Economists and environmentalists have grappled for centuries with the dilemma of overfishing. It goes like this: fishermen are incented to take all the fish that they can from the ocean while prices hold up, while their bodies and crews hold up and while supplies of fish hold up. Acting in their own interest, they deplete themselves of the very resource their livelihoods depend on. Inevitably, the fish either disappear entirely or survive in numbers too small to be worth the trouble.
What does fishing have to do with direct marketing? More than you might think. Not long ago, marketers could expect reasonable response rates and decent returns on direct campaigns — a 2% to 3% response rate was considered normal. Today, with response rates underwater, we’d be happy with 1%. Marketers struggle to show returns that are worth the investment at all. To put it simply, marketers have been overfishing. Anyone with a mailing address can relate; it’s relentless. I rarely open mail that even smells like a marketing solicitation. The sheer volume, compounded by irrelevance, is the culprit.
Let’s go fishing again — this time for solutions. Today, many countries enforce quotas and limits on how many fish can be pulled from the ocean, as well as how often boats are allowed to fish. Thus the fish can replenish themselves, ensuring supplies for future generations.
Why not approach marketing in the same way? Certain credit card companies have already overmarketed to the point that response rates are nearly zero. Mail from those brands generally hits the trash can unopened. But at least one retail bank has controlled “fishing” and has maintained a solid ROI. This bank is staying relevant by carefully managing the volume of campaigns. While it may not replenish the overall stock of customers, it may well refresh their current customers’ interest in offers from the bank.
Like quotas, an “adaptive contact planning” strategy could go far safeguard against customer overfishing. Beyond basic common sense, this approach has proven effective by organizations that not only testing offers, but test the frequency of those offers. Adaptive contact planning adjusts recency and frequency of contacts by considering all contacts: planned, trigger-based, and inbound. It also puts limits on channels, product types, or anything that contribute to customer contact fatigue. Because, as we all know, a customer with contact fatigue might just stop biting.