Veteran Analytics and Database Marketing Team Joins Communefx

Award winning group is a recognized leader for its work with blue chip consumer electronics and appliances retailers and manufacturers

July 26, 2011 – Communefx announced today the addition of the analytics and database marketing unit of ACCENT. The combination formalizes a year-long working collaboration already proven to be of great value to clients in the delivery of performance-based sales and marketing programs.

Recognized as the category leader in the sales and marketing of service contracts and extended warranty programs on behalf of leading consumer electronics and appliance retailers and manufacturers, the former ACCENT unit was recently awarded the National Center for Database Marketing Excellence award in Analytical and Modeling Solutions.

The combination adds considerable depth and complimentary capabilities to both firms in data hygiene, database marketing and analytics, creative services, digital and mobile technology development, and the execution of personalized print, direct mail, and email marketing programs.

“Our goal is to make the delivery of sophisticated sales and marketing programs simple and highly profitable for our clients,” commented Chris McDonald, CEO of Communefx. “The ability to combine the customer intelligence that makes direct communications relevant, with the content to make it compelling, and the technology savvy to create engagement and conversion is essential to this goal.”

In addition to Consumer Electronics and Appliances, Communefx works with leading marketers in Mobile and the broader Communications segment, Retail and Quick Service, Education, and Travel and Tourism.

Joining the Communefx Executive team are industry veterans Chrisie Dorton, Curt Bimschleger, Ryan Mitcham and Ed Thompson. The combined firm has over 120 employees across campuses in Pittsburgh, Louisville, Phoenix, New York, Dallas and Chicago. 

ACCENT, under the leadership of recently hired industry veteran and CEO Tim Searcy, will continue to focus on real-time consumer engagement leveraging voice, click-to-chat, click-to-call, social engagement, and other channels and data analytics to drive their clients’ sales and care initiatives.

“ACCENT continues to be a critical partner in our service delivery,” commented McDonald. “Strategically and operationally, this change further aligns the people and technology resources of each firm with the ever evolving sales and marketing needs of our clients.

Our New Data + Analytics Associates Are Award Winners!

ACCENT MARKETING SERVICES HONORED FOR EXCELLENCE IN DATA ANALYTICS AND MODELING APPLICATIONS BY THE NATIONAL CENTER FOR DATA MANAGEMENT

JEFFERSONVILLE, Ind. (Jan. 5, 2011) – ACCENT Marketing Services, a member of the MDC Partners Network and provider of customer engagement and performance marketing solutions, received the National Center for Data Management’s (NCDM) Database Excellence Silver Award in the Analytics and Modeling Applications category. The award was presented at the NCDM’s Conference for Engaging Customers Using Data and Technology.

Presenting findings from a recent client case study, ACCENT successfully demonstrated its ability to use advanced data analytics and modeling techniques to increase response rates on warranty offers by 20% while reducing claim rates by almost 19% on behalf of a leading appliance manufacturer. This was achieved by creating a multidimensional model matrix that combined response, claims and lifetime value models to produce a single marketing strategy customized by consumer segment. Additionally, the model helped eliminate duplication of marketing efforts and limited wasteful spending on consumers least likely to respond, helping to increase the overall profitability of the appliance manufacturer’s extended service plan program by 43%.

“Once again, ACCENT’s data modeling and analytics expertise is proven to help brands uncover the hidden potential in their marketing programs,” said Steve Tinlin, ACCENT’s president of performance marketing. “We are honored to be recognized as a leader in database marketing for our ability to develop and implement campaigns that optimize marketing and operational spend by increasing response rates and driving down costs to boost client profitability and return on investment.”

The NCDM Database Excellence Awards, organized and presented jointly by DIRECT (part of the Chief Marketer Network) and Direct Marketing Association, honor organizations that have demonstrated ingenuity and creativity in leveraging their marketing databases. Contestants were evaluated against the strength of their marketing strategy, execution and results gained across four categories: Analytics and Modeling Applications, Technological Applications, Multichannel Marketing, and B-to-B Marketing.

ACCENT was one of nine award-winning finalists and adds the NCDM Database Excellence Award to a long list of honors it has recently received including being recognized among the best in the world by ContactCenterWorld.com for Best Contact Center, Best Leader and Best HR Support Professional.

Direct Marketing Veteran Chris Lynde Joins Communefx

PHOENIX—Communefx welcomes direct marketing veteran Chris Lynde as Senior Vice President and General Manager of its Data Services practice located in Phoenix, AZ. Lynde is a proven and respected leader in the field who has built great teams in collaboration with some of the leading marketing organizations in the country. Much of his career has been spent developing innovative and integrated B2C and B2B services that incorporate CRM, database marketing, data mining and analytics, and lead generation solutions.

