Techno Bazaar

Direct marketers can perhaps be forgiven if they're getting just a little jaded.

Two years ago, many still saw the magic in cookies, search engine marketing and pop-up ads. But now the word most would use to describe those tools is “disappointing.”

And that may be because many firms failed to mix high technology with tried-and-true direct marketing methods.

“For online marketing to be successful, it's a lot less about technology and a lot more about direct marketing,” says John Ripa, product leader at Acxiom Corp.

With that in mind, Direct examined some relatively new tools and applications that work hand in glove with old-time DM. While this is by no means a complete list, we found several products that, if they work as advertised, will help marketers integrate offline channels with online ones, entice prospects more effectively, and all but reach out of the PC and shake hands with their existing customers.

Skechers, a shoe manufacturer based in Manhattan Beach, CA, is using a new hosted application by RightNow Technologies, of Bozeman, MT, which lets the company add to the database customer interactions that occur in the customer service department. Then the data is combined with e-commerce transactions and Skechers will use that information to craft upcoming e-mail campaigns.

“I have a real profile on every one of the Web buyers, so now I can talk directly to men, or women, or mothers who buy the shoe just for their children, or at the brand level — perhaps telling people that a certain shoe is running short size-wise,” says Geric Johnson, vice president of direct marketing at Skechers USA Inc.

The company has used RightNow's customer service and support solution program since January 2002, when it was implemented to automate inbound queries from Web customers. The program developed rules to respond by e-mail to typical customer problems and questions. And the reps have access to past call history, when they do need to customize their responses.

“We were getting 6,000 to 8,000 contacts a month,” Johnson says. “We now get 50% to 60% fewer phone calls and reduced e-mail contacts by 50%. If I didn't have the RightNow tool, I'd have three more agents handling contacts.”

The outgoing e-mail part of the package, called RightNow Outbound, was just introduced last month, and it will be helpful as Johnson plans his holiday mailings. “I probably won't be going one-to-one, but I could mail segments as small as 1,000 people,” he says. Moreover, the intelligence the RightNow product has gathered will allow Johnson to target his 350,000-record customer base more narrowly than ever.

“It sounds to me like finally somebody figured out what they should be doing to have relationships with consumers,” remarks Greg Stuart, CEO of the Interactive Advertising Bureau, the trade association for the Internet advertising industry. But the blending of marketing and customer service could mean “re-engineering an entire company,” he adds.

Another challenge for DMers is abandoned shopping carts. Kefta Inc. in San Francisco attacks that difficulty head-on by stopping the prospect before he or she leaves a Web site, emulating a salesperson tapping the departing customer on the shoulder.

Kefta's product, a module of the firm's personalization and scenario software, tracks the customer's behavior on a site. Say the customer is on a financial services site and starts to fill out a mortgage application, but then stops and leaves the site. At the moment the customer types in a new Web site address or closes the browser, Kefta's Personalization and Selling Solution module makes a pop-up window appear that displays type asking a handful of questions to re-engage the customer.

The pop-up might say: “Do you need more information? Click here to e-mail a representative.” Or it might comment specifically about the prospect's actions on the site: “You are interested in a mortgage, shall we have a sales agent call you?”

A study by French bank Societe Generale showed that up to 98% of the bank's potential customers left the bank's site before completing the purchase of a new product or service. After instituting Kefta's service, Societe Generale improved sales 20% to 30%, according to Phillippe Suchet, Kefta's CEO. Some 20% even gave personal information in response to the pop-up.

“It's like having a salesperson right there observing the customer and tailoring the interactions to each customer in a unique way,” Suchet says.

Another prospecting tool that has come to prominence lately has been the subject of at least one court battle.

New York-based WhenU makes pop-up advertising software, known as SaveNow. It's included with free bundled software packages. Users must click “agree” to download SaveNow onto their computers.

Advertisers engage in a pay-per-click arrangement to become part of the SaveNow directory. The program scans a user's Internet activity, and when the user arrives at a Web site that matches the information in the directory, a pop-up ad appears. Sometimes the pop-up is for products competing with the Web site, sometimes not.

U-Haul alleged in a lawsuit that WhenU was engaging in unfair competition and asked a federal court to ban the software. The judge dismissed the suit last month, saying WhenU did not break the law (Direct, Oct. 1). But that decision did not please everyone.

