DMers Have Untold Productivity Story, Speaker Says

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NEW YORK -- Direct marketers are in an ideal situation right now, a marketing consultant told attendees at yesterday's Direct Marketing Idea Exchange Inc. luncheon.


Christopher Kennedy, managing director of Direct Effect, Jacksonville, FL, outlined five business conditions: centralization of marketing, ascendancy of finance, CEO mindset, economic conditions and productivity gains.


"We have a story to tell about productivity," he said. "Every one of those other four conditions is in sync with a major trend in business ... which is productivity. Direct marketers are always in tune with the proper utilization of assets. We're always looking for incremental ROI, so ... we are in sync with the mindset of the CFO and ... the mindset of the CEO.


"If they don't think we speak their language, they're unaware that ... we work cross-functionally with finance, operations, customer service, risk and the rest. That fluid interaction ... is a productivity measure, but it's a story that's untold."


Kennedy then outlined where productivity gains originate:


· 15 percent comes from human capital, which includes people, labor, skills and education upgrades.


· 15 percent is generated from capital investment, including hardware, raw materials and equipment.


· But 70 percent results from technology, which includes software, invention, the adaptation of old technology and innovation.


"We're not looking to create an army of people to work on our projects [and] ... we're not looking to promote physical plant and equipment," he said. "We're looking for a technology investment ... [and] not hardware and people. [But] not as direct marketers pushing tactics, just people who have direct marketing skills pushing an idea."


Kennedy said 87 percent of companies over the past 10 years have had anemic growth.


"Only 13 percent of companies have had positive growth, year-over-year, even if it's flat and not negative," he said. "So the only way they can drive growth of any kind and satisfy analysts and others is bottom-line growth through cost control."


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