Targeted tactics drive response

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Relevant. Targeted. One-to-one. Go to any marketing or advertising event and those words will likely be used by speakers. They are hardly new concepts, but online direct marketing has accelerated marketers' ability to more precisely target b-to-b customers, and they are becoming much more tactical in driving response.

BtoB Senior Reporter Carol Krol held a virtual roundtable with three top direct marketers to solicit their views on trends in targeted marketing and changes within the direct marketing industry. Participants in the discussion were: Phil Gibson, VP-corporate marketing at National Semiconductor Corp., a manufacturer of high-performance analog devices for electronics systems; Theresa Kushner, director, customer intelligence and marketing intelligence at Cisco Systems; and Kristin Micalizio, VP-direct marketing at office supply company Office Depot.

BtoB: Direct-mail volume has been depressed the last year or two. Is there a long-term shift away from direct mail marketing within your organization and how are you replacing it?

Kristin Micalizio: Direct mail marketing is a very important piece of Office Depot's marketing strategy. Our ongoing strategy will continue to include direct mail, catalogs and online marketing.

In both online and offline direct marketing, customer segmentation, personalization and targeted message relevancy are important drivers of greater response and retention. As Office Depot celebrates its 20th anniversary, we will continue to contact our customers in the ways that they want with creative formats and exciting marketing pieces.

Theresa Kushner: I think direct mail is looked at as "oh so 20th century." That being said, we're beginning to see that certain kinds of direct mailwell-targeted, salient offers in attention-getting packages—are still very effective. Increasingly, we're realizing that [sending] direct mail—the right direct mail—is a great way to get the attention of decision-makers. The "right" [direct mail] is something that provides value. Gone are the days of mailing trinkets just to generate a response. It's expensive and ineffective. What's replacing it is the easy-to-send, inexpensive (or so it seems) e-mail. In fact, e-mail is so easy to send and so inexpensive that the only cost of doing so is the [potential] loss of a customer—or at least the [potential] loss of permission to e-mail the customer. I think if we considered the cost of a nonrelevant e-mail to our customers as the loss of all potential revenue from that customer, we might be more judicious in our use of e-mail as a marketing technique.

Phil Gibson: While National Semiconductor has always done fulfillment and catalog distribution by request, we have shied away from direct mail as a marketing tool since the Web came into being more than 10 years ago.

We focus our efforts on e-mail newsletters that are personalized by request categories.

We also run fairly sophisticated e-mail marketing dialogues that are triggered by user activity. The first activity by a user triggers a correlated marketing response. That begins a tree of potential follow up e-mail offers depending on the user's action/inaction. All of these activities are tracked, and leads are passed on to the salesperson or distributor who should follow up and engage [those potential customers].

For those whom we engage, we also prepare the salesperson with coaching on how to win that business with that customer.

None of this would be possible, nor as fast or effective, through printed mail.

BtoB: Which online media channels do you consider to be direct marketing channels?

Kushner:Not to ignore your question, but I'd like to bring some clarity to the words "direct marketing" versus what we do inside most large companies: "demand generation." The term direct marketing has become so synonymous with direct mail that most corporate practitioners have long since changed the name of the function so as to encompass an approach that could be described as "interruptive marketing."

In the world of today's empowered customer, interruptive marketing is becoming less effective. As marketers, we need to be ready to engage the customer whenever and wherever the customer wants. That means that search, e-mail, blogs and even online chat functions could all be classified as direct marketing, especially if you consider that all those interactions have the main ingredient—[the] company [communicating with an] individual contact. And in this world of collaboration, does it matter what we tag as a response? The measurements we need to concentrate on are those that show the progression of the contact throughout the buying cycle. Response may no longer be relevant.

Gibson: National Semiconductor's marketing mix includes print advertising in trade publications, printed selection guides and specialized brochures, and other printed media circulated through our distribution sales partners. While those are hard copy, they are all reused and reposted by all of our print and distribution partners on their online Web sites. This all increases awareness and pulls people to the Web site.

In addition to those physical tools, National Semiconductor uses e-mail, search keyword and term tagging, e-mail dialogues, online training in the form of Analog University—which offers 100 training courses for new engineers or those seeking continuing education?and online audio/video seminars. The online shows have enabled us to create useful partnership marketing sites that represent and promote related-technology companies in productive ways for our customers. For example, they train people on ways to create test programs for analog circuits that include National Semiconductor parts. And, finally, we have our online design environment called Webench. This [Web] community is a collection of both reference design circuits and intelligent, expert-based design calculators that automatically creates circuits that deliver the specific performance requested by an engineer visiting the site. Once [the design is] created, the designer can [put] it through simulations electrically and thermally and, if it meets their desires, they can order the kit of selected components and build them into a working design the next day based on the delivered board and schematic.

Google is certainly a dominant provider of search navigation for our Internet audience. That is a critical venue, and we have to be good at managing that resource. One means of doing this is our membership in the Google advisory board for the technology segment. That helps us to stay on top of trends and how to leverage their search dominance.

