Terry Jukes - President of B2B Direct Marketing Intelligence, LLC

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        

Retail's Struggles Are B-to-B Catalogers’ Gain

B-to-B catalogers always have had several advantages over retailers. They can maintain and offer wider and deeper product offerings as they're not limited to retail space. They can provide expert telephone sales and support, warranty and repair services, installation advice, and other “knowledge-based” services much better than a retailer can. Furthermore, new Web site shopping functionalities make it easy for customers to find, shop, learn, compare prices, order return and access a host of other related services much better than they could if they were standing in a store.

Now consider slumping retail sales and the impact of that on the ongoing viability of any and all retail stores. Think of the retail competitors in your market and what they might be doing to close marginal stores and cut their losses. Office Depot, Lowe's, Home Depot, CompUSA and others have announced store closings.

Also, think what will happen if this trend continues for another year or two. Consider the stores that remain and how they'll be cutting staff and services. And then there's inventory; inventory reductions impact product selection and in-stock availability. Could this benefit your B-to-B catalog company and present it with a unique opportunity?

Follow the steps below to help identify potential growth opportunities:

• Identify the retail competitors you have.
• Compile a list of all their stores and, in particular, the ones that may be closing.
• Target your catalog mailings to their trading areas. You might even communicate that “X store at Y location will be closing soon” and invite the shopper to try your offering.
• Ink-jet local messages on your catalogs. This can be a cheap and effective way to target local trading areas.
• Develop an appropriate “welcome offer.” Push your competitive advantages over retail, and give prospects a reason to try you now.
• Target your outbound telesales to businesses in the trading area of closing retail stores.
• Communicate to your customers in your catalog the advantages you hold over retail. For example, a headline like, “Is your neighborhood retail store closing? If so, we can help.” This might get your shoppers thinking about what would they do if their local sources of supply dried up.

With retail floundering, now's the time for direct marketers to stress their competitive advantages and steal market share from that channel. Good Luck!

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).

Tips for Managing Shifting Inbound Call Volumes and Staff Costs

Last week I provided several tactics your company can use to improve the performance of your inbound call-center reps. This week, I examine another key performance area in your inbound call center: how your call-center management team reacts to shifting inbound call volumes. In today’s recessionary environment and online ordering world, historical call volumes based on the number of catalogs mailed may not materialize like they used to.   

A call-center manager schedules staff based on projected call volumes, which are usually derived from mail volumes. This forecast never will be 100 percent accurate — there will be too few or too many reps at some point in time.

If there are too few reps, most companies I know have other employees who can be pressed into service at a moment's notice until additional call-center staff can be called in. When there are too many, the manager quickly must adjust by sending reps home, assigning them to other tasks, among other possibilities.   

The bottom line is that call-center managers must measure staffing volumes by their ability to adjust staffing (i.e., costs) to “flow like water” with inbound call volumes. This is all while maintaining acceptable service levels.

It's not about how they did in comparison to budget, but how they did in comparison to reality; what really happened hour by hour. Many companies’ budgets don't account for the flexibility that allows managers to make hour-by-hour adjustments in staffing.

Here are some tips to consider when planning your company's call-center needs:

• use split shifts, part-timers and seasonal reps;
• use a backup call center or virtual reps to help handle peaks in call volumes;
• review staffing and service levels against call volumes every hour;
• have training planned that can be done immediately when call volumes slow;
• use nontime-sensitive work (e.g., collection calls, mail orders, etc.) to occupy reps when call volumes drop;
• organize backup agents, possibly marketing staff, to take calls when call volumes spike unexpectedly;
• instill a spirit of flexibility so everyone “gets it" that responsiveness is key; and
• provide incentives to support that spirit of flexibility.

 

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).

 

How to Improve the Productivity of Your Inbound Call-Center Reps

It's no secret that there's no better time to sell to your customers than when they're already calling to order from you. When they call to place orders, they're open to you initiating a consultative selling conversation. It's also no surprise that you have some reps who do a better job at this than others. But do you know exactly how much better some inbound reps are than others? 

I visited a call center the other day where, after some discussion and preliminary analysis, I found the variance in sales and average order value between the very best two to three reps and the worst two to three reps was greater than 100 percent. At the same time, the variance in their salaries was minimal. So there's a huge opportunity cost of lost sales by not having all your sales reps perform within an acceptable range. If you haven't studied this, you'll want to.