Lynde has more than 25 years experience building and managing information services organizations and he brings a proven record of success in online and offline direct marketing. He was most recently President and CEO of AmazingMail Inc. a leading provider of digital direct marketing solutions, and CEO of Copperkey Inc., a SaaS based marketing analytics software company. Over the course of his career, Lynde has held several other senior leadership positions. He was Senior Vice President at Equifax Marketing Services; CEO of Oaktree Systems; VP of Operations at Experian Information Services Group, and VP, General Manager at EDS’ direct marketing business unit.

We are Communefx
Our success is a function of how we combine marketing’s core elements – Strategy + Analytics, Creative, Data and Technology – to deliver some of the most effective engagement marketing programs known to measurement. In our world, performance counts. We measure results. We tie our success to those measures. We call it Communication Effectiveness or, simply, Communefx.

We are a different breed of marketing company. We think differently. We want other disruptive thinkers to join our growing team in Louisville, New York, Phoenix and Pittsburgh. Part of MDC Partners network of over 40 marketing and advertising services firms and “The Place Where Great Talent Lives”, we are publicly traded on the NASDAQ under the symbol “MDCA” and on the Toronto Stock Exchange under the symbol “MDZ.A”.

Contact Us
Data Marketing Solutions (Phoenix) – Chris Lynde, 602.308.6823
Sales & Marketing Solutions (New York) – Gary Blau, 917.853.6926
Technology Solutions (Pittsburgh) – Michelle Hicks, 724.742.7144
Warranty Marketing Solutions (Louisville) – Curt Bimschleger, 630.665.5057

Profitability and Sustainability: Using Data to Find the Sweet Spot

As featured in the January 2011 issue of Career College Central…

CONTRIBUTED ARTICLE

Proprietary institutions are unique in the landscape of American industry. On the one hand, there is an ethical responsibility to the student to provide the best possible education while maintaining affordability and a customer-centric approach. On the other, there is a fiduciary duty to stockholders and/or ownership to deliver consistent and increasing returns on their considerable capital investment. Management can feel squeezed from both ends, especially as new government regulations threaten to cut financial aid to some institutions, forcing students to shoulder an unbearable load of the upfront financial burden while simultaneously reducing stockholder returns.

The situation is one that few people would envy. Managers feel that they must focus on one area of responsibility to the detriment of the other. Either way, students are hurt and profits dry up. 

There has to be another solution, right? What if there was a way to increase student engagement and rate of graduation, reduce the incidence of Title IV loan defaults, increase per-student revenue and reduce per-student institutional costs, such as marketing and operational expenses? Well, there is. It’s called the sweet spot, and it’s found by better leveraging and managing the data you already have.

The new Title IV regulations: inescapable box or target of opportunity?

The single greatest value proposition that proprietary institutions have to offer is their accessibility. Nontraditional students flock to for-profit schools because they have nontraditional needs, such as evening and online classes, increased guidance from student services, and accelerated programs to help them graduate and get into the workforce as soon as possible. The customer-centric profit motive of proprietary schools requires that they find new and innovative ways to meet the demands of this education-hungry demographic.

For over a decade, however, these nontraditional students at for-profit schools have been dropping out and defaulting at rates that far outpace traditional public and private nonprofit institutions. In fact, it is estimated that under new three-year measuring guidelines for cohort default rates, the industry average for proprietary schools could rise as high as 20-25 percent.  Congress has taken note of this alarming trend and is seeking to reign in the most egregious schools by threatening their Title IV eligibility. 

Many studies have shown that socioeconomic status and age have more to do with these rates than the type of institution attended. Although it may seem arbitrary or unfair to punish proprietary institutions for serving this older and more socioeconomically challenged demographic, the onus has nonetheless fallen on the schools to find the solution to the CDR problem without significantly reducing profitability or accessibility. 

Of course, it’s all good and well to call out the problems, but the real challenge is converting them into solutions. How is this done? It’s called finding the sweet spot.

What is the sweet spot?

The sweet spot is a solution that strikes a perfect balance between generating more qualified inquiries and referrals, maintaining student engagement from admission to graduation, increasing per-student revenue, and decreasing per-student costs.

Sound daunting? It is. Sound impossible? It isn’t. In fact, this well-balanced solution is achievable using data, and usually data schools already collect, to maintain good contact with students through viable channels. Students that are more engaged are more likely to remain in school, reducing the chance that they will default while maximizing the revenue generated by tuition. After all, you can’t continue to generate revenue after a student has left school.

How does data help schools find the sweet spot?

So we’ve established that the best way to maintain Title IV eligibility and increase revenue per-student is to better target, communicate with and retain the students you already have. The question now is how cleaner and more actionable data can inform these efforts. 

Data is central to all aspects of an education company’s operations. It’s more than just abstract bits of information – data is how you know who your students are, where they live, how to get in touch with them and how to foster the best possible educational outcome for them. Clean data is what your school, and its Title IV eligibility, lives and dies by.

