March 2008 - Direct Marketing News

Do NotOpen UntilMay

COLUMNCarmen TothA Lover of WordsShe is one of the brightest creative rising stars. This year she won both CMA Gold and two NAMMUAwards. One of the latter was the first-ever Dave Taylor Copywriting Award commemoratingthe late, famed direct marketer.I asked Carmen, “What gives you the mostsatisfaction in your work?” She answered,“Creating… and hoping to be an inspirationto others.”Carmen Toth has come a long way fromwhere she started. Her very first advertisingjob was a two-month internship at RetailCommunications Group (RCG).She explained, “It was part of the Humberpost graduate copywriting program. RCGgave me some very valuable experience thatI am grateful for to this day. They involvedme in conceptual development, copywriting,proofing and research. I was very green butalso very eager and they took the time to teachme what I needed to know to do decent workfor them.“My favourite memory is when a clientchose the headlines I had written to use in awhole campaign – print, in store and outdoor.I didn’t attend the presentation, but it felt greatto know that my work stood out. It basicallyconfirmed for me that I had chosen the rightline of work.”Carmen Toth is now a senior copywriterwith Rapp Collins, a division of DDB Canada.She has been working there for the last eightyears.“The work I’m most proud of has beenintegrated campaigns. I love it when we cantake a big idea and give it a whole new lifein direct.Knorr direct mail piece“One that comes to mind is the Knorr frozendirect mail we did in 2006. We took an elementfrom the mass ads—the word ‘frozen’ bleepedout and we expanded on it with thermo-sensitiveink that revealed a message when put inthe freezer.“We also had the opportunity to say morein copy with the word ‘frozen’ bleeped out.It achieved great results and won a CanadianMarketing Association (CMA) gold and twoNAMMU (National Association of Major MailUsers) awards.“Another piece of work I’m proud of is theDRTV spot we did for the launch of OneMatch,the stem cell and marrow network managedby Canadian Blood Services. Hardly anyoneknows that more than 70 percent of peoplewho need stem cell transplants will not finda match within their family and that an unrelateddonor is their only hope. The spot wastargeting young ethnic males to register aspotential donors.“The ad featured Chinese-Canadian siblings,Jack and Emily. All their lives they had to shareeverything, and then Emily got sick with leukemiaand needed stem cells for a bone marrowtransplant. The one time Jack most wants toshare with his sister, he can’t… because heisn’t a match. It was a compelling story thatworked. It aired nationally in October and ranfor six weeks. The spot performed well andCanadian Blood Services gained many newOneMatch registrants.“And then there was a piece we did for the2008 Subaru Impreza launch. The big ideawas ‘the Japanese car the Germans wish theymade.’ We brought it to life in direct with apackage that looked like it came from Germany.It was from whistleblower Gunter Schroder,a German engineer who must clear his conscienceby telling everyone what a great carthe Impreza is. It included a letter, plus photosthat he had secretly taken, with handwrittencomments about all the car’s virtues. I had towrite it as someone who still didn’t have a fullgrasp of English, so the copy is pretty funny.It’s one of the most creative projects I’ve everworked on.”Biggest influences“So, which person or persons has been the biggestinfluence in your life?” I enquired.“My family, my friends, and the people whohave challenged me,” she responded.The many who have challenged and inspiredCarmen start with her parents - her dad, John,a mechanical engineer and her mother, Sandra,who works as an HR Specialist.Carmen is the oldest of three children.Her younger siblings include a sister and abrother.Through her childhood, the family movedaround to many cities in Canada even living asfar away as St. John’s, Newfoundland.Carmen confessed, “I think living and studyingin St. John’s had a big impact on me, andmade me able to relate to others more easily.“While in school in Grade Nine one of the“While in school…one of the teachersencouraged me to keep a journal, whichsparked a love of writing.”—Tothteachers encouraged me to keep a journal,which sparked a love of writing. I still keepone to this day.“In school I always did better in the arts andcreative writing than math and science. In highschool I thought I would be a social worker,journalist or screenwriter. I took English atUniversity of Toronto and was even consideringgoing into advertising when I stumbledupon the Humber copywriting post gradprogram.Copywriter boot camp“Going to Humber College for media copywritingwas a big undertaking. It was like boot campfor copywriters. It whipped me into shape andgave me the discipline I needed. It’s a goodprogram, and a good school.”“Could you relate some personal anecdotefrom when you were just starting out in thebusiness?” I asked.“I realized that to find, and keep, a job inthis business, you have to be very persistent,confident and dedicated to evolving. You haveto really believe in yourself, because your portfolioand your work WILL be criticized. WhenI was looking for permanent employment as acopywriter, I sent out hundreds of resumes.“At that time I worked in a deli at a grocerystore and sent out my resumes with theheadline ‘Top ten reasons why you shouldhire a deli worker’. That’s when my currentemployer called me – they had received mydirect mail.”“Are you married; do you have children?”I enquired.“Married, yes for four years, kids no, but wedo have two cats,” she replied.“What about hobbies? Recreation?” I continued.Singing gigs“I play guitar, and I am also a singer-songwriter.I play the occasional gig in different venuesaround Toronto. My husband and I both playinstruments; he plays drums so we jam a lotat home. My family is also very musical, so Ijam with my dad, sister and brother wheneverI visit. And I play Scrabble (my favourite game)with my Mom – who is the best player I’veever met.“Whenever I can, I love going out withfriends to dance, do Karaoke, play pool, orsee a live show.“To stay fit and sane I do yoga during theweek and swim at the community centre onthe weekends. I also recently started running.I’m hoping to one day participate in a charitymarathon.”Carmen’s favourite group is FleetwoodMac and her favourite singer is Stevie Nicks,the singer-songwriter who was a crucial partof Fleetwood Mac and now a star in her ownright. A big highlight for Carmen was attendingtheir concerts recently with tickets in thefront rows.She enjoys listening to music while working.Every weekend she and her husband practicein preparation for what they hope will be a liveconcert together at a venue in Toronto.“Did you ever feel you had to sacrifice?” Iquestioned.“Yes, my social life. This line of work oftenrequires overtime. I have since learned towork smarter, so I can have a better work-lifebalance.”Direct &with Billy Sharma“If you could do it again, what would youdo differently?”“I wouldn’t have taken things so very seriously.I would have also been more proactive,”she answered right back.DRTV scripts, DM stories“Which area of the business have you generallymost enjoyed working for?”“I really enjoy DRTV, and anything else thatrequires a spoken script – such as radio andinformational videos. I also love creating directmail pieces that tell more of a story—like theSubaru piece.”“Which area would you like to get moreinvolved with in the future?”“I would like to do more direct work to gowith strong integrated campaigns – whetherit’s DRTV, direct mail, micro sites or somethingelse. And I wouldn’t mind working on somenew business pitches and strategy – I havelimited experience in those areas and wouldlike more.”“Could you narrate the moments or eventsthat have had the greatest influence on yourlife and your career?”“I almost didn’t apply to the Humber copywritingprogram. It was the night before theinterview and test and I doubted myself. ThenI heard a voice in my head say in a firm andloud voice: ‘you’re going!’It has been a year of recognition forCarmen Toth, senior copywriter withRapp Collins, for her work on theKnorr Frozen Launch direct mailcampaign. It won the addressedAdmail B2C campaign awardand this inaugural Dave TaylorCopywriting award from theNational Association of Major MailUsers. It also captured gold in thedirect mail B2C category from theCanadian Marketing AssociationAwards.President and creative director of Designers Inc., Toronto.“That’s why I always tell people to listento their intuition. It’s hardly ever wrong,” sheconcluded.So, I too am listening to my intuition, which istelling me that Carmen Toth, one of the brightestyoung creative stars, is destined to go places.Just watch her.As well as being bright, charming and articulate,she has already proved that she ishighly creative. I have agutfeeling that she will bea great inspirationto others.Billy Sharma is presidentand creativedirector of DesignersInc., Toronto. Hecan be reached at416.203.9787.March 2008 Direct Marketing News 3