Measure the following metrics for each rep:

• time available to receive calls vs. time paid;
• calls answered;
• orders taken;
• conversion (orders taken/calls answered);
• average order value;
• line items per order average;
• units per order average; and
• returns — transactions and credit dollars.

Over the course of a month, there shouldn't be any incoming call variations. Check to see if any logical differences exist between shifts or regular reps and tech support-type reps. You want to get all of your reps performing within a 30 percent range of each other. You also want to extrapolate how many more sales dollars you might achieve if all your reps performed like your best reps. Then ask yourself, “Can your best reps produce more?”   

Try hiring a “racehorse” rep. This is someone with more product knowledge, industry experience and/or sales experience that would produce a marked increase in performance. Even if you have to pay this person 50 percent more than your average rep, it's often a good investment if the rep can increase conversion and average order value by even 5 percent. Often, however, the rep can deliver a 15 percent to 20 percent increase.

Also, don’t assume that length of service makes for a better rep. While on-the-job experience certainly helps, many companies operate with reps who are set in their ways and find it hard to adapt to changing market conditions, like we have now. Sometimes, you need to give rigid employees a chance to be successful somewhere else.  

Now more than ever, you need to produce more with limited or less resources. Improving your inbound call-center reps' productivity is one of the best ways to do that.

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).

 

Hope Isn't a Strategy

We're hearing a lot about hope these days. Barack Obama was elected on that word more than any other. While hope and a vision for the future are necessary parts of any business strategy, they're not a strategy in and of themselves. B-to-B catalogers need something a little more tangible, especially in today’s increasingly difficult environment. Let’s face it: Most of us are being squeezed by some combination of rising costs and, more importantly, flat or falling sales volumes.   

Since hope isn't enough to solve these problems, you must be prepared with a definitive course of action as business conditions deteriorate. So what's your plan? What's your contingency plan if conditions get worse or stay unfavorable for all of 2009? Managing your costs and cash flow are more critical now than ever. Here are few ideas to consider.

• Your payment days outstanding are likely to increase. Monitor them closely, and be prepared to add collection efforts and/or incentives for faster payment.
• Most credit-granting companies are restricting credit. Now is the time to review your credit-granting policies. While you don’t want to inhibit sales, you don’t want to sell something that you won’t be paid for either.
• Stay close to your outbound calling folks. They're the front lines and can read the spending mood of your customers by segment.
• Provide incentives for your best customers to consolidate all their business with you.
• Reduce inventory levels, especially in higher-ticket items. Refine your “just-in-time” delivery from vendors. If you can take 10 percent of your inventory value down, you'll save a lot of needed cash.
• Manage your payroll expense in line with sales. Create flexibility in payroll by using temps or contract employees. Consider a salary freeze or even a salary cut as alternatives to laying off valuable employees. Your employees watch the news, too, and will likely understand even if they don’t agree.
• Look for lower-cost mailing pieces for those marginal segments of your prospecting universe. Test postcards or solo mailers vs. a more expensive catalog to your online buyers. Make sure you co-coordinate any pay-per-click advertising with your mail dates and the mail dates of your competitors.
• Make sure your inbound call-center reps have many upsell and cross-sell offers, and are training in consultative selling. There's no better time to sell than when a customer is ordering.
• Always remain confident, calm and purposeful in the face of adversity. Remember, your employees are counting on you to guide them through any business storm.  

After you've done all the above, then be hopeful. History shows that neither bad times or good times last, and we'll come out the other side at some point.

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).

 

Happy New Year?

Given the lackluster sales that most B-to-B catalogers are experiencing, many are wondering just how happy, or sad, 2009 will be. Clearly the marketplace has shifted in a way we've never seen before. But everyone knows one thing's for sure: The way you did things in the past won't be what you need to do in the future. The burning question is, “What do we do?”

The first thing is be brutally honest with yourself. I hear many companies that are in denial, believing business conditions miraculously will return "in a few months.” Forget it. What you see now will continue for 2009 and most of 2010, at least. Start thinking radical adjustments if you haven't already. Here are five tactics to consider.

