April 19, 2010

What We Lost

Ok, my direct marketing fans, here's my working hypothesis on what has been lost.

In 1995, your customer received a catalog. She liked something, so she placed an order. She called a call center, most likely one actually staffed by the company receiving the call. A human being walked the customer through the order process. The really good companies cared about this experience, and made sure they didn't cut costs here, they realized that all of the magic happens when an employee works well with a customer.

In 2010, show me where the human connection is? You rent a name from a co-op. You put the catalog in the mailbox. Or maybe you send the customer an e-mail message. The customer goes online, she searches using Google, she maybe chooses a competitor, or she buys from us. The transaction is a cold, humanless one, conducted by a secure server powered by coal from West Virginia.

In 2010, the customer doesn't have human connections in the world of e-commerce. But she wants human connections. If she didn't want human connections, Facebook and Twitter wouldn't exist, right?

So here's what we lost. E-commerce eliminated the human connections our customers actually liked. Our customers desired human contact, and migrated in large numbers to Facebook or Twitter. And our response to this was to set up a nameless, faceless brand-based presence on Facebook or Twitter where we offered discounts and promotions, thinking the discounts and promotions were what the customer really wanted --- not surprisingly, our customers didn't want a relationship with a brand that offered discounts or promotions. No, our customers wants a relationship with a real human being. If she didn't want this, then 90% of transactions wouldn't happen in stores, would they?

My working hypothesis is that the slow decline in catalog marketing isn't so much about print being "old school" as it is about the elimination of human beings and customer service that was facilitated by the transition from the 1-800 number to e-commerce.

Human beings, when on their game, are fantastic. They provide love, support, assistance.

Websites, when on their game, are cold, lifeless, and efficient. They process transactions, cheaply. By cutting human costs, the brand can give margin back in the form of free shipping. Human loyalty is lost, discount/promo loyalty is gained. Did the p&l improve?

This is what we lost. Human connections.

Fortunately, we can get this back. Quickly. It's not hard. It simply requires an investment ... in people.

As mentioned a hundred times on this blog and on Twitter, across my client base, when customers interact with employees, customer lifetime value improves. Do you want to increase customer lifetime value (otherwise known as loyalty)?


Y'all have heard of Customer Lifetime Value (called CLV or LTV), right? Another 10% of you calculate the metric and know what the rig...