Chapter 4

Using and Managing Your Customer Contact Information

In This Chapter

Understanding the different methods of contacting customers

Knowing when to leave your customers alone: opting in and out

Offering your customers some preferences

Name and address data as well as other contact information play a central role in your database. You cannot communicate with your customers without knowing how to reach them. This contact information also plays a key role in bringing customer data together. An e-mail address, for example, is what allows you to associate all of a user’s browsing history with a single customer. In a loose sense, that e-mail address is the customer.

In this chapter, I discuss some pros and cons of communicating using different channels. I also discuss the basics of managing and maintaining customer contact information. Finally, I point out the importance of allowing customers to opt out of hearing from you.

Contacting Your Customers

The whole point behind database marketing is to enable you to contact your customers. But there are a variety of ways of doing this. Tradition mail using the USPS is always an option. But you have other options as well. E-mail, phone, and text messaging are among the more frequently used options. These are usually referred to as direct marketing channels.

This section explains some pros and cons of the most common channels.

Mailing physical media

There are certainly times when you want to communicate with your customers by mailing them a letter or postcard or an even more elaborate package. To do that efficiently, though, you need clean and current address data. I discuss the wider importance of clean address data in Chapter 2, along with some techniques and resources for managing this data.

There are some drawbacks to communicating via “snail mail.” For one thing, it can be expensive. Creative development, envelopes, paper, printing, and postage all cost money. You have many decisions to make in managing these costs. Do you pay for first class postage? Do you mail a postcard or a letter? Do you use letter stock or glossy paper to improve photo quality? How much do you personalize the communication?

Unfortunately, with respect to traditional mail, the old adage that you get what you pay for is usually true. Letters tend to be more effective than postcards. Envelopes with first class stamps tend to be opened more often than bulk mail. Personalized communications with high production quality tend to better engage your customers. But these more effective options add cost to your marketing programs.

When it comes to communicating with your customers through the post, your fundamental trade-off is between the quality of the mail piece you’re sending and the number of pieces you send. Higher mailing and production costs generally mean higher response rates, but they also mean fewer customers can be contacted.

Another potential drawback of traditional mail is timing. It takes time to physically print a mail piece, stuff it in an envelope, and get it delivered by the USPS. Also, the actual delivery of the mail will be spread out over several days, depending on the remoteness of the recipient. Many of your marketing messages are quite time sensitive and simply can’t be effectively delivered by mail.

Firing off e-mails

The single biggest advantage of communicating with your customers via e-mail is that it is inexpensive. In fact it is dirt cheap. You will frequently need to pare back snail mail campaigns because your budget won’t allow you to mail every customer that you would like to talk to. This just doesn’t happen with e-mail campaigns. I’m only slightly exaggerating when I say that I would be shocked if this had ever happened in the history of e-mail marketing.

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E-mail is also fast — practically instantaneous. This allows you to get time-sensitive messages out while they are still relevant. E-mail can also be scheduled and automated. This makes e-mail a very attractive way for you to distribute regularly published newsletters.

Another significant benefit of using e-mail to communicate is that you can track it in great detail. Say you send out an e-mail containing a link to your website. You can tell if and even when the e-mail was opened. You can tell whether the viewer then clicked on the link to your website. None of this information is even remotely possible to get for a snail mail campaign.

Sending text messages

Though not quite as inexpensive as e-mail, text messaging shares the timing and quick turnaround advantages of e-mail. But the biggest advantage is that text messages tend to get read. Most people are closely attached to their ­cellphones. This means that text messages also get read very soon after they are sent.

The disadvantage compared to other methods of communication is that these messages need to be very short. Text messages are generally no more than a few sentences or a small graphic. They’re limited by what can reasonably be presented on a smartphone screen. This disadvantage is shrinking, however, as mobile devices evolve.

One way text messages are commonly used is to give customers real-time updates. My wife travels frequently — so frequently, in fact, that I often joke that I have to call her secretary to find out where she is. I actually rely heavily on text messages from the airlines to keep me informed of her flight arrival and departure times as well as any delays.