LIST WATCHREADER FORUMReader FORUMWhat was one of your most effective directmarketing campaigns in 2007 and why?We posed the above question to marketers at many companies and agencies. Some of their repliesappear here. Others ran in the February issue, and more will appear in the April issue.Self-promo card draws interest from non-profit sectorFor 2007, our self-promotional card “Hello my name is Phil” wins hands down. We wantedto announce the official launch of our new division: Phil Communications dedicated tonon-profit and community organizations.To do so, we created the “Hello” campaign in print, Web and even carried the theme throughour stationery. About one in 10 responded to the card by either setting up an appointmentto meet with us, or asked to know more over the phone or by email! Our graphics were eyecatching, the message was simple and our mailing list was very selective.First we mailed the card to our existing clients to thank them for their continued trustin us. We also encouraged them to spread the word among their colleagues and peers(we threw in extra business cards for them to pass along).Then we made a mailing list of clients we wanted to have, and mailed those out. Ineach case, the card had a pre-printed generic message about our services, but in eachone we wrote a personal note –by hand!– to each individual expressing why we felt aconnection to their organization. We also wrote each envelope by hand for an extrapersonal touch.We sent out very few at a time to ensure that we would have time to follow up witheach person with care. We sent out between 10 and 20 cards a week, for several weeks.We stopped in early December as to not compete with holiday cards and other largevolumes of mail. In January we resumed the mailing and it continues to do very well.Our specialty is branding, so we were able to develop a very consistent messagethroughout the various channels (print, Web, etc). I think this has a very positive impacton people. It shows that you have thought things through and have stability, all whilebeing creative and very approachable. These were all qualities we wanted to get acrossto our audience.In such an overly techy, “connected” world I feel people are more “disconnected” thanever with advertising. We see, but we don’t feel. The fact that we hand wrote the envelopesand message inside was what made people take notice of our direct mail piece.For our audience, it was particularly important to be “hands on” since many in thenon-profit sector are often intimidated by professional marketing services. This was ourway to make an immediate connection with the reader.Kim Fuller, owner, art director, Phil Communications (division of IDGCommunications) Montreal, QuebecB2B campaign drives holiday gift card sales for HbcOur most successful DM in 2007 was by far the Hbc Corporate and Olympic Sales DM.The objective was to drive holiday sales of our gift cards for corporate gifting and incentiveprograms while creating awareness of the larger B2B product and service offeringHbc provides.The campaign was segmented into two deployments. The general deployment wasthe larger of the two and garnered a five percent response rate, while the premiumdeployment achieved a 51 percent response rate, and the campaign overall far exceededsales expectations.The success of both deployments can be attributed to the high level of personalizationas well as the interactive nature of the piece. Both the exterior and interior of the pieceswere customized with the recipient’s name and a unique pin number was provided foreach recipient, driving them to our Web site to reveal their special offer. This allowed usto track the response rate as well as their navigation throughout our Web site.The premium deployment had the added element of being highly targeted to a smallgroup of hand selected high potential leads. In addition, this was a three dimensionalmailer in an outer envelope designed to appear as a courier delivery.The piece included a USB drive which contained a very short animation tying in thecreative and then automatically drove them to our site in order to reveal their specialoffer. Finally the offer provided to this select group was richer than that of the generaldeployment.Susie Nezic, marketing manager, Hbc Corporate Gift Cards and Incentives,Toronto.‘Cheque us Out’ postcards lure people to landing pageOur most effective campaign in 2007 was called “Cheque us Out”. We used a combinationof unaddressed and addressed Admail with a postcard format enticing the customer togo to our landing page chequeusout.ca. The Canadian Payments Association (CPA) hadmandated a change to all cheques that was originally to take effect on June 30, 2007.NEBS took the lead on this change by changing over our entire cheque inventory tothe new CPA compatible format and then asking businesses “Are you ready?” Our positionwas to inform and educate small businesses on what the changes were and whythey were happening.We did this by posting white papers, cheque specifications and links on our landingpage for businesses to reference. We also included a response form where businessescould ask for free samples of cheques to see the quality of the cheques and the changesdirectly.They could also be entered into a draw if they opted in to our email newsletters. Wealso ensured that all front line sales staff were fully informed on cheque changes andcould speak to this on every call.Through predictive models and regional targeting we contacted all appropriate businessesacross Canada with this message. During this time period, cheque sales increasedby 20 percent!Alison Durtnall, director of marketing, NEBS Business Products, Midland, ON.listWATCHThane Direct has Canadian appliance, health & fitness buyersBREWSTER, NY--Macromark Inc., based here, has been appointed to manage ThaneDirect’s Canadian customer file. Gnames Media previously managed it.The file identifies more than 88,000 household appliance buyers who spent US$100 to $260in response to a long form infomercial. A separate segment offers more than 7,800 health andfitness product buyers. Orders were received by phone and all were paid for with a credit card.Thane Direct sells high quality fitness, health and beauty and household products throughDRTV. The unique product line consists of appliances for the home, cleaning products,exercise equipment, and more. Sixty five percent of buyers are female.Base rate is US$125/M. Selects include gender and province each at additional US$7/M.For more information, contact your list broker or call Paula Dazi of Macromark at845.230.6300 ext 349 f: 845.278.0650 or e: paulad@macromark.comFile identifies people with interest in travelling to EuropeCHICAGO, IL—An email list of online subscribers to The Travel Insider is available fromThomas Townsend & Kent, based here. These are people who indicated an interest inEuropean travel.A corresponding postal file has more than 200,000 addresses. Data was gatheredduring the subscription process without incentives. Selects include household income,homeowners, hotline, state/SCF/Zip.Base rate is US$100/M for the email or postal file.For more information, contact your list broker or call Dominique Hines of ThomasTownsend & Kent at 312.266.6400 ext 104 or email dhines@thomastownsendandkent.com.Employee Benefit News Canada email list has 4500+ addressesPEARL RIVER, NY—SourceMedia offers more than 4,500 email addresses on the EmployeeBenefit News Canada email list. ePostDirect Inc., based here, manages it.This file reaches vice-presidents, human resource managers, benefits managers,chief financial officers, pension fund managers and other professionals. No selects areavailable.Base rate is US$325/M.For more information, contact your list broker or call Frank Cipolla of ePostDirect at845.731.3832 or frank.cipolla@edpostdirect.com.Baby Boomers creating a new lifestyle number 913,600+SAN FRANCISCO—A file of more than 913,600 Baby Boomers is available who are saidto be creating a new lifestyle. Name