1. Outsource. You no longer can afford to perform activities that outside service bureaus can do better and cheaper. It just doesn't make sense to run a call center or handle programming, payroll and a host of other areas when there are service firms that specialize in your business area and perform these functions on behalf of 10 or more similar B-to-B catalog operations. "But our business is different" is often the refrain I hear, but you need to take a very close look at that justification. It's very likely you no longer can afford that bias. You must reduce your operating costs.
2. Manage your risk. Most companies know their profit and loss statements fairly well, but what they don't understand is the level of risk they're taking in a down economy. What will happen if sales fall 5 percent, 10 percent or 15 percent? What about if your supply chain in China is disrupted (think food or toys) or costs increase dramatically? Where are the "shock points" that could put you under?
3. Look for the bright spots. With a new president coming into office, there will be changes. Look for the bright spots, and adapt quickly. Infrastructure rebuilding, health care and renewable energy all look like potential bright spots. Also, the tectonic shifts in the lending industries will present new opportunities. Lenders and mortgage brokers are fast becoming loan medication officers and asset portfolio managers.
4. Focus on the "must-haves," not the wants. Go through your product offering, and promote the items your customers must have to keep operating, not the discretionary items. Reposition offers with quick paybacks or lower prices. Give bonuses or rebates for loyalty and higher value orders. Your customers don't want to spend; you need to entice them further.
5. Look for acquisition opportunities. As smaller competitors falter, you have the opportunity to acquire good assets at very reasonable prices. Stay alert and in touch with any acquisition prospects you have.

 

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).

 

How to Survive a Recession

Someone asked me last week, "What are the best ways to survive a recession?" Without thinking much, I responded, “Love the customers you got!" As I began to reflect on my knee-jerk answer, I realized just how important it is for B-to-B catalogers to do just that.

B-to-B marketers, unlike their B-to-C counterparts, have many customers who provide them large sums of revenue each year. The range in average order values, average annual spend values and lifetime values by site is usually great.

When you think about it, it stands to reason since B-to-B marketers sell to various sized customers (businesses). If you sell office supplies, for example, a buying site with 2,000 employees generally buys much more than a site with 20 employees. In fact, with most B-to-B catalog companies you generally find that 20 percent to 30 percent of the customer sites account for 80 percent of the sales. So in tough times, it's much easier to get a few more dollars in sales from 20 percent of your customers than the other 80 percent.

Love the customers you already have. Arm your outbound telesales staff now with new products, offers, services and other reasons to call your best customers.

Do the Right Things
Another conversation I had last week was with representatives of a company that wanted my counsel on their catalog's creative. They asked how they could improve it to get more sales. They thought the creative issues through and had a good plan to improve performance. After an initial conversation about the makeover, however, I began to understand that the company had many other larger, more immediate opportunities before it.

After all, changing your catalog's creative is a minor piece of your overall success that's hard to measure. And, has a longer-term payback. You need immediate return and easy measurements. Generally, you look for significant and definitive positive impacts, not “minor adjustments."

Developing new outbound sales programs is a good example of a project that could have significant and immediate benefits. The point is, don’t just do things right; make sure you do the right things. List all of the possible things you could or should do to improve your business, factoring in the cost, time to implement, risk and other key variables associated with each. Then prioritize to make sure you do the right things first.

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).

 

6 Tips to Increase Your Productivity in 2009

As many catalog/multichannel B-to-B and B-to-C marketers do their annual planning and budgeting for 2009 right about now, I suspect many are having a difficult time given the events of the past six months. Who really knows what 2009 will bring?

One thing to focus on during your planning process is how you'll increase productivity, no matter what your function or position is. As a B-to-B catalog marketer, consider the "outputs" (e.g., sales, new customers, retained customers, account penetration, others) of your area of responsibility and know your "inputs" (ad spend, payroll costs, etc.). Plan to increase your productivity 5 percent or more each year.

Easy to say, harder to do, but maybe these six tips will help you reach that goal of 5 percent:

1. Find ways to apply technology to eliminate man-hours. There's a great deal of new software out there for the Web, catalog production, call centers and CRM that can impact your work processes. Look for technology specifically designed for direct marketers with embedded operating intelligence.
2. Search for ways to maintain or increase customer contacts by phone or mail. Develop a less costly mail piece for your online buyers, for example, or use e-mail or auto voice mail technology to extend the reach of a telephone account rep.
3. Meet with your vendors to solicit their ideas. Better still, give them the mandate of increasing their productivity 5 percent each year. It works best when it's a continuous process, not just a year-end event.
4. Develop a detailed list of things you spend your time on, and eliminate the bottom 20 percent of activities that have little or no return.
5. Meet with your staffers, and enroll them in the process. Be ready for blunt feedback on how your business needs to change to realize higher productivity.
6. Cut back on e-mails and meetings. I recently heard of one company placing limits on the number of e-mails any one user could send each week. Another company holds meetings standing up to make sure they're short and to the point.

