Team Alpha 375

"You can always find some expert who will say something hopelessly hopeless about anything."

Peter McWilliams

Hark Unto the Wisdom of Tom Evans, Folks... With Distinct Scepticism
By Drayton Bird

A while back, my Australian partner Malcolm Auld sent me a piece by a marketing expert named Tom Evans, which stated that "direct mail for customer acquisition is dead." You should still put your money into direct marketing, said Tom -- but do it online.

After reading that, I rushed to the phone as fast as my little legs would carry me. I had a client who was sending out 48 million direct-mail pieces a year to get business. I had to warn him.

He needed to know that the game was up. Direct mail was dead. Run for your lives, everyone!

But he pooh-poohed my warning.

"We're the only big firm in our industry doing well," he said. "Everyone else is in a mess. Our main competitor can't even service their bank loans. I think I'll just ignore this Tom Evans chap, being as we're doing so well."

Every time I hear that something is dead, especially if it comes from an expert, I remember Mark Twain's reaction after reading his own obituary in a newspaper. The telegram he sent to the editor read, "The reports of my death have been greatly exaggerated."

In his piece, Tom Evans presented what he considered to be compelling evidence that direct mail for customer acquisition is finished. The evidence: Direct-marketing spending decreased by 12 percent over the last year, driven by a shift away from direct mail and promotional material delivered door-to-door. And the top 10 direct-mail users had spent 40 percent less on direct mail.

Not only that, but he quotes Justin Basini, vice president of marketing for Capital One bank (once a top three direct-mail user), as saying that they were getting out of direct mail and putting their customer acquisition "resources" (which is marketing-speak for money) into online marketing. "Sending out loads of direct mail with [credit card] application forms isn't working anymore," said Basini.

From all this it is but a short leap to conclude, as Tom did, that "direct mail will always be important and it will still play a large part in direct marketing for many years to come, especially with regards to customer retention. However as a vehicle of customer acquisition it's finished. Digital does the job more cost effectively and in a word, better."

But, unlike Capital One, my client was not in the financial services business. He was in home-improvement. And what works for a financial services business doesn't apply to everyone.

And there is more naivety in Tom's piece. On the matter of lead generation, he says that when you generate leads online, "the Cost per Acquisition model... is a no-lose and no-risk proposition. Marketers can simply request a set number of sales leads for a guaranteed fixed cost. If the lead quality is up to par, calculating the ROI is straightforward."

The man inhabits wonderland. This would be true -- except for one thing. As more and more businesses recognize the joys of online customer acquisition, more and more will be willing to pay more and more to get those leads... or settle for fewer.

The same thing happened with e-mail marketing. Once it got amazing results. Now it doesn't.

And guess what the smart people in online marketing are doing? They're telling everyone to start testing offline. So whilst I -- and most of my clients -- have switched many of our efforts online, we are not so foolish as to believe that this is the only means of succeeding. We are interested in integrating our efforts.

Yes, it is true that, right now, online marketing in general tends to return a better ROI, but it is also true that many online marketers are being more imaginative than the direct mailers.

Not long ago, for example, I wrote a direct-mail promotion that doubled response for an insurance firm. It wasn't because my stuff was so brilliant but because what these people had been running was so bloody awful.

It has been about 10 years since a drunken creative director in a bar in Kuala Lumpur told me (I was not exactly sober either) that e-mail would kill direct mail. Now Tom Evans -- whose chief interest in publishing his words of wisdom, of course, is to attract clients -- says online is the answer to a maiden's prayer.

And so it is, and will be for a while. But in the long term, results will determine where marketers put their money. As Bertrand Russell remarked, "What men seek is not knowledge, but certainty." You won't find it in just one medium or one marketing discipline. That's kindergarten stuff.