Finders, based here, manages it.These Boomers are described as getting ready for their “second act” in life. They are reinventingretirement and making plans for a long-lasting, satisfying, and productive life.Boomers have the most disposable income of any age group. Born between 1946 and1964, they are among the most knowledgeable and sophisticated responders. They arehungry for information and are looking to reinvent themselves in mind and body.Many Boomers are starting new businesses and need computers and supplies. Someare going back to school to further their education and need information both for localand distant learning. They are now looking for the tools and advice that will allow themto enjoy a sense of security and luxury. These Boomers are also looking for informationto pursue hobbies like golfing, boating, travel and gardening. They want the finer thingsin life and are able to afford them.The list is comprised of 85 percent male. They are of the ages 45 to 64 with estimatedhousehold incomes of US$125,000. Direct mail is the source.Base rate is US$125/M. With phones, the rate is US$300/M. Fundraising rate isUS$100/M.For more information, contact your list broker or call Name Finders at 415.955.8585or 1.800.221.5009.Directory contains more than 450,000 Canadian businessesSAINT-SAUVEUR, QC—Canadian Business Publications, based here, has introduced theCanadian buyers directory, described as a completely exportable database containingmore than 450,000 Canadian businesses. It includes business description, keywords,title, business name / owner’s name, address, city, province, postal code, phone, andfax (when available)This fully importable / exportable B2B list is said to let entrepreneurs and marketing professionalsgain quick access to a wealth of information to start a direct marketing campaign.Data can easily be imported into most popular applications such as Microsoft’s Word, Excel,Access or ACT. Files are saved in plain text CSV (colon separated value) format.The retail price is $249.95For more information, contact your list broker or call Canadian Business Publications819.322.5756 or visit www.canadianbuyers.caCanadians are on Disney masterfile of 5.6 million+ peoplePRINCETON, NJ—The names of children’s book buyers has been added to Disney’smaster file, which previously consisted only of subscribers to children’s magazines. ALCData Management, based here, manages the file. The latest count surpasses 5.6 millionand includes Canadians.Base rate is US$105/M. Selects include Canadian, hotlines, change of address, gender,paid and source.For more information, contact your list broker or call Susan Packard of ALC DataManagement at 609.580.2785 or e: susan.packard@alc.comCornerstone B.I.G. offers array of business-to-business filesTORONTO--The Business Information Group (B.I.G.) of the Cornerstone Group ofCompanies, based here, offers a vast array of business-to-business lists in Canada.Mailers can target a wide-ranging assortment of titles within all industry segments forgeneral business mailings, or reach those specialized people in niche markets.Mailers can choose from extensive databases, such as the Canadian Business Database,by selecting by title, employee size and industry - or pick key contacts from auditedindustry-specific publications, such as Canadian Architect, Canadian Consulting Engineer,Truck News and others. Lists are available in the categories of automotive, professionals,manufacturing, energy, services, transportation and distribution, retail, telecommunications,email and others.For more information, contact your list broker or call Cornerstone at 416.932.9555 orvisit www.cstonecanada.com.4Direct Marketing News March 2008

UPDATEINBRIEFinBriefThree agency team wins AIG Travel Guard accountTORONTO, ON, --Travel insurance provider AIG Travel Guard has selected BrandworksInternational Inc., based here, an independent advertising and branding agency, as itsagency of record in Canada. It follows a competitive search for an integrated agency thatcould deliver a full spectrum of marketing services.With a proven track record in strategic planning, branding, search, online and offlineadvertising, Brandworks partnered with PGeMarketing for direct mail and ParadigmPublic Relations for public relations. The integrated team was awarded the account aftera competitive pitch process in late 2007.“We selected Brandworks because of its strong online advertising expertise, its understandingof the industry and its creative approach to communicating to Canadian consumers,”says Dan McGinnity, AIG Travel Guard’s vice-president of marketing communications.“Additionally, the integrated team of Brandworks, PGe and Paradigm demonstrated theycould deliver a solid strategic campaign under very tight timelines.”AIG Travel Guard’s Canadian initiatives will include online, direct mail, public relationsand traditional brand awareness advertising in 2008. It is a wholly owned subsidiary of AIGTravel, Inc., a member company of American International Group, Inc. (AIG), an insuranceand financial services purveyor with operations in more than 130 countriesStoddart decries tripling of data breaches last yearOTTAWA--Misuse and mishandling of personal data represent increasing privacy threats,warns federal privacy commissioner Jennifer Stoddart. She points to a proliferation ofidentity theft and spam as well as a tripling of reported data breaches around the worldlast year.Stoddart has been pressing the federal government to update the law to make it mandatoryfor businesses to notify people whose personal information has been compromised bya data breach. Industry Canada is in the midst of consultations on breach notification.She is also concerned that a significant number of businesses in Canada have yet to liveup to their legal responsibilities to protect personal data. A poll conducted for the Officeof the Privacy commissioner found almost one third of businesses reported they had notfully implemented the provisions of Canada’s private-sector privacy legislation.Non-profits seen hiking DM spends through 2012NEW YORK--Non-profit organizations typically received a $14.47 return for every $1invested in direct marketing last year, according to a new report from the U.S. DirectMarketing Association (DMA). Through 2012 non-profit advertising expenditures areforecast to grow 2.4 percent annually, while direct marketing driven sales are expected toclimb 6.8 percent, says the DMA.By 2012 non-profit organizations’ catalogue spending is pegged to reach almost US$486million. However, direct marketing driven employment in the non-profit sector is anticipatedto decline 1.4 percent annually through 2012.Catalogue sales among non-profits are seen rising 7.6 percent annually, according to theDMA. Educational services will likely see the lowest return on direct marketing investment,about $9.38 for every $1 spent.Grey Vancouver snares six recent partnershipsVANCOUVER, B.C.—Agency Grey Vancouver recently added Wireless Wave, T-Booth,Day4 Energy, Royal Roads University, and Oasis Airlines to its existing client portfolio.The agency also got a standing offer from the Government of Canada to act as the primarysupplier for all regional requirements in British Columbia.“We’ve achieved exactly what we set out to over the past year – fundamentally evolvingour capabilities, our approach and our focus in order to better serve our clients and deliver aworld-class, zero-geography product that happens to be based out of Vancouver,” says MacMacdonald, vice-president and managing director, Grey Vancouver. “These wins, and oursuccess in attracting some phenomenal new talent to the agency, are further proof positivethat our strategy and work, work; and we will continue to charge ahead in 2008.”“Our new partners are indicative of the energy, momentum and passion within theagency right now – a passion shared for uniting creativity with commercial purpose,” saysTim Johnson, president, Grey Vancouver. “We’re delighted to have seen such robust andsustained growth quarter by quarter in 2007, and we’re looking forward to an exceptional2008.”Grey Vancouver is part of Grey Group, the global marketing services organizationoperating 110 offices in 88 countries with more than 10,000 employees. The Grey parentcompany is WPP.Cossette Media expands role with Tourism MontrealMONTREAL--Cossette Media, a business unit of Cossette Communication Group, hasbeen awarded the mandate for Internet media planning and buying for its client TourismMontreal, as well as all work that relates to search marketing. This mandate is in additionto the traditional media planning and buying that Cossette Media has been carrying outfor this client since the fall of 2005.