(Direct) Today more than ever, consumers and business prospects alike subscribe to the age-old direct marketing principle WIIFM: “What’s in it for me?”

Personalization is a tactic that most direct marketers realize is a key way to boost response rates, both in direct mail and just about every other kind of media.

The trend toward customized content is partly attributable to the negative effect information overload has on society in general. In North America, each of us is exposed to upward of 7,500 media impressions every day. Technology was supposed to simplify our lives, but instead it’s made it more complex. Our hectic lifestyles don’t leave much room for relaxation. Therefore the messages that stand out in the mailbox are those that make an immediate personal impact — by being entirely relevant to me and my needs.

The same is true online. Think about it: What are the fastest-growing Websites? YouTube, MySpace, Blogger and others that allow users to create their own content. And the iPod has exploded in growth because it allows every user to make it their own. Indeed, personalization is the driving force behind the new “interaction economy,” according to a Foresight 2020 research study, recently completed by the Economist Intelligence Unit and sponsored by Cisco Systems.

“Personalization is going to be a key differentiator,” says Nick Earle, Cisco’s vice president of services, planning and operations for European markets. “Customers will have so many choices that their brand expectations and personal experiences will influence [those] with whom they choose to do business.”

Item one: data
Personalization is all about accurate data. You don’t send a direct mail campaign to an unworthy, outdated list. Likewise, your customer service team needs up-to-date information to place and revise orders, bill correctly and communicate properly with your audience.

With timely data in hand, your entire organization will be empowered to utilize the data to its full potential. This means you’ll sell smarter and deeper, service better and significantly increase your return by testing and using a variety of personalization techniques.

Keep in mind that personalization and your ability to segment and customize information is uniquely dependent on your database and the fields of information you capture. Most businesses capture too little data. Others garner a lot of unnecessary information, requiring a data warehouse to sift through it.

A good rule of thumb is to capture enough information to get the job done. That means gathering much more than in the past. Here’s where a marketing plan — complete with tactics, test matrix development and offer/messaging strategies — is paramount.

Remember, better use of customer and prospect data, profiling, modeling and geographic patterns should be commonplace in your database management processes. Segmenting customers and truly understanding patterns is a great starting point.

Consider the following questions:

What fields are being captured and which are not?

How is that data currently used?

What is your contact strategy?

Does your strategy vary, and has it been tested to boost response?

Data fields that often are overlooked include the response (or call to action) medium, offer-response data, purchase history, and secondary (frequently home) e-mail addresses.

Anytime, anywhere
Think multichannel for your customer and prospect interactions. And make information, services and personnel available to your customers and prospects anytime, anywhere and via whatever device they choose.

The term “interaction economy” is on target. By improving or completely reinventing the interactions you have with customers and prospects — based on the multichannel methods they’re using, including the Web, cell phones and PDAs — you’ll empower target audiences and capture more attention from them at the same time. If the new interaction systems and processes you employ are built to offer higher value-added personal relations with your audiences, then you’ve also gained a competitive advantage.

Keep it relevant
No matter what the medium, creating a personalized interaction with your target audiences should be founded on one goal: to make these individuals more productive in meeting their own needs.

Develop personalized features that provide real benefits to customers and prospects. And spend the time necessary to understand how this investment will benefit your company. That means continued testing — something direct marketers do very well.

Using an integrated marketing program for multichannel efforts reduces the risk of confusing audiences with dissimilar, random or changing messages. The very fact that every year consumers are exposed to more and more marketing impressions causes us to selectively repress the greatest majority of the thousands we’re subjected to each day.

Leverage branding by focusing on competitive advantages. Every vehicle platform and medium must interrelate to support and promote the brand’s core competencies, strengths and benefits, and at the same time strategically reinforce customer satisfaction. And communicate a relevant message consistently. Present your offer in a crystal-clear manner and make it very, very simple for prospects to respond.

Grant A. Johnson ([email protected]) is president/CEO of Johnson Direct in Brookfield, WI.

TODAY MORE THAN EVER, consumers and business prospects alike subscribe to the age-old direct marketing principle WIIFM:

Everyone has a story to share when it comes to sloppy direct mail customization. The Electronic Document Systems Foundation reports digital bloopers such as a sweepstakes notice addressed to

Direct’s annual database survey shows increased reliance on personalization

FEAR OF COMMITMENT? Not among database-focused marketers. For them, lifetime value calculation and personalized communication geared toward existing customers makes dollars and sense.

DIRECT’s annual survey of database marketing professionals shows that nearly 40% say they calculate customers’ lifetime value (LTV), an increase from the 33% of all marketers that did so last year. And these companies are speaking more intimately with their customers: By a 3-1 ratio, companies that calculate LTV are also using customer data to give their offerings a personal touch.

Overall, 64% of all surveyed use personalization strategies, a figure that held regardless of which audience (consumer, business-to-business or mixed focus) was being targeted. Such schemes look to become more important, with 44% saying their budgets for personalization will expand in 2001, while only 3% said customization expenditures would drop.

But these activities require information. Items that could enhance a database marketer’s customer knowledge lead the pack among projected purchases over the next 12 months.

Largely this includes expanding storage capacity. Six in 10 said they were inclined to do so, with another 25% saying they plan to install a data mart. Other investments involve bringing databases in-house. Consumer companies, which have much a much greater number of records (on average, 8.8 million), were almost seven times more likely to house them outside than B-to-B firms.

Ninety-five percent of the smallest companies, those with under $10 million in annual revenue, keep their databases on site. Conversely, 23% of the larger firms ($100 million or more in revenue) use an outside service bureau.

However, nearly 6% of all respondents