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Direct marketing is outbound, measured and designed to pay for itself.
So, the catalog you get in the mail, or the Fuller Brush man. The idea was to buy stamps (or some other form of contacting people) and make enough money on average to buy more stamps.
Before the internet, direct marketing was on a steady growth path. The science of testing and improving offers and the industrialization of systems that lowered costs meant that more and more organizations were using direct marketing to solicit donations, get votes and sell products and services.
One of the key elements that allows direct marketing to grow so fast is that once you know how much an action is worth (a returned phone call, a door opened, an address added) you can buy it from anyone, in any quantity. Because it pays for itself. The media works on commission, for you.
The internet, of course, is fueled by direct marketing thinking. What's a click worth? How much will you bid to have your ad on top? How many visits does this buy create? What's the funnel on our site, and how do we make it more efficient? What's the allowable for a download?
So Amazon grew largely on the basis of its affiliate program (anyone can join, you only get paid when someone clicks and buys–classic direct marketing thinking). And so Google grew without a salesforce, because the direct marketer doesn't wait for someone to show up and sell–instead, the direct marketer eagerly seeks out anything that generates a click for less.
This is the opposite of the other kind, which doesn't really have a name. Brand marketing, or mass marketing, or indirect marketing. The kind the guys at Mad Men do. The full-page ads in magazines, just about all the ads on TV, sponsoring a conference…
[For the purposes of this post, I'm talking about the duality of marketing in the traditional sense. My take for the last 15 years is that marketing is merely storytelling and promise making/keeping, and in fact, everything the organization does is at some level, marketing.]
If you're hoping to build something on the web, then, you're almost certainly required to think like a direct marketer.
That means that if you're searching for traffic or action or sales or word of mouth, you will be offered a hundred ways to measure what happens. And if you improve what you're measuring, the amount you have to spend on each action goes up, and if you earn enough from each action, direct marketing becomes a profit center, not a cost.
That means if you're required to sell ads or sponsorships, the easiest sales to make, and the most likely sales you'll make, will be to a direct marketer, and the offer is probably similar to Amazon's original affiliate offer: We'll pay you when it works. We'll pay for a click or we'll track how many people type in a discount code, or…
Sometimes eager direct marketers will pay upfront for an ad, but they always measure, and they don't keep running ads that don't measure up. That's at the core of direct marketing.
There are costs to this shift, worth thinking about:
1. While it's tempting to build an organization with direct marketing techniques, just about all the brands that matter to our culture aren't built this way. The subtle and powerful stories behind Starbucks and Apple and Harper Lee don't lend themselves to direct response ads.
If you're trying to build that kind of brand, it's essential that you reject direct-marketing tactics as a shortcut. They will drive you to make decisions that keep you from building the sort of promise you seek to build, and they'll end up not paying for themselves either.
Whether you're a solo entrepreneur or a giant corporation, this is a trap the web sets for you. What you need to sacrifice to make the numbers work might be the very brand you seek to build.
2. Open-system direct marketing (where just about anyone can carry a link or run a banner) inevitably destroys the media that gets hooked on them. If your podcast becomes dependent on getting people to visit a sponsor's site and type in the discount code, you can bet that there will be ever-increasing internal pressure to mention the code louder and more often. Not by the advertiser. He doesn't care, he'll just move on. By your partners and your boss. And so we get popups and popunders and sneaky data tracking. Because people are measuring.
[There is an exception to this, which proves the rule: The Yellow Pages, where responding to the ads is the only function of the medium. Craigslist and eBay understand this.]
In many ways, direct marketing on the web is a self-limiting process, because the more that media companies embrace it, the worse it works. This is precisely the opposite of what happened for a generation to branded ads in Vogue and other magazines. Work too hard at getting clicks on the ads you sold, your audience leaves.
Lester Wunderman, Lillian Vernon and LL Bean built direct marketing businesses at their kitchen table, buying stamps and mailing lists and learning the hard way how to think like direct marketers. The web has turned all of us, if we want to be, into direct marketers. Go in with your eyes open, and do it well, and for the right reasons.
Systems under severe stress degrade.
While individuals might do extraordinary work while pumped with adrenalin (lifting a car, running through a burning building), panic can decrease the efficacy of a system by 30% or more–often completely destroying it.
Compare the typical throughput of a highway during rush hour (when it's filled with seasoned commuters) to a similar road when people are fleeing a natural disaster…. in the first case, the cars naturally keep a safe distance, drivers are sufficiently alert, everyone gets home. In the other, there's a complete standstill.
Or consider how the TSA functions in an environment of stress (like the Orlando airport). A combination of leisure travelers, poor management and bad architecture means that (at least every time I've been there), there's a lot of yelling, invaded space and wasted time. Not to mention frayed nerves among Disney-overdosed parents in need of anything but more hassle.
