Essential Reading for Marketing & Business Professionals
Thursday April 3rd 2008

Insights in this issue:
* CRM market "still highly fragmented" says Gartner
* 'Dead-tree Medium' No Longer as Direct Mail Outperforms Digital

A new study by Wharton University suggests
that cues in the environment have a
significant impact on what we buy. Ads that
reference everyday things we encounter can
have a greatly improved impact. Gartner's
latest conference on CRM makes depressing
reading and begs the question why anyone is
still bothering. And finally some good news
from the US for Direct mail where volumes
and results are on the up. We ask "is Email
about to go on the back foot?"

James Pearson - Editor

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Cues in the environment influence what we buy.
A new study by Wharton University suggests
that that marketers should be associating
their products more closely with the things
we see around us every day. For example, an
experiment in which participants who were
shown repeated images of dogs were quicker to
recognize the Puma brand, and liked its
trainers more, than those who had not seen
the images. Confused? It turns out that dogs
are associated with cats, and cats are
associated with Puma.

Another example is Mars Bars, which saw an
increase in sales after NASA landed the
Pathfinder spacecraft on Mars on July 4,
1997. "Although the Mars Bar takes its name
from the company founder and not from Earth's
neighboring planet, consumers apparently
responded to news about the planet Mars by
purchasing more Mars Bars," the authors write.

Now lets look at the most successful car
company Earth - Toyota. For a long time it
ran the tag line on its advertising "The car
in front is a Toyota". So every time
consumers saw a car in front of them, they
are far more likely to think "Toyota". On the
other hand, one of the car companies that is
not doing quite so well, is Ford. Their
current ad for the Focus shows an orchestra
playing instruments made from bits of the
car. Given that most of us never see
orchestras it would be reasonable to suggest
that this ad is therefore missing a trick.

What does this research mean in practice? We
suggest that it re-inforces one of the
age-old adages of advertising - namely
"relevance". But it adds a twist by placing
the emphasis more onto relevance to what the
consumers sees and experiences every day. The
challenge then becomes one of linking your
product to familiar cues in the consumers'
environment that have some resonance with
your product. Of course, ads like Cadburys
"Gorilla" prove that sometimes all you need
is a sufficiently mad idea. But lightning
doesn't strike predictably, does it?
To read the full report, click here

Click here to read the full article

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CRM market "still highly fragmented" says Gartner

70% of CRM applications have been custom
built, which explains why the CRM market is
fragmented, only slowly consolidating and
characterised by lots of churn, said Gartner
VP Ed Thompson at a 'vendor landscape'
presentation at the analyst's 2008 CRM Summit
in London. There are, says Gartner, 800 CRM
vendors, 25-30 of which merge or are acquired
during the course of the year, he added.

But perhaps the most damning comment of all
was that only 4% of customers can demonstrate
a genuine return on investment (ROI) from CRM
initiatives, mainly because most companies
fail to benchmark projects and real success
stories tend to be anecdotal.
Attendees to the ninth annual Summit, held at
the Royal Lancaster Hotel in London, were
told how many CRM programmes that have been
established to improve the customer
experience are often uncoordinated and
actually have the reverse effect, negatively
impacting the experience of the brand. As
such, it was suggested that CIOs need to work
with sales, marketing and customer service to
improve customer experience and build
consumer trust. According to Gartner VP, Mark
Raskino, customer relationship management is
now a top priority in boardrooms around the
world, with a survey of CEOs rating
'retaining customers and enhancing
relationships with customers' as their most
important goal, with 'attracting new
customers' second. "If I had done this survey
five years ago," said Raskino, "cost cutting
would have been at the top. If I had done it
10 years ago, something to do with selling
would have been at the top - and managing
existing customer relationships would not
have been anywhere near the top."

Part of the problem with CRM, suggests Don
Peppers, is that it has a tendency to stifle
marketing innovation. At MI we have noted
many times that large CRM solutions make
change very hard to achieve and instead drive
a measurement culture based around what the
system is capable of measuring, rather than
what it should be measuring.

Click here to read the full report

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
'Dead-tree Medium' No Longer as Direct Mail Outperforms Digital

The latest news from the US suggests that, to
mis-quote Clarence Clemens "rumours of Direct
Mail's demise have been greatly exaggerated!
Marketers' use of direct mail and other
printed materials is stronger than it's been
in years. Thanks to variable-data printing,
companies can now tap purchase-history
databases to design, create and print
entirely personalized catalogs that
cross-sell products and services to
individual consumers. They can also combine
print with other media in the evolving
discipline known as cross-channel marketing.

According to the U.S. Postal Service,
approximately 103 billion items were mailed
at the commercial rate last year, surpassing
the nearly 96 billion letters sent first
class. The Direct Marketing Association (DMA)
projects print-based expenditures will rise
over the next four years.
'People Want to Feel Special'
Mocked as a "dead-tree medium" not long ago,
print today defines as its core strength the
flexibility once claimed by digital
communications. Email, hailed in its infancy
as a cost-effective panacea, has grown into
an unruly adolescent with a spam-tarnished
image that keeps many legitimate marketers
away. According to Wharton marketing
professor Eric Bradlow, print offers
marketers a clear advantage over digital
media, such as email. "Many people see email
as impersonal and costless to write," he
says. "People want to feel special. In
marketing [terms], email is transactional;
paper is relational."

Ed Manzitti, chief researcher at the DMA,
suggests that paper is both relational and
transactional. "Print is very much a potent
channel for marketers," he says. "It has a
flexibility that online doesn't offer to the
same degree, and it has the possibility of
tremendous personalization. But the biggest
attraction may be simply that people read it
-- to a degree they don't read email. The
marketer can include four or five pages of
words with the expectation it will get read.
An email? You better make it short and
punchy, because that's all you can expect
will be read -- maybe."