The New Vanguard

Every industry has its luminaries—pioneers whose names become synonymous with the techniques or products they developed. Ed Burnett, Ralph Lane Polk II, Richard Benson, John Caples, Leon L. Bean, Lillian Vernon, Jeff Bezos and, of course, Lester Wunderman come to mind.But not every trailblazer operates in the white-hot spotlight. Many conduct brilliant work day after day for their companies in relative anonymity. That is, until Target Marketing decided to nose around and find those professionals who are setting new standards for direct marketing performance. With the help of our Editorial Advisory Board and other key industry figures, we’ve selected eight exceptional direct marketers who refuse to settle for status quo program results.From production, e-mail marketing and data segmentation to channel integration, loyalty marketing and more, these stories of innovation cover the gamut of challenges facing direct marketers today. Read on to learn how each one of these all-starsThe Relevance AdvocateGlenn Bader, Director, Emerging Channels, Schwan’s Home Service“I fundamentally believe that giving customers control and choice is key,” says Glenn Bader, director of emerging channels at Schwan’s Home Service, which for the past 50 years has offered customers home delivery of frozen cuisine. From berries to haddock, Schwan’s customers have their pick of products from a truck that visits once every two weeks on the day and time of their choosing.Because Schwan’s home delivery is personal by nature, Bader feels it’s imperative that this experience is replicated on the company’s Web site. “It can’t just be technology, it has to be something that complements that relationship.” To do so, Schwan’s has centralized several data sources in a data mart and uses personalization software to recommend individual product mixes that better promote a customer’s interests, resulting in more frequent visits, higher conversion rates and higher average orders from online customers.To further encourage customers to order online, Bader introduced a points-based loyalty program called Home and Gifts. Customers receive two points for every dollar spent online, which can be redeemed for kitchen-related merchandise. Offline customers earn one point for every dollar spent.The project most near and dear to Bader’s heart, however, is Impromptu Gourmet, a gourmet line that targets a new market for Schwan’s: urban individuals age 25 to 50 who earn an average of $100,000 or more. It also marks Schwan’s entry into the incentive market. According to Bader, the company saw an opportunity “to reach customers with a brand that really can be used for gifting, whether it was personal or corporate, and also something that was more of a fine dining experience.”To better launch new brands such as Impromptu Gourmet or add new sales channels like corporate sales, Bader implemented a service-oriented architecture that allows Schwan’s to flow sales from many different channels into a common back end. Bader says the company needed “a platform that would allow us to grow into new markets without having to go back to the drawing board each time and create a new system for a new idea.”Bader also believes in listening and responding to his customers. Prompted by customer requests, Schwan’s recently introduced Impromptu Gourmet’s “design your own meal” experience that allows recipients to select each item for a three-course meal complete with dinner music and a wine recommendation.—LYLThe Sustainability ChampionMeta Brophy, Associate Director, Publishing Operations, Consumers UnionSustainability has a double meaning for Meta Brophy, associate director, publishing operations for Consumers Union, the watchdog, nonprofit testing and information firm. In working with the company’s marketing department, she devises strategies to meet the primary corporate goal, to “increase our subscriber base across all products,” with the secondary challenges of cost-efficiency and environment-friendly sourcing.Brophy explains, “We hear the terms ‘media neutral’ and ‘multichannel’ and ‘cross matrix’ for instance, and we know that marketing is handling a wider scope of responsibility with more varied direct marketing initiatives that serve a broader base internally, yet are more specifically targeted externally … Production has to be a resource. We are expert buyers but we are consultants, too, and we have to do our research.”This research pertains not only to finding the right materials and production processes at the best prices, but also to understanding response rates and other factors in a mailing’s chance at success. “To incorporate sustainability goals into direct mail campaigns, marketing gives production the opportunity to devise tests,” Brophy explains. As such, she says that production’s “recommendations have to be credible and viable in marketing’s eyes. Then I can introduce new initiatives.”Some of the advances Brophy and her team have made on the sustainability front are a reduction in format sizes; the use of high-yield, recycled content and other environmentally friendly papers; and the transition from poly-based film patches to corn-film patches on some envelopes.She also is proud of production’s ability to respond to ninth-hour requests from marketing to accommodate extra names on a mail drop. “In this way, we support the goal of increasing response, but additionally we know that it will be more efficient and consume fewer resources to add quantity during certain seasons. This adds up in the aggregate. We want to consume less.”While Brophy and her team are far from tested out when it comes to ideas for reducing consumption without compromising response, she does have her eye on an additional goal: “What I’d like to see is a way in which we can encourage our customers to recycle what they receive from us.”