Given what we've experienced in the last three months, I'd also advise that in this upcoming year you pay particular attention to the tolerances and flexibility of your annual plan. Given the uncertainties ahead, you'll probably need a set of contingency plans for 2009.

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).

 

Now Is the Time to Review Outsourcing Opportunities

Given the tough economic times and sales levels that are most likely below plan, most B-to-B catalog managers are looking to reduce overhead costs without affecting revenue-driving activities. Much of the “low-hanging fruit” has been had when it comes to cost savings, and I submit that now is the time that many of you must face “significant structural change” as an option. Inevitably, your discussions will lead you to consider outsourcing noncore functions in your company.

The first question you might be asking is, “What’s a noncore function?” The answer varies for every company, but generally, I consider noncore functions to be anything that doesn’t directly touch a customer. Common examples include building management, HR, IT, accounting and training.

Increasingly, however, smart catalogers are moving closer to the “virtual corporation” model where even customer-touch functions are being outsourced. Functions like inbound and outbound call centers, fulfillment services, warehousing, Web site management, catalog production, and circulation planning are now all on the table to be considered. When entering the “make vs. buy” discussion, start with the following three premises.

1. The outsource vendor can perform the function better at a lower cost. This is only logical if it focuses on one function and does it on behalf of several like-minded catalog companies. Lower cost is easy to define; better takes a little more analysis.

2. That you’ll maintain or increase the level of functional knowledge and quality control when you outsource.

3. There are significant savings to be had through outsourcing.

Gone are the days when you can say, “Nobody can do this as well as we can.” In the last 10 years, many specialized vendors have invested in the people, software and transactional volume to do it better than any one catalog company alone. Developing your own fulfillment software would be a good example of this.

Not outsourcing is an option. Not considering outsourcing in a methodical, detailed way is not. (Please also see the current poll question about outsourcing on the CatalogSuccess.com home page and cast your vote.)

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).

13 Steps to Make Your Business Recession-Proof

Given what’s happening in the catalog world these days, many of you must be thinking about what can be done to help make your business “recession-proof.” While hoping for the best (i.e., a short, mild recession), plan for the worst (a long, deep recession).

Consider taking the following steps to help recession-proof your business:

1. Freeze hiring. Don’t replace vacated staffers, and focus on employee productivity. Your employees know times are tough and are ready, willing and able to do more. Just ask them to.

2. BUT, avoid layoffs. Your staffers won’t mind taking on more work if they’re assured job security.

3. Hold off on major capital expenditures.

4. Collect payments efficiently. Now is the time to stay on top of your accounts receivables. Cash is king, so be prepared to offer discounts for complete payment if necessary.

5. Stretch out payments to suppliers. Ideally, this can be done with their permission through negotiations.

6. Keep inventory levels low, and preserve your cash. This is particularly true if you have short, domestic-based delivery times.

7. Sell to existing customers. Stay close to the 20 percent of your customers who account for 80 percent of your revenue with regular phone contacts and special offers. Don’t take their loyalty for granted, or risk letting them be scooped up by the competition.

8. Continue mailing, no matter what you do. If you need to reduce costs, look at lower-cost mail pieces for your online buyers.

9. Focus on the basics. Forget the exploratory projects for the moment, and focus on the handful of projects that’ll make a difference in the short term. Is it shortsighted? Maybe, but survival is shortsighted.

10. Ask your vendors for help. Check on the availability of longer payment terms, larger discounts, more product support, customer financing programs, training or anything else your vendors can do for you.

11. Remain positive and realistic. No ship goes down until it’s under water. Until then, the fight is still on. Things often seem bleak before you catch a break.

12. Be the leader you’re supposed to be. More than ever, now is the time for management to be present, visible, flexible and ready.

13. Don’t simply “hope for the best.” Success is where luck, opportunity and hard work meet.

Good luck weathering the storm!

 

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).