Here are some thoughts for someone who might want to write a book about the panic tax (or someone who runs a system that shouldn't be degraded):
1. The cost of ameliorating panic in your system is always less than the cost of the lost productivity when panic hits. In other words, all the other steps are worth it.
2. Slack is the enemy of panic. When in doubt, add resources, or even simpler, remove requirements. That's what the gated entry points on crowded freeways do… the entire road goes faster when fewer cars are on it, meaning that gating cars at the entrance is actually far faster than letting them on over the course of the commute.
3. Media voices, politicians and others that create panic for a living need to own responsibility for the way their actions dramatically magnify the cost we all pay.
4. The answer to, "should we panic," is always no. Always. Panic is expensive, panic compounds and panic doesn't solve the problem.
5. Install panic dampers at every opportunity. TSA officers should be trained to talk more softly and slowly when their systems approach capacity. Sound deadening devices should be tuned to be most effective when volume increases. The police should be trained to seek compliance second, after they are able to diffuse panic.
6. They call them panic attacks for a reason. After-action review, an attack-analysis session, ought to be held whenever a system freezes under panic. Find the instigator, the first step, not the last one, and invest in what it takes to ameliorate it next time.
Mostly: Panic averted is far cheaper than panic survived.
There's no more important criticism than self criticism.
There's no amount of external validation that can undo the constant drone of internal criticism.
And negative self talk is hungry for external corroboration. One little voice in the ether that agrees with your internal critic is enough to put you in a tailspin.
The remedy for negative self talk, then, is not the search for unanimous praise from the outside world. It's a hopeless journey, and one that destroys the work, because you will water it down in fear of that outside critic that amplifies your internal one.
The remedy is accurate and positive self talk. Endless amounts of it.
Not delusional affirmations or silly metaphysical pronouncements about the universe. No, merely the reassertion of obvious truths, a mantra that drives away the nonsense the lizard brain is selling as truth.
You cannot reason with negative self talk or somehow persuade it that the world disagrees. All you can do is surround it with positive self talk, drown it out and overwhelm it with concrete building blocks of great work, the combination of expectation, obligation and possibility.
When in doubt, tell yourself the truth.
Perhaps you've decided that the idea of Pick Yourself is sort of a new-age mantra, a promise that everyone is entitled to what they want, right now.
What a shortcut it seems to be. A false promise, holding out that illusion that we can get what we want if we just raise our hand. Pick yourself, you win…
It's precisely the opposite.
If you want to be responsible for making music, make music. If you want to be responsible for writing, speaking, making change happen, go do that. Waiting to get picked is a form of hiding, not realism.
No, it’s not always possible for everyone to succeed by being the most popular, the most clicked on, the most liked. In fact, it will never happen. No one is promising that, I hope. What pick yourself means is that it’s never been easier to decide to be responsible for your own work, for your own agenda, for the change you make in the world. To have a chance to matter. Not to be finished right now, but starting now.
Pick yourself means we should stop waiting and whining and stalling.
The outcome is still in doubt, but it’s clear that waiting just doesn’t pay.
Fast growth comes from overwhelming the smallest possible audience with a product or service that so delights that they insist that their friends and colleagues use it. And hypergrowth is a version of the same thing, except those friends and colleagues quickly become even bigger fans, and tell even more people.
Often, we get sidetracked when we forget about "smallest possible." If you make the audience you're initially serving too big, you will dilute the very thing you set out to make, avoid critical mass, and compromise the magic of what you're building. You'll make average stuff for average people instead of something powerful for the few.
By "smallest possible" I don't mean, "too small." I mean the smallest number that eventually leads to the kernel of conversation that enables you to grow.
[Minimum Viable Audience, a great term, originally coined by Brian Clark.]
The kind of listening we're trained to do in school and at work is passive listening. Sit still. Get through it. Figure out what's going to be on the test and ignore the rest. Your eyes can glaze over, but don't let it show. Try not to nod off. People are talking, and they'd like the illusion of listening to accompany that. Don't interrupt.
Passive listening is letting the other person talk.
Active listening, on the other hand, requires that you interrupt when you need a clarification, and it requires that you ask a truly difficult question when the speaker is finished.
If it's worth listening to, it's worth questioning until you understand it.
Customer service is difficult, expensive and unpredictable. But it's a mistake to assume that any particular example is automatically either good or bad. A company might spend almost nothing on customer service but still succeed in reaching its goals.
Customer service succeeds when it accomplishes what the organization sets out to accomplish. Google doesn't have a phone number, doesn't want to engage with most users. McDonald's doesn't give you a linen napkin. Fedex used to answer the phone on one ring, now it takes 81 seconds for them to answer a call. None of these things are necessarily bad, they're merely examples of alignment (or non-alignment).
Organizations don't accidentally run ads, don't mistakenly double (or halve) the amount of cereal they put in the box. They shouldn't deliver customer service that doesn't match their goals either.