“Tourism Montreal is very dynamic in its communications approach,” says John Tarantino,vice-president and media director of Cossette Media in Montreal. “We are very pleasedto be able to participate in further promoting Montreal as a destination to discover to therest of the world.”Cossette Media, a business unit of Cossette Communication Group, provides media planningand buying services for its clients as well as all Cossette Group clients. They includethose associated with the Internet and direct marketing.Microsoft offers early access to Dynamics CRM LiveBELLEVUE, WA--Microsoft here is continuing to test its Microsoft-hosted customer relationshipmanagement (CRM) product, Dynamics CRM Live, through its second early-accessrelease of the product. With Dynamics CRM Live, users can combine online services withtheir existing productivity applications to manage customer information and businessprocesses. Microsoft is expanding the product’s access for its customers and partners inCanada and the U.S.To use the test program, customers must go through Microsoft-approved DynamicsCRM retailers. Users can sign in to the program using their Windows Live ID. Microsoftis promoting Microsoft Office integration, including Outlook, Word and Excel, and theMicrosoft Office’s familiar interface as CRM Live’s main selling points.The professional version of the system, Professional Pro, will be available sometime thisspring. Users of this program will not be charged a subscription fee for its services untilthe early access period ends.Eloqua issues latestConversion SuiteTORONTO -– Eloqua Corporation, based here,supplier of automated demand generationapplications and expertise for business-tobusiness(B2B) marketers, recently releasedthe latest version of the Eloqua ConversionSuite. It’s a family of integrated demandgeneration applications for marketers taskedwith generating leads for their sales forcewho demand measurable results from theirmarketing efforts.This newest release is said to provide businesseswith technology that delivers enhancedcampaign measurement capabilities andinsight into the interests of prospects, aligningsales needs and processes with marketingactivities.As the B2B buying process moves online,marketing and sales teams need to be even moretightly aligned than ever to capture, read andrespond to prospects’ digital body languagesuch as their response to online campaignsand Web-based activity, says vendor. Theseactivities can direct sales teams to the bestleads and provide insight into the prospect’srole and stage in the buying process.Part of the suite is the Eloqua Sales Toolkit.It arms salespeople with critical understandingof their prospects’ interests without havingto change their existing process or learn newsoftware.The toolkit is said to give sales reps visibilityinto prospects’ level and areas of interests withreal-time emails that provide a detailed reportof prospects’ Web site activity. It yields instantnotification so that when an important prospectis on the site looking at the pricing page thesales person can move to close the deal.Sales reps can also initiate micro-campaignswith brand-consistent templates developedby marketing. Microsoft Outlook integrationlets sales send marketing-approved messagingand branding direct from Outlook that isB2B firms grow inpricing sophisticationATLANTA, GA--In B2B companies around theglobe, pricing practices are becoming a largerand more influential part of improving profitability,according to the 2007 Global B2B PricingBenchmark Survey. Released early this year,the survey was conducted by the ProfessionalPricing Society, the world’s largest associationMeet competitionPrice optimizationCost-plus approachPast experienceRules-based formula50%44%44%42%39%then tracked, logged and added to a prospect’sprofile in the CRM system.New dashboards in the suite are said toenable marketers to quickly discern how campaignsare driving activity so they can directmarketing resources to those efforts that showthe greatest return on investment. Dashboardslet marketers see the impact and effectiveness ofmarketing programs with sophisticated metricswithout the laborious process of data mining.These measurement capabilities provide adiverse array of metrics from form submissionsto geographic distribution of leads generatedto the number of qualified leads at each stageof the sales pipeline.“The Eloqua Conversion Suite has provento be a critical marketing element able to driveprograms that generate leads,” says EloquaPresident and CEO Joe Payne. “With Eloqua,marketers have the opportunity to not onlygive sales greater visibility into the needs ofprospects, but also to provide more visibilityinto how they’re driving sales in their organizations,elevating the role of marketing withinorganizations.”Eloqua Conversion Suite is available inenterprise, team and express versions. It meetsthe needs of a wide range of businesses, fromsmall companies to global enterprises. An ondemandsystem, Eloqua automates and integratesthe key marketing and sales functionsof email, direct mail, prospect profiling, Website analytics, campaign analytics and salesforce automation to improve the quality andquantity of sales leads, eliminate waste andaccelerate the entire selling process.Eloqua’s customers include Sybase, Seagate,Nokia, MySQL, Administaff, Nuance and othermajor B2B marketers. The company has officesthroughout North America and in the UK andSingapore.of pricing professionals, and Zilliant, providerof price optimization and management softwarefor B2B industries.The annual survey reveals trends in pricingpractices and capabilities across industries andaround the world. More than 500 pricing professionalsparticipated in the latest survey.“The 2007 Global B2B Pricing BenchmarkSurvey confirms several trends we’ve observedover the last few years – namely, that B2Bpricing groups have become larger and moreinfluential, have taken on more strategicresponsibility, and as a result are investingin better processes, tools and capabilities,”says Professional Pricing Society PresidentEric Mitchell.The survey results establish a cross-industrybenchmark on how B2B organizations approachpricing, the effectiveness of common processesand tools, and what initiatives drive improvement.The survey revealed the following:1. Pricing and profitably go hand-in-hand.Most respondents at 72 percent cited “improvedprofits/margins” as the principal driver of theirpricing strategy, and a correspondingly high 82percent cited a “high” or “very high” level ofexecutive attention to the pricing function.2. Advanced pricing techniques require morepowerful software. Companies have increasinglyadopted more sophisticated price settingmethods such as price optimization (44 percent)and rules-based formulae (39 percent), thoughsimplistic approaches like meet competition(50 percent), cost-plus (44 percent) and pastexperience (42 percent) remain prevalent.While price setting techniques have becomemore diverse and complex, the vast majorityor 70 percent of respondents still rely onspreadsheets as their primary pricing tool. Notsurprisingly, the companies that continue toPrice-setting practices commonly appliedCompanies have increasingly adopted more sophisticated price setting methods such as price optimizationand rules-based formulae, though simplistic approaches like meet competition, cost-plusand past experience remain prevalent.depend on spreadsheets reported lower levelsof overall pricing effectiveness compared withthose running commercial pricing software.3. Pricing improvement initiatives are widespread.Very few respondents at six percentdescribe their current pricing processes andtools as “very effective,” explaining why 73 percenthave active price improvement initiativesunder way and almost half at 48 percent arecurrently considering, evaluating, or deployingprice management software.4. Better decision-making is the goal. Themajority of companies surveyed at 72 percentsee “better decision making” as the primarybenefit of price management software – not“process efficiency gains” at 34 percent.“Price is one of the most effective levers forimmediately improving profitability,” saysAndy Dvorocsik, vice-president of pricingexcellence at Zilliant. “Our survey confirmsthat the ever-increasing focus on the pricingdiscipline is driving widespread adoption ofsophisticated pricing software tools like priceoptimization to take full advantage of theopportunity to maximize margins.”Founded in 1984, the Professional PricingSociety serves thousands of members, representingindustries worldwide.6Direct Marketing News March 2008

