WHEN THE RESULTS of this year’s DIRECT survey first came in, I felt like demanding a manual recount. Instead of the modest shifts we tend to see from year to year, there were two real eye-openers.
One was a 15% drop in retention budgets and an apparent shift of those dollars into acquisition.
Does this mean that the CRM revolution is over? Not quite.
One reason for the change is that companies feel a need to replenish their house files after a period of heavily relying on them. As catalogers know, this is part of a time-honored direct marketing cycle.
Another possibility is that retention costs are going down as firms turn to e-mail for customer communications.
Which brings us to the other change: A major upturn in spending on online marketing, and a decline in use of traditional media.
In terms of sheer dollars spent, this may not be as dramatic as it sounds – paper mail and DRTV still have plenty of money pumped into them.
But this diversion is likely to accelerate as more firms realize benefits from their technological investments. Our survey also reveals that Web profits are on the rise.
All of which shows that budgets are finally catching up with the hype.
Of course, there’s one other numbers-related story in this issue – about the U.S. Postal Rate Commission’s rate decision.
The numbers we report are hardly final – the postal Board of Governors still has to rule on them – and this increase is hardly the worst we’ve ever seen. But there’s a connection between the postal story and our survey stories – that as postage goes up, the Web may grow in popularity.
Take the case of catalogers, who received the worst hit once again. Their only option may be to move as much of their business as they can online and reduce their dependence on the USPS.
There are signs that this is already happening. Yes, our readers will spend more on acquisition in 2001, but they don’t expect to increase their use of outside lists.
Network
