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The ‘big picture’ approach to marketing has gone the way of rabbit ears on television sets. As Procter & Gamble global marketing officer Jim Stengel said at an ad industry conference recently, “There is no more ‘mass’ in ‘mass media’ anymore.”

“There’s a real push to understand that direct marketing is more than just postal,” says Eric Schmitt, senior analyst at Forrester Research Group. “The definition has definitely expanded beyond direct mail and telemarketing. Now there’s e-mail, point of sale in retail, Web sites, call centers and loyalty programs, wireless devices and television.”

The rise of multiple media outlets could be seen as both a blessing and a curse. On the one hand, marketers have more ways to reach customers — including more measurable ways.

But customers are increasingly resisting the barrage of commercial messages. They’re pushing back with filters, signing up in droves on the federal do-not-call registry and helping to pass legislation like the Can Spam Act.

That has led to a sea change for marketers, both in mindset and in the way they collect, store, view and use customer information. Smart companies are seeing the opportunity and tailoring permission-based offerings to accommodate customers’ finely segmented demands, wherever they originate.

To do that, though, they need a central data repository that can collect data from all points and shoot it back in real time. This means “taking all of our marketing resources and putting them under one umbrella and getting it to work efficiently,” says Eric Welter, senior vice president of marketing services at J. Jill.

Intrawest, a $1.1 billion global resort company, has made a quantum leap in that direction in the last two years, moving from a flat-file database that generated 50 direct mail campaigns per year to a large, centralized database that delivers 2,400 e-mail and direct mail efforts.

“Our database now allows us to look at the customer holistically,” says Linda Denis, vice president of customer relationship marketing. “We can pull everything together and get a better understanding of what kinds of vacations they want.” Previously, for example, they might not know that the avid golfer who lives in Phoenix, but travels to an Intrawest golf resort in Canada might be interested in some of the resorts closer to home. “Before, we weren’t leveraging that information.”

Moreover, customers have the critical choice of opting out of one thing without losing access to what they want. If, for example, they want an e-mailed reservation confirmation, but not marketing material, they have that choice. When data was siloed, opt-out was global — one opt-out meant opting out of everything.

“Given the landscape of privacy issues, we’re being proactive about our customers’ preferences. We do piloting and testing to see how they want us to communicate with them. The idea is less product push and more customer empowerment,” Denis says. New customers who come through one of the company’s nationwide skiing and golf resorts receive an “access program” e-mail reassuring them that their names won’t be sold, and giving them the chance to correct any inaccuracies in their information that may have occurred at the point of entry. It also gives Intrawest the inbound opportunity to offer them a variety of subscription newsletters that promote other Intrawest products — a trust-building strategy that seems to be working. Out of 345,000 recent “welcome” e-mails to new customers, 140,000 signed up. “That tells us that people are giving their consent to communicate with them.”

“Multichannel marketing and developing an integrated view of the customer is one of the largest trends in the current landscape,” says Jack Aaronson, president of the Aaronson Group, a 3-year-old consulting firm that specializes in multichannel marketing user experience. “The adoption rate seems to be gaining momentum,” but there is still significant resistance.

One of the biggest stumbling blocks, he says, is the fear of what he calls “channibalism.” This fear, he says, permeates not just retail, but every industry, including business-to-business, the automotive industry and the financial world. “It is the fear that one channel will not only outsell another channel, but steal sales from another channel.” Businesses usually are created in a siloed structure, Aaronson explains, and each channel typically has its own sales and marketing staff, and, therefore, its own accountability. “The idea of a holistic customer view from the technical perspective is scary, but it’s life-threatening to a sales manager whose largest salary component is a bonus based on his channel’s performance.”

Research has shown, however, that those fears are unfounded. According to Forrester’s Schmitt, customers are more loyal if they have access to more than one channel. “By not unifying its channels, companies run the risk of losing customers to those that do.”

There are some signs that those concerns are abating, says Aaronson. “The trend we’re seeing in the marketplace is that dot-com subsidiaries are being brought back into the company and senior executives are finally understanding that their customers don’t divide their loyalty along channel lines,” says Aaronson, pointing to Barnes & Noble’s purchase of all shares of BarnesandNoble.com in June.

As a result, says Schmitt, the demand for database services is going up. There’s more interest from consumer goods, food and beverage companies, consumer electronics, automotive and catalog firms. A growing number of companies — especially midsized businesses — are investing in and using database marketing services. “Clearly, there’s demand to make marketing more measurable,” says Schmitt. What those companies are looking for, he says, is not just a multi-channel service bureau, but one that has a high degree of active involvement in all facets of tying together data in a centralized database. “Marketers want deeply integrated multichannel service offerings that weave together all the pieces, among them data and campaign management.”

Software vendors are responding, too, with a greater selection of business intelligence, campaign management and other analytic software — and while they may not be perfect, says Schmitt, they are getting better all the time.

“There’s been an explosion of tools on the market in the last three or four years,” agrees Experian vice president Chandos Quill, noting that her clients are more proactive and more educated about the array of available tools than in the past.

As more companies adapt to the right-time marketing model, and an integrated database, they need to proceed with care. “The key to success,” says Experian senior product manager Bill Scully, is staying on a course of planning, testing and measuring. Although that may seem obvious, Scully notes, many companies leap too far ahead. In one case, for example, a specialty retailer bought a high-priced marketing automation tool. The goal was to channel customer data into its boutique stores. The retailer’s marketing team suddenly realized that the company didn’t have the operational infrastructure to handle it.

