Button pressing baloney

Right now there’s a new service being touted to UK direct marketers, by the name of Ocean, which combines 20 different databases and promises to provide over 100 million data records on 40 million named UK individuals.

The service, provided by database firm CACI, offers marketers access to names, addresses, telephone numbers, email addresses and so on plus a comprehensive analysis of their geodemographic status (income etc), their spending habits, newspaper reading habits, what they buy on the internet, and current spending plans (for example, whether they intend to change mobile phone user in the next few months).

It’s being sold as the holy grail of direct marketing. Its advertising slogan: ‘Does your consumer data push the right buttons?’

In fact, services like this a part of the problem, not part of the solution. They underline the fact that the direct marketing industry has a big problem. A very big problem which lies deep in the unstated assumptions by which the industry currently operates.

Here are three of these assumptions.

First, that good marketing is about effective messaging: if only we can find the right message – the right stimulus – we can be assured of the right response. Thus when CACI talks about pressing the right consumer buttons it is treating ‘the consumer’ – a living, breathing human being with his or her own purposes, priorities and intentions – as if ‘it’ was a non-sentient automaton that, if you can press the right buttons, you can get to do what you want it to do.

The second assumption follows from the first one: to discover the right buttons and how to press them you need more, better data. So increased marketing effectiveness depends on gathering ever more data and mining and analysing it in ever more sophisticated ways. The more you know about ‘the consumer’ the more effective your button-pressing: i.e. the greater your influence and control.

A third assumption is that this consumer data is a natural resource like fish in the sea: there to be harvested and used by anyone who has the investment and technology to do so (subject to the laws of the land). Since the only entities capable of making these investments are companies, direct marketing naturally revolves around helping companies harvest as much as possible data from consumers, and then to use it as efficiently and effectively as possible to ‘press their buttons’ and get them to do what companies want them to do.

So what’s wrong with these assumptions?

Well, first, as sentient beings with their own purposes and priorities, individuals don’t always respond well to having their buttons pushed by others – especially by hundreds of different button-pushers all at the same time. The real secret of marketing effectiveness does not lie in bigger, better button-pushing. It lies in offering consumers better value. (That’s hardly news, but it’s amazing how often marketers think that the better messaging, rather than better value, is the real secret of success.)

Second, rather than seeing consumer data as a commons – a resource which is there to be harvested and used by anybody with the means to do so – we should see it as a private, personal asset. In which case, the main benefits of this asset should accrue to the asset’s creator and generator: the individual.

That is how most individuals see it, already. Thus, Information Commissioner research that shows protecting people’s personal information is now the third highest priority issue for UK citizens, with 83% of individuals nominating it as a cause of concern (behind improving standards in education and preventing crime). And that is what lies behind recent changes to electoral roll regulation which means that today one third of the electoral roll database is no longer available to direct marketers.

Third, if the first two alternative views are right, then the future for direct marketing and CRM lies not in harvesting, selling and using consumer data behind individuals’ backs and mostly without their knowledge, influence or control. Instead, it lies in encouraging and facilitating individuals to volunteer information about what they are planning to do, when.

There are two points to note about this alternative. First, while predictive patterns of possible future behaviour can be derived from historical data about attitudes, attributes, transactions and behaviours, there is only one entity that actually knows the answer to the question: ‘what is this individual going to do next?’. It is the individual himself. Even the best predictive models are exercises in guesswork, and most of the effort that currently goes into predictive modelling is invested in attempts to reduce the levels of error and waste it inevitably creates.

Second, individuals will only bother volunteering significant amounts of information in a sustained fashion if they have a good reason for doing so (if they profit from it and can trust it) and if it is easy for them to do so (see the Personal Knowledge Banks White Paper and personal information management service presentations on www.rightsideup.net).

And that points to a completely different type of service: one that acts for and on behalf of the individual, helping that individual make the most of his personal information.

Today, every technology, public opinion and legislative trend is pointing towards this alternative. A new personal information management or ‘personal information logistics’ industry is emerging – an industry which adds value for individuals by helping them access the right information about the right things at the right time and to acquire, collect, store, secure and protect, analyse, pass on the information they want and need to manage their lives better.

As this industry matures (driven mainly by technology providers, not marketers) the centre of data gravity is beginning to shift: from many different and separate organisations holding small, isolated bits of information about many individuals (and desperately struggling to fill the resulting holes by clever bits of modelling and data fusion), to individuals holding ever larger amounts of data about themselves, and letting chosen organisations access and use discrete elements of this data on a permission-only basis, for clearly defined purposes and clear benefit to the individual.

If you are in marketing, as you look towards the future, where should you be investing? In harvesting ever more data from consumers and using it to ‘press button’. Or in a new model of value creation that wins the consumer as its biggest, most active ally?

Alan Mitchell

Comments

[Iain Henderson]

Yes, SXIP and quite a few others are active in this space - to the extent that I think change in the direct marketing industry might happen sooner than you think.

When the individual is more empowered by technology (and ultimately by legislation) then they are able to articulate their 'needs' to organisations in ways that do want involve the current DM processes - pull from the individuals rather than push to the individual will be possible. These articulated needs amount to an 'intent to buy' data stream, and where that exists the direct marketing/ CRM industry won't be far behind.

[Morriss Partee]

Here's a company working on person-centric, person-controlled online identity: Sxip

I discovered the company because I like Guy Kawasaki, and Guy's blog referenced a speech by Steve Jobs for the Cupertino City Council, and that was in turn featured on a site about presenting, which has links to a fabulous talk given by Sxip's CEO.