—HMThe Relationship BuilderAngie Moore, Managing Director, CRM, American Cancer SocietyAngie Moore believes in building dialogues with her constituents at the American Cancer Society. Whether they participate in an event such as Relay for Life, sell flowers for Daffodil Days or make a direct mail donation, Moore is working toward maximizing those relationships through data-based decision-making and integrated strategies.After six years as head of The Arthritis Foundation’s customer relationship marketing department, Moore returned to her former employer three-and-a half years ago to take the lead job in the American Cancer Society’s (ACS) direct marketing department. At the time, Moore recalls, ACS was developing an integrated fundraising plan that would pull together all the activities associated with income development. As part of the new plan and subsequent reorganization, the direct marketing team was given a new name and purpose. Moore took the lead for a newly dubbed mass market CRM team that expanded beyond the transaction side of the business to identify untapped markets and build stronger and better relationships with those constituents using direct marketing techniques. These mass markets include constituents who give $1,000 or less through channels other than direct mail.Moore says ACS also recognized the need to become more constituent-centric, and embarked on a CRM initiative that includes business strategy for the whole organization. Moore took charge of this new initiative three months before the CRM system was deployed and became the organization’s “database of record.” A primary engagement under the CRM initiative is “constituent care,” which, according to Moore, is a process of understanding different constituent segments and how those individuals are interacting with the organization based on transactional data, behavioral information, and studies about constituent perceptions and commitment.Says Moore: “We don’t have a one-on-one opportunity with every constituent that walks through our door, so we have to use our data and what constituents tell us to maximize those relationships. That’s the heart of constituent care. One of our main CRM talking points is that data is not anything unless we turn it into knowledge, and ultimately use that knowledge to learn something else, grow a relationship or enhance our marketing.”—LYLThe Test MasterEric Morley, Director, Outbound Internet Marketing, VeriSignSince joining intelligent infrastructure services provider VeriSign in 1999, Eric Morley’s priority has been lead and demand generation for the company’s Security Services. The driver behind the company’s direct marketing success, according to Morley, is the optimization process. “The most important accomplishment at VeriSign has been the team’s ability to build a model that has allowed us to continually optimize the direct marketing program spend to continue to improve profitability over the years,” he explains.Morley also avoids relying too heavily on any one marketing channel or strategy, and looks to the numbers to make the smartest marketing investment decisions. “I think the guiding principal is really focusing on tracking and testing,” he says. “So really tracking the initial program that went out the door, the click, the lead, the sales rep follow-up, the actual conversion through multiple different systems is the goal. And a big part of that, for us, is really partnering with the sales team to help them understand the leads that are being generated and the programs that are being generated, and to provide them with any tools we can to help them convert leads into sales.”Always looking for new ideas is another hallmark of Morley’s philosophy. “Look beyond just your direct marketing and lead generation,” he suggests. “Interface with your Web team and your product team and your sales team, and look for innovative ideas on how to generate leads, traffic and sales from all the infrastructure around you, versus always saying we need to throw more money at direct mail or search marketing or advertising.”And sometimes, innovation means “recycling” a tactic that worked in the past. “E-mail marketing was huge for a while, and not many people were doing hard copy direct mail,” Morley describes. “So we went back and [asked] how we can make hard copy direct mail work again.” He’s also made a success of the company’s SEO efforts by focusing on the core analytics.However, Morley warns against making the easy choices and simply