When a privacy advocate challenged Lynn Wunderman to make her own personal marketing profile public, she told him to wait five minutes. The president-CEO of database management firm I-Behavior (and daughter of direct-marketing legend Les Wunderman) was waiting to testify on consumer privacy before the Federal Trade Commission. She had brought along a typical data profile to explain what data are collected, and how. The profile was her own.
“They had my salary wrong and missed the fact that my husband has a registered antique motorcycle, but other than that, it was pretty accurate,” recalls Wunderman. The advocate, she adds, was speechless.
It’s tempting to field data-based campaigns, especially since online marketing has spurred an exponential jump in available consumer info. But it’s a tough environment in which to get cozy with consumers, who are increasingly wary of how marketers collect and use their data. Database marketers walk a tightrope to foster a conversation with their best prospects without ticking them — or regulators — off.
“Consumer perceptions [of data collection] will be as important as legislation,” says Jim Lucas, director of planning and analytics at DraftWorldwide, Chicago, even as restrictions prompt marketers to field better work through “creative compliance rather than reluctant compliance.” Much better to let consumers self-select, so they define themselves, rather than be defined by marketers.
The biggest regulatory development this year is a national Do Not Call list from the Federal Trade Commission, set to launch this summer after legislators approved $16 million in funding to set up the registry (March PROMO). “I am delighted that the FTC can now respond to consumers’ pleas to end unwanted telephone intrusions into their homes,” says FTC Director Timothy Muris in a February statement.
The FTC’s registry will supercede 20 current state lists, and the FTC is talking with the Federal Communications Commission about coordinating efforts. (The FCC is considering its own national Do Not Call registry). Some states have aggressively enforced their own lists, with Pennsylvania and Oklahoma prosecuting their first cases early this year — in Oklahoma’s case, only days after infractions and a mere month after the law took effect. Industry-watchers warn that the FTC is likely to follow with a Do Not E-mail list. In fact, the FTC convenes a three-day “Spam Forum” this month (April 30-May 2) to discuss consumers’ experiences, e-mail address harvesting technology, security weaknesses, legislation and recent enforcement, among other topics.
Consumers’ biggest fear, at least over the last three years, has been identity theft. In 2002, it accounted for 43 percent of complaints to the FTC. Consumers lost about $343 million to such fraud last year, up from $160 million in 2001. (Fraud complaints jumped to 380,000 in 2002 from 220,000 in 2001.)
Meanwhile, Congress is mulling anti-spam legislation and haggling over jurisdiction of the Internet. In January, the Direct Marketing Association issued mandatory data-protection guidelines to protect personally identifiable information, as well as a separate security checklist created in collaboration with the FTC.
Privacy officers help protect marketing data from identity theft. I-Behavior’s co-op database — 77 million names, pooled from 450-plus marketers — lets member marketers group shoppers by purchase behavior and attitude (thanks to a new overlay with Yankelovich Partners’ Mindbase), but doesn’t single folks out.
“We look at groups, not individuals,” says Wunderman. “We look for the factor that makes a target audience different from everyone else. It’s the exact opposite of advertising, which looks for the way everyone is the same. The whole premise is to send offers to the people who want them. If you took away the ability to target people, everyone would get more offers that they don’t want, marketers would have inefficient programs, and prices would go up. We’re not doing it to be nosy.”
Still, erring on the side of caution has clipped some traditional resources. For example, opt-in permission, required by law to obtain licensed driver data, has forced R. L. Polk & Co. to find other sources for its automotive database (the country’s oldest consumer marketing resource). That forces automakers to carefully cultivate relationships with existing customers.
Asking consumers directly for data is trickier, too. “People are getting more apprehensive, so marketers need to be ever more candid,” says Alan Maites, president of Robinson & Maites, Chicago.
Getting permission is common sense, says Robb Lippitt, COO of ePrize, Farmington Hills, MI. “When you walk up to someone in public, you’re usually polite enough to ask if you can talk with them before launching into your pitch.” It’s also crucial to understand what consumers have given permission for — product information, ongoing contact, sharing their name. If a marketer oversteps, there should be a clear way for consumers to halt pitches they don’t want, says Wunderman.
So how do marketers navigate within laws and guidelines to reach consumers fed up with the onslaught of unwanted offers, but also prickly about being watched? Here are a handful of brands that target consumers in a careful, considerate — and effective — manner.
RJ Reynolds Tobacco
RJR has spent 20-plus years cultivating its multimillion-name database, and each person goes through rigorous checks before ever getting on the list. Consumers verify that they’re over 21, already a smoker, and want to get mailings from a tobacco company. “We don’t prospect among people,” says Senior Manager-Database Marketing Paul Knouse. “We don’t want to mail to anyone unless they’re a smoker and they want to hear from us.” It costs from 50 cents to several dollars to gather each name.
