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IBM getting tough with opt-in rules

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Many Ivy League academics make consulting with Fortune 500 companies a lucrative, part-time gig. Some, however, can't ignore the lure practicing full time what they've long preached.

Gary Bridge is one of those Ivory Tower dwellers who's successfully made the transition. A former Columbia University business and psychology professor, Bridge joined IBM Corp. in 1995 and has emerged as an expert on database management and an authority on privacy matters. Bridge now serves as Big Blue's VP-worldwide market intelligence and oversees its global research forecasting, customer satisfaction and customer information efforts-and the $150 million earmarked for those efforts.

In a recent interview with BtoB, Bridge shared his insights on direct marketing, specifically the future of e-mail marketing. He also revealed that IBM recently introduced a sweeping internal e-mail marketing policy with severe opt-in rules-a program he said will put IBM at a short-run disadvantage but is crucial to its future success.

BtoB: What factors are holding back b-to-b e-mail marketing?

Bridge: There are several factors we've got to consider here-mainly, technical issues. For instance, globally, companies are having trouble finding the right person at the right time to have a conversation with. This goes back to e-mail addresses.

I'll bet you have two e-mail addresses or more. And you change these more often than you do your phone number. Now, along with that, 20% of the U.S. population moves around each year, so data decays.

Another problem is that some businesses are trying to use e-mail as a low-cost way of prospecting. They are annoying people because they don't have a relationship. IBM is blessed with lots of relationships around the IT world. A lot of times people come to us to start the conversation. How does this work? We capture what they send us and continue the conversation how they'd like to. It's different from a shotgun approach.

BtoB: How critical to IBM is e-mail direct marketing? How is it integrating it into its overall client marketing process?

Bridge: It's critical and growing more important every day. [Bridge predicted that by 2005, 80% of IBM's sales would involve e-mail marketing. He could not supply today's percentage.]

In the world we live in, you have to serve customers anytime, any day, from any medium. This includes remote devices.

Last month, IBM promulgated an internal e-mail marketing policy. We have severe opt-in rules. First, we require that prospects establish the relationship with us. We also have a volume control system that asks: Do you want more or less? Do you want a headline, or the whole story, sent to you?

This severe opt-in policy puts IBM at a disadvantage in the short run. In the long run, however, it will be an advantage. And there will be no arrogance here. We realize we're playing catch-up against Dell Computer Corp. and Cisco Systems Inc., who are elegant users of
e-mail and the Internet. We're on their heels now and are going to zoom ahead in the next six months.

BtoB: What led IBM to start this policy now?

Bridge: Why now? IBM is a big proponent of building trust. We're in a period of new technologies where we don't have rules. There's no sheriff. We not only want to set ourselves aside knowing that, but also want people to recognize us as a leader in privacy.

In 27 countries, the second most-common response to the IBM name is "trust.'' [The first is "global leader,'' Bridge said, citing IBM surveys.] And trust is key to the kind of products and businesses we sell. You can buy your [technology] anywhere. We want you to buy it from us.

We want to be viewed as being extremely clear on how our privacy policies work and be a leader in that regard. It's how we nurture our relationships.

BtoB: What could stop the growth of b-to-b e-mail marketing before it really takes off?

Bridge: That would be legislation that restricts the exchange or use of data. And that's going to happen if we cannot, as a community, build trust. We have to be clear on our own policies and who has access to data. And if someone looks at data, did they have a right to it internally? IBM has painstakingly put in place these types of procedures.

We direct marketers as a group have to label the bandits, the spammers, and exclude them. If we don't identify the bad guys internally, we're going to end up having to do it publicly. And that's going to raise costs.

And then there is volume control. We need to constantly let our targets tell us whether what they are getting is too much or the wrong stuff.

People are concerned that if we do all this, we'll lose our audience. If we don't, we'll lose them anyway.

BtoB: On privacy: What concerns should be keeping b-to-b direct e-mail marketers awake at night?

Bridge: Privacy and security are two of the most important issues facing us. Most people haven't thought of that. What should be keeping us awake at night is this: Have we gone through all our business processes to make sure security is tight, or are there doors open? IBM handles this with a practice that audits systems. We call them ethical hackers. Even the U.S. government uses us to attack their own systems.

For privacy you need to think: 'What data do I want to use, and how do I want to use it?' When in doubt, don't take advantage of data, but instead, ask if you can use it. People will give you a tremendous amount of data if you ask them up front.

BtoB: What is the best way for b-to-b marketers to manage data?

Bridge: There are oceans of new data on the way. It will be doubling and tripling over the next three years. It will arrive driven by technology.

There are more than 110 touch points for capturing data. Companies need to learn how to use them. In the old days, you could only respond by mail. Now, we have e-mail, the fax, the Web, and wireless fax and e-mail, WAP [wireless application protocol] phones. Managing that mix is important. Increasingly, customers are telling us that they want information from all of these outlets.

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