Tuesday, February 2, 2010

Direct Marketing Is A Pain In The...

I was chatting with a buddy of mine recently about the intricacies of successfully executing a direct marketing campaign. It was one of the more interesting conversations I've had ...

I love direct marketing. I think it's awesome. But I've continually been frustrated by the inability of organizations to see the value that DM can bring. I used to think it was because people were scared of numbers (sometimes), or bad at pivot tables (which I still think), or just downright morons (always a possibility, but highly unlikely)...but my friend's comment made it much simpler to recognize the inherent problem with direct marketing -including both online and offline.

Here's his hypothesis, in a nutshell...

Creating a marketing plan is a pain in the ass.

Creating a direct marketing plan is a pain in someone else's ass.

In order to successfully execute a direct marketing campaign, we need cooperation. We need for the web team to provide landing pages and measurement. We need for sales to provide lead source and close data. We need for customer service to answer any emails that are generated from our activity. We need a content management system that can turn our genius into reality. We need for legal/compliance to go over every rule you can think of - for each creative version we create - to make sure we're not violating some nebulous law. We need for senior management to understand this "different" way of thinking. We need for IT to track everything and tie it all together. We need all these things, yet we control almost none of it.

In most organizations, DM is not central to the business. There are lots of ways that business is generated - the organization is not necessarily "sold out" to the power of DM. As a result, direct marketing campaigns and "stuff" is extra. The people you need for cooperation did not ask for you to give them work. They have enough to do. They usually don't have insight to your marketing genius. To them, it's just more work. Aka - a pain in the ass. Their ass. Your idea, their pain.

This is a burden that "traditional" marketers don't face. Making a TV commercial or print ad doesn't tax internal resources, because it's almost always created by an external agency. In fact, it's very exciting for senior execs to go "on set" and see the magic happen. It's even more exciting to see the product on TV - way more exciting than seeing your text link appear on Google. The only pain you'll feel is in the wallet but you'll happily pay it if the pictures are pretty.

If there's one failure that we've faced as direct marketers, it's impressing upon our management that we are, in fact, a pain to some people in the organization. Our senior management NEEDS to recognize this, so that they can provide the muscle that will eventually be needed to clear up the car crash that our "extra" work can cause. Showing a clear and concise value to DM (something we sometimes struggle with) is critical in forcing the cooperation we need.

Yes, DM is a pain. If your running from that fact, you're probably struggling with properly valuing your efforts.

Thursday, January 14, 2010

The Downside of M&A Activity

There seems to have been quite a pickup in M&A activity recently. While I'm thrilled for the principals (I hope your pockets are lined with cash!), I have to admit a certain sense of sadness to it all.

Companies are started by rebels. People who thought either "I can do this better" or "Screw You, I'm right". There's a certain passion that is hard to contain and infects everyone in the organization. There's a huge focus on accomplishing things - usually because accomplishing things means everyone gets to eat this week. Companies like this pay close attention to the needs of their clients and can move quickly to modify, improve and customize. Companies like this are massively fun to work with. They are often also massively fun to work for. Crazy hours. Crazy passion. Crazy disorganization. Crazy results!

If the company survives its start-up mode, it gets noticed by companies who struggle with the idea of getting things done. They love the youth and vigor of these smaller companies. So they buy them, hoping to capture a piece of the spirit that made that smaller company so successful. Yes, it's just like a 55 year old rich dude nailing down a 27 year old trophy. In fact, it's startlingly similar. Everyone knows that - if it were not for the big giant payday - this probably wouldn't be happening.

Here's the problem...more often than not - rather than infuse the larger company with life - the smaller company's spirit gets squashed by the corporate parent. People from the acquiring company protest "oh, we want to keep that spirit alive!" People from the acquired company say things like "our synergies will create a dynamic NEW environment." But here's what happens. First, it starts with a misguided attempt at "branding". After all, they were smart enough to buy you, so they must be smart enough to properly label your business. Then, it moves onto "integration", where some sort of "corporate" person has been "integrated" into the acquired company in order to "keep an eye on things/bring operational improvements/eliminate any fun people are having." Nobody usually likes this person all that much, because they instinctively know this is the first of many Terminators. By this time, the founders are usually on their yacht in Newport Beach, generally because rebels don't work well in a corporate environment, their earn-out is finished, or one of their "charges" had a little too much fun at the company Christmas party. Finally, it results in the dreaded "management re-org" where the "originals" are stripped out and replaced by people who are "more in line with the company's thinking." The company then becomes a division - or worse - a product line. It's the neutron bomb of corporate America - the infrastructure still stands, but most of the people are dead. If people do survive, they're usually mangled beyond recognition. Almost like Bruce Jenner.

I've watched this happen (and sometimes been part of it) way too many times. I worked with some folks that ran a real boot-strap kind of company. We accomplished amazing things. I've made friendships that I hope will last a lifetime. They were purchased by a larger organization.I was thrilled the day my buddy drove up in his fancy new car. But I also realized it was the end of things as we knew it. Within a very short period of time, the "new" company became a complete pain in the ass to work with. As a client, I went from being important to being "tolerated". Instead of getting things done, we put things "on the product road map."

Let's face it - when you're acquired you go from being independent to being controlled by the corporate parent. What you may have been able to do as independent isn't tolerated for long if it falls outside of "corporate values" - where the #1 value is "protect the corporation at all costs.." Your independence and freedom of thought is not gone...but it's severely muted.

So to anyone out there who has hit or is about to hit the big payday - congratulations are in order. You've achieved a slice of the American Dream (at least, let's hope you have!) by getting rich. Even better if you've spread the wealth to some of the people who helped get you there. Hopefully, you'll prove to be the exception to the rule and bring your spirit and success into your acquiring companies.

You'll be missed.