By maintaining a clean repository of actionable contact information, you can not only keep in contact with your students, you can know who they are, how likely they are to default or drop out, how much and what types of aid they draw, and how best to meaningfully engage with them. You can proactively contact and counsel students that appear to be in danger of dropping out. You can get in touch with former students once they’ve slipped into default. You can even track individual student outcomes back to their original lead sources and manage your marketing mix accordingly.

In short, when it comes to managing your responsibilities to students and investors, it’s all about the data!

Why does all of this matter?

According to data generated for a recent government report, 57 percent of students who entered the 16 largest for-profits between July 2008 and June 2009 had withdrawn by the summer of 2010. That’s 546,749 withdrawals out of 959,220 enrollments. The median time enrolled for these students is 20 weeks. 

According to the College Board, the average yearly tuition at a for-profit institution is $14,000. If a student only stays in school for 20 weeks, the revenue earned from tuition is approximately $5,384.62. That means, on average, a withdrawn student comes with a yearly opportunity cost of $8,615.38. When you factor in the high per-enrollment cost of marketing and admissions ($1500-$3000) as well as fixed operational costs, this is leaving an incredible amount of profitable revenue on the table. 

Using the above figures, the industry generated approximately $2.94 billion from withdrawn students in 2009-2010. If these withdrawn students had stayed in school 50 percent longer (for a median of 30 weeks), this revenue would have expanded to $4.42 billion for a difference of $1.48 billion, or roughly the equivalent of one-and-ahalf EDMCs. If the industry were to retain 100 percent of these students, the difference comes to $4.71 billion, or rather 19.6 percent of this 24 billion dollar industry. Again, considering fixed per-student costs, nearly all of that difference is profit.

The road ahead

Moving forward, the for-profit industry is set to encounter some of the most fundamental changes to how it operated for the past 20 years. With changes to enrollment compensation and stricter controls regarding Title IV funding, there will come a greater emphasis on student outcomes and a higher premium on student retention. Financial success will no longer hinge purely on the number of students enrolled, but on the number of students that see a positive and sustainable change in their lives.Education professionals must be prepared to meet these challenges head-on with data tools and strategies that can not only address the new climate, but leverage the opportunities it presents. Better know your data, and you’ll better know your students and your school’s future. After all, it’s all about the data!

Averting the Student Loan Crisis

As featured in the November 2010 issue of Career College Central…

CONTRIBUTED ARTICLE

After burdening one American generation with mortgage debt they cannot repay, among other factors the highest unemployment rate seen in decades is hanging a financial albatross on a new generation. Some financial experts claim that forprofit students will owe $330 billion on defaulted loans over the next 10 years. Those same financial experts say that stricter gainful employment regulation is the solution, but that begs the question: how many sustaining jobs are available? 

Frankly speaking, what can the for-profit industry do to avert this looming catastrophe? We think there is another solution independent of factors that for-profit schools cannot control. The industry needs the proactive ability to maintain a dialogue with students from admission through degree pursuit, employment and alumni involvement. An integrated data-driven strategy amplified with frequent communication can be designed to achieve the best outcome for mitigating default risk. Let’s explore how the default aversion process of managing student data can play a key role toward solving this dilemma.

The Challenge: Creating the Master Constituent Database
In essence, the logic behind preventing default, or mitigating  default risk, is as simple as having a two-way mutually beneficial conversation with each and every student as often as  you can. Communications delivered creatively with relevance  and measured scientifically with accountability are key. We  are referring to developing a well-designed digital relationship  between you and your most valuable asset: your student. It begins with capturing, intelligently retaining, and employing every byte of information in a Master Constituent Database.

The process begins with your first engagement with  student prospects, at enrollment and admission, while  actively pursuing their degrees, and then continues when  they are gainfully employed and are actively engaged alumni who are advocating your school. Yes, referring other cohorts to your school!

As the pool of digital data grows into an actionable student database of rich information about each student, it must be readily accessible for each scheduled, addressable communication. You must leverage information about the student’s attitude, about their relationship with you, with near real-time speed and accuracy to begin reducing your default rates.It is not only the compilation of meaningful data, but also the attentive detail to validating, archiving and retrieving on demand specific and accurate information that provides the means to minimize default risk. This new paradigm attacks the problem head-on and flips the hockey stick metaphor … to where CDR will actually decline.

How does this all come together? 
In order to appropriately touch your students with meaningful and relevant messaging you need to appropriate the necessary financial resources to build and maintain the constituent data warehouse. It is there that you will store a vast collection of student and alumni data.

