About Charles de Gruchy

As we age I think we sometimes become more sentimental.  The analyst in us looks back and tries to understand what has really changed.  My consensus is not really very much. I’ve been in the direct marketing industry my entire career and the questions being asked today are much the same as yesterday.  The answers, however, are much more complex — strategic alignment, 360 view of the customer, integrated systems, one channel view, etc.  We all wanted these things 30 years ago and we still want them today with few companies (even today) actually realizing the goal.  Surprising? Not really when you think about it.  Of the companies I’ve worked for some have made a real commitment to customer marketing while for others it is  simply the current thing to do and there was no investment. Worse still the digital guys thought they knew all about it and you know that story.  This blog is about things observed a while back that are still relevant now.

A Canadian star makes the catalog business shine, May 1989 By Karen Gillick Direct Marketing Magazine

Barbara 1989, Direct Marketing MagazineEvery now and then, the fruits of a writer’s efforts are rewarded with fan mail.  When Charles de Gruchy from Goodis & Sharbura, Inc., Toronto, Ontario, wrote, he opened with the following statement.

“As a faithful reader of Direct Marketing magazine and of your column, I am surprised not to see a change of perspective.”

Well, it was sort of fan mail!  What did he mean by this?

What Charles was suggesting specifically was that I cast my eyes across the lake to some of the bright young stars in the Canadian direct marketing industry.

In checking out the Canadian stars, Barbara Canning Brown’s name rose to the top.

When she was approached, she graciously agreed to the interview.  She bubbled over the fact that this has been a particularly good year for her and that she had just been promoted to director of marketing for Regal Greetings & Gifts, she was just starting as chairman of the newly formed Canadian Catalog Council and she was about to take a trip to Guadeloupe.

As the interview began to roll, she described her life as a child, growing up on a 400-acre farm in Orillia, Ontario.  Her father raised beef cattle and in the spring, eh made maple syrup from the trees in their maple forest.

She has fond memories of gazing at the starts, enjoying the country life and loving her pets. She chuckles about a picture of herself in a lace dress surrounded by 14 cats.

During grade school, she was a member of a church organization called “Canadian Girls in Training” (CGIT).  She and her friends said t really stood for “Cutest Girls in Town!”  As a member of this group, she received her early training in arts and crafts, piano and organ.  Her leadership qualities surfaced during this period when she was elected president of the organization.

Because she lived in such an isolated area, her extracurricular activities in high school and college were limited.  Heavy emphasis was placed on education. As a result, she was the recipient of numerous awards in history, French, Spanish and public speaking. When she graduated from grade 13, she received the high honor of Ontario Scholar.

It was so refreshing to hear about Barbara’s hobbies during her school years.  They weren’t, as we so often hear, jogging, aerobics and bodybuilding, but back to the basics.  She wrote poetry and painted.  She attended the Royal Conservatory of Music.

As she was about to graduate from McMaster University with honors in English and fine arts, she wondered what she would do with her “non-useful studies.”

She picked copywriting and answered an ad for a junior copywriter position at Sears.  She was tested and hired.  A large portion of our industry’s superstars started in Sears’ school of copywriting and role to the top.  She is no exception.

Her first stop was soft goods.  She wrote about children’s bedspreads with ballerina and another with jungle scenes.  Her headline was “How to Tell the Girls from The Boys.”  When she got to fashion she described knee socks as “soxy”.  When writing about brightly colored suede shoes with chunky soles, she name them “the Rebels.”  This method certainly wasn’t the norm for Sears, and she constantly had to justify her style.  The advantage she had was that she knew the current market, and her customers and she usually won the battle.

She quickly progressed from junior writer to senior writer in merchandise and direct mail merchandise promotions.  Because of her constant thirst for challenge and development she was able to convince Sears to let her go forward.  A promotion out of the copy department after one year was a major breakthrough.

Her new position was sales promotion coordinator.  In this role, she was responsible for design and execution of monthly sales promotion packages to all of Sears’ national outlets.

After two years, she was promoted to creative group director of fashion and special projects.  She had a staff of six.

During her free time, she picked up some free-lance assignments.  One led her to a catalog showroom company in Montreal called Cardinal Distributors.  She like the company and decided to accept their offer to join them as assistant advertising manager.

In this position, she was responsible for all catalog execution and sales promotion.  She was the liaison with the advertising agency and also became involved in producing Eastern Canada TV spots. She loved her responsibilities, despite the difficulties of moving to another province with French as their first language.

A little over a year went by when Cardinal was bought out by Consumer Distributing.  There wasn’t a fit for her at Consumers so she took the opportunity to move back to Toronto and form Barbican Advertising.

