International Mailers On the Prowl at DMA '06
At DMA'06 in San Francisco in October more international mailers than in previous years wandered up, down and around the aisle where the "International Pavilion" was located. There were also more than a few Canadian and other large-volume mailers looking for outsourcing opportunities mostly to cut their print and production costs in lower cost Asian countries and then to mail back into North America. In addition there were U.S. mailers looking to outsource in Asia and ship back to the USA for direct injection into the USPS.
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Postage is the Most Critical Cost Element in Outsourcing
These days low volume acquisition mailings continue to be handled by local printers and lettershops (less hassle), but significant savings can be obtained by outsourcing large volume mailings. This can make the difference between a certain loss on new customer acquisition mailings and break even or better.
It's no secret that the most critical factor in the overall cost of outsourcing direct mail production are the postal rates when you actually mail into one or more markets from offshore. Here it helps to work with a service provider who can negotiate with postal operators on your behalf on the back of their existing volumes. The difference between one postal quotation and another these days can be very substantial indeed (using reliable operators only).
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How Do You Get International Mailers to Debate International DM Strategies Publicly for the Benefit of the Industry
and Other International Mailers?
It was good to observe mailers eager to talk to international service providers again at DMA '06. Too many "DMA" events around the world are dominated by service providers talking to each other. It's all very convivial but somewhat futile unless a minimum number of mailers are present at these events. After all, it's the mailers who pay the bills -- and keep the wheels of the DM industry turning
What exactly will attract more mailers to DM events more often (especially events which cover cross-border direct marketing)? This is a good question, and it's a question to which the International Council of the U.S. Direct Marketing Association are currently trying to find an answer using a detailed questionnaire which has been circulated to members. They want to identify just what the topics and issues are which will flush out experienced and aspiring international mailers and "entice" (using the International Council's word) them to participate in "international DM" events.
In my view there's only one formula which will work. That is to invite senior, experienced international mailers (if they're willing) to publicly debate with one or more other senior, experienced international mailers about direct marketing into specific markets (or regions) and at the same time to accept relevant, spontaneous questions from the floor from other international mailers who come to hear them speak in an open and transparent way. Surely this should be at the heart and core of any public exchange of ideas about cross-border direct marketing. In my view, nothing less will do. (Service providers will turn up at these events anyway especially when mailers are present).
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Cycles in DM Response
We were being told by mailers at DM '06 that the German market is now responding well again to direct mail offers (in German language, of course). Only a year ago international mailers were pulling out of this market due to declining response. In the same way response rates have picked up again around most Asian markets while just last year (2005) response levels seemed to be depressingly low. I wonder whether this relates to the volume of mail being dropped in any one market at any one time? If mail volumes are high, consumer response seems to fall. When volumes decline due to less mailing activity, response rates seem to pick up again. If you mail into a range of different markets this is worth watching and is another good reason for keeping in contact, and sharing notes regularly, with other mailers. (DMA's who organize lunches for their members please note).
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Is it Time for "Smaller Multinational Markets" to Come Back into Favour?
There's no doubt at all that the multinational ("smaller markets") sector has been comparatively neglected for several years now. Response rates began to fall not long after 9/11, and mailers began pulling out even though average response levels in most smaller markets were 250%-300% higher than average response rates in the larger markets. Small markets in themselves are insignificant, but collectively they represent a "high response" sector (for global offers) which can be reached in one language (English) and in one currency (US dollars) although some mailers are now getting more than acceptable results multinationally using Euros. Order processing and fulfillment can be handled offshore from your headquarters.
What's going to bring this sector back? It needs multinational direct marketers, with a pioneering spirit, to mail the gathered and compiled lists available out there since multinational responder files (regrettably) have become "far and few between"! It would be good if those global mailers amongst us can get the process going again of building up responder files in these neglected markets around the world which are small (but beautiful)! Consumers there haven't seen much postal mail for quite some time.
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Big Donors Should Give Fundraisers a "Fishing Rod"
to Generate Their Own Funding
After Bill Gates, Warren Buffet, Li Ka-Shing, Richard Branson et al began pledging billions to philanthropic endeavors (usually in a blaze of publicity), hardly a day passes without newspapers reporting that another rich investor, family or businessman is planning to dedicate a significant percentage of their wealth to a particular charitable trust, charity or charities. Many international banks now employ specialists to advise high net worth clients on where and how to give their money in a planned way to good causes. Philanthropy has become fashionable.
However there's a growing donor demand for accountability from charities. In this context, I'm reminded of a Chinese proverb which proposes that rather than give a man a fish to feed for one day, it's better to "give him a fishing rod to catch his own fish so he can feed himself for a lifetime."