These updates are not in themselves generating business for the airlines. They are, however, serving two other purposes: They give me a reason share my contact information with the airlines, which they might later use to contact me with offers, and they get me in the habit of viewing the airline as helpful. In other words, they’re the beginning of a relationship that I feel good about.

Text messages can also be used to communicate very short-term offers. Cancelled reservations are a constant problem for restaurants, golf courses, and any business with limited capacity. Texting customers on a waiting list can effectively and quickly fill the opening created by a cancellation.

Think about text messaging like this: If your message is short and time sensitive, then consider sending a text. But make sure you’re following the regulations regarding the use of text and mobile messaging.

Cellphone use is widespread among teenagers and even among younger children. Just as widespread are sensitivity and concern among parents and legislators about what messages children are getting as well as what information is being collected about children. I address the issue of privacy in general in Chapter 2.

Tread particularly carefully when it comes to text messages. This channel is more tightly regulated than any other. Unlike most other marketing regulations, this channel falls under the purvey of the Federal Communication Commission rather the Federal Trade Commission. Essentially, you're required to get a consumer's permission before you send them marketing messages via text. And the FCC does enforce these regulations. For more on the text message regulation visit www.fcc.gov/guides/spam-unwanted-text-messages-and-email.

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Dialing the phone

The practice of making calls to potential customers is frequently called outbound telemarketing. This term is somewhat misleading. Call centers in most companies are not engaged in marketing at all. They are engaged in either sales or customer service or both.

What’s the difference between marketing and sales, anyway? A simple example can help you understand. Say you work for an automobile dealership. Your database tells you that the lease on my car is expiring soon. So you send me a letter describing your newest cars and the latest and greatest lease terms. In this letter you invite me in to the dealership to take a look. This is marketing. Your goal as a marketer is to get me in the door. Once I show up at the dealership, the marketing role ends. I’m then greeted by a salesperson whose job it is to seal the deal, as the saying goes.

As a database marketer, you don’t manage your company’s telephone sales efforts. For one thing, outbound calling is generally prohibitively expensive as a marketing channel for large volume campaigns. It involves setting up call scripts, tracking the closing rates of the call center employees, and a host of other functions. Telephone Sales For Dummies by Dirk Zeller (Wiley, 2007) treats this subject at length.

You do have a role in telephone sales, though, because you’re the one with the customer data. For this reason you may be asked to provide your call center with at least some of their call lists. You may also be involved in managing do-not-call lists.

There may also be times when it makes sense for you to contact a small number of customers by phone based on something you spot in your database. A mistake in an order, a cancelled transaction, or some other unusual circumstance may justify a customer service call to address some particular concern. These types of campaigns are sometimes called event-triggered campaigns (I talk in detail about them in Chapter 10).

Though phone calls are not widely used as a marketing tool, phone numbers still play an important role, of course. In managing your database, phone numbers can provide useful information that links guest data together into households (I discuss householding in more detail in Chapter 2).

Don’t Waste Your Breath: Allowing Customers to Opt Out

Your customers have varying levels of tolerance for marketing communications. This tolerance may actually vary by communication channel. Some people can’t stand sifting through junk mail. Others are profoundly annoyed by their e-mail inbox filling up with unwanted e-mails. You should give your customers the opportunity to tell you to stop contacting them. This is known as opting out of marketing communications.

Opt-outs are generally collected and stored separately by marketing channel. In other words, a customer may opt out of postal mailings but not from e-mails. Standard practice and even legal restrictions on contacting customers vary somewhat between channels. Phone and e-mail communications are much more tightly regulated than traditional mail.

Because it’s the right thing to do

Allowing your customers to opt out benefits you by helping to control marketing costs. The idea is that if they don’t want to hear from you, they aren’t going to respond to your solicitations or offers anyway. There is some debate among database marketers as to how true that really is. But it is certainly the case that you’re better served focusing on customers who are not negatively predisposed to hearing from you.