Barbican was a creative boutique offering services in creative development, media placement and strategic development and planning for packaged goods marketers, as well as retail.  The company was also involved in POP direct mail solicitation and public relations projects.

Thirteen months into Barbican, she had to make a choice.  Consumers Distributing came after her, offering position as sales promotion manager. Her decision was whether or not to return to corporate life.  In the final analysis, the answer was ‘yes’.  She wanted to return to her true love, the catalog business.  Her new position at Consumers gave her invaluable experience in administrative responsibilities and corporate communications.

During this time, she was instrumental in bringing in on-line typesetting system whereby copywriters worked on terminals with telephone lines that went directly to an off=site typesetting service.  This allowed the writers to control the typesetting process and they would get the copy back within minutes.  This was extremely innovative for the time.

Her four years at Consumers were enjoyable, but she didn’t see any room to grow.

In 1984, she seized on an opportunity with lots of potential for growth.  She had her hands full when she came to Regal Greetings & Gifts as catalog advertising manager.

Her department desperately needed systems, reorganization and credibility. There were schedules, but no one followed them.  What systems there were, they were not used.  There were outstanding bills from suppliers, but no one knew what they were for.

Their production system was to take a catalog page and have everyone take a run at it.

After she fixed those problems, she was promoted to marketing manager, where she was responsible for media advertising, promotions and sweepstakes, new customers, catalog creative, production and mailings.

Most recently, our subject was promoted to director of marketing…no small challenge in a $64 million company.

She is thrilled with her promotion and extremely proud of how the company has turned around and grown. She attributes this success to Tony Keenan, who came on board three years ago as president.

When she retires, among other plans, she wants to return to astronomy and know the names of all the stars.  When you get there, Barbara, look up, your name will be there.

 

Karen Gillick, 1989 Direct Magazine who wrote about Barbara

Karen Gillick is president of Karen Gillick & Associates, a national executive search  firm specializing in direct marketing.  Her knowledge of direct marketing comes to her through her father, Bob Stone. Gillick may be reached at 980 N. Michigan Ave., Ste. 1060, Chicago, IL 60611 – 312/337-0345

Loyalty is a two way street, or it should be Direct Magazine June 28, 2000

The scene is childhood in the 1950’s. You’ve just come home from a trip to the supermarket with your mother. She passes you a sheet of little green stamps and a book to stick them into. Finally, after weeks of collecting and licking and sticking stamps enough books are full to warrant sitting down with the catalogue of all the neat stuff you could “buy” with the books of stamps.

For those of us too young to have participated in that primordial, philatelic pastime, let’s fast forward to the mid ’80’s. In droves we joined the ranks of”frequent flyers”, flitting from airline to airline to take advantage of the latest promotion for triple miles between Oshkosh and Oshawa. It was fun…for awhile.

Then came the ’90’s   sales slid…costs climbed…profits peaked.

Suddenly, like a virulent contagious disease that remains undetected until the emergency wards fill up, the dernier cri was unleashed on an unsuspecting consuming public…customer loyalty programs! Things to collect like membership cards, points and more points. Stuff to receive like newsletters, free samples, special services. Places to belong like clubs and circles. Wonderful words to describe you like Premium, Select, Priviligé. You and your peers, whoever they are, from kids to seniors.

Cookies, coffee, cat food, credit cards or cars, it seems no product is immune (or not for long) from the scourge of customer loyalty programs. In fact, I’m sure it could be a full-time occupation just keeping up with them all.

” But, but, but…”, I hear the marketing managers sputtering. “We have to get customers to stay with us. We have to compete. We’re building a database that allows us to track customer behaviour around the clock. We have all this information at our disposal. Look at this powerful new program, these prestigious new premiums, our bountiful new benefits. We’re giving away gifts. We’re giving away goodies. We’re giving away margin…”

You’re giving away the farm.

Know why? Loyalty can’t be bought. At least, not for long.

Not to mention it may all just be getting to be a teensy bit much too much for people to take. In medicine, when the disease takes over the patient dies. In marketing, when the customer reaches overload…you know what happens next.

Let’s put on our consumer hats for a minute. I ask, “Hey, Marketing World! This is not only about my loyalty to you! What have you done to deserve my loyalty? You’ve pushed merchandise at me. You’ve mailed me more stuff than I ever care to read. You’ve invaded my privacy. I’ve got a wallet full of every conceivable form of membership identification. Every breath I take, every move I make has been data captured, data processed and data based (or may be it’s de-based). Hello, out there. Anybody home?”

