Yankelovich: DMers Aren't Acknowledging Consumer Backlash
The Atlanta-based president of market researcher Yankelovich Inc. made the case to a room full of database marketing attendees that overwhelmed, media-saturated consumers were hitting back at marketers.
"This death spiral of even greater spending chasing ever-declining response," is how Smith described the issue. "The problem that we face today is one of changed attitudes, changed relationships in the marketplace."
The national no-call list proves the changing attitudes toward direct marketing, he said. On June 28, only two hours after the list was unveiled, nearly 250,000 consumers registered to stop telemarketing calls. By noon, the number rose to 370,000 and, over the first four days, to 10 million.
"This is an indication of what consumers were thinking of telemarketers in particular and direct marketers in general," Smith said. "[But] should this have been a surprise to anyone?"
Marketers have lost emotional resonance with consumers, he said. Models developed 20 to 40 years ago, when advertising and direct response were different, do not acknowledge the changed consumer.
"Nothing is novel or new to them anymore," Smith said. "It's a different kind of attitude. Marketers need to think of reselling to them in ways that they find to be more compelling."
He proposed the four new P's of marketing as the rules of re-engagement:
* Placement. There is not a right time to market to consumers, only the right frame of mind. Marketers should find those moments.
* Performance. Every contact has to deliver some kind of value, not simply promote the value of something else. Customers should be rewarded for their time and effort.
* Precociousness. Consumers are better educated, more experienced and sophisticated. They expect to be treated as such. They increasingly want to interact with knowledgeable people and receive trustworthy advice.
* Participation. Marketers should give consumers the chance to share in the meaning of the brand. Examples are Icehouse.com, a brewer openly soliciting consumer ideas for its ads, and Gap Inc., which recently ran an online casting call for its campaigns. MTV is another case, letting consumers post videos on MTV.com.
So, Smith recognizes there is a shift in priorities, especially as baby boomers age. Quality is taking precedence to quantity, intangibles to tangibles and time over money. Material gratification is taking a backseat, sitting next to marketing.
Yankelovich has noticed a trend toward hiving as opposed to cocooning, contrary to popular thinking after the Sept. 11 tragedy. Consumers are re-engaging with their lifestyle. The home is command central.
Smith brought armfuls of backlash stories to share.
A 1998 Yankelovich Monitor survey on things consumers did not want to take into the next millennium had 73 percent answering Jerry Springer. The same proportion also cited telemarketers.
Another consumer poll of the top five things needing government regulation had advertising as No. 4 -- before nuclear safety, but after water pollution, toxic wastes and air pollution.
Saturation was an issue as well. Grocery stores in the 1970s stocked, on average, 7,000 items. Today, they stock more than 30,000. Last year alone, 22,000 new items were introduced, up 15 percent from the preceding 12 months.
Marketing fares no better. People in the 1970s were exposed to 300 to 500 ads a day. Today, that has ballooned to 3,000 to 5,000 daily.
Direct marketing was known for specific messages that differentiated it from general advertising. Then marketers started saturating consumers with calls, e-mails, catalogs and other messaging.
"It's creating a consumer experience that consumers are fighting back," Smith said. "They're not engaging us ... they're just increasingly resistant."
Take the droves of people removing their names from mailing lists. For 1997, 1998, 1999, 2000 and 2001, the number was up year-over-year 12 percent, 16 percent, 20 percent, 21 percent and 23 percent, respectively. This year Yankelovich Monitor estimates a 33 percent rise.
The same goes for people removing their names from telemarketing lists. For 1997, 1998, 1999, 2000 and 2001, opt outs increased year-over-year 13 percent, 14 percent, 18 percent, 17 percent and 18 percent. It is projected to climb 29 percent this year.
Sample some of the actions explained in another Yankelovich Monitor survey.
Fifty-two percent said they screened calls with caller ID. Twenty-nine percent pretended they did not receive mail. Similarly, 24 percent said they had a rotary phone or dialed "0" to bypass the system.
Now consider the paradox: Direct marketing still works. A Yankelovich study last year revealed 54 percent of those surveyed had responded to a DM offer in the past six months.
"They hate us, and they use us," Smith said. "How can they hate us when they use us for so much? It's our best customers that are pushing against us."
To wit: That earlier cited study showed a dichotomy between DM non-responders and DM purchasers. Thirty-one percent of non-responders had their names removed while 45 percent of purchasers did, and 27 percent said they had numbers removed as opposed to 36 percent of DM purchasers.
"It's our best customers that are asking us to do something different," Smith said. "They like direct marketing, but they know that the answer to a drought is not a flood."