DATABASE SCREAMS!
The DMSI e-NEWSLETTER... Rants and raves from the database pros at DMSI.

In This Issue:

Dear Friends,

Once in a while an inspiration comes along that upsets your traditional view of how things work. Such is the case with The Tipping Point (see my notes on it below). I found it incredibly insightful, and I believe you will, too.

Upgrading your software skills? DMSI and CompUSA are proud to announce an exciting training partnership that begins in Aug 2003. Read on if want to quickly get up to speed on the latest business software applications. Finally, we also provide updates on two topics that continue to generate interest: Lifetime Value Analysis, and our WiseGuys Marketing Software.

As always, we invite your feedback, and ask that you let us know how DMSI can help with your Database Marketing challenges.

Bruce Gregoire,
President and founder,
Desktop Marketing Solutions, Inc (DMSI)

Adjunct Professor, Marketing Information Systems
Johns Hopkins University Graduate School

Recommended Reading: The Tipping Point - Malcolm Gladwell
I read the excellent business book The Tipping Point by Malcolm Gladwell this summer. I loved it, and I highly recommend it. It may change your approach to direct marketing.

Gladwell believes that "Ideas, behavior, messages, and products often spread like outbreaks of infectious disease." They become 'social epidemics', and the moment when they take off, when they reach their critical mass is the 'Tipping Point'". The implications for direct marketers are profound, chiefly because Gladwell uses direct marketing examples to make his case.

One of his key points is the value of "stickiness" in starting and building an epidemic. For example, he writes:

"Conventional advertisers have preconceived ideas about what makes an advertisement work: humor, splashy graphics, a celebrity endorser. Direct marketers, by contrast, have few such preconceptions, because the number of coupons that are mailed back or the number of people who call in on an 800 number in response to a television commercial gives them an objective, iron-clad measure of effectiveness. Direct marketers are the real students of stickiness, and some of the most intriguing conclusions about how to reach consumers have come from their work."

Learn More: Amazon.com The Tipping Point includes the classic study of how direct marketing pioneer Lester Wunderman challenged a New York ad agency to match his results -and won!
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CompUSA Corporate Seminar launch - it is time to Power-Up©!

This fall, you will notice a major new campaign at CompUSA: the launch of its Corporate Sales division. And DMSI has been tapped by this retailing giant to play a key role!

Starting Tuesday, Aug. 26, Bruce Gregoire from DMSI will facilitate the "Power-Up©" series of small business seminars for CompUSA. Power-Up© provides a complete introduction of 6 business software applications in 3 hours - including popular packages like Quickbooks, MS Access, and Goldmine. Power-Up© is designed for small and mid size organizations who need expert advice about exploiting the power of desktop marketing applications. If you are a career minded marketing professional, you will find this seminar invaluable in taking control of your own customer database!

Learn More: CompUSA , or contact Kim at CompUSA directly (703) 212-6502 to register (space will be limited). Be sure to mention DMSI, and receive a substantial discount on your registration fee.
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Lifetime Value Analysis Part 2: Risk Analysis - for very serious marketers only…

Since we introduced Lifetime Value Analysis in our last e-newsletter, many of you have requested a complimentary copy of our Lifetime Value Analysis (LTV) spreadsheet (in Excel). So we are repeating this offer now… you can call or email our office (address below) if you want to this valuable tool. You will be able to plug in the marketing variables from your own organization, and calculate your own customer lifetime value!

Here is an update to the discussion of an important part of the Lifetime Value Analysis: the Risk Factor. The Risk Factor is included in the LTV calculation for a number of reasons. As Arthur Hughes points out (in Strategic Database Marketing), the variables in LTV are subject to serious risks, including interest rate fluctuation, product obsolescence, and new competitive products. But how can risk be measured?

A new study appearing the May 2003 edition of Harvard Business Review looks at this issue from a different perspective. It introduces the concept of Risk Adjusted Lifetime Value (RALTV). RALTV deals with the problem of unpredictable customer behavior by following the practices of sophisticated investors in stocks, whose prices fluctuate in unforeseen ways.

Since customers can be considered a risky asset, this same type of analysis can be applied to a "portfolio" of customers as well. The model is similar to that of investment. Before a firm decides whether to acquire a customer (at a certain acquisition cost), it must first decide whether the addition of the customer will have the desired effect on the riskiness of the portfolio.

If you are familiar with the "beta" formula for the valuation of stock, you may find this approach useful. (If not, you'll need to continue to trust your gut when you assign a risk factor in your LTV calculations).