All I, and, I think, most consumers really want from a “loyalty program” is:

  1. To perceive that what you’re trying to get me to do has some genuine substance and relevance for me…personally. Too often marketers seem to assume people are just sitting waiting for their first next bright idea. Wrong. My life has context and texture and a lot going on in it. That wonderful database will tell you all about it. Now, what are you going to do for me that ninety-nine others won’t do?
  2. Not to have to work at this loyalty thing. Just make it easy for me. Don’t ask me to remember to carry goofy little cards around, or make me wade through encyclopedias of instructions and wait weeks and weeks before collecting “my rewards”. Relationships with my nears and dears keep me busy enough, thank you. Don’t ask me to go out of my way to work at one with you, because I simply won’t.
  3. A little love in your heart, as the old song goes. OK, that may be pushing it, so I’ll settle for a little empathy…human being to human being. The target market of one. What that looks like is well-researched, substantiated approaches, real thought put into the use of technology, delivered through tactics that aren’t intrusive in an obvious way.
  4. Delivery on your promises…and then some! You earn the right to receive my loyalty and maybe, just maybe, I’ll stick around.

 Charles de Gruchy remembers how it was

I’m trying to understand Direct Marketing, January 22, 1993

Learning the basics of direct mail can be as simple as taking a look in your mailbox and studying what you find there.  As I discovered recently, despite my years in the direct marketing industry, I can be just another eager prospect when an intriguing envelope shows up in my mail.

Basic direct mail rule number one: the courtship for a customer begins or fails with the envelope.

In my case, I was enticed by a closed face (no window) 6 x 9″ white envelope, properly addressed to my office in Markham, apparently, by good old-fashioned typewriter…not really, but a very good facsimile. I was immediately impressed that my name was spelled properly (no hyphens). Further, it included the politically sensitive salutation of “Ms”.

So far, so good.

Now, there were a couple of dead give-aways that this was not a birthday card from Aunt Sadie. First, the postage. Not a first class stamp. Nor, on the other hand, a pre-printed bulk rate indicia. It was metered for bulk rate at twenty and a half cents and post marked Ottawa.

Second give-away was the return addressee–“The Honourable Barbara McDougall, P.C., M.P.”–definitely not Aunt Sadie.

But, I was still interested. Why?

The envelope had accomplished a couple of things. It had established credibility through the use of good quality personalization. Although it wasn’t stamped, being metered gave the perception of better quality than a pre-printed indicia. Plus, it did look as though there was a real letter inside. And, from one of our nation’s notables, no less. So, I opened it.

Primary mission accomplished. Get the envelope opened.

Sure enough, it was a letter , again, properly, personally addressed.

Lost it a little with “Dear Mr. Gruchy”, but, I was willing to allow that a computer couldn’t figure out my two part surname.

The nice, hefty, buff-coloured paper could reasonably pass for Barbara’s official, everyday letterhead. Two, single-spaced pages were printed, one side only, in the, now familiar, pseudo-typewriter style. (One might argue that printing both sides saves wasted paper, postage and promotes environmental consciousness, but that’s another column).

You know what’s great about political mailings? No expense is spared. You get to experience the epitome of direct mail execution–all the things we’d all love to do but can’t ever afford.

And, what a letter!

“The Prime Minister and a small leadership group of The 500–a prestigious group of generous Party supporters from across Canada–have asked me to recommend several individuals for membership in The 500.

I consider it a special honour and privilege to recommend you to the Prime Minister.

The 500 membership is designed exclusively for key Canadian men and women who are leaders in their business and professional fields, as well as in their communities.”

There are those who might now argue that the role of the letter in a direct mail package has changed and can be down-played or eliminated. However, there are also many more vastly-experienced practitioners who insist that a well-written and executed letter is still essential to getting good response. And, they’ve proved it.

Did my letter qualify so far?

For starters, with the nation’s leader running a distant third in popularity polls, most likely 85% of those who opened the envelope threw the whole thing away after reading the first three words, so, I think, the opener could have been better thought out.

But, setting political sentiments aside, was it a good direct mail letter? Yes, provided the recipient was susceptible to somewhat saccharine forms of flattery. I must confess, I did read it with some interest–and, that’s the point–get the letter read, and your story told. But, there’s more to it than just that.

What totally blew it for me was the next sentence: “You are certainly recognized as such a leader in Western Canada.” Oops!

A direct marketer’s classic nightmare!

As with so much in life, in direct mail, it’s the little things that count. Murphy is always at work and he gets more help than he ever needs from that chronic computer virus called “human error.”

Direct mail lesson number four hundred and thirty-two (The one that’s only ever really learned the hard way): Check, check, double check, triple check, up, down and sideways. And, in this case, run live samples to check that whatever triggered “Western Canada” (probably the postal code) printed “Southern Ontario” , “Toronto Area” or whatever it was supposed to, correctly.