PROFITING FROM THEONLINE REVOLUTION*Web Marketing/Online Integration/Internet Initiatives/eCommerce Tactics/Digital Transactions*Interactive marketing software extends platform to FacebookSAN FRANCISCO—Interactive marketingsoftware Spongecell, based here, last monthextended its publishing platform to includeFacebook, a leading social utility that helpspeople communicate more efficiently withtheir friends, family and coworkers. Spongecellallows marketers to further spread andtrack peer-to-peer communications withinFacebook’s community of 58 million activeusers.Events from any Spongecell-powered calendar,Web site or blog can be added into individualFacebook profiles. Calendar items on a person’sFacebook profile – such as movie premieres, concerts,trips, openings or other experiential events– will show up in the mini-feed section on theprofile pages of a person’s community or can besent as an invitation, alerting a social network ofan upcoming event.“Online communities are where consumers‘live’ and connect, and it’s a natural environmentfor marketers to communicate with theiraudience more organically and efficiently,” saysSpongecell CEO Marc Guldimann. “The extensionof the Spongecell application to Facebookis an obvious next step as many brands areseeking to engage people online and on socialnetworks. Our customers use our softwareas a way to drive people to take action – fromattending an event to buying a ticket to purchasingmerchandise.“Because our software is platform-agnosticand can be integrated with many differentforms of media, we empower our customers toengage their audience anywhere including ontheir mobile devices, MS Outlook, blogs or anyWeb-based venue.”An interactive marketing software that helpsdrive online consumers to take action – fromevent participation to ticket sales – Spongecellprovides real-time metrics for marketers andevent promoters. Reports show how the eventinformation spreads via widgets, links, invitationforwards, SMS reminder and the like. With theSpongecell-hosted Facebook application, marketerscan even track comments made regardingtheir event.With Spongecell, marketers can send outindividual or mass communications aboutrelevant news or events based on past viewingpreferences. By segmenting audiences basedon media preference and historical interaction,people are informed about relevant content thatinterests them, and are more likely to continueto spread the information virally. Each Webbasedcommunication retains the brand of thecompany, artists or individual.Spongecell is a Web-based software applicationthat creates direct, one-on-one engagementbetween brands and consumers and convertsinterest into participation in online and offlinesales, events, promotions, and activities.Spongecell has been used by Oprah Winfrey,Lucky Jeans, Yari Film Group, Flavorpill.com,and Shakira, among others. Founded in 2005,the company is funded by Halo VenturePartners, The Interpublic Group of Companies(IPG) and the Pilot Group.Spongecell CEOMarc Guldimannsays the extensionof the Spongecellapplication toFacebook is anobvious next stepas many brands areseeking to engagepeople online andon social networks.Glogger.mobi helps curb identity theftTORONTO – A social networking site, basedhere, offered an innovative new way forconsumers to prevent identity theft the pastholiday season. Glogger technology lets consumersphotograph retail clerks before theclerks handle the customer’s credit cards.Glogger automatically sends the photo to theglogger.mobi site or the customer’s personalWeb sites. That way, if questionable purchasesappear on the credit card, possible perpetratorscan be identified easily.Many have been victims of “skimming”:when sales staff, waiters or managers illegallyskim an extra copy of the credit card,and then use it illegally. Although credit cardcompanies usually reimburse victims for thislost money, ultimately it costs all consumersby way of increased credit card fees.Recent surveys reveal the majority ofCanadians continue to be concerned aboutidentity theft and these concerns are impactinghow they shop. By photographing everyonewho handles their credit cards, people cancollect potential evidence that may be usedto support law enforcement and credit cardmanufacturers.Glogger is a unique digital network thatis described as providing the missing linkbetween the mobile phone and the Web. Tojoin, ‘Gloggers’ download and install theGlogger program on to their mobile phonesand in a minute they can transfer photos,videos, and text directly from their mobile tothe glogger.mobi Web site or any of their socialnetworking sites, blogs, or personal pages.Glogger also offers a distinctive story-tellingdigital interface that makes it easy to createphoto-essays or video essays along with textdescription of each photo/video. They canthen be posted online with the click on abutton.Glogger is a free Web service and programthat lets people broadcast live content fromtheir camera phones or manually from theirdigital camera to any of their social networkingsites, blogs, or personal pages. Developed bythe FLUID_LAB at the University of TorontoDepartment of Electrical & ComputerEngineering and Social Dynamics Interactive(SDI) Corporation, the Glogger mobile/onlinecommunity has been growing quickly duringthe past few years with more than 20,000 registeredusers. The ‘Web site features a mapdisplaying the latest content as it comes inreal time from around the world.Last holiday season, Glogger ran ‘OperationPython’, a campaign to help prevent identitytheft by empowering the public throughinnovative new ways to protect consumersfrom lurking fraud artists. Glogger teamsvisited busy shopping line-ups introducingconsumers to the power of their personalmobile camera-phones, and calling on themto “Stop Skim Scams”.iCongo creates online events,virtual tradeshow platformMONTREAL—Ebusiness systems and softwaredeveloper iCongo, based here, recently releaseda 3D online events and virtual tradeshow platformcalled iCongo Live. It also formed a separatebusiness division with the same name ofiCongo Live.The new 3D platform is billed as innovativeand powerful software designed specifically tocreate and manage interactive online events andvirtual trade shows. iCongo Live lets mediagroups, organizations, universities, colleges andcompanies create and manage 3D virtual tradeshows, job fairs and online events. Moreover, theplatform has been designed on a software as aservice model, enabling companies to launchvirtual events quickly and efficiently.The new iCongo Live business unit markets,sells and supports the new line of servicesrelated to the iCongo Live platform. It is led byYves Daoust, newly appointed executive vicepresidentwith 15 years experience in onlinemarketing and media.“The new iCongo Live virtual tradeshowplatform enables companies to achieve a higherreturn on their technology investment throughmore efficient use of the Internet as a sourceof business leads,” says iCongo CEO IrwinKramer. “We are excited to introduce to theindustry this state-of-the-art software platformwhich will greatly enhance both the exhibitorand attendee experience.”“Our 3D software platform provides realbusiness value by improving lead generationwhile enabling companies to engage with newand existing customers in new and interactiveways,” says Daoust.Virtual events include online seminars andleft: Yves Daoust, executive vicepresidentwith iCongo, says 3Dsoftware platform provides realbusiness value by improvinglead generation while enablingcompanies to engage with newand existing customers in newand interactive ways.right: iCongo CEO Irwin Kramersays the new iCongo Livevirtual tradeshow platformenables companies to achieve ahigher return on their technologyinvestment through moreefficient use of the Internet as asource of business leads.discussions by industry experts, exhibit boothsfrom sponsoring companies including access tomarketing material and lounges where attendeescan interact with each other and with companyrepresentatives. The primary objective is toincrease event participation, lead generation,revenue creation and improve communicationand collaboration between existing and potentialattendees/customers and the organization.iCongo Live recently forged an alliance withTrade Show Executive magazine, Carlsbad, CA,a prominent publication for trade show andevent executives. It will produce the trade showindustry’s first interactive directory of resourcesand industry vendors, the Trade Show ExecutiveI-Show in April 2008.