German direct marketing is on a roll. Up to 40 billion deutsche marks will be spent on DM media this year, depending upon whose statistics you believe. And that’s only one sign of growth.
Another is that DIMA, the German direct marketing conference, is now so crowded that it will have to relocate to a larger city. Next year’s conference will be in Dusseldorf, which offers twice the amount of exhibit space as Wiesbaden, the long-time home of the event.
And get the new slogan that will be used in 2000: One to One Solutions. As in the United States, it reflects an exploding trend.
“In 1990, the U.S. was five years ahead of us,” said Holger Albers, chairman of Deutscher Direktmarketing Verband (DDV), the national trade association. “Now the gap is maybe one or two years.”
Some say Germany is even more advanced than the U.S. – especially when it comes to CRM.
“It’s actually bigger here [in Germany],” said U.S. direct marketer Larry Light, CEO of Arcature LLC, who spoke at DIMA yesterday. “That’s because it has smaller clusters of population.”
Light explained, “There are not as may customers, so you had better cherish each one.”
Companies now spend “a bigger part of their media budgets on relationship marketing,” said Franz-Josef Rensmann, managing director of OgilvyOne Worldwide, Frankfort. In such markets as automotive, he suggested the percentage would be 20% to 30%, but much higher for mail order companies. However, for “fast moving consumer goods,” it might be about 5%.
The topic is now so hot that Germany has its own CRM publication: One To One, produced in Hamburg.
With or without CRM, DDV statistics show that DM is a growth industry. Big media spending will reach 39 billion deutsche marks this year. This is up from 36 billion in 1998 and 23.3 billion in 1994. (The U.S. dollar is worth 1.8 deutsche marks.)
Deutsche Post, the German post office, suggests the figure is even higher – some 40 billion deutsche marks.
There has been a corresponding growth in telemarketing spending. It is now at 5.1 billion compared with 2.8 billion in 1994. And it employs 150,000 people a figure that should hit 260,000 in 2001. Germany has some 1,500 call centers, while Europe itself has only 8,000.
Internet growth is also huge – at least judging from consumer behavior. Germany has 8.4 million Internet users, roughly 10% of the total population, compared with 106 million in the United Kingdom, according to statistics provided by the DDV.
But German Netheads buy more. This year, DDV expects Germans to spend $290 million (U.S.) compared with $170 million (U.S.) for Britain and $85 million (U.S.) for France.
And German companies are now rising up to compete with the likes of Amazon.com at home. For example, Bucher.de and Bertelsmann.de are both on the Web, Rensmann said.
The biggest challenge for German direct marketers for Rensmann is the way companies are organized. Many have product management structures in which firms are “not taking of the customer’s needs.”
For Kracke, it is “the lack of qualified people. It’s a big bottleneck for potential growth.”
To counter this, DDV is: sponsoring the first professorship of direct marketing at Siegan University; lobbying the government to recognize database manager as an apprenticeship category (there are several marketing jobs for apprentices, but this would be the first for direct); and changing DDV’s communications structure as well as relaunching its Web site to have both Internet and Intranet functions.
As for DIMA, it has clearly outgrown Wiesbaden, an ancient town known for its Roman era mineral baths. This years there were 363 exhibitors, but 100 were turned down because of a lack of space, according to DDV spokesman Nils Hachen. The conference drew some 1,700 attendees, while the exhibition hall drew 12,000 visitors.
DIMA may also have outgrown its original mission. Next year in Dusseldorf, it will build on an experiment this year of creating a special “e-day.” The conference will conduct simultaneous days for several disciplines, including call center, mail order, CRM, fund raising, integrated marketing, database, and telecommunications, Kracke said.
It will also partner with the Dutch direct marketing association to create a more international flavor as well as have an international pavilion. It will partner with other European countries in the future. And DDV itself hopes to grow from 900 member companies to 1,000.
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