How Yesterday’s Direct Marketing Evolved into Today’s Customer Relationship Marketing
Lester Wunderman was the “father of direct marketing,” the forerunner to CRM as we know it today. He founded Wunderman in 1958 on a brilliantly simple premise: Acquire with the intention to retain, and retain with the intention to grow.
Before Wunderman, who died earlier this year at the age of 98, consumer companies spent a great deal of time on the first part and not nearly enough on the second. Customer acquisition has long been the be-all, end-all for marketers. Before Wunderman and his colleagues, once a customer was “won,” usually at a cost via discounting and/or paid media, the whole hunt went back to the beginning. After Wunderman, marketers began to think in terms of “life cycle” marketing. Phase One: Acquire. Phase Two: Grow.
The key cog in the wheel of Phase One in Wunderman’s day was the NCOA. The National Change of Address registry was a database of everyone who informed the Post Office that they were moving for the purposes of having their mail forwarded to their new residence.
For reasons still unclear to me, the NCOA was then made available to marketers. Despite a laughable dearth of information by today’s standards, the NCOA enabled a lot of very smart marketing by the standards of the day. You usually knew the person’s name, could infer gender (simpler times!), where they were moving from and to, and on what date.
Just those few fields were pure gold. They enabled geographic contextuality that made for a perfect entree for people in the moving business, local services (lawn mowing, snow removal), and other local businesses (“Welcome to the neighborhood!”). These efforts often worked because they were specific, relevant, and timely. What would not have worked would be to send that same message to every house in a neighborhood. Aside from significant expense, that line of reasoning simply wouldn’t work as most consumers didn’t have that same context. There was no equivalent “trigger event.” They weren’t moving. In fact, they may have already been customers of these same businesses, so campaigns like this would likely be met with equal parts confusion and disdain.
The NCOA also lent itself to other types of very powerful marketing insights. If someone is moving, it could be logically assumed that they’d be in need of new furniture and other kinds of things that were not necessarily place-based, but “life stage” relevant. The nearest Sears & Roebuck might have sent a generous offer to moving families because timing like this might never happen again. Everybody didn’t get it. Just those on the move.
It worked then. It works today.
But we’ve gone into new modalities of “direct” that Wunderman and his colleagues could never have envisioned.
The NCOA was the leading trigger in its day. Today, however, every single consumer, not just people who are moving, sends out triggers that signal their intentions. We open apps. We browse items. We open emails. We redeem offers. We call service lines. We refer friends. And ideally, we make purchases.
Each of these “events” warrants some kind of response from a business. It could be a thank-you, a receipt, a survey, or some other important but largely functional response to what has happened. The brilliant basics will never go out of style. It could, however, be an incentive for what would ideally happen next. A limited time offer that’s personalized and directly relevant to your prior action. Status upgrades or points awards redeemable for future incremental purchases. The options are endless.
Today’s consumers, unlike Lester Wunderman’s, reveal virtually everything you need to know about them in order to design offers and experiences that will make them better customers, because you can be a better company for them. You’re factoring their likes and dislikes, both stated and observed, and are leaning into the former and ratcheting down the latter with each successive piece of data.
Because you were moving doesn’t necessarily mean you’re in the market for a new couch. Because you’re looking at couches for hours a day and reading every line of spec about them probably does.
Where Lester had to solely rely on the “birds of a feather” principle—where if you were a certain age and gender living in a certain zip code, then you likely gravitated toward the same things as the other people in the that area—today’s marketers and merchants know much, much more about your unique tastes and are able to act accordingly if they are outfitted with the right organizational tools and talent.
If you’re only getting customer signals and events on a weekly or monthly basis, you’re missing out. If the customer is looking at your couches, she’s also likely looking at others as well. If the other business has both active listening tools and a process to act on those signals, there’s an overwhelming chance they’ll get the sale before you even figure out you were in the running.
CRM equals customer relationship marketing. The more you know about the customer, the more frequently you engage with her, the better you listen, and the more timely you respond and adapt to her needs and wishes, the stronger your relationship will be.
Being aware someone has moved, in and of itself, is not the basis of a relationship. Knowing why they moved, their hopes and aspirations for the move, the drivers of the move, and so on are the foundations for a relationship rooted in mutual understanding and respect.
Unlike in Lester’s day, today’s consumers “move” every day—even when they’re standing still.
Patrick Reynolds is chief marketing officer of SessionM. Prior to that, he ran marketing and strategy for two successful startups in the streaming audio industry. He also has client-side experience as chief marketing officer of a publicly traded retailer as well as multiple leadership positions with leading international advertising agencies. Reynolds has contributed articles on mobility to Forbes, TechCrunch, and VentureBeat among others, and spoken at CES, NAB, and SxSW. He is a graduate of St. Bonaventure University.