Here are some uses of customer service:
To create a significant competitive advantage by engaging with customers in a way that others can't or won't. This is what the over-the-top customer service approach of Zappos did. They went from being a commonplace (you can buy shoes from anyone, we're anyone) to a customer delight company that happens to sell shoes. Rackspace does the same thing with technical support.
To streamline the delivery of inexpensive goods produced in an industrial way: This is the model of most fast food places. Deal with the exceptions quickly and well, and keep the line moving. Part of this mindset is to not make it easy for people to complain, and to treat every complaint in just about the same way. When you get a bag of rancid nuts from Planters, sure, you can visit the website, click a bunch of times, fill in a form and let them know, but they don't use it as an opportunity to earn your loyalty. "Here, take four coupons, each good for a dollar off one purchase, thanks, we're done."
To lower expectations and satisfy customers by giving them exactly what you promised, which is not much: This is the model of automated customer service at most big web companies. They'll do just about anything to avoid an interaction with a human, and they're clear about this, meaning that they should only end up with customers who are okay with this.
To raise expectations and delight customers by giving them way more than they hoped for, which was a lot: This is a truly difficult promise to maintain (Apple did it with the Genius bar, but they rarely surprise there any more). The secret is to find a focus, a budget and a scale where you can actually deploy talented individuals to keep this promise.
To dance with customers in an act of co-creation: This is part of 37Signals' secret. From their book to their blog to their clearly stated point of view about platforms and the way they do business, they invite customers to debug with them in an ongoing dialogue about finding a platonic ideal of utility software. They don't promise perfect, they promise engagement. Over-inform. Speak with respect. Be clear about the invitation. This is a very special sort of customer service, and companies often think they're doing this but end up cutting corners and are merely plodding along, disappointing those that would have preferred to engage instead.
To diminish negative word of mouth: Many large organizations resort to this, the last step in a sad journey. As soon as a wheel gets squeaky, they grease it. But that's all they do unless pressed. The problem is that many of your unhappy customers are too busy to get squeaky, they merely go elsewhere, and the ones who you finally do try to help are so pissed off it's too late.
To build extraordinary trust: This is the initiative taken by an institution to do far more than is expected, at a human level, to earn the privilege of serving again. This is the banker who visits you in the hospital, merely because she heard from another customer that you were ill.
To treat different people differently: One way to reward your best customers is to treat the best of them substantially better than others–the word will spread, others will want to join this group, and those in it will be hesitant to switch to a competitor. But if you make that promise, you need to double down on it substantially, continually improving how you treat your favorites.
To race with competitors to lower customer service costs just a bit more than they will: This is the current progression we see among industrial titans who see customer service as a cost, not a profit center. When you measure this, you can't help to want to drive the cost down, and you will do it just a bit faster than your competitors, because to do it too fast is to risk condemnation. Alas, in just about every industry that the internet has sucked the profits out of, we see this cost-cutting race to the bottom. It's not going to end well.
Because you can: This is awfully rare among public companies, but there are many organizations that treat people as they'd like to be treated. Not to grow market share, but because it's the right thing to do.
So it's clear that good customers with urgent problems left on hold by Fedex is a mismatch between what they built customer service for and what they're doing with it. And that a busy startup that doesn't invest as much time as they could in co-creation communication is not serving the goals of the beta fully. On the other hand, the novelist who doesn't invest time in answering reader mail is probably doing good customer service, since reserving her best efforts to write another great novel is precisely the promise she has made.
Every single person who makes budget decisions, staffing decisions and customer service decisions must to be clear about which strategy you picked, needs to be able to state, "we're doing this because it's congruent with what we say customer service is for."
Obviously, you can mix and match among these options, and find new ones. What we must not do, though, is plan to do one thing but then try to save time or money and do something else, hoping for the results that come from the original plan without actually doing it.
Customer service, like everything an effective organization does, changes people. Announce the change you seek, then invest appropriately, in a system that is likely to actually produce the outcomes you just said you wanted.
Make promises and keep them.
Students choose to attend expensive colleges but don't major in engineering because the courses are killer.
Doing more than the customary amount of customer service is expensive, time-consuming and hard to sustain.
Raising money for short-term urgent projects is easier than finding support for the long, difficult work of changing the culture and the infrastructure.
Finding a new path up the mountain is far more difficult than hiring a sherpa and following the tried and true path. Of course it is. That's precisely why it's scarce and valuable.
The word economy comes from the Greek and the French, and is based on the concept of scarcity. The only things that are scarce in the world of connection and services and the net are the things that are difficult, and the only things that are valuable are the things that are scarce. When we intentionally seek out the difficult tasks, we're much more likely to actually create value.
Wine coolers, Julia Roberts movies, fondue, Geocities pages, baby on board signs, a line at the Krispy Kreme…
Ubiquitous doesn't mean forever, and popular isn't permanent. Someone is going to fade, and someone is going to be next to take their place.