This principle can be applied very precisely to the role of DM in the fundraising industry. Rather than contribute disposable money to a charity where it's spent and continually needs to be replenished with further funding, some donors should be encouraged to fund the ability of their favorite leading charity (or charities) to invest in a donor base (ie. a "fishing rod"), build relationships with those donors and to nurture those donors in true DM relationship building manner over time so that the charity can generate their own funding in the future simply through communicating with, and giving program information to, both large and small donors.
Many charities of course, do just this, but they are funding this activity with the help of small donors who believe (innocently perhaps) that 100% of their money is being devoted to children, pets, old people, the poor etc. Database marketing can be a very efficient "fishing rod". If big donors can specifically fund donor acquisition campaigns (as some foundations have done in the past domestically within the USA), fundraisers can then look new donors in the eye and say truthfully that 100% of their donation is being dedicated to "the appeal" rather than being used to fund some or all of the marketing cost of reaching that donor (which is the current somewhat unhappy state of affairs in most large-scale fundraising where direct mail is used).
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Another Free Newsletter Worth Reading
I have often seen copies of TARGET MARKETING MAGAZINE over the years (and indeed been a contributor form time to time) and have always associated Denny Hatch with this publication whenever I meet him at DM conferences and events. Recently a mailer I know mentioned a newsletter Denny publishes called DENNY HATCH's BUSINESS COMMON SENSE. Published twice weekly online this often covers direct marketing issues and tends to focus on one major news story in each issue (the current issue (No.79) focuses on "How to Communicate via E-mail
The Perils of Landing Page Limbo"). I simply didn't know about this free newsletter until a couple of days ago. However it reads well it's useful and I'm impressed by it. It's worth having a look at their website
www.businesscommonsense.com (and the price is right).
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Sans Serif Best for Web Marketing
In the last issue of DM Diary I mentioned that a serif font (such as Times Roman) always outpulls a sans serif font (such as Helvetica) in direct mail marketing. There were several strong squawks from email marketers to say that exactly the opposite applies on the web. A check around several websites indicated this clearly seems to be the majority view since all were using sans serif fonts.
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Return on Investment (ROI) or Return on Ego (ROE)?
It's interesting to note that Reader's Digest (one of the biggest direct marketing organizations in the world) has just been taken over by a private equity firm in the US for US$1.6 billion despite long term debt totaling US$776.3 million.
A plethora of other newspaper companies and television stations are also up for sale in the USA at the moment partly due to losses to the Internet of both readers and advertisers which has slowed down growth rates for traditional media.
Many well-known names are stepping forward at the moment to head private equity groups to purchase media companies. What's the motive force here? In my view (and I used to be in magazine publishing which I considered a "labour of love") is that it's not so much ROI (Return on Investment) that's feeding this current frenzy, but ROE (Return on Ego). Periodical publishing is a tough, tough business these days, so the expected return on ego (and the perception by owners they will be able to command instant respect and be party to influencing men and events in a way they haven't been able to do before), has got to be more attractive than the likely return on investment.
At the same time, it's predictable that businessmen who take over print media, will undoubtedly "slash and burn" marginal circulation (much of it premium driven) which is so expensive to acquire and maintain. They will also allow circulations to drop to a more natural level where advertisers will need to get used to the idea of paying a premium to reach core readership only and not be mesmerized anymore by the "circulation rate base" syndrome.
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Special Event in Virginia
For no other reason than I'm the publisher of DM Diary and can write what I like (as long as it's not libelous), I draw your attention to an apparition of the "Blessed Mother" which has been manifesting in a grotto (now made into a Shrine) at the "Synchronicity Sanctuary" in Virginia since August 2006. This is the home of a non-sectarian spiritual community.
I haven't experienced the apparitional presence myself yet but have spoken to residents there (some of whom I know) who describe its presence as having "a power and amplitude which saturates the Sanctuary". More than 75% of those who have visited the shrine have apparently seen (or felt the presence of) the "Blessed Mother".
Although there have been many such authentic appearances (especially in Europe) over the years, few it seems have been so visible to so many people.
Some local newspapers, have published stories, but it seems no mainstream national or international media have yet visited the Sanctuary to investigate. The residents of the Sanctuary are prepared for visitors but they do not want the apparition promoted since they consider the manifestation intrinsically authentic and sacred. For the more than curious, (or for the media who read this newsletter) you may like to visit the website: http://www.synchronicity.org/Apparition.html. One person there in a position to explain things, and probably answer most questions, is Alan Scherr at alan@synchronicity.org. His telephone number is +1 757 644 3388.
James Thornton
Managing Director
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