focusing on the latest trends—such as SEM: “What’s hard is going back and looking at everything from hard copy direct mail to Web seminars to inside sales and lead cultivation, and your lead contact strategy through your inside sales team, and looking at constantly improving those systems.” —ICThe Loyalty ProDavid Norton, Senior Vice President, Relationship Marketing, Harrah’s Entertainment After time spent with MBNA and American Express, David Norton joined Harrah’s Entertainment in 1998, which is now benefiting from his focus on and understanding of the relationship between customers and marketers. “I would say that we’ve turned this into a very strong marketing company, and it’s recognized as one of the marketing leaders of any industry in the United States,” says Norton. “Our financial performance has been a great story for seven years, in terms of seeing strong sales growth for 25 quarters or so.”Much of that success Norton attributes to a multipronged approach that relies on analytics and customer research (including testing out ideas via customer satisfaction surveys), a very close partnership with Harrah’s IT division, and input from the field. “A lot of the execution happens at the individual property level, and [we’re] making sure we have that input from the field right from the outset.” Buy-in from the bottom up, as well as top down, is crucial, according to Norton. This balanced approach has brought year after year of profitable initiatives that have driven revenue and boosted customer loyalty. Norton is particularly pleased with Harrah’s direct marketing execution, which is a “highly segmented, closed-loop test and control process [executed] in a fairly automated way [that] allows us to be very smart, as well as very customized based on the individual’s needs.” Harrah’s Total Rewards Loyalty Program also is running on all cylinders. Norton describes it as, “The first national loyalty program in the casino industry. [We] continue to refine it, make it better, so that about 80 percent of our gaming revenue now is tracked to a total rewards card.” Another highlight is the marketer’s VIP business. “It’s sort of like a clienteling or a personal banker type relationship our top customers have, balancing not only the service aspect but sales,” describes Norton. The VIP program makes up more than a quarter of Harrah’s business and has grown upwards of 20 percent each of the past few years, according to Norton. The latest initiative he is excited about is the focus on domestic, Asian marketing, which launched last year and has performed very well thus far. “Our goal is to achieve greater levels of customer intimacy,” concludes Norton. “We started with the lowest hanging fruit, and what we’re doing now is really cutting edge to get closer and closer to that one-on-one state in as practical a fashion as you can.” —ICThe New Media JugglerRon Pulga, Vice President, Direct Response Marketing, Bare EscentualsWhen Ron Pulga arrived at Bare Escentuals in early 2003, the company’s infomercial still was in its infancy. Three years later, the infomercial has become the driver of an integrated, multimedia program carefully scripted by Pulga and Bare Escentuals CEO and President Leslie Blodgett. In addition to its infomercial, QVC show and retail outlets, the company has added a Web presence, a continuity club and a catalog to the media mix, which has significantly increased sales in the past few years.Bare Escentuals takes advantage of the interactive DRTV format to fully educate consumers on the benefits of its i.d. bareMinerals product line. By focusing on how the makeup enhances the user’s life, the infomercial answers the question: “What’s in it for me?”Adding a URL placement to the show and building a Web presence has, according to Pulga, had a huge impact on the company’s business. The site ties together multiple channels by providing infomercial and QVC show schedules, as well as links to its retail partners. It also gives customers the option of joining one of several continuity programs to automatically replace the products of their choice. Recognizing the Web’s impact on the continuity club model, Pulga says, “We’ve allowed customers to go in and manage their own accounts, change their [shipment] intervals and what products they are getting. That’s one of the biggest things with making continuities work. Customers don’t want to feel like they are locking themselves into something. They want the convenience and the benefits, but still maintain control.”Another element of the marketing mix Pulga has helped to refine is the company’s cross-sell and upsell opportunities. By working with its telemarketing staff to better convey the benefits and uniqueness of its products via phone, Bare Escentuals has been able to test an increase in its price points.Pulga also has expanded the assortment of products featured in the Bare Escentuals’ catalog inserted in every makeup kit, raising the catalog’s page count and profitability. Once customers get comfortable using the basic foundation kit, they can peruse the catalog for supplemental products. The catalog insert, according to Pulga, supports the firm’s other channels as well as provides an additional revenue stream.