$43.6B U.S. agency revenue
In light of such evidence that "green" is moving mainstream, marketing's proverbial four "Ps"—product, price, place and promotion— may soon be joined by a fifth: protecting the planet. But professionals striving to keep pace with their customers on the environmental front may be surprised to learn that the road to sustainability isn't simply paved with post-consumer recycled paper. On the contrary, reducing mail stream waste through smarter database marketing practices (thereby conserving trees, water, fossil fuels and other natural resources) is an ideal way to improve a company's environmental impact.
Assessing b-to-b's impact
According to the Direct Marketing Association's 2006 "The Power of Direct Marketing Report," growth in b-to-b direct marketing advertising expenditures is outpacing that of the consumer marketplace—so much so, the DMA expects total b-to-b direct marketing advertising expenditures to achieve parity with that of the consumer market by decade's end.
On the surface, this sounds like good news. But some professionals expressed concern about the amount of waste in b-to-b direct marketing. There are data quality issues caused by inadequate attention to list maintenance and data management. "Poor customer selection, duplicate catalogs being delivered to customers and catalogs returned due to address errors are all key contributors to 'marketing waste,' " said Kristin Micalizio, VP-direct sales at Office Depot.
Then there's targeting—or the lack thereof. As in the consumer world, business decision-makers have become accustomed to regularly receiving—and dumping—marketing mail that's neither relevant nor timely based on their purchasing habits.
"I don't think companies are giving any thought to the value of customer data integration, predictive modeling and data analytics as a way to reduce their environmental impact," said Jeff Zabin, director of marketing at Fair Isaac Corp. "There are a lot of companies adopting these techniques to become more effective in how they go to market … but as a by-product of that effort, they can make a real difference."
What marketers can do
One area ripe for improvement is data hygiene. It might sound like direct marketing 101, but "maintaining in-house do-not-market lists; monthly use of the DMA's Mail Preference Service; and maintaining clean mailing lists by use of NCOA, address element correction, ZIP code correction and Delivery Sequence File (DSF) go a long way toward cutting down the volume of unwanted mail consumers receive," said Pat Kachura, senior VP-ethics and consumer affairs at the DMA.
It's also essential to keep house files up to date—no easy task given high turnover in the business world. Dick Goldsmith, president of Horah Group and a member of the DMA's Committee on Environment and Social Responsibility, said marketers need look no further than their own mailboxes to understand the scale of the problem. His company recently received a stack of catalogs from an office supply provider. "It was a foot high—all the same ones, just multiple copies—and only one [recipient] was still working here," he said.
Data accuracy can be improved by "breaking down data silos and creating a unified view of clients and customer relationships," Zabin said.
Lance Osborne, Acxiom Corp.'s CDI solutions marketing manager, recommended designating a "data steward," someone charged with "developing and enforcing common and consistent rules for using and sharing customer data across all lines of business and departments." The best customer data integration vendors offer consulting in this area, he added.
Some companies might consider supplementing data integration efforts with a personal approach to data maintenance. "Call the house file or send out postcards [to qualify recipients], and then pay attention to the responses," Goldsmith said.
Once solid data management fundamentals are in place, companies are better equipped to take their marketing—and their environmental goals—to the next level by optimizing mailing messaging and frequency.
Office Depot's 'mail streams'
In addition to moving many of its catalogs online, Office Depot, which follows a "buy green, be green and sell green" vision, has gotten smarter about its mail streams. "We have developed a variety of mail streams in order to optimize the number of catalogs that customers receive, so that customers who require less direct mail do not receive books that would end up as waste," Micalizio said.
Whatever tack marketers take to improve their precision, Zabin said "the upside potential is huge, not only in terms of … the moral imperative but because more customers [are] looking to companies to become more closely aligned with their own value systems."
Of course, a vital piece of the puzzle is measuring one's environmental impact, setting benchmarks for enhancements and tracking successes—something the DMA acknowledged last month in a board-approved resolution to "move members along a continuum of ongoing environmental improvement over the next five years."
The DMA is calling on its members to establish internal measurements to benchmark their progress during the coming year. The group's board has also committed to developing target goals for marketers in five key areas: paper procurement and use, mail design and production, packaging, recycling and pollution reduction, and list hygiene and data management. Its goals and corresponding timetables will be announced in June 2008.
Until then, Zabin said, even traditional marketing metrics, such as response rates, can help marketers assess and reduce the amount of unwanted mail they produce.
"Every company should aim to reduce the number of catalogs and solicitations they're issuing per thousand customers, clients or target prospects, and put a time frame around [improvements]," he concluded. "The goal should be to reduce the environmental impact you're making without negatively impacting your marketing objectives."