I see mail first, phone second and web third when it comes to driving (i.e. creating orders and new customers, not to be confused with “taking”) B2B business.
2. The mail and phone have “interruption power”. They intrude and must be responded to in one way or another. In the online world, nothing….absolutely nothing happens until a prospective customer sits in front of a computer. Think about it.
3. Online marketing and media are gaining an ever growing share of marketing spend at technology delivers new and different ways to find, talk to and service customers. It is spectacular growth but still a relatively small fraction of most marketing budgets in B2B catalog businesses. It will continue to grow faster and be a more important part of the mix as we apply our DNA “test and rollout” methodologies.
4. In a B2B catalog business, nothing (so far!) in online marketing is as important as managing your customer circulation effectively using RFMCP – recency, frequency, monetary, channel and product.
5. There is a world of online buyers out there. You will get your largest share of those buyers using a multi-channel approach....not any single approach.
6. As always….watch the balance. The balance between where you focus and where you get your results. I see too many marketing teams spending too much time on internet projects while neglecting the basics of the business. I also see too many companies making risky decisions about online marketing investments in the belief that it will TOTALLY overtake their mail or phone programs in the near future. Some are even stopping all their prospect mail, cutting customer circulation and reducing their telesales staff. While there are always exceptions, I believe this to be dangerous territory for most B2B catalog marketers....unless they are totally changing their business model along with such changes.

Are you struggling with the balance between your offline and online marketing investments?   Are you having trouble measuring the effectiveness/ROI of each.  Please call me.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221        

Are you becoming a virtual company?

As I look back over the last five years and forward to the next five I see a clear trend in our industry.  More and more companies are going virtual.    Now, become you assuming what that means let me share the observation that there are many different kinds of "virtual".   Here are some examples.

1. A company that has "at home" inbound customer service reps, either their own or a third party.
2. A company that has several employees who work remotely. This usually occurs with a good employee...or desirable new hire.....who can not re-locate for any number of reasons.
3. A company that has outsourced a major part of their business because they have realized that they are not experts in that area. Software development, fulfillment, call center, human resources, light manufacturing/assembly are just a few such areas.
4. An ecommerce pure play company who has chosen from the beginning to outsource everything. (I believe this is more a function of the fact the company was born when all the needed outsourcing services were already developed.)
5. A company that has realized the dangers of being too insular and needs outside input or vendor input in various operation areas to deliver continuous improvement.

It is important to note that becoming virtual is a continuum, not a zero sum game.   You never become 100% virtual, nor are you 0% virtual.  Everyone is on the continuumn. 

Some of the typical reasons for not outsourcing functions include loss of control/understanding, risk caused by vendor failure, vendor staff turnover, trust, etc.    (This is somewhat ironic as very often most of these issues are present when a company decides to perform all functions internally.)   On the other side of this issue are, I believe, more enlightened companies who realize they can not be expert at everything and they need to focus on only the critical differentiators like product and brand development.  More importantly, they realize that many areas of their business have become too complicated, too sophisticated, too technology laden for them to underwrite the cost of what it takes to become and remain leading edge.  They realize they must perform these functions co-operatively with others (other customers of their vendor) in order to keep costs in check, learn, advance and remain competitive.   After all, is it reasonable to believe that you can be leading edge in all areas of your business?   Is it reasonable to believe your employees won't get isolated, myopic or stale in their non-critical functions?   It is worth a hard look in the mirror on this one and at least a look at what others in your category are doing.   I believe we will continue to march towards the virtual company.  We will be pushed by our internal failures and shortcomings and pulled by the success and new virtual business model of many ecommerce pure plays.   No matter what side of this fence you are on, I would welcome a conversation.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).

 

Is your ecommerce solution performing up to your expectations?

I have been working with several companies recently who have been struggling to get their ecommerce results up to par. Most have been using entry level ecommerce solutions and/or developing their own solution in house. They are frustrated when they hear the better results of other B2B multi-channel marketers. While all businesses are unique, I do see some trends that have emerged between those that lead and those that lag in online peformance. Here is what I see in the leaders.
1. They have extremely good measurement and metrics and can answer just about any question I throw at them.
2. They keenly track their organic search results from keywords and traffic to conversion, AOV and LTV.
3. They are getting about half their total organic search visitors from non-proprietary search terms. The other half comes from branded company or product terms.
4. Organic search is now driving about half their total site traffic.
5. The gap between online and offline AOV is narrowing each year as online up-sell, cross-sell and customer service improve.
6. Retention of buyers online (those that come back and make a second purchase) is increasing substantially.
7. They have multiple "feedback loops" to keep them up to date with what their customers are thinking, doing, feeling.
8. They sites are a collaborative effort using leading edge partners/suppliers and their technologies to keep their sites at the leading edge in key areas - SEO, usability, site search, product display, etc.
9. They have the integration between their front end web solution and their backend OMS and fullfillment systems working seamlessly.
10. They are thinking about tomorrow's needs today, leading not playing "catch up". They are busy testing social marketing and mobile commerce programs now.
So, I guess the question is, how is your company doing in this critical area?

