March 2009

When the going gets tough…
An economy like today’s changes all the rules. Cam Shapansky

Organizations think differently, plan differently, and spend differently. Priorities change and so do objectives. Rather than looking for big potential wins on the client loyalty and acquisition fronts, organizations are fighting cost-reduction battles. Like every other viable business in this economy, Blue North is rapidly rewriting its PowerPoint sales deck to fit the economic climate.

Here’s a story that does a good job of illustrating how the current economic climate is shifting plans and objectives.

Early last summer, a mid-sized US investment firm asked us to respond to an RFP. Management called it their “print-on-demand” initiative. They wanted the winning firm to evaluate every piece of communications they delivered, with an eye to finding opportunities for personalizing communications in order to increase customer relevance and impact. They also wanted to develop processes and practices that were more scalable than their traditional approaches. Nothing was off the table. The work included looking at direct mail pieces, newsletters, e-blasts, statements, prospectuses, annual reports, marketing collateral, a variety of regulatory documents, and many other customer interaction materials.

Shift focus
We won the business.

We are now about six months into this exercise. Our client’s investments have shrunk by billions of dollars. The short- and mid-term outlook is bleak. Marketing, communications, and advertising budgets have been slashed across the board. Yet, our project remains intact with expanded funding.

Why?
About three months ago, our executive sponsor called us in and told us our client was still committed to customer excellence, but our initiative was going to die a quick death unless we could instantly shift the focus onto quantifiable cost savings realized within this fiscal year. We had gathered enough information to be able to jump at this opportunity without drastically changing the work we were doing. It was more about reframing our efforts. Yes, efficiency and effectiveness are both possible.

Some examples, you ask? Here are a few:

• Move to print-on-demand. Our client was designing, printing, inventorying, picking and packing, and destroying massive volumes of communication material. By switching these documents to variable print-on-demand packages, we are able to reduce printing, shipping, postage, and waste (a tractor-trailer load of out-of-date communications pieces every month or two). There are setup costs but the savings dwarf the initial investment.
• Consolidate communications pieces. The client was delivering more than 600 pieces of customer communications every year, coming from various parts of the organization. This number was difficult to pinpoint because no department knew what others were sending out. By centralizing functions and monitoring the communications, we are able to find many opportunities to consolidate messages and integrate several generic pieces into far fewer variable pieces. The cost savings in postage and print more than paid for the effort.
• Move customers online. The client was mainly sending out paper communications, without trying to convert customers to online ones. By developing an intentional campaign to encourage e-migration, customers are beginning to receive timelier material, trees across North America are heaving a sigh of relief, and money is saved in postage and print fees.
• Offer only relevant information. The client was delivering thick, generic, paper-based investment education material such as prospectuses, annual reports, and fund updates. While investor information is critical, this volume should be reduced to relevant information only—that means providing information only about the funds each customer holds, and where possible, offering the information electronically. This drastically reduces the volume of paper, while increasing relevance to customers.

I could go on, but I suspect by now you’re getting the picture. While everything could not be finished in 2009, the overall program offered a significant same-year cost savings.

Whether you are a bank, an investment firm, a non-profit, or a telephone company, you should take a big step back and think about the stream of information you are blasting out to your constituents. Does it all fit together? Is it all relevant? Does it demonstrate that you know who you are talking to and that you are grateful for their loyalty? If you answer “no” to any of these questions, my next question is:

“Why not?”
I’ve heard a lot of answers to the “why not” question, but I don’t find many of them satisfying. Sorry, but the fact that your data isn’t perfect makes you normal, not an exception. The fact that budgets are being cut is a reason to do it, not stop. The fact that you don’t know what’s involved or how to get started simply means you need to talk to someone who does.

Let’s pause the discussion for a moment and shift from thinking about what drives your organization’s decision making to thinking about your customers. To do this, I’d encourage everyone who is reading this to conduct a small, introspective focus group of one. We are all people, we are all customers, we all know how to read; I think that’s a good enough screener. How do you feel about the volume of mail you receive? Do you appreciate irrelevant messages from companies you deal with, even though you spend lots of time and money with them? Would you rather receive a big, fat book of information, most of which doesn’t apply to you, or a concise summary of things you care about? I’m hoping the answers to all of these questions are obvious. Delivering a leaner, more efficient, more environmentally friendly, cheaper stream of communications is in everyone’s best interest.
As organizations think through this shift, I like to encourage them to work towards a visit-based approach rather than a topic-based one. Here’s what I mean. For the most part, organizations deliver information one topic at a time. If a legal notice needs to go out, it goes out. If a newsletter is due to drop, it drops. A marketing campaign follows its set schedule. From a customer perspective, this is weird. At times, we as customers receive two or three pieces of mail in a given day from a single organization. Why? Because these materials deliver information on two or three different topics (likely from two or three different departments).

How people really function
That’s not the way people function. Think of a visit with a friend. During it, you catch up on everything that is relevant at that given time. You rarely get together and cover only one topic; instead, you catch up on a whole bunch of topics. With communications tracking tools, queue management software, good planning, and variable communications, you can emulate this experience. Yes, there are times when you want or need to keep it to one topic, and that’s fine, but that should be an intentional decision, not an assumption.

When the economy is flying along and organizations are willing to step out on a limb and try something new, we don’t have to spend a lot of time talking about cost savings. Maybe this is a mistake. I think this economy induced sobering of our perspective is helping us to make long overdue decisions. It’s jolting us out of the comfortable and forcing some changes that really needed to happen anyway. It’s making change management a lot easier: “Folks, we’ve got to cut costs, we’ve got no option.” Crisis tends to do that. I think this economic crisis is to marketers what Y2K was to technologists. And folks, when it’s all said and done, we’re going to be better off.

Cam Shapansky is a partner and consultant at Blue North Strategies Inc., where he is a developer and proponent of White Page Marketing™. For more about White Page Marketing™and Blue North, go to www.bluenorth.ca.