When it comes to traditional mail, there is a central repository of customers who have opted out. This repository is managed by the Direct Marketing Association, or DMA as it is commonly called (www.thedma.org). Database marketers are not required to honor these opt-outs, but it is widely accepted as a good idea. The mechanics of purging customers on this list from your mail files is generally done by the vendor who executes your mail campaign. Many, if not most, of these vendors require this purge to protect their own reputations.

The DMA also maintains an e-mail opt-out repository. This repository is not quite as universally used as the direct mail repository, probably because it hasn’t been around as long.

There are also a variety of industry-specific opt-out registries. For example, the major credit bureaus offer a service to suppress credit-card solicitations. Because these mailings generally get run through the credit bureaus at the last minute to check credit-worthiness, the bureaus are in a convenient position to purge opt-outs from the mail lists.

Opting out through the credit bureaus can be done in writing or over the phone. The phone number is the same for all three bureaus, 1-888-5-OPT-OUT. If you prefer to do it in writing, you need to write directly to the bureaus. Here's a link to one of the bureau pages which explains the process: www.experian.com/credit-education/opting-out.html

Such services are not magic bullets. Customers will still try to contact you directly to opt out. You should have a straightforward way for them to do that. Just as importantly, you should have a convenient way to honor their requests. If a customer was annoyed at hearing from you before, imagine how annoying it would be to hear from you after they thought they had opted out.

Because sometimes it’s the law

Chapter 2 discusses the legal environment surrounding customers’ personal data. There are also laws regarding contacting customers for marketing purposes. These laws specifically address the ability of customers to opt out of such communications. There is not currently a wide-ranging legal mandate regarding direct mail. But there are laws that specifically address telephone and e-mail channels. In Chapter 19, I discuss several resources that can help you navigate the legal ins and outs of addresses.

The Federal Trade Commission (www.ftc.gov) manages a do-not-call registry. Consumers may enter their telephone numbers in this registry in order to avoid telephone solicitations. Companies are legally obligated to honor these opt-outs and can face penalties for not doing so.

There are some exceptions to this law. Nonprofits and politicians (what a surprise) are exempted. There are also some exemptions for communicating with your existing customers. The basic idea is that if you're communicating about an existing relationship, then it's not really a marketing communication. The FTC site (www.fcc.gov/encyclopedia/do-not-call-list) has a link labeled Industry that explains the regulations in detail.

As mentioned earlier, small telephone campaigns you may want to execute could fall under this exemption. But it is important that these campaigns are in compliance with the law. Consult your legal department, if you have one. Or familiarize yourself with the details of the FTC regulations. The broader telephones sales efforts in your call center are generally not exempted.

You also should be aware of the amusingly titled CAN-SPAM law. This law has nothing to do with potted meat products. Rather it deals with marketing via e-mail. (The acronym stands for controlling the assault of non-solicited pornography and marketing.)

The name aside, what the law essentially says is that you have to allow people to opt out of marketing messages sent by e-mail. In fact, you have to specify in all of your e-mail marketing messages how they can do this. Most often this means putting a link in your e-mail to an opt-out site.

CAN-SPAM also addresses some issues concerning misleading consumers as to who is actually sending the e-mail. It also deals with some of the more underhanded ways that e-mail addresses are sometimes collected. You should familiarize yourself with the basics of the law. But if you’re running afoul of these provisions, you’re probably already aware that you are doing something shady.

You should also be aware that regulations regarding opt-outs differ dramatically by country. The United States is actually one of the least regulated nations in this regard. Canada and especially the European Union have much more restrictive laws regarding marketing communications.

It's important to understand these regulations if you're communicating outside the U.S. Unfortunately, there's no global repository for marketing regulations. Each country needs to be researched separately. A starting point for understanding the European environment can be found at ec.europa.eu/justice/data-protection/.