“More than a directory but not a face-to-faceevent, TSE’s I-Show is a new business platformthat enables show executives to access richinformation about venues and service firmsin a way that has never been available to tradeshow executives before,” says Darlene Gudea,vice-president/publisher & editor of Trade ShowExecutive. “We are very excited to work withiCongo Live who offers one of the best softwareplatforms to make this event a success.”Gudea says the content within each exhibitor’sbooth is limited only by the imagination.TSE’s I-Show will resemble the look and feelof a trade show. Exhibitors will be arranged bycategory into one of six halls.Also, TSE’s I-Show will feature a GrandBallroom & Conference Centre with Webcastsfrom the industry’s most renowned speakers whowill address timely and critical subjects such asforecasting, budgeting, attendance promotionand legal issues. It will also feature streamingvideo live from Trade Show Executive’s GoldAwards Gala which will debut this year.The site will include The Trade Show Lounge,which will include a Chat Room and Newsstandoffering past issues as well as the best of TradeShow Executive articles and research. It will alsooffer “Hot Dates” -- an advertising section whereconvention centres can post for a price the “holes”that are coming up fast in their booking schedulesthat have not sold and for which they are offeringspecial low rates, packages or upgrades.“We are looking forward to this alliance withthe strong Trade Show Executive brand,” saysDaoust. “Together, we will create innovativenew ways for marketers to communicate withtheir customers and prospects. By providing acomplete set of online and offline marketingand advertising solutions, Trade Show Executivemagazine and iCongo will enable trade showvendors to reach new levels of success.”8Direct Marketing News March 2008

FOCUS ON VARIABLE DATA IMAGINGUnleashing power of variable copyCreating the copy for variabledata printing campaignsdoesn’t mean a descent intochaos and schizophrenia forcopywriters. Here are 10 stepsto take to get organizedand pursue a structuredapproach.BY TIM ELMYDear Smith:Here’s a simple, proven process to boost theincome of your by unleashing the awesome power ofvariable copy.Sure, writing variable copy is a bit like playingmixed doubles with Sybil, but by tailoringyour copy to specific sub-segments withinyour list, you can make your message morerelevant and persuasive without the cost ofcreating, printing and letter-shopping completelydifferent letters. Following are somethings to consider.1. Do the segments have enough in commonwith each other in terms of basic motivatorsto make this approach practical? If all segmentsare motivated by say, saving time, thisapproach might work.Sub Segment Copy points - Before Copy points - After❭ Medical practitioners ❭ Billing time is reduced with X ❭ You’ll cut the time you spend billing by 50% or more.❭ Community leaders ❭ X helps in creating funding applications ❭ You’ll reduce the time it takes to write your next funding proposal.❭ Home business owners ❭ X is a useful invoicing tool ❭ You’ll spend less time chasing clients and get your money sooner.2. On the other hand, are they differentenough to warrant the variable treatment orcould you get away with a non-variable copypoint?3. Are you talking to people who are differentiatednot by the kind of activity they areengaged in, but only the specifics, e.g. they allown stores, even if they sell different kinds ofproducts?4. Can you craft the variable points intosentences or bullet points of roughly the samelength and structure?5. Can each point flow from the previousone without a break in logic or syntax?6. To get started, build a matrix with thesub-segments listed down the left columnand the key benefits or points you want tocommunicate to each segment down the rightside. Then translate each point in each fieldinto the same tense and grammatical structure.For example:7. Once you have your matrix, with yourfinal copy points arranged in parallel structure,map out your letter. Identify the placeswhere you’ll be inserting the variables andindicate them with these .8. It is best to print out copies of the letterswith each variable inserted on its own to checkthat tense, syntax and most importantly, flow,make sense. Flow is everything in long copy.Any awkward hiccup in the flow can throwthe reader off track and interrupt the naturalenergy of your sales proposition.9. Try to have all the variables appear onone page if possible. This keeps costs downand simplifies the process. You can then printthe other pages offset if that’s more cost effective.10. You’re not restricted to just lasered letters.With computer printing techniques youcan produce multiple versions of brochures,sales sheets, and broadsheets, all localized,personalized and segmentized.Writing variable copy adds time tocopy development but is usually worth it.Customers and prospects want to feel thatthe company they do, or may do, businesswith understands them as individuals – withindividual needs, desires, interest and fears.Layering in variable copy points – features,benefits, proof, that you know will resonate onan individual level, helps create this impressionthat your company is the right choice outof all you target’s options.Tim Elmy is senior copywriter at Bos Advertisingin Toronto. You can reach him at tim@bos.caFRANKtalkwith Frank McPhersonPresident & H.D.M. of Custom Data Imaging Corporation, TorontoPerfect partners:VDP personalization forloyalty campaignsLoyalty programs can generate very high response rates. Imagine what happens whenyou pair them with personalization. Here are a couple of mini case studies.entire chain rose 20 percent over the previousyear.CIGNA retirement statementsTransactional marketing using personalizedstatements are one of the most powerful applicationsfor print personalization. CIGNA, aU.S.-based full-service retirement business,was one of the earlier companies to offer thisimprovement to their customers.The reason?CIGNA wanted to ensure consistency ofcustomer communications at all touchpoints.In addition, it needed to improve the readabilityand understand ability of the informationit was conveying to its customers.This would allow participants to becomemore involved in and make better decisionsabout their retirement planning. CIGNA alsofelt it was important to publish targeted educationalmaterial needed by each individualto assist them in making better decisions.The results were significant. CIGNA sawa 10.5 percent increase in plan participationfrom first-time participants and a 5.3 percentnet increase in net ongoing contributions byplan participants. Moreover, a customersurvey found that 95 percent of CIGNA customersfound their statements easier to readand understand.Estimating the effectThe loyalty campaigns in the PODi databaseSee FrankTalk, page 23In my previous article, “Estimating Successfor VDP Campaigns,” [DMN, August 2007,page 13] I reviewed a landmark studyby Caslon & Company (“Response RateReport: Benchmark Information for RelevantMarketing Programs,” December 2006). Thisimportant study was the first attempt tobenchmark the “typical” increase in responserates that relevant personalization can provideas compared to static campaigns.At the time, we looked at examples fromdirect order, fundraising, and lead generationcampaigns from the Print on DemandInitiative case study database to illustrate theCaslon results. In this article, we’ll look at theeffect of personalization on loyalty programsin light of the Caslon study results, as well.Caslon defines loyalty campaigns as “campaignsthat promote interaction with existingcustomers.” Since the goal is to cultivate along-term relationship rather than an immediatesale, loyalty campaigns can have very highresponse rates. So just imagine what happenswhen you pair them with personalization!Let’s look at a couple of examples fromPODi archives.Acorn Awards programAcorn Stores, an upscale retail store offeringwomen’s designer clothing, wanted toincrease the number of visits by target segments,the spend per visit, and build strongerrelationships with its loyal customers.To achieve these goals, it developed the“Acorn Awards” customer loyalty program.By spending $500 or more with Acorn, customerswould qualify for a membership cardentitling them to a five percent discount onmerchandise, special discount coupons, andfree shipping on purchases. The 50,000-customerdatabase was segmented into threegroups:1) those who had already reached the targetspending level;2) those who had spent between $100 and“The median absolute responserate across these exceptionalprograms is 31 percent.”$500; and3) those who had spent less than $100.Acorn developed personalized brochureswith relevant messages and offers for eachtarget group. The first tier received a plasticmembership card attached to a personalizedbrochure. The second tier received a personalizedmailer promoting the program andinforming each recipient of the amount ofadditional purchases needed to qualify for themembership card. The third tier was sent apersonalized brochure promoting the benefitsof the loyalty awards program.During the 11-day promotion period, 20percent of tier 1 customers participated in theprogram and averaged $245 in new purchases.Eleven percent of tier 2 customers participatedand increased their average spend from$15–$70 per month to $140. Inconsistent shoppers,the third tier, enjoyed a three percentparticipation rate, with an average spend of$115 each. Overall, same-period sales for theMarch 2008 Direct Marketing News 15