“There's no law that covers what WhenU does, but that's the same as if there were no law against someone stealing from your home and you are forced to arrest the thief under ‘unjust enrichment,’” charges Stephen Messer, CEO of Linkshare, a performance-based advertising network on the Web.

“What happens if you go to a Web site and 15 pop-ups appear?” asks Messer, who refers to the pop-ups as “browser spam.”

Messer adds: “You can't shop anymore. It used to be that e-mail spam wasn't that bad, but as the technology grows, the harm grows.”

WhenU CEO Avi Naider points out that people choose to download his software and that the clickthrough rate is 5%. “We deliver to marketers people who are interested in their product,” he says.

Naider adds: “Consumers make an explicit choice to be part of the WhenU desktop advertising network, and receive free online coupons worth thousands of dollars and free consumer software such as BearShare for agreeing to view relevant WhenU ads.”

One casualty of e-mail spam has been the decline of e-mail as a prospecting device. One way marketers have compensated for that is to mine their house files.

Acxiom plans to introduce a product in early 2004 that will analyze marketers' customer files against Acxiom's database of U.S. households (the working title is InfoBase ChannelMax).

The result of that analysis? A report telling the marketer which channel customers prefer to shop in, which they prefer to buy in, and which they prefer to be contacted in. Then a firm can segment its file accordingly, and develop a channel strategy, says Acxiom's Ripa.

Sure, marketers prefer to use the less expensive online channel, but that's not necessarily cost-effective in the long run, Ripa says. “We're saying, ‘Mr. Marketer, you've got to stop ramming a channel down a customer's throat because it may appear more profitable,’” he continues. “Customers are far more likely to engage with you when you market to them in the channel they prefer.”

Marketers' reactions to ChannelMax can't yet be gauged; the product will be beta-tested with select clients during this year's fourth quarter.

Targeting and relationship management may be great, but which technology will add more dollars to Q-4's bottom line? Steve Nober says his does.

Nober is CEO of inQ Inc. in Los Angeles, which produces Frontline, a system that delivers a pop-up box (Nober calls it a “chatskin”) just as a customer is completing his transaction on an e-commerce site. A live rep converses through an instant-message-type system with the customer to complete the upsell. The reps rely on scripts, but can also answer specific questions.

“Our technology enables Internet retailers to conduct an upsell at the end of their Web transaction very similar to a telemarketer upsell at the end of a call,” Nober says. “It's the golden moment — they've just given their credit card information and confirmed.”

The upsell offers come from third-party partners who pay a bounty for each sale. The bounty is split between inQ and the e-commerce site.

Typical partners are membership clubs and continuity programs. “The upsell has to be a classy program so the customer stays involved,” Nober says. For instance, a discount dining or shopping offer with a free trial works well.

The chatskin is designed to resemble the client's site, and often features the face of a friendly-looking rep. About 50% of the people who see the chatskin interact with it, Nober claims. Of those, about 12% to 20% make a purchase.

Nober's company manages the technology and the live reps.

Publishers Clearing House, Port Washington, NY, initiated Frontline in July, using it to sell customers who had ordered magazine subscriptions on an outside membership club.

Web chat is hot with DMers now, but interactive chat works better, says Rory Cumming, general manager of PCH.com.

“It's easier to upsell through live interaction than through a static Web page,” he says.

So far, PCH is pleased. “It's almost like selling advertising space on the confirmation page and the revenue stream has exceeded our expectations,” Cumming adds.

Does the upsell help or hinder the PCH brand?

“It's too early to tell, but as time goes on, we'd consider a co-branded offer,” he says.

A Solutions Sampler

RightNow Technologies

Bozeman, MT

Product: RightNow Outbound

Price: Starts at about $12,500 flat fee for two years for a basic level of service.

Kefta Inc.

San Francisco

Product: Pop-up software is a module of the personalization and scenario package.

Price: French bank spent less than $100,000 for a pilot program.

WhenU

New York

Product: SaveNow pop-up software

Price: Cost-per-click model from 50 cents to $3 on average.

Acxiom Corp.

Little Rock, AR

Product: InfoBase ChannelMax

Price: Probably around $100,000 (price hasn't been worked out yet).

InQ Inc.

Los Angeles

Product: Frontline technology

Price: Partners providing upsells pay a pre-arranged bounty on each customer who converts. The amount is split between inQ and the e-commerce site. Bounty is between $20 to $22 per customer on average.