January 26, 2008

Contact Strategy Evolution

Pretend you are a loyal customer of a leading catalog brand. Let's see how the leading brand might have contacted you, over the years.

1965:
  • You enjoyed receiving your three big books a year, 600 page monsters featuring the entire store. You mailed your order to the brand on October 1 along with a check covering the purchase amount, hoping the merchandise would arrive in 4-6 weeks.
  • Total marketing contacts = 3.
1985:
  • You stumbled across a "specialty brand" that mails you twelve catalogs a year, smaller monthly reminders averaging 124 pages each. You phone your order in on October 15, giving a credit card for payment.
  • Total marketing contacts = 12.
1995:
  • Your favorite specialty brand "branched out" into other product classifications, sending you twenty-four catalogs a year.
  • Total marketing contacts = 24.
1999:
  • E-commerce, the dot-com craze, and Y2K preparedness dominate the landscape. In addition to 24 catalogs, your favorite specialty brand started sending a monthly e-mail campaign, and has a website where you can purchase merchandise. You visit the website on a quarterly basis.
  • Total marketing contacts = 36.
  • Consumer-driven contacts = 4.
  • Total interactions = 40.
2002:
  • The surprising rise of Google allows you to "shop around". You use Google once a quarter for shopping purposes. Your favorite brand has upped e-mail contacts to 24 a year. You visit the website on a monthly basis.
  • Total marketing contacts = 48.
  • Consumer-driven contacts = 16.
  • Total interactions = 64.
2005:
  • Google owns the world, having become your starting point for your shopping habits. You use Google once a month to research product offered by your favorite specialty brand. Your favorite specialty brand ramps up the e-mail program to one per week, and maintains 24 catalog contacts per year. You visit the website once every three weeks.
  • Total marketing contacts = 76.
  • Consumer-driven contacts = 29.
  • Total interactions = 105.
2008:
  • Your leading specialty catalog brand adds RSS feeds to the mix, allowing you to see new and exciting merchandise offerings once every three days. E-mail contacts have increased to three every two weeks. You visit the website once every three weeks, and you use Google to search for comparable merchandise once every three weeks.
  • Total marketing contacts = 102.
  • Total pull-based contacts (RSS) = 17.
  • Customer-driven contacts = 34.
  • Total interactions = 153.
During my twenty years in this industry, I haven't observed significant gains in annual repurchase rates or annual purchase frequency. I observed significant decreases in response to catalog and e-mail marketing activities.

Then I step back, and truly see how we contact customers. It all makes sense. We simply average high response in a dozen activities across a hundred activities, yielding low response.

Sure, customers can opt-out of catalog and e-mail marketing ... but once the customer is in, we make sure we're in their mail-box/in-box a couple times a week.

As leading brands, we work out tail off to make each interaction, each contact, as productive as possible. We are driven, using real-time metrics, to employ "best practices" that maximize ROI. We micromanage metrics like click-through rates, never stepping back to see if all the changes in click-through rate actually cause an annual increase in repurchase rate.

At the end of a year, we've saturated the customer with more than a hundred contacts ... contacts that produce the exact same annual repurchase rate, the exact same number of purchases per year.

And then we wonder why customers are fed up with spam and junk mail, when this process is repeated across the five brands the customer purchases from on a regular basis, not to mention another fifty catalog brands that try to entice you into purchasing via unsolicited customer-acquisition-based mailings.

3 comments:

  1. As usual, great post. If you think about it, the evolution is not unique to the catalog world. David Armano, VP, Experience Design for Critical Mass discusses the same concept, graphically in his blog, http://darmano.typepad.com/logic_emotion/2008/01/infinite-touch.html He believes we will move from multiple connected touch points to infinite touch points. What do you think?

    ReplyDelete
  2. He does a very nice job of creating beautiful imagery.

    Maybe there will be a percentage of customers who want to interact with brands via infinite touch points. Time will tell.

    ReplyDelete
  3. "If you are interested in Risk metrics and KPI in business, check this web-site to learn more about Metrics

    www.business-development-metrics.com

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