You may need to create partnerships with database purveyors to meticulously maintain a clean database, including a link to each student, with which you will communicate highly meaningful messages, each with a specific goal. Speed to market response is critical, so you need instant, actionable access to your data when you require it. Developing, capturing and storing data is just the beginning for implementing your risk aversion program. And as you know, data processing is only part of a much larger default prevention management strategy. 

Designing the epicenter for your student relationship ecosystem.
As the student evolves through the lifecycle from enrollment towards graduation, then gainful employment, it is necessary to educate, communicate, and sometimes track them down, through various methods such as direct mail, Email, telemarketing, and less frequently employed methods such as field force intervention (face to face contacts). Here are some key elements to consider about your data epicenter:

• Can you (figuratively) push a button to verify, assess and assign risk scores for each student?

• Can you view your cohorts from a bird’s eye view or drill down to the individual student level?

• Is it your command central for all things regarding the execution of deliberate, hands-on, strategic, insightful action for managing CDR?

With a well-designed database you are able tap into an enormous student data warehouse. You can assign default risk, and segment each student into “mini-cohorts,” each of which is treated with the appropriate messaging at just the right time and through the best medium to get the job done.

Let’s talk about our risk aversion philosophy.
Risk Aversion is mathematically related to the degree that you have been able to capture and maximize each student’s “digital fingerprint.” It does not need to be a win-lose situation. In fact, if handled appropriately, you will have unlimited opportunities to engage students in very positive ways, while the student is still actively involved on campus or online.

A Master Constituent Database will become your go-to resource for linking each campus representative, regardless of reason, to connect with the student in order to prevent defections, improve relations and educate your students on the value of paying off their loans when they graduate. 

By setting up social media networks on campus and capturing specific data via online surveys with creative incentives, you will be able to listen, learn and react in ways that will truly impact the quality of your data capture and if necessary down the road, your clean, accurate data will allow you to track down students who drop out or “skip.” Skip tracing practices are utilized as one of the final resorts to re-connect with lost students. However, if managed on a regular basis, the need for such methods will be mitigated.

Can this be tested? 
Yes, it’s as easy as pulling test files to determine the “cleanliness” rating for the database. Your third party vendor must be able to immediately deliver clean, actionable data. Even if you are not in a full-blown DPM program that utilizes a student database, you are most likely in need of incorporating processes that assure you are on track. By partnering with a third party data provider you will, within weeks, recognize immediate results. You will see the incredible results that the power of clean data provides because properly managed data is the cornerstone of averting default risk.

Building the bridge across the abyss.
The extent to which you engage with any third party data vendor is clearly determined by your confidence in their processes, creative ideas and their power to partner towards a total solution for mitigating default and, beyond that, capitalize on the hundreds of great stories from successful alumni! We believe that there is a bridge for crossing the abyss. You’ll need the right guide, proven processes and tools, and actionable knowledge combined with real time communications and measureable results. 

Remember, it’s all in the data … always. 

Communefx to Support Colle+McVoy in Agency of Record Project for Mammoth Mountain

Issued by our MDC Partners sister agency Colle+McVoy, Communefx is pleased to share the following press release, announcing our involvement in the Mammoth Mountain Ski Area Agency of Record project. CFX will be supporting Colle+McVoy's marketing initiatives at Mammoth Mountain through targeting customer segments and other strategic CRM work. 

FOR IMMEDIATE RELEASE

COLLE+McVOY NAMED AGENCY OF RECORD FOR MAMMOTH MOUNTAIN SKI AREA

MINNEAPOLIS, Oct.  14, 2010 – Colle+McVoy, a member of the MDC Partners network, announced today that it has been named agency of record for the Mammoth Mountain Ski Area. Mammoth is a world-class mountain resort in Mammoth Lakes, Calif., that is expanding its marketing investment to help increase guest visits after recently adding direct plane access from Los Angeles, San Francisco and San Jose.

As AOR, Colle+McVoy will lead strategic and creative development of digitally driven, integrated marketing programs targeted to adventure enthusiasts. MDC Partners agencies Communefx and Varick Media Management will also share in the assignment, providing CRM activities targeted to different customer segments and online spot media buys, respectively.

“We have chosen to lead with digital engagement based on how our customers and guests want to be connected to Mammoth Mountain,” said Howard Pickett, Chief Marketing Officer, Mammoth Mountain Ski Area. “Colle+McVoy and the MDC network are best able to position Mammoth Mountain as a leader through digital engagement.”

This substantial new assignment is the latest win by Colle+McVoy, which has also recently been awarded new business from Old Navy, Explore Minnesota Tourism, Regis Corporation, General Mills, Land O' Lakes, Nestlé Purina and Zimride.

“We are honored to help promote one of the top mountain destinations in the country by using our expertise in the category and our deep understanding of how interactive experiences along with traditional mediums affect the decisions of adventure enthusiasts,” said Christine Fruechte, President and CEO, Colle+McVoy. “This is also a tremendous opportunity to showcase the strength of the MDC Partners network of agencies and how working together we can create customized agency models to benefit our clients.”

