San Rafael, CA—The ‘80s weren’t just about power ties, big hair, and MTV. For catalogers, the decade was a time of lower customer expectations, which made it easier to do business, according Brian Rainey, CEO of Lafayette, CO-based co-op database marketing firm Abacus. In his keynote address at the Lenser Client Summit here on Oct. 18, Rainey reminded attendees of the old days when customers were told to expect their order in 10-18 weeks, “and we told them that they’ll be happy about that.” On top of the slow delivery standards, he said, “we made them pay for the call. Those were good times.”
Progress and technology has changed all that. In 1983, 80% of orders were mailed in while 20% came in through the phone. In 1990, 20% of orders were placed via mail and 80% over the phone via an 800-number that the marketer paid for. With the 800-numbers, Rainey said, “we had people who called up and wanted to chat.” Today he estimates that 42% of orders are made via the fax, phone, or call center, 38% via the Web, and 20% through stores.
As a result, Rainey said, “Consumer expectations today are much greater.” Customers now expect multichannel service options, such as buying goods online and returning in-store. How can merchants best serve increasingly demanding customers? For one, you have to follow your customers’ path to purchase, Rainey said. “Try to understand your customers and do your best to contact them and market to them in the way that they’ll respond best.”
It’s also important to determine the long-term impact of marketing strategies beyond the initial response, Rainey said. “How do you get customers to convert once you have them on board?” He reminded attendees that you don’t make money on a customer when they make their first purchase–it’s after the second and third purchase that your efforts pay off. He noted that in the 1980s, “we didn’t really care how great we were in tracking orders, we only counted the money as it came in.” Now, Rainey said, the data is out there but it’s how marketers use it that has become more difficult.
In the next five years, Rainey predicts that direct marketers will see continued cost increases, a proliferation of advertising channels, consolidation for marketers and vendors, and less expensive technology with faster access to data. He also warned merchants not to forget about the basics, such as product selection. Merchandise is king, he told the audience: “If I were a retailer, I’d be spending a lot of time figuring out what I’m selling.”