What’s on the Horizon in Direct Marketing

What’s on the Horizon in Direct Marketing

Editor’s Note: George Lizama, a founder of Production Solutions and its CEO and chief marketing officer, is a recognized leader in the fundraising industry. Lizama is the former president of the Direct Marketing Association of Washington and recipient of its Distinguished Achievement Award. He received the Washington Business Journal Philanthropy Award for CEO Leadership in 2008, in part to recognize his longtime support of Northern Virginia Family Service, of which he is a director. His blog is called Production Interrupted.

At Production Solutions, we provide direct mail programs to approximately 90 clients either directly or in partnership with agencies. Ten clients are from the commercial sector, ten are associations and the remainder are non-profit organizations. We are also an aggregator of several hundred national printers, mailers, data processors, online and social media suppliers.

In short, we work with some pretty savvy fundraisers, direct marketers and direct response technicians.

This extensive bank of consumers and service providers presents us with firsthand understanding of trends, strategies, campaign successes and failures — as well as very early access to cost fluctuations in materials, postage and fossil fuels.

So let me share with you some things from my unique “observation post” that I feel are trending in 2012, and how these trends affect direct mail and internet marketing.

Cannibalism of Competitors

Mergers and acquisitions of industry service providers have been a dominant theme in 2011 and 2012, although I tend to think of it more like cannibalism. I suspect the trend comes from hard dealing purchasing agents, growing competitiveness of requests for proposals (RFPs), agencies screaming for deep cost cuts, which often results in unrealistic and ludicrous price guarantees.  The end result is that some suppliers just could not stay above water financially and selling out to a competitor (at fire-sale prices) was the only option.

When providing prices to your customers, realize that you cannot control paper prices and you cannot control the cost of fossil fuels. You must factor in the impact of a postage increase on your customers, and realize that quantities may have to be cut back dramatically.  You cannot extend customer payments beyond 60 days.  You cannot work in the very laborious industry of printing and mailing with a skeleton crew without expecting mistakes. You won’t last long if you do.

Customer loyalty cannot be bought by low prices alone.  Loyalty can only be developed with consistency, trust and solving a need between the user and the supplier.

Providing good quality and consistent service along with fair pricing will keep your clients for the long run. And, these traits will keep you from having to close your doors or sell to your competitor.

It’s the Election, Stupid

All of my clients are still very concerned about the economy.  Weak results continue to show up in many campaigns.  This summer has not been good, and all eyes are on the elections and what the Fall will bring.  The pressure is on to watch costs, cheapen packaging, switch from first class to bulk mail, and gang print multiple programs.

The pressure is on for clients to mail and email to their most active targets, or “sure things,” while using multiple channels to aggressively convert the lapsed and lost previous buyers.

Being Social is the New Status Quo

The clients with a strong direct mail program, but weak email marketing and social media, appear to be suffering compared to those who aggressively deploy their online and offline marketing tools.

Social media, search engine optimization and search engine marketing are not going away! Take these multi-channel online powerhouses seriously. Being “social” is no longer a hobby.  Organizations are now hiring full time employees to manage social media and search marketing, which is something most had been reluctant to do.

Whether you like it or not, an important aspect of moving the market to YOUR organization is consistent communications through blogging, Facebook, LinkedIn, e-newsletters, Twitter and other forms of online content distribution.

Not surprisingly, there is now serious attention being paid to measuring the success of social media and e-marketing. Best practices and sophisticated analysis of social media and online marketing are being developed to give organizations a much better accounting of the return on their investment.

Acquire or Develop Donors and Buyers?

Our program workloads show that our clients are really working on donor and buyer development, as opposed to acquisition.  I suspect this is the year to focus on retention and good stewardship rather than just churning prospects.

These next couple of months will be very interesting from a direct response and direct marketing perspective.  While I don’t have a crystal ball, I keep my eyes and ears open to identify the right tools and trends for those products and fundraising causes that matter.

George Lizama

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