About Mammoth Mountain Ski Area
Mammoth Mountain Ski Area is the leading four-season mountain resort in California. With 1.3 million annual skier visits, Mammoth Mountain is currently the third most frequented ski resort in the United States. The company owns and operates a variety of resort businesses, including recreation, hospitality, real estate development, food and beverage, and retail. Specific businesses owned and operated by Mammoth Mountain include Mammoth Mountain Ski Area, June Mountain, Tamarack Lodge and Resort, Mammoth Snowmobile Adventures, Mammoth Mountain Bike Park and the Mammoth Mountain Inn. Mammoth Mountain also operates Juniper Springs Resort, the Village Lodge and Sierra Star Golf Course in Mammoth Lakes, California. For more information on Mammoth Mountain, visit MammothMountain.com or call 800.MAMMOTH.

About Colle+McVoy
Colle+McVoy is a 2010 O’Toole Award Mid-size Agency of the Year finalist and internationally recognized for creating game-changing ideas for Aveda, Bikes Belong, Caribou Coffee, CHS, Cost Cutters, DuPont, ESPN, General Mills, Land O’Lakes, Mammoth Mountain Ski Resort, Nestlé Purina, Novartis, Old Navy, Recreational Boating & Fishing Foundation, Taubman Retail Centers and Yahoo! among others. A member of the MDC Partners network, Colle+McVoy is a digitally driven and fully integrated agency. For more information, visit www.collemcvoy.com, www.facebook.com/collemcvoy or follow on Twitter @collemcvoy.

Data to the Rescue: How to Avoid the Liability of Cohort Defaults

As featured in the September 2010 issue of Career College Central…

CONTRIBUTED ARTICLE

It’s a well-known fact that default rates are out of control, creating a financial liability to schools some have compared to another mortgage bubble about to burst. The financial services fund manager for Morgan Stanley’s Frontpoint Partners predicted “the stocks of companies operating for-profit could fall as much as 50 percent if the U.S. tightens student loan rules.” (Bloomberg, May 27, 2010)

What if the solution to hundreds of millions of dollars in mounting liabilities took less than 30 days to implement, and your marketing team already understood the nuances of how to manage and implement such a program?

The answer is in the data. Most of it is the same data your marketing team uses to determine which prospective students to target for direct marketing promotions. By combining the data management and targeting practices used by direct marketers with the person finder and skip tracing methods of the collections industry, we have found that mitigating the risk of cohort default rates (CDRs), which jeopardize schools’ access to federal financial dollars, is not so complicated.

Let’s talk about constituent database management
There is nothing mythical or magical about designing and implementing a great constituent database management (CDM) solution. All it takes is a lot of discipline in how you collect and organize your data and then borrow from the best practices of database marketing to manage targeted communications. By adding a sophisticated, well-planned CDM solution to your default prevention management schema, you could be well on the way toward CDR aversion. It's all in the data.

Think of how many ways you could possibly engage in this digital world with every incumbent constituent. Leverage students’ initial willingness to share by using innovative constituent data capture tactics right out of the gate. Engage through social networking, Web portals, email, direct mail and telemarketing throughout your relationship. Close the engagement loop by taking advantage of a robust data store to structure relevant communications throughout the entire life cycle.

Database management is your secret weapon
There are many ways to communicate with the constituents, but it begins with the data. What is most important is partnering with a company that has expertise in managing the information. Database management technology is the weapon for storing vast amounts of disparate data; integrating it; structuring it into segments; completing it through data appends; and then keeping it clean and current in a systematic, segment-based “test and learn” environment. All of that expertise is available to help you lower CDR.

Completing and continually refreshing contact information is the foundation for success. Once clean, accurate and complete, the data is carefully designed and organized into your CDM warehouse. Through the entire student relationship and up until they fulfill their fiduciary promise, it is imperative to refresh all constituent data and combine it with third-party data sources to keep the data current.

Remember, the data doesn’t lie; it’s all in the data  
Your constituent database must be run through continual data hygiene and append processes to assure data accuracy. If determined through the process that at any point a constituent data record is inaccurate or becomes obsolete, appropriate and technologically sophisticated methods should be applied to resolve the issue. All segments are rescored based on the status changes of the student behavior.

There are multiple segments of constituents based on numerous pre-determined variables. Treat each constituent segment differently in terms of how you engage with them throughout the life cycle. This perpetual engagement includes frequency, content, context of the dialogue and the media used to reach them. Nothing is left to chance, as each segment is scored based on the constituents' behaviors that drive the likelihood to default. During these frequent touchpoints, should any new or changed data be garnered, it must be updated in the CDM warehouse.

