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| | July 8th, 2008 |
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| "The Difference" |
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| A LETTER FROM MONICA C. SMITH |
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| Happy Summer! In this issue I take another leap into the world of diagnosing the realities of our industry, how it affects your business, and then a road map to success. The last newsletter received an overwhelming response and our mail list grew another 20% from you all forwarding it. It would be remiss of me not to say thank you for all those who shared their stories with me and wished me well on my journey. We are all in this together and your words remind me of that. |
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| In this issue, I want to talk about the "personality of direct," those characteristics which define our industry for better or worse. And although I do not recommend a full lobotomy for the industry, I do have some recommendations for change and the encouragement to make it happen now. |
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| Last month HBO ran a docudrama called Recount starring Kevin Spacey and Dennis Leary, which presented what happened in the weeks following the November 2, 2000 Presidential contest between Bush and Gore. The movie hit a chord within me. We as a nation rely on our system and those charged with administering it to be the best it can be. And yet it is filled with so many overwhelming flaws. Nonetheless, even with imperfections and pockets of people behaving badly, overall our governmental system still operates with amazing consistency. I have learned that I can accept these bumps on the path as long as I do not fall into the trap of thinking that there is nothing I can do about it. |
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| While the Direct Marketing Association is not deciding the fate of the free world, it does play a large part in influencing issues that are of critical concern to our industry which is struggling on the sand which is constantly shifting beneath our feet. Unfortunately, we are an industry mired in the status quo. |
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| I have often been asked by people who have heard me speak in smaller forums why I do not speak at the big Conferences. On occasion those questions motivate my staff to fill out the speaking proposal forms for the DMA/NCDM or ACCM. But I have been told that the topics I propose are not relevant for the people attending the conferences. The last two topics I wanted to speak about were (1) Recognizing the importance of EBITDA in your "go to market strategy" and (2) "The Next Mile", understanding the path to purchase through analyzing the data in your marketing database. Here is my last "Dear Jane" that just arrived before we went to print. |
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| Now, I can be and have been called many different things - long winded, over the top, dramatic, unorthodox, and a few other unprintable things, but I can guarantee you "not being relevant" is not one of them. As matter of fact, my job is to ensure relevancy in years to come for our clients and I believe for the industry. |
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| Of course I do not demand a recount from the DMA. But I am very conscious of the fact that the status quo no longer has status. |
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| We need to demand and embrace change - not for the sake of change, but for the sake of our survival, and ultimately good health. In past newsletters we have discussed how the industry has become much more complex than in its heyday of the mid 80's to 2001. Technology has increased consumer options and business consolidation has decreased industry options. There is also an increased focus on the bottom line (also known as EBITDA). At the same time, direct remains a very personal business - driven by personal interactions and transactions. We need to understand the relationships which underlie our business: Customer-Brand; Customer-Company; Company-Vendor; Vendor - Association/Trade Press; Association/Trade Press - Brand. |
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| We must change how we perceive the marketplace; AND we must demand change from those who provide services to us; AND we must expect change from industry resources. |
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| Our industry resources include our trade organizations and trade press. We need to ask of them - are they delivering the information, resources, and services that help us understand the realities of our business environment better? Are the courses they offer ones that make us better equipped to do our jobs or serve our customers more successfully? Do the articles they write provide insight on the dynamics of our industry for the long term? Do the industry forums they offer provide opportunities for increased knowledge and improved processes? Do they represent us in the larger economic landscape in ways that help mitigate our pain? Are they helping policy makers shape laws that help our industry and improve our economic outlook? |
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| What I am talking about is nothing less than a "Rebirth." |
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| So in this issue, the "personality of direct," we peel back the layers of the onion and propose what we believe are hard, honest look at the direct marketing industry. |
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| I start with the discussion of the ACMA American Catalog Mailers Association conference (An Industry in Crisis). We then discuss the need to expel those practices which hold us back and embrace those which can take us forward, to stop focusing on minutia that do not matter, inaccuracy, weakness and lack of expertise (Herding Cats). Read deeper and you will see an article that talks about the realities of marketing integration, identifying tools that can be used to develop and enhance strategy (It's all about MI). |
