One-third of direct marketers polled feel the biggest challenge they face when dealing with an outside service provider is the vendor’s lack of understanding of their business. And an even greater percentage of service vendors agree, according to a survey conducted by database firm Alterian.
“Marketing service providers (MSPs) have a long way to go to get a handle on what their customers are starting to demand,” said Alterian CEO David Eldridge. “They need to think strategically with their customers, and that can be done in many ways.”
In another finding, nearly twice as many marketers as vendors cited cost concerns as the biggest challenge to working with a service provider.
“Marketers need the MSPs to demonstrate that their services can deliver return on investment,” said Koslowsky. “This shows me that marketers are saying, ‘We need to demonstrate that we’re getting something for the amount we’re spending on it.’”
Despite cost concerns, nearly two-thirds of both marketers and service providers indicated that they expected marketing spending—excluding that for postage and printing—to rise in the next 12 months. Might this anticipated increase be due to mailers using analytics as part of a rush to beat proposed postage increases in 2006?
Doubtful, said Eldridge. Marketers polled in the United Kingdom showed similar activity without a looming rate increase. Instead, DMers are investing in strategic services over the long term, with higher-tech analysis and campaign management offerings gaining cachet. Survey respondents also weighed in on the single offering service companies provide that adds the most value: Both marketers and service bureaus listed marketing strategy and planning expertise first, followed by data and list hygiene.
But the agreement ended there. Marketers listed beefing up creative expertise third, while the service providers relegated that to fifth place. The service bureaus put more emphasis on their analytical expertise, while the marketers felt this wasn’t quite as desired. Both groups agreed that program management, and campaign planning and execution, were comparatively unimportant offerings compared with the others mentioned.
Alterian’s survey was based on responses from 181 direct response marketers and 157 marketing service providers compiled during the fourth quarter of 2004.
The full story appears in the January 2005 issue of Direct magazine.