To avoid getting caught in the trap of overzealousness, Scully also recommends implementing limited improvements across several divisions, and proceeding once those systems are operating efficiently. Scully cites a financial services firm that tried to integrate its own data among its divisions with that of a recent acquisition. Instead of first integrating the data it knew best and then expanding to the acquisition’s, they were unable to accomplish the task, costing them financial support on additional plans.

Consultant Aaronson says he has seen his share of waste. “So many companies made the mistake in the late ’90s of spending millions of dollars on huge data warehouses that have never been used properly, because of a lack of strategic initiative to actually change the way the business operates. Technology is a tool, not a business model.”

RFP = Really Fabulous Proposal

The art of letting vendors know what you really need

Sometimes we’re so caught up in our own worlds we take for granted everyone else knows what we’re thinking. Perhaps that accounts for the high volume of poorly executed requests for proposals.“Typically, RFPs that I see are two-paragraph e-mails that say something like, ‘I have 3 million customers. I want to clean up my database and launch a loyalty program,” says Fred Barber, executive vice president of Austin, TX-based Conclusive Strategies, a provider of database marketing and analytical tools. Here are a few insights on the process from the vendor side.

Develop a clear business strategy

In his nine years as a consultant, Barber says he has seen only one well-written request for proposal, from an automotive repair chain. The proposal included a plan for list rental, requirements for point-of-sale (POS) data integration, requirements for householding and goals for statistical analysis capabilities, among other things. Knowing what you want, and articulating that in your RFP, helps the vendor propose the most effective solutions. “If your business strategy is to cross-sell existing customers, what you have to do to achieve that is very different than acquiring new ones,” says Experian vice president Chandos Quill. The more information you offer about your business goals, the more useful the proposed solution. “If you’re very clear on your business strategy, that will drive what capabilities you need, and help us set up ROI measurements.”

A detailed RFP also creates a tight set of responses, which makes it easier for companies to evaluate bidders’ proposals, adds Kevin O’Connor, a vice president at Conclusive Strategies.

Keep an open mind

Some proposals contain strict directions on what the company is looking for in terms of technology. “They’ve already determined what they want,” says Quill. By doing so, they may well be overlooking other possible solutions that may be better suited to the company’s goals

Prioritize goals

Spell out your immediate needs, and those that can be implemented over time, suggests O’Connor. If, for example, you’re putting in a new POS system and you need a vendor to install it in your firm’s Western region first, it can be scaled to the stated budget.

Include a deadline for vendor questions

In your RFP, include a date for vendors to submit their inquiries. All vendors then are on equal footing, because everyone has the same set of information. Receiving all the questions at once also helps the company see the holes in information they’ve provided.
— Lorraine Calvacca

What to Ask

Ten factors for narrowing down the field of marketing database vendors

Basics

1. Will the vendor manage our marketing database on an ongoing basis or prefer to provide services around a system that we manage?

2. Does the vendor take a self-service technology-centric approach or embrace a full-service agency-style philosophy?

   Business Services

3. Will the vendor be an active contributor to our database marketing strategy?

4. Does the vendor have experience designing and managing the type of marketing programs that we have in mind?

5. Will the vendor’s analytical capabilities satisfy our needs?

6. Does the vendor have the online marketing expertise that we require?

   Technology

7. Has the vendor designed and built a system as large or as complex as the one we need?

8. Does the vendor prefer to specify the technology platform or will it support decisions that we make?

   Extras

9. What other value-added services — such as compiled data, print or fulfillment expertise — does the vendor offer?

10. What experience does the vendor have in my industry?

SOURCE: FORRESTER RESEARCH INC.

Choose Wisely

How to select the right database marketing service provider

Most clients pay database marketing vendors between $500,000 and $4 million per year. Buyers have to engage in a rigorous selection process depending on a variety of factors, including the complexity of data sources and marketing campaign needs, number of channels and level of channel integration, and the type and frequency of updates. Forrester Research Inc. recommends a five-step process.

1. Spell out project scope and definition.

   Project champions must focus on aligning the organization around the project, getting buy-in from relevant stakeholders and developing a functional specification of the project. Firms also should develop a preliminary analysis of expected costs and benefits at this stage.

2. Make the “in-house vs. outsource decision.”

   Before looking at vendors, conduct a frank assessment of internal technical, analytical and marketing skills and the ability to coordinate these capabilities. Consider that in-house projects have a greater big-bang investment profile while outsourced costs can be amortized over the life of the relationship.

3. Identify vendor candidates.

   If the decision is made to hire a service provider, compile a list of eight to 10 vendor candidates based on their prior experience, recommendations and firsthand research on vendor sites and trade shows.

4. Narrow down to four or fewer vendors.

   Gauge vendor fit by focusing on 10 key factors (see sidebar, page S6). Requests for proposals can be distributed at this stage.

5. Make a final choice.

   Use the functional requirements specification to walk through each vendor’s proposal. Check client references beforehand — at least two per vendor. Don’t overlook the most important aspect of the relationship: the people. Interview the deployment and outgoing support teams. If reservations arise, ask the vendor for alternatives.