The Internet, and our Web site, is a great medium to promote awareness, but its real advantage is the ability to reach out and touch every lead. We do this directly through electronic means or through the salesforce if that [strategy] is more likely to win.

Micalizio: Within the online space, everything we do is part of our direct-marketing efforts or intended to drive purchases in our multiple selling channels. E-mail is our largest online driver of one-to-one marketing. Search, display advertising and contextual advertising have opened up new opportunities, allowing Office Depot to market in a more one-to-one fashion through behavioral, geographic and demographic targeting. The online space is very exciting and ever-changing. We are eager to move into the many different interactive formats that are possible in the online or virtual space.

In addition to e-mail, which is the most traditional form of online direct marketing, we are using new forms of direct marketing such as relevant marketing messaging based on behavioral targeting online and post-click targeting campaigns within ad networks online. Post-click or post-visit targeting is communicating with the shopper that browsed your site after they leave. For example, some ad networks let you target customers who had visited your site within their ad network. This allows the advertiser to buy relevant ad space that is targeted to a previous site visitor. We are looking to be part of some groundbreaking marketing techniques with unique formats and methods of touching customers as we move into the future.

BtoB: How are you applying direct marketing principles to your interactive marketing strategy?

Gibson: Any kind of interest shown by a customer is tracked. Once interest is shown, we check our database to determine whether that customer is an account-holder. If the account is known, the appropriate salesperson is notified. If the account is new, we begin a filtering process whereby that account is qualified. If the account is found to be of interest, it is delegated to a direct salesperson or delegated to distribution with guidelines on what to do with this customer.

We also use e-mail newsletters to drive an exposure cycle with our sales force and channels. Those newsletters direct them with a list of products to promote and an electronic tool with which to promote them. Any leads generated through this manner are credited back to the channel that triggered them through outreach and exposure. Interactive marketing drives our lead generation and our follow-up.

Micalizio: Post-click targeting campaigns and behavioral targeting are part of our most recently adopted forms of interactive direct marketing. E-mail and search are our traditional direct marketing vehicles, and we continue to come up with greater segmentation and personalization strategies that drive share of wallet, accelerated conversion and up-sell opportunities within our product categories for our customers. In a recent post-click targeting campaign, for example, we partnered with [an ad network] to target site abandoners who later visited an network site where we purchased ad banner space. We targeted that past visitor with an Office Depot message. An example of greater segmentation and personalization in e-mail was our recent effort to target paper buyers who do not buy ink from us with an ink message and offer to get them to try that category.

Kushner: Considering that direct marketing is just good marketing, I would say that we're applying those principles in our online relationship marketing program. In the interest of creating a relationship with the customer directly online, we've had the most success with this program aimed at small-to-medium busi-nesses. It uses all the basics of direct marketing?targeted data, relevant offers, interesting creative and sales follow-up.

BtoB: What are you using e-mail for in terms of direct marketing? In addition, is it still more a retention tool for existing customers than a prospecting tool?

Micalizio: We have a multichannel approach to our e-mails and therefore our strategy is a mix of retention, growth and prospecting. For example, a customer who signs up for our free Worklife Rewards Program in one of our retail stores and provides their e-mail address is part of our e-mail stream. We share enticing offers with them that will hopefully cause them to shop in both our retail and Business Solutions Direct sales channels. We also use e-mail to share valuable information with customers, including weekly retail inserts, NASCAR sponsorship-related offers, conferences, store grand openings, hot sales items and new products and solutions that we have to offer.

Kushner: Because we are a networking company, I think that we use e-mail as much for acquisition as for retention. As we move more into the emerging countries, we're finding that e-mail is probably as accepted as postal mail. Some of these countries have skipped whole generations of infrastructure (such as building a postal system) and moved immediately into wireless communications. This puts a huge burden on us to find new ways to attract these customers, collect their e-mail addresses and [secure] permissions to market to them. We have to be relevant the first time we touch them.

BtoB: What keeps you up at night? Which issues concern you most when it comes to b-to-b online direct marketing?

Gibson: Google continues to grow in influence and that is a caution. Innovations that I create through the Internet are very exposed, and competition can usually follow them within two to three years, so the advantages I create are fleeting.

The biggest problems I have, honestly, are internal to National Semiconductor and seldom external in nature.

Kushner: Since I am responsible for marketing data privacy, I tend to stay awake thinking about how to best manage the use of e-mail. I've been asked several times to address perceived "over-e-mailing" issues by sending out edicts to marketers about how many messages they can send to a customer in a given time period. I always object to that strategy. As marketers, we should communicate with the customer as often as the customer wants or needs and always about what the customer wants or needs. Controlling numbers of e-mails is not as effective as managing the messaging to the customer.

Micalizio: I think it is important to balance wanting to be cutting-edge and adding more enhancement features with basic blocking and tackling. Verifying that our customers' experience matches our customers' desire is key. There are so many new options and choices to consider in the online space that making sure that we put our efforts and partnerships with the right partners, vendors and software applications is important to us.

[Another challenge is] ensuring that we have created an integrated marketing approach between all of our contact points: e-mail, search, retail marketing, direct mail/catalogs, telephone account-management and call centers.

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