After consumers sign an affidavit that they are 21 or older, names are filtered through third-party age verification vendors who use credit-card and other public records to pinpoint age. RJR also collects names in age-restricted venues, like bars, and makes a photocopy of each driver’s license to verify age. RJR keeps all documentation, and can pull affidavits from its files within 24 hours. RJR dabbles in e-mail; its online registrants opt in twice, and go through the same age verification. Minors tried to sneak into the database ten years ago or longer, but third-party verification put the kibosh on that, says Knouse. (Consumers who lie about their age commit mail fraud.) Regulators’ top concern is that recipients are smokers over 21; secondary is that they can easily get off a mailing list. That’s why RJR puts an opt-out 800 number on the outside of all mailings.
RJR collects name, age, address, brand preference, promotion responsiveness and some lifestyle data to tailor offers from specific brands. Loyal users get coupons, details on an upcoming retail promotion and event invitations; competitors’ users may get similar offers, with a different slant. Some brands talk with loyal users five or six times a year, says Knouse. Brand managers work with their ad agencies of record and RJR’s in-house database marketing staff. Mailings are sent by one of a half-dozen printers; agencies provide only creative mechanicals, and never have access to the database.
Some states allow product sampling in age-restricted venues. Some allow tobacco companies to mail cigarettes for “product preference testing,” with a product-preference survey that users answer via toll-free number or online. RJR mails once to ask if smokers want to try a new item; those who do get a second mailing direct from RJR headquarters, with product and a survey. In fact, RJR often surveys its users, to update its files and to show consumers that it’s listening to them. “I like to leave space on surveys for comments,” says Knouse. “People appreciate when you ask their opinions.”
Jeep
DaimlerChrysler hosts its most loyal fans at Camp Jeep each summer, but it talks with them all year long. “Camp Jeep is one of our best events to keep in touch with owners,” says Lou Bitonti, senior manager of DaimlerChrysler brand events. Jeep spends about 20 percent of its marketing budget on events; of that, 30 to 40 percent funds direct-marketing and measurement.
Consumers who ask for more info via Jeep’s 800 number or Web site go into the event database and get an invitation to Camp Jeep in the mail, and a follow-up phone call to help with registration and travel arrangements.
“True hand-raiser management means you have to establish a dialog with customers,” Bitonti says. “If you can turn a hand-raiser into an event participant, that makes them a stronger prospect.”
Jeep dedicates staff to register campers, and as details are set — Jeep books a performer, or adds a session — everyone in the database gets an update via mail or e-mail, with a follow-up phone call seven to 10 days later if they haven’t registered yet. Updates “give us a reason to gently nudge people without being a pain,” says Bitonti.
Once at Camp Jeep, consumers get to talk directly with engineers, marketing teams and managers at roundtables so popular with consumers that they book solid. Jeep tracks attendance electronically at Camp Jeep events; daily updates let Bitonti and crew manage crowds in busy sectors, and funnel campers to less-crowded areas. Everywhere, staffers ask campers’ feedback on activities, food, even staffers’ clothes. “We’re sensitive about measuring results of the event, but we don’t want to be in someone’s face about it,” says Bitonti.
Jeep follows up after the event, contacting attendees every three months or so. “If they made the time in their schedule to come out for three days, we’d better talk with them and show an interest in them,” Bitonti explains. This year, Camp Jeep has two U.S. locations — a first for the nine-year-old program — and a third event in Italy. (Camp Jeep ran in France two years ago.) Camp Jeep runs June 26-28 in Charlottesville, VA, then hustles cross-country to Santa Barbara for Aug. 14-16 via BBDO Worldwide, Detroit.
Beech-Nut
Beech-Nut Nutrition Corp. doesn’t have national distribution, so it needed to find not only households with infants, but households close to stores stocking its products. (Past campaigns mailed coupons to some homes 50 miles away from the closest store with Beech-Nut.) Its database of stores, generated by its sales force and brokers, cost $100,000 a year to maintain, but it still wasn’t complete or current enough to use. So last spring, Beech-Nut used Trade Dimensions’ TDLinx store database and mapping software to list all stores selling Beech-Nut foods, then overlaid a list of homes with infants (up to three months old). ZIP codes and mapping software enabled Beech-Nut to pinpoint addresses within a specific radius of a given store. The process cut Beech-Nut’s mailing list 40 percent, but test mailings showed a 40-percent jump in redemption.
Money saved with a tighter, more targeted list lets Beech-Nut test different offers and radius bands around stores. The TDLinx store database also powers Beech-Nut’s “where to buy” tab on its Web site: Moms enter their ZIP code and get a list of the closest retailers carrying Beech-Nut.
