Notes

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So while the Harris and Tesco stories are
terrific, I will provide
pointers to some books that summarize each
of those stories quite well.
I want to emphasize that they're not the
only ones who have built a business
around a deep understanding of their
customers,
and by no means are they the first.
In fact, the first companies that actually
built a business in
this manner, around their customers, has
happened many, many years ago.
And it emerges from the sector of direct
marketing.
When I say direct marketing most people
don't have a real positive association
with it.
They think about low end products.
They think about infomercials and other,
you know, not great marketing activities.
it, it's, it's not the kind of industry
that
you aspire to be associated with or learn
from.
But when you strip away what most
customers
see from direct marketers, and look at the
actual
business practices below the surface, you
realize that it's actually quite
impressive.
If you, if you look at, at what direct
marketing is
really all about, it is really building
the business around the customer.
But not just, the customer in some generic
sense, but around each and every customer.
It's about understanding the relationship
with each different customer.
Who has bought what from us.
For how much.
What kinds of products have
they inquired about.
What kinds of products have they returned.
What interactions have they had with
customer service.
That's what direct marketing is all about.
It's having a much richer relationship
between the company.
And the customer.
What's interesting about it is, that
direct marketing is not a new concept.
it's been around since 1967, when Lester
Wonderman
looked at these emerging set of data
driven
business practices.
And said, you know what?
There's actually a lot we can do, we can
actually formalize some of
these business practices, and come up with
some best practices associated with them.
But even if you don't spend a lot of time
thinking about direct marketing, a lot
of the words and the concepts have already
filtered their way into today's everyday
marketing conversation.
So, a lot of the segmentation concepts
that Barbara discussed are
often associated with direct marketing.
But even other expressions like customer
lifetime value.
Something that you've heard about before,
that we're going to spend more
time talking about, that's, that, that
comes directly from the direct marketers.
So the direct marketers were the first
ones who said, you know what?
We can collect all this data about our
customers, about each and every one of
them, and
we can actually build a business by
understanding
who the valuable customers are, who the
less valuable
ones are.
Which messages we should be sending to
which customers at
which time, and, importantly, what kinds
of products we can develop
and deliver in order to create more value
for our most
valuable customers and to try to attract
more customers like them.
So the Harris and Tesco stories are
wonderful, but they're not unique.
And so I want to spend a
lot of time celebrating some direct
marketing practices.
And I want to emphasize that a lot of
firms out there today might
not aspire to be direct marketers, but
they don't realize it, but they are.
Any company that's operating on the
internet.
Any company that has the capability to
track a particular customer over time.
Has the capability to learn from direct
marketing, and I
encourage all of you to read books on
direct marketing.
Even if you don't think about yourself
that way, there's just so many concepts
that you can learn
and leverage, especially as we enter this
world of big data.
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