As each student cycles through the various stages of the loan repayment process, you will start to understand which students are most likely to default. If you have no data management process in place or if the data is missing, in silos or is incorrect, it would be impossible to be a responsible steward of your fiduciary purveyors’ money.

It is time to take control of your data and step up to the data technology batter’s box. The default bleeding will only end with a single positive solution: constituent database management. You need data – clean data – and it must be organized so that you can take action.

And now let’s get rid of the “D” in CDR. 
It begins with the enrollment process and appropriate collection of all constituent data, to include name, address, cell phone and contact data of all known constituents, family and friends. Then it is all about appropriate and continual digital collection and proper relational storage of every byte of contact data on a given constituent.

The creation and continual management of your constituent database system will be the most important factor in keeping CDRs under control. Your active participation ends only with the fulfillment of the student’s fiduciary responsibility, and it is your responsibility to be a good steward of his or her (government-sponsored) financial promise. The good news is, highly sophisticated collections, skip tracing and database marketing tactics are very mature. StudentLink from Communefx is one example of a data service that helps schools lower their default rates by continuously matching students and their constituents with updated contact information throughout their lifecycle. 

But it takes top-down commitment, dedication and deliberate efforts to keep your student data warehouse accurate, up to date and actionable. Finding a partner experienced in all three disciplines, that facilitates the process and helps you turn data into positive results, will greatly improve your success rate.

Implementing a winning data collection and management strategy that includes a proper communication plan is an investment you can ill afford to avoid. The devastating consequences of default will cost you far more than the financial commitment to integrating a solid constituent database management strategy to your current marketing efforts.

We all know the bottom line to skyrocketing CDR. But don’t worry. Data to the rescue, right?

Alchemists Needed

By Gary Blau and Susan LaRosa, Communefx

Studs Terkel* said, “People aren’t meant to turn on and off like water faucets”. So why have so many marketers been interrupting consumers and expecting them to turn on to their messaging? And why now are marketers finally beginning to engage consumers in more relevant ways and on their terms? It’s because consumers are now in the driver’s seat and Forrester agrees …It's no longer about sending a message and expecting it to be heard:

• Consumers trust one another more than they trust marketers
• Consumers determine what is relevant — and will avoid your communication if they don’t want to receive it

This game-changing shift in customer power has created big challenges. Gartner observes that, through 2012, more than 35% of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets.

This observation is supported by a recent survey of CMOs conducted by Heidrick & Struggles/Digital Scientists. They found that:

• 49% agreed that it is important for the CMO to be proficient in digital marketing, but only 13% said that their companies had developed the internal talent required to develop and implement growth-generating digital marketing programs.

• Only 12% said their company was improving the consistency of its marketing and sales communications, and less than a quarter are very satisfied with the how their company is conducting ROMI, Web site activity analysis, CRM and SEO.

What’s at risk?

The good news for all you game changers is that all the valuable lessons of the past are now converging at a new epicenter where marketers’ dreams can come true and customer value can be better identified, managed and extended. For those of us who are willing to embrace Engagement Marketing, the light at the end of the tunnel has never been brighter. For those that stand still (even for a moment), here’s what’s at risk: Only your most loyal and profitable customers and the people they influence.

So what is this thing called Engagement Marketing?

Forrester defines it as “a marketing strategy that directly affects the level of involvement, interaction, intimacy and influence that an individual has with a brand over time.”
The age of Engagement is the confluence of science and creativity. It is where the analytical left brain must inform creativity, and big ideas. It is a dialogue and two-way, cooperative interaction that enables rich, timely, relevant and measurable communications. In this age, performance will count and marketers will be accountable…for delivering interactive consumer engagements across all addressable touchpoints.

Transforming Core Elements into Marketing Gold

Marketers will need to become Alchemists, and success will be a function of how they combine marketing’s core elements – Strategy, Analytics, Data, Technology, Creativity and (Social) Media. Creating the right formula will transform these elements into marketing gold and allow the optimization of online and offline communications across multiple channels and tactics.   The “Art of Alchemy” will enable marketers to deliver the most effective engagement marketing solutions known to measurement.

How do you get there from here?

Well it’s quite simple…but not that easy! You start by harnessing a permission-based, fully addressable, measureable marketing ecosystem that creates data everywhere. You engage customers on their terms in the most meaningful way: where, when and how they want to dialogue. Then you take the brand and the brand experience directly to people through interactive channels with communications that resonate on a personal level. And finally, you leverage technology and expertise and choose your partners wisely to ensure seamless execution of your Engagement Marketing solution.

Only then, will you truly be responsive to your consumers’ needs and expectations. And you’ll no longer have to worry about turning the faucet on or off. Your customers will do it for you. 

If you need an Alchemist, just give us a call.

