March 01, 2009

Catalog Customer Acquisition

A quote from the non-profit industry, courtesy of Mark Rovner, from pages 114-115 in Seth Godin's "Tribes". See if you see any similarity to our industry.
  • " The era of cheap direct mail and high response rates in acquisition is over. The economics of direct mail are failing. That is more or less an uncontroverted fact. It costs more to mail, and fewer new donors come back with each mailing. This trend has been masked somewhat by higher average gifts by donors you already have, but sooner or later, the acquisition crisis is going to affect bottom lines. For some, it already has. What currently passes for an online fundraising model is at best a stopgap."
I've written nearly 1,200 blog posts, maybe 300,000 words. Why couldn't I have summarized my thesis this easily?

Even more important than somebody actually stating what we're all seeing is the last sentence. "What currently passes for an online fundraising model is at best a stopgap."

In our industry, this means that what we're doing online to acquire customers and build relationships is at best a stopgap. The future of online marketing isn't paid search and tossing a few banner ads up there and participating in shopping comparison sites and hosting a Twitter page. In fact, we simply don't know what online marketing will become.

But many of you now tell me you're beginning the experimentation process!

For many of the "experimenters", the outcome is a profitable customer acquisition program with lower-than-average long-term customer value. I've observed a few "whoppers", programs that literally replace catalog customer acquisition, programs that scale beyond traditional online marketing. These programs are not done via catalog marketing, via online marketing, or via social media, though those channels often get credit for the order. They are the outcome of experimentation!

Why our industry leaders refuse to publicly acknowledge the evolution of our craft is puzzling to me. Seriously, find me a series of articles in trade journals, blog posts, or conference sessions in our industry that address the issue that so many of you keep asking me to forecast the impact of.