Marketing to minors is also a touchy subject. Chapter 3 mentions the COPPA law (Children's Online Privacy Protection Act) which prohibits e-mail and text marketing to children under 13. But the FTC also retains broad powers to regulate marketing to children based on their interpretation of regulations regarding deceptive marketing practices. You can read this article about how this regulatory power is applied: www.ftc.gov/speeches/starek/­minnfin.shtm.

In addition to government regulations, you should adhere to a number of self-imposed industry best practices. Start with the Direct Marketing Association website, www.thedma.org, for more information. Among other things, that website provides a template for generating a privacy policy specifically focused on data related to children.

The bottom line is that honoring customer opt-outs is just good business. It helps you manage costs and improve marketing campaign performance. It also keeps you from falling into an adversarial relationship with your customers. Happy customers are much more likely to continue to do business with you.

Different Strokes for Different Folks: Understanding Customer Preferences

The flip side of opting out is opting in. A customer who has told you not to talk to them is probably not the best person to communicate with. But a customer who has told you when and/or how to contact them is a great prospect. Many companies give customers a chance to do just this by setting up a web page where they can manage not just their contact info but their contact preferences. This is sometimes called a preference center.

The basic idea is that you want to get the customer’s permission for you to contact them when you get their contact information. After they enter their e-mail address on your website, for example, you offer a check box for them to indicate whether they would like to receive special offers or promotions at this e-mail address. If the box is checked, they are considered opted in.

Opting in versus opting out

If your company has such a website or you plan to implement one, you’ll discover yourself in the middle of an amusingly (or frustratingly) persistent debate. Every marketer seems to have a heartfelt opinion on whether the check box should be pre-checked on the website. At some level opinions on this matter are somewhat subjective, like whether or not you take cream in your coffee. But there are some points to be considered:

The case for pre-checking the box: You will get more opt-ins. The customer has to actually take action to uncheck the box. They may not bother or they may not even notice the opt-in language.

The case against pre-checking the box: If the customer has to take the trouble to check the box themselves, then they are truly interested in hearing from you. This makes them more explicitly opted in. By implication, these are higher-quality e-mail addresses from a marketing ­perspective.

The crux of the decision for me comes down to how you’re going to treat the unchecked boxes. If the box is unchecked, do you treat that as an opt-out? Put another way, is opting out the same as not opting in? Regulations are ambiguous or silent on this issue, so it really is a judgment call for you and your team.

Regardless of where you land on this issue, it’s important that you not keep changing your mind. Transparency is important in complying with regulations. It’s also important in maintaining a positive relationship with your customer. If you’re inconsistent in the way you treat the customers’ preference data, you run the risk of looking foolish or even dishonest.

Other types of preferences

One reason having a preference center is useful is that it helps you prevent customers from giving you their contact information and then later opting out because you’re contacting them with messages they don’t want.

Newsletters provide a good example of what I mean. A customer may have signed up for your newsletter when it was a quarterly e-mail. But you’ve since decided to publish this letter on weekly basis. The customer was fine with quarterly but is tired of hearing from you every week.

Without a preference center, the customer may have no other option than to simply opt out of all e-mail communications from you. This effectively removes the customer from any future communication. But this may not even be what the customer wants. They may well still want to hear about special discounts.

A preference center allows the customer to opt out of specific communications without completely breaking contact. You can even ask them how often they would like to hear from you.

Many large companies have another reason for using a preference center. They share customer data, in particular mailing lists, across separate corporate divisions. Take, for example, a company which runs a variety of restaurant chains. These chains are very different from each other — one may serve Mexican food, one specializes in burgers, and another is a high-end seafood restaurant. It will not be at all obvious to customers that all these brands are run by the same company.

In cases like this, these three brands may all have separate marketing departments. They will certainly have separate websites. If you’re in this type of environment, you may want to consider explicitly asking customers of one chain whether they want to receive offers from the others. This information tells you which e-mail addresses you should share among the different brands.

You can make your preference center as elaborate or as simple as you like. But don’t ask for any preferences that you’re not prepared to honor. If you can’t control how often a customer is contacted, don’t create the impression that you can.