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).

Lessons from a Thai street vendor

I recently had the pleasure of traveling to Thailand for some business and vacation.   They call it the "land of a thousand smiles" and for good reason.  Thai children are taught to smile and be very well mannered.  Bangkok is a city of street vendors and I thought it might be useful to obseve their success in the context of good direct marketing.   Here is what I noticed....

1. They always make eye contact, smile and greet you with sincerity.
2. They invite you into their store or to look at their merchandise.
3. They ask you where you are from....to know you better and tailor their offer/price and to keep you engaged and involved.
4. They make every attempt to get to know you by observing who you are with, what clothes you are wearing, your language/accent.....even your sunburn!
5. They watch your eyes, your responses and shopping movements to know just what to say, or present, next.
6. They price based on everything they have learned from you up to the point when you ask "How much?".   They charge what the market will bear.
7. They quickly adjust and negotiate price based on your verbal and non-verbal language.  They make you work a little for the deal so you will feel you got a bargain and tell your friends.
8. They service you....offering to unwrap, try on, measure, etc.
9. They up-sell like crazy...."take three, good price"
10. They cross-sell like crazy offering 3-4 complimentary items with each purchase.   They clearly know how to make the most out of every customer.
11. They wrap and present your purchase like a gift and take your payment respectfully with honor.  It all makes you feel important.
12. They use your testimonial/example.   As you walk away from their stand they tell the next shopper "He got good deal, he happy!"
13. They say goodbye like you are their new best friend.  They put a card in your shopping bag with directions back to their stall.  They want you to come back and bring your friends!

Now, the average Thai street vendor is not a highly educated, worldly or experienced person but they have perfected their craft of direct selling and are proud of their skills and success.  Each sale brings them a sense of personal satisfaction and joy.  You can see it on their faces.

Can we say the same for our direct selling business?   Can we learn something from the Bangkok street vendor?   I think so.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).

Measuring your multi-channel performance

Many catalog marketers today struggle with accurately measuring the return on their various marketing investments. With many more customer communication channels being used it is hard to decipher what activity really drives demand. Most marketers today are using some sort of match back analysis where incoming orders during a period are matched to a mail file. Typically such analysis can lift direct source code tracking from 30-50% to 50-70%, but it is still not 90-100%. Increasingly, smart marketers are capturing web source data and attaching that information to the order file in order to do additional matchback analysis. Also, more and more, I see companies doing fractional allocation which recognizes that, just maybe, more than one marketing activity contributed to the order. Capturing the web source data and continuing the match back process using that data recognizes that some orders...probably a growing percentage of orders if you are doing a good online marketing job....are coming from SEO/SEM activity and have nothing to do with any offline marketing activity like mail. More often than not, however, I see that marketers are surprised to see that orders are associates with mail activity rather than online activity....as strange as that may sound to some. This is particularly true if the marketer assumes that a proprietary brand or product online search or direct entry of a branded URL was created from offline marketing spend. This would seem logical. Another point of confusion is PPC where searchers click on a paid ad versus an organic listing after a proprietary search. How much of the resulting order is attributable to the PPC spend versus the proprietary search? These are the types of questions that arise...and there are no right answers, just good judgements. The best methodologies I have seen make deploy good judgements and then track over time. Remember, changes in relative performance versus absolute performance are informative and actionable. The biggest mistake I see is doing nothing because marketing teams can not agree of what to do. Usually that discussion is more about finding out what is wrong with any particular evaluative process versus focusing in on what is right with it. There are also several interesting intelligence by-products from this analysis, not the least of which is realizing that PPC results vary greatly depending on what you, or your competitors, have in the mail and the resulting mix of search terms/traffic. This is certainly an area of performance that warrants a full day of discussion. I am too often amazed that millions of marketing dollars get spent with only a small fraction, often less than 2%, spent on measuring the ever changing return on such investment. To me this is as fundamental as RFMPC - recency, frequency, monetary, product and channel analysis - but few are doing it right. It seems we are all too busy "doing" and not spending enough of our collective brainpower on the "thinking". As always, if you would like to talk more about this issue....or any other that is drively you crazy....please email me. tjukes@b2bdmi.com