[HighJive]

For starters, I would hesitate to say I’m probably right on anything. The paradox of the business, and even society, is that there are no right answers. We’re all just forwarding personal opinions, hoping the opinions may lead to better systems, solutions and more.

You wrote, “But equating emotion with ‘creative’ sounds to me like 1980s advertising agency messaging-speak.” Perhaps. But I also contend that the majority of direct marketers in the U.S. are working like 1980s advertising agencies on certain levels.

While the more progressive U.S. direct marketers (progressive U.S. direct marketers being an oxymoron, in my opinion) are utilizing contemporary methods for gathering data and focusing lists, they are almost prehistoric in creating messages. The general belief is that the straightforward offer is the message — versus trying to make the offer relevant and meaningful to the receiver. Even the response results are tabulated in terms of numbers versus trying to ascertain why people responded.

Business people who spend most of their time viewing consumers as numbers are not best suited to create emotional connections, in my opinion. That’s why I believe the revolutionaries in the quest to build trust in direct marketing will probably come from the creative department — or account planners. In U.S. direct marketing agencies, there are few true account planners, contrary to anything the agencies might claim.

I believe that almost all decisions ultimately have a strong emotional component (that’s hopefully not a unique perspective). People make decisions for personal and emotional reasons. I also believe that most U.S. direct marketers think people make decisions for primarily rational reasons.

I believe that the divisions between direct marketing and brand advertising are continuing to blur, especially with the accelerating evolution of new media. Direct marketing must become more emotionally-driven, just as advertisers are demanding that brand advertising must become more sales-driven (or more like direct marketing, if you will). In the U.S., most direct marketing agencies do not have enough people in ANY department who are viewing the work for emotional drivers like trust.

I think you build trust by showing you understand the customers’ needs, desires, behavior, etc. You build trust by showing respect to individuals.

In the U.S., direct marketers do not show respect to individuals.

But this is all just my opinion.

[Alan Mitchell]

You are probably right. People who make their money doing old things in old ways find it very difficult to be pioneers. In a sense, that is why we formed the BCCF (www.rightsideup.net) - to encourage pioneering which, in this case, will almost certainly come from outside the industry.

I would pick you up on one point though. You say, "Building trust is an emotional endeavour which places itself into the creative arena".

I don't think I agree with this. Yes, absolutely, trust is a very emotional thing. But equating emotion with 'creative' sounds to me like 1980s advertising agency messaging-speak.

I think you build trust by being trustworthy. The buyer-centric concept is about inventing new types of business that individuals have good reason to trust - because they make their money by acting for and on behalf those individuals.

BC is about personal services. Direct marketing is a corporate service. I think that's where the trust issue lies, not in 'data versus creative'.

[HighJive]

Well, I can’t speak about the state of affairs in the U.K. But I have toiled in direct marketing and general advertising agencies in the U.S. Both specialties could benefit from a new business model. And both will probably refuse to explore such possibilities, at least in our lifetimes.

When I worked in direct marketing, I was surprised to see the alleged exactness of the trade is pretty suspect at times. Results can vary based on the services used to track information; that is, I literally witnessed response rates change after filtering the numbers through different measuring services. And like research conducted by general advertising agencies, direct marketers are skilled at putting positive spins on any less-than-stellar response. Direct marketing may be more measurable than general advertising, but it employs an equal share of hucksters.

The difficulty direct marketers will have adopting a new business model lies in the paradigm shift that would need to happen. Direct marketing is primarily obsessed with data and lists. Creative usually receives about 20 percent of the overall efforts. But building trust is an emotional endeavor, which places it into the creative arena. Until direct marketing respects and embraces the creative component — which would require wholesale staffing upheavals in most direct marketing shops — don’t expect any revolutionary changes.

In this age of brand managers seeking instant sales gratification, direct marketing continues to enjoy growing popularity. Which ultimately makes it even more improbable that folks will explore improvements.

[AlanMitchell]

I agree with you. The direct marketing industry is awash with rhetoric about building trust, relationships and dialogue with consumers - about 'getting closer' - but its day-to-day practice belies this rhetoric.

I suppose in this posting I was trying to make two points.

1) if you seriously want to build trust, relationships, dialogue and so on, you actually need a different business model: one that works for the individual; one that providers supplier relationship management rather than customer relationship management, for example. Or an Added Value Buying Service (AVBS) that helps individuals find and access value from the market, rather than marketing strategies designed to find customers and access value from them.

Whether direct marketers' talk of trust, relationship and dialogue is bare-faced lying or a heartfelt and genuine quest, the point is, it's not going to happen within the current framework, which gives individuals no reason to invest their time, effort, attention, information etc in the process.

2) Ironically, as AVB services, supplier relationship management and other services emerge to gain critical mass, sellers who cooperate with them will discover they have an enormous amount to gain. Because these services can solve the problems of efficient buyer/seller connection that direct marketing cannot.

[HighJive]

Your post is right on so many levels. But it ignores a major problem at the heart of direct marketing. Direct marketers don’t give a shit about individual people’s concerns — or even collective people’s concerns. The basic tactic (at least in the U.S.) is to drop a message on a mass amount of people; and if even 1 percent responds, it’s usually considered a tremendous victory. In other words, direct marketers are completely fine if 99 percent of the audience ignores, rejects or absolutely hates the message. Direct marketers are not interested in gaining trust and asking consumers to volunteer information; rather, they’re seeking to make a sale by interrupting and disrupting people’s sensibilities. In direct marketing, people are not people. They are numbers.

Of course, most direct marketers will probably dispute my rants.