Friday, August 26, 2005

Marketing on Steroids

We first put together the principles of what we called contextual marketing in 1979 when Richard Blumberg, Barron Krody and I formed a new promotional marketing agency. It evolved rapidly when we brought Ross Johnson into our fold ... Ross was a maniac over analytics. It worked for many Fortune 1000 enterprises: Procter & Gamble, Imation, Toshiba, Disney Institute, Compaq Computer, Canon, Olsten Services, Florida Power and Light, Wisconsin Tissue, Mercury Marine and many others.

This methodology reversed the 2% response rate that most traditional promotional marketing campaigns were achieving and delivered 35-50% response rates and sales that often increased 100% a year over multiple years.

Contextual Marketing aligns sales and marketing messages with:

(1) who the individual customer was,
(2) what the customer's identified needs, wants and interests were,
(3) what problem the customer wanted resolved,
(4) how the enterprise delivered value to match customer needs,
(5) when the customer was most likely to purchase.
Contextual Marketing blended and fused the activities of sales and marketing into a relationship management methodology (long before the acronym CRM became vogue), where the entire goal was to service the customer's needs.

Our first big initiative using this methodology was for Pillsbury. We produced about two million individually personalized recipe books, each with a set of smart coupons on the last page. These coupons were designed to reveal important information about the consumer household which was databased and used to cluster consumers into Persona Groups which then received new recipe books that tuned content and offers to the recipient needs.

This was, and is marketing on steroids. Caution, however. Walk before you run. Learn as you grow. Add complexity as you learn. It took many of our clients several years before this kind of marketing became second nature. And, did I mention, it is hard work ... which is why I believe most marketers shy away from it and stick with episodic marketing campaigns that are fortunate to pull in 2% responses.


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