Learn More: "Hedging Customers", Dhar & Glazer, Harvard Business Review. May, 2003©
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WiseGuys Ver 1.2 Upgrade released - enables even better targeting!
This month, DMSI staff have released an upgrade to The WiseGuys Marketing Software^TM - a suite of Database Marketing software utilities. The WiseGuys, written in MS Access for your desktop, help marketers learn more about their customer purchases. Marketers can then nurture their most valuable customers for long term relationships and increased sales. As before, WiseGuys links to the Mail Order Manager database, and will soon link to other marketing database brands as well. The new features in version 1.2 include "smart filters" - that filter out the noise level in your database. You can now vastly improve your targeted mailings to customers using the filtered RFM analysis feature. For example, you can save mailing expenses by suppressing selected customers records as follows:
      - Customer types (e.g. filter out wholesale customers from your RFM analysis)
      - Product classes (e.g. filter out promotional freebie product orders)
      - Source codes (e.g. filter out walk-in customer orders)

Here is the early reaction to WiseGuys:

"When WiseGuys was first implemented, it provided us with a way to slice and dice to analyze our data in terms of RFM and Lifetime Value. No other computer program has ever been able to provide this."
Willis Logan - The Virginia Company

Learn More: Order your Free demo copy of The WiseGuys Marketing Software from DMSI by calling (703) 941-8109. Detailed information on WiseGuys is also available at www.DesktopMarketingInc.com/products.htm
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16 point Direct Mail checklist by Albert Fried-Cassorla

Database marketing is only one-half of the art & science of Direct Marketing. Once again DMSI is happy to feature a guest column from Albert Fried-Cassorla, a Direct Marketing copywriting expert from Philadelphia, PA.

In creating successful direct mail, so many ingredients contribute to great results. Check through this list before, during and after your campaign. Of course, such a short list must be very selective. It could easily be 100 times longer. But these ideas work for us. Let us know how they turn out for you!

1. Market Understanding: Have you studied the marketplace & spoken with prospective buyers?
2. Product Understanding: Do you understand all of the product's features? ("Products" in this list will also include services.)
3. Product Understanding: Do you understand all of the product's benefits and how they are distinct from features?
4. Product Understanding: Have you asked a sampling of customers how they RANK the importance of various features & benefits?
5. Offer: Have you considered a wide variety of premium incentives for a response? For a sale?
6. Offer: Have you done a cost/benefits analysis and projected a minimum acceptable response for a one-time or multi-year pay-back?
7. Offer: Considered giving 2 gifts rather than 1? One of these can be low-cost, high perceived value - such as a pamphlet.
8. Offer: Does your offer include a Money-Back Guarantee?
9. Offer: Are you using a deadline date for a gift or other key benefit to ordering quickly? (Beware of downside of deadlines)
10. Database / Offer: Have you considered different formats, incentives, creative approaches for different markets?
11. Database / List: Have you explored all possible lists, including house, response and compiled lists appropriate for your product?
12. Testing Plans: Thought seriously about testing multiple variables, including creative, format, offer, and list?
13. Creative / Concept: Have you used an experienced copywriter or direct mail consultant? Contact me for assistance, or visit www.the-dma.org for listings.
14. Creative: Envelope is KEY! Does this approach capture the imagination at a glance? (Attention precedes interest, which precedes the sale.)
15. Copy: Do the headlines and teasers provoke interest or powerfully convey benefits? Is it "you" oriented rather than "we" oriented? Does it flow? Call for the order in many ways?
16. Back End: Have you analyzed results, considered how you could improve upon them?

Albert Fried-Cassorla is a direct response copywriter and president of Fried-Cassorla Communications, Inc. He may be reached at albert@fried-cas.com or 215-635-5189.
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How Desktop Marketing Solutions, Inc. can help you!
DMSI is a full-service resource for database marketing software, programming, installation and applications. Whether you're considering a new software system or just need help assessing your current one, DMSI can help. The staff at DMSI offer the rare combination of database know-how and direct marketing expertise. Our niche is small to mid-size organizations who need the power of advanced database techniques to grow their business. We provide software product installation and customization for "best of breed" marketing database and CRM packages.

And now, pick up the phone! One call gets you 15 minutes of Free Database Advice
Step 1: Call DMSI offices anytime at (703) 941-8109
Step 2: "Ask the Experts" at DMSI - give us your toughest database question.
Step 3: No charge - no obligation. 15 minutes may be all the help you need to start solving your marketing database problem.
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Web site: DesktopMarketingInc.com
E-mail: Info@DesktopMarketingInc.com
Telephone: (703) 941-8109
3814 Bent Branch Road
Falls Church, VA 22041