In late April, Direct Newsline interviewed Direct Marketing Association interim president and CEO Robert “Bob” Allen. The second part of an edited and condensed version of the interview is presented below: The first part appeared yesterday (http://directmag.com/news/dma-allen-interview-digital-staff-0517/).
Direct Newsline: Talk about the corporate outreach efforts the DMA is doing—the efforts to win new or win back companies that may have fallen off. What’s the message?
Allen: The message is that there is value here in the areas we are very successful in, conferences and events, education and in advocacy. That, in spite of the reductions in staff, we are still doing those things quite well. The first communication I sent out to the membership was that DMA is a place for both the small and maybe even traditional marketer and the very large ones. I think we also can and should appeal to the Amazons and the Googles and the larger direct marketers, both traditional and non.
Direct Newsline: Why does Amazon and/or Google need you? And you do have someone from Google on the board.
Allen: We do. They need us for the full umbrella of all the services but I think they would look to us first for the advocacy role that we do down in Washington. If you were to hire your own group to monitor what is going on in Washington, and lobby and advocate for the industry, it would cost you many, many times what a membership in DMA is. I think they see great value in the advocacy, I hope and believe they still see value in education and the other things we do. Amazon is a good example of a pure-play internet sort of business [which is] now looking at putting things in the mail. Google is now looking at putting things in the mail. We’ve talked about how DMA could be a resource for them.
Direct Newsline: Let’s talk about the recent announcement that the American Catalog Mailers Association [ACMA] would be working with the DMA. There had been a split. What happened?
Allen: When I came here, I don’t think there had been any conversations or real work done for almost two years. I don’t remember exactly when the ACMA started, but I think it might have been a year prior, maybe 2007, after the rate case I would say. [ACMA president and executive director Hamilton Davison] was literally my first call when I got here back in February. I had a file, and I said “Hamilton, the last letter I have in here is from March or April of 2008, and I said we need to start a dialog again.” And he said “Absolutely,” with no hesitation.
Direct Newsline: Why had the dialog fallen off?
Allen: I honestly don’t know.
Direct Newsline: What was the last letter in the file?
Allen: It was not a “we’re going to stop talking” kinda letter. Somehow the conversation stopped. Initially Hamilton was looking to get us partnering. And the end it was sad that it didn’t happen. It would have been the right thing to do at the time, but it just didn’t happen. But I said to him let’s talk. So we met, and we were both attending the New England Mail Order Association [NEMOA] conference several weeks after that, and I said “Why don’t we consider issuing a joint letter?”And he said great. And we did.
Direct Newsline: What is the nature of the relationship since then?
Allen: Very positive. We are working on something else, which is we are working on a three-party approach to the postal service. Nothing has been released on this, but we are looking at bringing NEMOA, DMA and ACMA all together around the postal issue. We are probably completely in alignment on 90+ percent of the issues.
Direct Newsline: Part of the reason the ACMA was established was that catalogers felt – rightly or wrongly – they weren’t getting their just due from the DMA, which is probably the same complaint that non-catalogers can make, that e-mailers can make, that B-to-B marketers can make. Nobody’s satisfied. You said you are in agreement on 90%. But if that schism was there before, how are you bridging it?
Allen: [While] the schism was there, I’m not sure it was ever, with perceptions being reality, that it was ever as real as the perception was. Give you an example. The 2006 [postal] rate case: DMA lobbied very hard for all of our members, including the catalogers. The sad part is we never told that story. In fact, [DMA senior VP of government affairs] Jerry Cerasale, who has been in our government affairs office for close to 20 years, calls it the greatest story never told. And that he in fact did work very hard for catalogers back then. In reality it just…the rate case hit catalogers very hard. 20% increases in postage for an industry which at the time was struggling.
Direct Newsline: Catalogers got hit hard, so what was the great story that didn’t get told?
Allen: I think the impression was that we did nothing for catalogers, which wasn’t true. It was just simply not true. One of the things we are trying to do as an industry is convince the postal service that they have a vested interest in increasing standard mail.
I think if they were to lower the rates on first-class mail today, let’s say they cut them in half, I don’t think they’re going to get a lot maybe no more first class mail. If they were to cut the rates for standard flats, for catalogers—if they were to let’s say, cut 10%, 20%...the summer sale is coming up again. That will help some catalogers, but not a lot, because a lot of them can’t take advantage of it. But we try to present a case: Here’s a class of mail in which if you do lower the rates, we can guarantee you will have more volume.
Direct Newsline: More volume means more expenses for them. Have you seen figures that say they can simultaneously cut the rates, increase the expenses because they need more trucks, more delivery, more gasoline, and cover their costs?
Allen: The postal service may believe flats don’t cover their costs, but I’m not sure it’s true. The post office currently has to go to the home or the office or whatever six days a week. They are going anyhow. If they are going and instead of carrying three catalogs to a home they are carrying six, they are not going to need another driver or delivery person going out to the home. It’ll be the same person just putting six catalogs in the mailbox instead of three. I know for a fact that if you offer catalogers a 10% reduction in the year-round, particularly in the fall season when we all mail more catalogs, I can guarantee you [volume] will go up. And I think it’s probably their only opportunity for increased volume. My sense is, knowing enough about the business, they could make money on it.
Direct Newsline: Perhaps there’s not much incremental cost in delivering six catalogs as opposed to three, but certainly 6,000 over 3,000, or 60,000 over 30,000, then you start talking about more trucks….
Allen: [The DMA, the ACMA and the New England Mail Order Association] are doing some research on this. We are going to try to present something in the near term that I think should get serious consideration by the USPS.
Direct Newsline: The DMA’s fiscal year is going to end on June 30. Between now and when the books close, what changes do you anticipate?
Allen: There’s not much time, so there won’t be a lot. We have been working on the 2011 budget, which is very positive, I will say. Positive meaning a positive net. This organization is going forward with the prospect that revenue should more than meet expenses, which is a really good thing.
Direct Newsline: When was the last time that was in balance?
Allen: Couple of years ago, maybe two years, and I am proud of this group, this staff. I didn’t do it, we just sat down and said ‘We’ve got challenges ahead of us, how do we get there?’ I mean, we have been negotiating everything. Cleaning contracts. Copier contracts. So we have worked very hard to trim expenses where we could but also with an eye toward revenue growth over the next couple of years growing the membership back. I think we’re positioned very well going into 2011.
Direct Newsline: How do you see your interim presidency going? Do you see yourself staying on for a while after someone is hired, and where is that process now?
Allen: I’m not on the search committee but I fully expected that at the end of the search process I will be brought in. If I were a finalist I would certainly want to talk to someone who was sitting in the chair for the previous three, four, five months.
I have the expectation that it will be sometime during the summer that I will be transitioning out and someone will be transitioning in. Sometime in July or August.
Direct Newsline: Are you a candidate for the position?
Allen: No, I am not.
Direct Newsline: What do you want to accomplish between now and the end of the summer?
Allen: In the months of May, June and July, I’d like to be able to spend more time focusing supporting them in membership. Use me more to reach out to members.
Direct Newsline: How much contact have you had with [former president and CEO John A. Greco, whose mid-term resignation created the vacancy Allen filled] since you became interim CEO?
Allen: [Forms a zero with a thumb and forefinger.] Never met John before, and obviously I have never met him period. He has not contacted me, I have not contacted him. No need to. The past is the past, as far as I am concerned. My whole focus has been looking forward.