DISTRIBUTION / DELIVERY SERVICESMAILING EQUIPMENTCANADIAN MAILING MACHINES INC.qxd 11/05/2007 2:07 PM Page 1aeromail worldwideYOUR RDP FULFILLMENT CHECKLISTRDP FULFILLMENT CORPORATIONCOPYWRITERSERVICES: CANADIANMAILINGMACHINES INC.Established August 1988 Fred De Civita Frank De Civita514-744-9351 •"Bursters Forms Cutters • Folders •"Letter Opener•"Inserters •"Labellers •"Inkjets •"Postage Meters•"Z Fold Feeders •"Inkjet Feeders •"GBR Smart Feeders•"Tabbers •"PolybaggersW E A L S O B U Y U S E D M A C H I N E SVisit our web site for latest Inventory www.epc-cmm.comIs Your Copy Costing You Sales?My Copy Critique service provides an objective review of a direct mailpackage, sales letter or ad. Existing copy or a work in progress.You’ll receive a written report that analyzes your copy in detail. I tell youwhat works, what doesn’t work, what should be changed…and how.Order a Copy Critique today. The first 20 callers receive my FREEreport on “How To Write Web Copy That Sells”.Gerry Black, CopywriterPH: 905-830-1015gerryblack@hotmail.comDM CREATIVELIST SERVICES16Direct Marketing News March 2008

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COLUMNSPART 2How you divide and conquer the B2B marketSegmenting your B2B customer base can be very impactful and can generate significant return on your marketing and servicing investments. This second ofa two-part series looks at how some companies have done it in practice.BY EMMAWARRILLOW.In our first article[DMN, February2008 issue, page 13“Can you divideand conquer theB2B market?”} weaddressed some ofthe challenges faced in applying customer segmentationto the business-to-business market.In particular, we looked at three primary challenges.First, the collection of good data is complicatedby the reliance on sales people, longpurchase cycles and the limited availabilityof overlay. Second, customers are typically acollection of individuals (buyers, users, seniorexecutives) and policies making behaviourdifficult to understand or predict. Finally, theimplementation of segmented strategies can bechallenged by the necessity to deliver throughthe field sales force.In fact, we dwelled on the challenges so muchthat we may have put some of you off! Restassured, segmentation can be very effective inthe business market.B2B marketers do, however, need to berealistic about the complexity of the segmentationthat they can implement. They need toconsider the state and availability of data oncustomers and their behaviour, and their abilityto implement.In this article we look at two companies thathave tackled these challenges head on andsuccessfully applied segmentation in theirbusinesses.Monster CanadaMonster Canada (www.monster.ca) is a careermanagement portal whose clients include theHR professionals and other hiring managers inCanadian businesses of varying size. Monsterhas been using segmentation as a tool to betterunderstand and target both its customers andprospects.Jean-Paul Isson, director of business intelligence& CRM, says that the segmentation workit is doing “helps customers achieve their desiredresults …getting qualified people to apply”. Thishas a huge impact on customer intimacy.” Hecites improved retention, up-sell and cross-sellas some of the tangible benefits.Monster has tackled the data challenge bylooking for data in innovative places.“Everything starts with the data”, assertsIsson. “Once you have the data, you have toput some intelligence into it.”Monster has augmented its internal databaseswith information from third parties includinginformation on the entire business universe fromDun and Bradstreet and macro-economic data(such as GDP, unemployment and turnoverrates) from Statistics Canada.“To be able to achieve success you have to beable to marry external and internal data to getthe full picture,” he notes.Monster has used third party data to segmentthe Canadian business universe into three prospectsegments based on their propensity to buyand potential value. This has allowed the salesforce to spend time where they expect to getthe best return.In addition, Isson’s team calibrated the repsportfolios to give everyone the same chance toreach high value prospects. This approach hasallowed Monster Canada to understand salesperformance and increase sales productivity by40 percent. In addition, this type of success hashelped fuel acceptance of business intelligenceby the sales force leading to buy-in for furtherinitiatives.Monster also uses segmentation to drive interactionswith existing customers and better servethem. It uses recency, frequency and monetaryvalue (RFM) analysis, and predictive models,to segment its customer base and to understandthose with cross-sell and up-sell potential.RFM is a fairly simple technique groupingcustomers based on when they made their mostrecent purchase, the frequency with which theybuy, and the amounts they spend. Profiling theresulting segments has provided Monster withconsiderable insight into who the customersreally are – beyond just their purchase history.These segments help Monster to use resourcesmore effectively to proactively retain high valuecustomers (retention is up 15 percent) and upsellhigher margin products. But the segmentsaren’t just used in sales.According to Isson, they “are learning how tobetter serve high value customers and synchronizeour efforts with customer service.”The company also leverages what it haslearned to adjust its advertising efforts. Forexample, banner advertising has been adjustedto reflect where high value segments are comingfrom online.Monster claims marketing efficiency hasimproved by 40 percent since adopting its business-intelligencebased segmentation strategy.Royal Bank of CanadaSometimes even simple firmographic dimensionscan yield significant results. In theirbook Angel Customers and Demon Customers,authors Larry Selden and Geoffrey Colvinstate: “A customer segment is a group ofcustomers with sufficiently homogeneousneeds that the segment members can bewon with a common value proposition andcommon marketing.”According to the authors, Royal Bank ofCanada had great success with its businesssegmentation based heavily on firmographicssuch as employee size and industry classification.One segment they have identified is ‘highgrowth manufacturers.’ Royal Bank has developeda specific value proposition for this segmentwhich includes specially trained experts todeal with their unique businesses and productofferings tailored to their needs. These offeringsinclude such things as seminars/conferences,access to First Research TM industry insight toassist their sales force, and tailor solutions toassist them in managing their growth.And it seems to be working. According to thebank’s presentation to the American BankersAssociation a few years ago, product penetrationhas increased from four to six and the bank has350 new ‘high growth manufacturing’ clientssince the implementation of this strategy.Three pieces of adviceAnd so our advice to business-to-businessmarketers is three-fold.• Start simply – often basic segmentation canyield great results. Start with what youknow but look to continually grow yourunderstanding of the customer base (throughinteractions and external data) to allow yoursegmentation to become more complex.• Prove yourself – build buy-in from the salesforce through small successes. Their buy-inwill allow you to slowly augment your dataand implement more impactful strategies.