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| Next we suggest that you look at your vendor relationships in light of the results they produce; encourage internal executives and team members to take risks that are highly calculated, that can be articulated, and are well informed, surrounded with the right talent, not necessarily the cheapest (Vendorship). Finally, we end with a discussion of the Sales Tax laws that face us and the possible ramifications of pending legislation. |
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| It is my hope that this newsletter provides additional value and maybe the edginess that I think is important in having an informed point of view. At Marketsmith we come to our point of view from our work with over 30 business models we will touch this year alone, at a profit and loss level, through rigorous analysis of data at a customer level to develop strategies that actionable and sound. |
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| As always, my team and I wish you and your Brand the very best on this journey to a new world of success. May you all find that you are doing what you want to be doing, that you know exactly where you want to be and who you are? May your families and you have a happy and safe Summer. |
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My Best Always,
M- |
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| P.S. We have exciting news here at Marketsmith. As we discuss in our article on Marketing Integration, we have expanded our offerings to allow our clients access to a full spate of marketing services - email deployment, paid search, and database building. Our point of difference is that we lead with analytics and leadership, and provide the services as a way to create a consolidated view that allows our clients to understand "The Path to Purchase". Please visit our website and email us for a description of our new products and services. This is a "Big" move for us and we are really excited as we face our next decade of business, leading and serving those "Brands" we love. |
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| P.P.S. Due to the number of requests to have this email in a printable format, with this Issue it is now possible. Thank you for your continued suggestions.
Download a Printable Copy of "The Difference"
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AN INDUSTRY IN CRISIS - AN ADVOCACY GROUP PROVIDES HOPE AND
STRATEGIES |
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| On June 26 and 27, 70 companies came together under one roof for two days to have the most important dialogue for the catalog community in the past year and a half, at least. Top level executives from catalogs of all sizes gathered along with industry suppliers to work together for reform and advocacy for the community on which their livelihoods depend. |
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| The young American Catalog Mailers Association (ACMA), in its first year, called to order its first annual meeting, not only with a Who's Who of marketers, but with a group of executives who really care. The intensive agenda was packed with policy leaders, ...Read more. |
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| CAT HERDING |
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| At Marketsmith we have a saying to describe almost everything. For instance, we talk about someone who talks off point or off the cuff as "Free Willy"; when someone creates a budget to save his job and it has little or no chance of success, we call it a "Hail Mary Pass"; when we know someone is forced to work with us and s/he does not want to, her/his interactions with us are what we usually call "violence." The newest word in our lexicon describes a person, usually a circulation manager or director, who is so mired in data, due to a proliferation of source codes, that s/he has no way to navigate out of this situation and feels like the only hope is to create a new piece of information, which only adds to the confusion. We call that person a "crazy cat person." Read more. |
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| PRESS RELEASE - IT'S ALL ABOUT MI |
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| We at Marketsmith recognize that the Direct industry is at a watershed. Mailers' bread and butter consumers are inundated with online and offline messages; business costs are going up across the board (paper, postage, utilities, money); competitors are consolidating into larger, more powerful adversaries. |
| There are large number of companies supplying print, email deployment, search, list, and database services. They price themselves differently and claim to offer unique options for merchants. But the truth is, they are all offering the same commodities. Read more. |
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"VENDORSHIP" - THE THIN LINE BETWEEN SUCCESS, PAIN, AND
COMFORT |
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| "Vendorship" is another Marketsmithism, combining vendor and a personal relationship. We are defining the term to mean the practice of using an outsourced resource because of a prior relationship rather than the value or core competence of the vendor's service. |
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| As we noted earlier, the business of direct is very personal, and "vendorship" is a reality of our industry. I am sure that many of the vendors who are reading this newsletter right now have faced the phenomenon as you responded to RFP's. It certainly can be annoying or frustrating. But we all recognize that it is up to the Brand/company to make a choice based on its criteria or expectations, whatever they may be. Therein lies the rub, and hence this article. Read more |
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| UPDATE ON SALES TAX ISSUE |
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| As of this writing, there have been no new developments on the New York State tax law which went into effect June 1, 2008, requiring internet vendors who receive more than $10,000 in compensation for goods or services from New York residents are required to collect and pay sales tax to the State of New York. (See our Special Bulletin) Read more. |
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