—LYLThe “Being” CounterJesse Roberts, Senior Marketing Strategist, H&R Block Mortgage Co.The financial services industry often gets characterized as a group of bean counters who make business decisions based on raw numbers, without considering the human factor. Jesse Roberts and his marketing colleagues at H&R Block Mortgage Co. (HRBMC) are shattering this stereotype by implementing a data-driven approach to profitable direct marketing that also personalizes the company’s customer contact.To drive a “stable quantity of highly qualified leads to our loan officers,” HRBMC worked with data solutions firm KnowledgeBase Marketing to develop channel-specific, look-alike response and conversion models for housefile selection and suppression, says Roberts. Then, this audience was segmented, with each segment “profiled along demographic, lifestyle and attitudinal lines.” The insights gained from this analytics work has enabled HRBMC to craft highly targeted copy and creative for customer direct mail efforts. Roberts still is waiting for the full results to initial direct mail test panels dropped in November and December, but notes that response so far shows significant lifts for the more versioned efforts.“Our testing could easily extend into other channels, such as telemarketing scripting,” Roberts says. “Also, it could be used to vary incentives, to generate greater relevance between the mail piece and the consumer, and thus [generate] more response.”He is most excited about the potential these tools have to greatly maximize efficiency and ROI by allowing HRBMC to “identify thresholds of performance per segment, and to establish selection/suppression limits per segment.”Getting to this point has required a substantial commitment of time and resources on HRBMC’s part to identify the business goal, plan a data roadmap to follow, assess available resources and set a budget. When asked what has been the best investment HRBMC made in advancing its database marketing efforts, Roberts unequivocally singles out his company’s analytical data mart. “It was the basis for all of our house list modeling, profiling and segmentation. And an incredible learning experience. A recommendation to anyone considering the development of an analytic data mart—be involved. The exploratory data analysis, in particular, can provide remarkable insight as to marketing opportunities.”—HMThe Data IntegratorAl Rosato, Director of Database Marketing, MediaLive International Inc. When Al Rosato joined event marketer MediaLive International Inc. (MLII) in October 2004, the company—whose brand portfolio includes 20 annual, global events spanning emerging, accelerating and established technology markets—was going through organizational change. Some of the turnover meant much of the database history was lost. Brought in to complete the database build, Rosato had to start fresh with new vendors and registration companies. Rosato applied his data integration expertise to help MLII implement a holistic approach to data management.Rosato’s accomplishments over the past year and a half are numerous: “We’ve brought all legacy data into the database and have established standardized data capture and feeds from all sources going into the database,” he describes. “Now, I’m focusing on better customer relationship management to be able to match our customers with relevant events and opportunities. One of my goals is to be able to help our exhibitors ‘see’ who would attend our events and to be able to help attendees find out more about the products and services of our exhibitors.” It is this single view of customers that Rosato believes sets this database apart from the ordinary. “A lot of people [who] do event marketing have all of their different event data piled in event-specific buckets, but they don’t get a single view of the customer across events,” he points out. The database boasts a regularly scheduled, standardized XML feed of MediaLive event data; MLII’s database vendor processes its data to give it a single view of its customers over time; and the database is integrated with the company’s e-mail vendor so MLII can segment and target relevant customers with offers that might be of interest.The system also allows for cross marketing. “We’re able to look at the company level or the individual level, the whole holistic picture of what the company is doing, what the individual job functions within that company are doing, and match them with any of our events,” Rosato describes. Although the project is new—up and running since September 2005—thus far, it’s starting to show positive value, particularly in terms of boosting data analytics capabilities and finding and reactivating prospects, he adds. For Rosato, all of this work really is about building a strong relationship with his customers. “We’re aiming to provide the most qualified leads to an exhibitor,” he says. “Likewise, we want our events to be relevant to our customers. We constantly gauge our audience profile to make sure the right exhibitors are at the right events.”—IC

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