• Develop value propositions – use your segmentunderstanding to develop distinct valuepropositions. Leverage what is different aboutthe segment.Dell ComputersHere’s one final example. We recently receivedan offer from Dell for its new Vostro line of PCs.This product line is targeted at its small businesssegment and appears to be based on Dell’sunderstanding of this segment of its customerbase and how it differs from consumers andlarger businesses.The proposition includes dedicated technicianswho understand small business, notrial-ware to disrupt the business day, andcustomization to fit the needs of the individualbusiness (meaning you only pay for what youwant). While the segmentation is simple, thevalue proposition is well-tailored.Emma Warrillow runs Emma Warrillow &Associates Inc. (www.emmawarrillow.com) andhelps companies articulate their analytic strategiesand make the most of their customer data. She canbe reached at emma@emmawarrillow.comLoyaltyLandscapewith Rick FergusonThe bonus is the thingBonuses are a tool for focusing marketing dollars on customers who matter most. They arealso a tool for shifting the behaviour of those valued customers in more profitable ways.Here’s how it is done.Over the past few months, we’ve learned alot about how to motivate customers througha combination of hard and soft benefits. Toestablish a true value-added relationship withyour best customers, you need to both rewardand recognize them for exhibiting profitablebehaviour.Within the realm of hard benefits, there’san essential tactic that you’ll need to master inorder to build strong customer relationships. Allrelationship marketing and loyalty programsestablish a funding rate of earning benefitsthat corresponds to the cost of delivering thosebenefits to members— in a very general rule ofthumb, you should strive to return a perceivedvalue of five percent of a customer’s spend backto her in the form of rewards. Five percent isabout what it takes for a customer to perceive areward as worth her time.However, smart marketers take funding ratesa step further. Rather than flat-lining a five percentfunding rate across the entire membership (acommon practice with co-branded rebate creditcards), they establish a compelling, yet not overlyrich, base funding rate—say, two percent— andthen use bonusing techniques to drive customerbehavioural change among the most desirablesegments. Through bonusing, they focus theirmarketing dollars on those customers who matterthe most to the bottom line.Here’s a simple example of bonusing. Let’s sayyou offer a simple punch card frequency programthat awards one free sandwich for every 10 sandwichespurchased. If Tuesdays are particularlyslow days, why not invite customers to come eatlunch on Tuesdays and earn two punches insteadof one? You’ve just bonused your customers forprofitable behaviour— a core loyalty marketingbest practice.This concept can be more flexibly applied inprograms built around a promotional currency.At COLLOQUY, we consider it a loyalty bestpractice to design bonus offers around whatwe like to call the four dimensions of customerbehaviour. They are temporal, spatial, transactional,and personal bonuses.Temporal bonusesThe temporal dimension occurs when a customerbuys. Ideally, you know down to the minutewhen a purchase was made. You know yourhigh-volume and your low volume times anddays of the week. You can use temporal bonusesto time-shift customer behaviour.Are your soccer moms filling up after practice,right at the dinner rush? Maybe you canconvince them to come in before practice, justafter the lunch rush. Are your retail storesempty on Fridays? Bonus ‘em to stop by onFriday nights.Temporal bonuses offer maximum flexibility.You can bonus members for visiting at specifictimes and dates, and you can even combinetemporal bonuses with frequency objectives,such as, “earn X if you visit Y times during Zperiod.” Even better, you can make this offeronly to those member segments most in needof behavioural change.Spatial bonusesThe spatial dimension encompasses where thepurchase occurred. You should consider theattributes of your physical locations, as theyadd more depth to the dimension.Some of your locations are old, some new, somehave a different layout, some are in urban areaswhile others are rural. You might operate severaldifferent brands, and you certainly operate indifferent geographies, whether your market islocal, regional or national.Can you use spatial bonuses to drive customersto a new store opening? That’s no doubt aprofitable behaviour change.If you operate multiple brands, can you getcustomers to frequent brands in which they haveyet to show an interest? Perhaps you can get themto visit downtown locations vacant during theweekend, or to visit a dormant location whereyou want to build traffic.Maybe one of your locations is so busy thatyou need to move traffic away from it. Spatialbonuses can be profitable tools.Transactional bonusesThe transactional dimension encompasses thewhat of customer purchases. No two transactionsare alike.Some customers only buy in the front of thestore. Others only buy commodity items andstay away from your high-margin inventory.Some stay in your hotel but won’t eat in thehotel restaurant. Some pay with cash, othersuse cards, and some still pay with cheques. Eachof these transactions carries a different pricingand cost structure— hence, each translates intovariable profit.Enter the transactional bonus. Not all customerswill purchase additional high-margin goodsand services just because you ask them to. Somewill, however, especially when you give them areason to do so.You can bonus customers for paying withspecific tenders, using specific aspects of yourfacility and purchasing specific merchandise. Youcan combine transactional bonuses with crosssellobjectives to offer bonuses only if memberspurchase X ways across Y offerings—for example,purchase coffee and donuts in your bakery andearn double points.Transactional bonuses can increase the yieldfrom members by accelerating their earning inthe program. Their increased spend translatesinto incremental revenue for you.Personal bonusesThe personal dimension encompasses the whyof customer behaviour. By analyzing all of theattributes you’ve managed to collect on the customer,you seek to design offers that appeal to thatcustomer’s wants, needs and desires. You mightknow what program tier the customer is in, her ageand marital status, how long she’s been a member,her revenue or profitability score, her likelihood toattrite, or even her potential value.Perhaps she has signed up for an email newsletteraddressing interests or desires that you canmine. You can deduce some tendencies from pastpurchases, and you can even pony up to obtaindemographic or psychographic data from thirdparty sources— although it’s often better toallow a member’s behaviour to speak for itself.Member surveys can net even more data aboutlikes, dislikes, and perhaps even intentions.The value in personal dimension data lies in itsusefulness in effecting changes in other dimensions.With it, you can hone your targeting.Maybe your offer varies by gender— redeem500 points for a spa treatment for women and around of golf for men. If a survey tells you that amember purchased a new car less than a year ago,then offers for free car detailing may motivate.Knowing personal attributes allows you to putout the right message.It all sounds great, of course, but as with anyloyalty implementation, the execution can becomplex. Since bonuses are based on specifictransactional variables, your POS system andloyalty rules engine must be able to capturethat transaction and apply the bonusing ruleto eligible members. Manual entry becomes socumbersome that a minimum level of technologyis usually required.But even at its most basic level, bonusing providestremendous flexibility in funding your loyaltyprogram. You can introduce bonuses when,where and how you want, and you can targetthem to alter specific behaviour among targetedsegments of your customer base.Bonuses provide members with ways to acceleratetheir earning, and thus influence their choiceof where to shop, what to buy and what tender touse. Most importantly, you can add and removebonuses without substantially altering your basefunding rate and increasing the overall cost of theprogram. And your customers love it.What could be better?Rick Ferguson is the editorial director ofCOLLOQUY, provider of loyalty marketingpublishing, research, educational and consultingservices. He can be reached by email atinfo@colloquy.com.22Direct Marketing News March 2008