*By the way, Studs is a Pulitzer Prize-winning author and Futurist who clearly understood the needs of people when in 1974 he penned this famous line in Working.

Gary Blau and Susan LaRosa practice the “Art of Alchemy” at Communefx, helping clients create the right formula to transform core marketing elements into gold.

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Marketing Convergence: Advertising and Direct Marketing Collide

Traditionally polar opposites, direct marketers and advertisers sound a lot alike

By Chris McDonald, President of MDC Partner’s Performance Marketing Group

“I don’t know what direct marketing is anymore” – my opening remarks to a group of world wide executives assembled to evaluate our firm’s ability to help them with their Direct and CRM strategies.

Direct marketers focused on addressability and accountability. They mailed offers and used direct response television advertising to make the phones ring. They worked on metrics like response rate, allowable cost of acquisition, and average order value.

They were the antithesis of Brand Advertisers using Gross Rating Points (GRPs) to estimate the size of an audience reached with a perception shaping message. Air a television ad 10 times to 20% of your target audience and you have 200 GRPs (frequency times % reach) and a measure of impressions on the eyeballs of your demographic.

Direct marketing grew out of the need for niche offers to find their target audience in the most cost effective way possible. DMers adopted statistics to improve upon crude rules used to select a target audience for a given campaign. And though we began using math on multiple consumer attributes to decide whether or not to promote somebody, we were ultimately still selecting a list of people to whom we would push a promotion constraining for advertising cost (i.e., print, paper, postage, etc.) in order to meet allowable cost of acquisition measures. Free of the advertising cost constraint, we would have promoted far more broadly, that is, less targeted. To that end, Analytics were used as much to exclude people from a promotion as they were to determine who to include.

Today both groups sound alike. Addressability, accountability, efficiency, transparency, and performance – direct marketing principals have collided headlong with media and tactics traditionally thought of as top-of-the-funnel or broad reach.

Precipitating the collision are seven developments that seem straightforward when taken individually, but are absolutely transformational when taken together. Truthfully, one could carve these topics up a lot of different ways as it is all unfolding so fast. It’s not liner, serial, or even exponential. It’s more like an explosion, an absolute disruption of marketing as we knew it less than a dozen years ago.

1.    Addressable, Connected Media: Not only has screen-based media become largely addressable but the ability to tie outer active and experiential media to a direct response mechanism like mobile has made nearly every form of media no more than a click, tweet, short code, or QR code away from measurable and interactive. It works a lot like putting an 800 number in a TV spot, only a lot cheaper, more personal, and much more fun.

2.    Integration and Participation: Taken a step further, we now understand how various media forms interact to create a better result, a rising tide effect by how they are combined. We also understand the spillover effect into social media; and how participation-based or earned media forms create a halo effect. We now have the empirical data to help us answer the oldest question in marketing – “how should I allocate my marketing budget?”

3.    Access to Inventory: Exchange-traded media is nearing 30% for display putting it on the same path as Search. Initiatives to put TV, Radio and everything else on trading platforms are already out there. Google’s Invite Media acquisition furthers ease of access to exchange-traded media. Even Apple intends to become an advertising network with the planned launch of iAds in July. The upfront market doesn’t disappear, in fact it’s performing quite strong, but the ability to readily and efficiently address the exact eyeballs you want at any given moment has arrived.

4.    Real-Time Bidding (RTB): When a commodity becomes exchange traded it is only a matter of time before real-time bidding joins the equation. RTB is still in early stages but will very quickly become a mainstream reality as infrastructure normalizes to a standard and platform costs enabling you to participate come down (as all things inevitably do).

5.    Actionable Data: The linchpin to this ecosystem is data. The saturation of cookies, tags, pixels, and other data-collecting mechanisms combined with an ability to quickly link it all together and make sense of it, gives marketers the ability to make smarter, faster decisions on how to address that person and appropriately action our tactics.

6.    Optimization (or Math): When there are over a billion combinations of variables that go into deciding what action to take in one-tenth of a second the ability for the math to take over is essential. Analytics have matured, become embedded in key points of the value chain, and effectively consider, at the most basic level, attributes about a person (e.g., behaviors, location, demos, etc.), media inventory, available ad units, ad cost, and value potential enabling marketers to optimally achieve the objective, ROI or otherwise.

7.    Speed to Insight: Not to be confused with actionable data, speed to insight refers to post-action learning and the application of the insights we glean to improve our next campaign. That campaign may be 5 minutes later or 30 days later depending on the nature of the insight and campaign. The point is we are able to learn and improve extremely quickly when you can put out a new offer and immediately receive real market-driven feedback.

Many of these developments are new to both advertisers and direct marketers yet fit perfectly into the practices of each. When we say “marketing” in today’s paradigm, we are solving for a march toward a fully addressable, measurable marketing ecosystem where media has fragmented, taken multiple forms, and is largely digital and addressable. Data is created everywhere and competitive advantage is born in knowing how to combine it, understand it, and action it.