“Not only does it provide results, [but] it’s now a simple, systematic process. We now have confidence that our results are not skewed by an inaccurate [store] database,” says Senior Product Manager Earle Justice in a statement.
Gerber
The clock is always ticking for Gerber: Parents are only interested in its products for about 18 months (for baby food) to, at most, four years (for personal-care items). The good news is, they’re passionate about anything they buy for their babies — especially food.
“Consumers are more absorbed in the end user than with any other product category. The end-user is their world right then,” says Director of Relationship Marketing Mack Jenks. “Parents are quick to respond to us, and eager to give an opinion.”
Gerber spends about 25 percent of its marketing dollars on direct marketing. The brand’s greatest asset is consumer trust — independent research shows it’s the most-trusted brand in the U.S., says Jenks — so the Novartis Consumer Health division is careful to respect consumer privacy. “Any name we use is with permission,” he says. “That is fundamental.” Gerber gets names independently, via other manufacturers, and from third-party list builders who reach new moms in hospitals with offers such as diaper service; moms give permission for additional baby-related offers.
Gerber records the month and year a baby is born, then tailors mailings by age. It deliberately doesn’t record babies’ names, and gender is irrelevant. Annual attitude-and-usage research gives Gerber a good feel for when moms feed First, Second, Third Stage and Graduates foods, so Gerber can tailor frequency of mailings and types of incentives as babies grow. Once babies reach a certain age, they fade from the franchise and Gerber stops mailing Mom. Noble & Associates, Chicago, is lead agency; Gage Marketing, Minneapolis, handles promos.
Regionally, market development dollars fund co-branding (including some direct-mail) with key retailers who want to drive traffic for photo and prescription services as well as their baby aisles. Clear River Communications, Midland, MI, handles co-marketing.
Gerber re-launched its Web site in late March, adding interactive elements “to help move us where we want to be with relationship marketing,” says Jenks. Users register online to get info on child development, health, education and products, as well as promotional offers. Grey Interactive, New York City, handles.
Some of Gerber’s best information comes from parents themselves. Calls to its 24-hour customer service line give instant feedback.
Mailings often include survey cards, but Jenks has stopped leaving blank space for open-ended comments. “Moms wrote in circles all the way around the cards,” he recalls. “When you get 20,000 responses like that, it costs tens of thousands of dollars to decipher the data — and it’s a problem if they expect an answer.”
ConAgra
Who doesn’t like popcorn? But not everyone wants to converse with a popcorn brand, so ConAgra uses online games to cultivate names for its Act II Popcorn database. A recent Pop, Peek and Win campaign used an on-pack message to send consumers online for an instant-win game. Players gave data (name, e-mail address, ZIP code, birth month) to enter; the game piece was a popcorn bag that explodes to reveal a winning message. Winners get free product (nice for sampling) and Act II follows up via e-mail with product info and coupons. EPrize handles the game; data-management shop Seurat, Chicago, handles analysis and follow up.
“The whole idea of Internet marketing is to reach fewer people who are your real target, not more people who don’t want to hear from you,” says ePrize’s Lippitt. “Start by asking, ‘Hey, are you interested in me?’ and then move the conversation forward.” Accurate analysis is crucial: “People expect you to retain the information if you’ve asked them a question.”
Cambridge Galleria
The upscale Boston mall is phoning it in these days. Galleria’s Smart Mobile Shopper program lets shoppers request promos delivered to their cell phones. Shoppers call an 800 number that’s posted on signs throughout the mall or go online to specify which Galleria retailers they want to hear from. (Participating retailers include Sears, Borders Books, The Gap, J. Crew, Dunkin’ Donuts and Taco Bell.) A text message comes with a coupon code; shoppers show the code at Galleria’s customer service desk to get a paper voucher to redeem in-store. Redemption averages an impressive 18 percent.
Shoppers control who calls, when and how often. Registrants get one offer every three weeks. “It’s conservative timing, because we’re oversensitive about poisoning the well,” says Mike Troiano, senior VP-business development for mobile marketing firm m-Qube, which handles Galleria’s program. Telecoms fighting subscriber churn worry about losing customers who are turned off by too many messages. Besides, it costs about 10 cents to send one text message, so “that incents marketers to target more carefully,” says Troiano.
Boston-based m-Qube ran a promo for New Line Cinema’s Knockaround Guys, sending trivia questions about the movie and its stars to registrants’ cell phones. Players answered via phone or online to vie for cash (and register for future New Line offers).
Text messaging skews younger — “13 to 24 is our sweet spot,” says Troiano — and all promos are opt-in. (Ads via Clear Channel and others get the word out to woo players.)
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