Our ability to reach a wide audience a sliver at a time through integrated paid media amplified by participation media and the inertia of activating our customer base means we are no longer constraining for ad cost. The mathematics of analytics is no longer about figuring out who to promote, but how to engage. In the process the constraint has moved from advertising cost to the data and insights that enable us to be relevant.

The old principles of direct marketing solved for accountability and addressability. Now they apply to this new digital marketing ecosystem.

No wonder we are all speaking the same language.

Follow Chris on Twitter @AffectResults

Follow @Communefx on Twitter for live updates on this topic at 10:30 a.m. (ET) on June 10, 2010 from BMO Capital Markets 2nd Annual Advertising and Marketing Services Conference (#BMOData).

No Time for Nostalgia: Test and Challenge Everything (Because You Can)

Once upon a time, retailers advertised their products or services very methodically, one media form at a time—TV, radio, newspapers or The Yellow Pages. Though we weren’t sure which tactic brought them in, prospective buyers would come “kick the tires” none-the-less while glad-handing salespeople hovered, waiting to answer a question.

When the inevitable “Does that refrigerator come in any other color than avocado?” question arose, Joe Salesman would eagerly inform that it also comes in coffee, peach and sky blue. After the short Q&A session, said salesman would try to upsell the customer to another product that offered the store (and salesman) bigger incentives, all the while regaling the customer with the benefits of the more expensive version. Finally, Joe would close the sale, and repeat this process day in and day out.

Not so very long ago, this scenario played out all across the globe. However, time and technology changes most things, and the way that business is conducted has changed as well. How?

The push of general information about your products or services through traditional mass media channels that operate exclusive of one another has been replaced by scores of media channels that either work together to improve how consumers pull information to learn about our products or come off as an uncoordinated carpet bombing tactic that actually hampers demand creation.

The result?

With a myriad of push- and pull-oriented media forms to integrate for any given campaign, and with consumers often more educated than the salesperson on what they want to buy, consumers are more prepared to interact with you than you are to interact with them. And, on top of everything else, they expect to obtain information or purchase products 24 / 7. Feel like you are on your heels, unable to catch up to your customers?

How can you compete, let alone thrive, in this business environment? How can you develop strategies to sell to prospects in different phases of purchase consideration? Given the fragmented media landscape that exists today, how can you get the most for your marketing investment?

By recognizing the differences in consumers. They are not all created alike. While some are ready to purchase, others are in different phases of researching and learning about a product and, most likely, actively considering several options. What’s more, due to the many different media outlets, there is no single place to promote a marketing message.

Forward-thinking companies recognize the changes that have taken place. They develop engaging media-specific, yet fully integrated, marketing strategies to successfully lead prospects through the purchase funnel. From interested prospects just beginning to consider a product to advocates who will actively endorse and recommend the product to others, many, if not most, of the marketing channels are deployed.

Communicating effectively today means recognizing how prospects begin to engage with you. You must develop a tailored communication strategy that pulls prospects through the funnel. This tailored strategy varies in methods, media, messages and even offers.

For example, the prospect who responds through a toll-free number on an FSI might be totally different than a consumer who responds as a result of a DRTV spot. That prospect, in turn, is most likely different than the blogger or tweeter. Since an FSI typically contains more product information than a 30-second spot, these prospects may be further along in the purchase consideration funnel, and might only need a gentle nudge to complete the purchase. The more impulsive DRTV responder, on the other hand, is earlier along in the consideration and research phase, and might need a longer, more educationally-based follow-up communication strategy with a strong offer to close the sale. Someone making comments through social media requires an entirely different communications approach.

Add in the need to understand how that FSI and that DRTV spot may be working together to improve the performance of both, and how tying in search or online display advertising might lift it further, adds yet another layer for the marketer to solve.

Commodity product or luxury service. It doesn’t matter what you’re selling, you need to determine the right combination of media, the source of a lead, where the prospect is in the funnel, and develop specific communication strategies to convert leads to sales. Measuring and then optimizing each of those ingredients, applying that learning, quickly, has evolved the model greatly from the days of buying one media form at a time and waiting to see what happens (and then not knowing for sure why it happened).

Test yourself:

1.    What are the natural phases of your purchase funnel?

2.    How does your strategy vary by customer segment?

3.    How does performance change as the media mix varies?

4.    What are the appropriate metrics to understand and optimize performance?

Today’s successful companies are not reminiscing about the good ol’ days, but asking themselves hard questions and embracing new strategies to lead them to smarter, more effective communications, and long-term relationships with satisfied customers.

Follow @Communefx on Twitter to learn more about our solutions for communication effectiveness.