Untold dollars (of our money) had been spent on creative, mailing lists, printing, computer time, mail preparation, and postage. And, for what? To blow all that credibility, prestige and flattery I had soaked up higher than a hot air balloon.

So, what happened to the eager prospect next?

After a good laugh, I read on. Why? Because I still wanted to know what it was all about. Would anyone who’s not in the direct mail business? I doubt it.

Next came some background on The 500, which, according to the letter, is actually 1,500 people (That’s Ottawa-style counting, I guess). Then, an appeal to the future of my children and grandchildren (I don’t have any). And, an attempt to justify the “courage and strength” it takes to make the PC Government’s “unpopular decisions” under Brian Mulroney. This was based on the notion of being “right for our nation…our people and…our future.”

Finally, it got to the point.

Turned out the purpose of the letter was to soften me up to receive a “formal invitation ” from the big chin himself!

Just to make sure I got the point, there was also an enclosed, personalized card announcing my nomination for membership. Such was the quality of the piece, I expected to find small print somewhere saying “Keepsake, suitable for framing”.

I now knew this was going to be more than a one-night stand and I could look forward to a prolonged courtship.

Ten days went by.

This time the envelope was closed face, business size. Again, “typewriter” personalization of my name, a return address on “Slater Street, Ottawa, and first class, metered postage.

Inside: “It has come to my attention that a letter…erroneously identified you as a resident of Western Canada”. I knew that!

The next sentence spoke legions: “Mrs. McDougall was informed immediately of our error and was disappointed that her message was incorrectly presented.” Signed: “Brian O’N. Gallery, The National Chairman, The 500.”

Wait a minute, wasn’t that her letter? Who was this guy? I’d never heard of him. Why wasn’t Barbara doing her own apologizing?

So, now there was additional expense for another mailing, but the thought didn’t count for squat. Why?

The basic lesson missed, and it applies not only to direct mail, is the best and proven approach to damage control. Have the “courage and strength” to make an “unpopular decision” to face the music head on. Remember Tylenol!

The letter went on to express regret and encourage me to “give every consideration” to Mrs. McDougall’s letter (too late) and the PM’s invitation.

I could hardly wait.

Another four days went by. Then came a closed face, buff stock, business size envelope, personalized, metered at twenty cent bulk rate, addressee “The Right Honourable”, himself. Inside: letterhead, complete with gold-embossed Parliament Hill, two pages, one-sided, single-spaced.

“Dear Mr de Gruchy: One of the finest Cabinet Ministers ever from Ontario, the Honourable Barbara McDougall, has nominated you for membership in The 500…” No comment.

The letter went on to extol the virtues of the PC party and exclusivity of The 500; blamed our economic woes on past governments and “the chaos they left behind”; mentioned that ” The 500 members…will be key to moving our renewal agenda forward and to winning the next election.”…blah, blah, blah.

Enough, already. What was in it for me?

The seventh veil finally dropped on page two, paragraph five: “Your contribution of $1,000 or more…will give our organizers the political tools they need now to build a winning campaign.”

That wasn’t all.

There was another personalized, invitation-like card requesting the favour of a reply. And, a personalized RSVP form (with French language option). And, a postage pre-paid, cheque-sized reply envelope. And, the pièce de resistance, a slick, gold-embossed-plus-special-colour-PC-blue brochure outlining the virtues of The 500 which “requires” a “personal contribution” of $1,000 per year.”

And, here I was all set up to think they wanted me for my “leadership”!

But, there was a meager sop for my injured pride: “Your membership fee may be partly returned to you in the form of a $450 tax credit.” Oh, joy!

Final direct mail lesson for today.

This is the 90’s. Perceptions have shifted.

Successful appeals only to power, prestige and one-upmanship have gone the way of Michael Milliken and friends.

If you want money, say so, and why–simply, clearly, without wasting time or paper.

If you’re selling something, talk about yourself, your company and your product only in terms of direct benefit to your prospect.

And, please, if you make a mistake, don’t look for a fall guy or waste more paper and postage.

Imagine if Brian’s letter had begun: “Sorry, we blew it…” Wouldn’t it have fostered a much more positive impression? Then again, in his case, maybe not!

Innovation is really re invention or is it just about the process! Direct Magazine June 15, 1996

At one point before I left graduate school I learned that the Peloponnesian War was really a precursor of one of our modern conflicts – the Vietnam War. I learned Napoleon marched his French troops to invade Russia, almost all of his troops died from frostbite, hypothermia and starvation. Hitler did the exact same thing. In the direct marketing industry we are constantly repeating ourselves but we don’t call it best practice and tend to be cautious about adjectives like ‘innovation’.

My partner and I were sitting around recovering from the day. I think it was about 11:00 PM and we were talking about calling it quits for the day.  But our conversation rambled on and into a discussion of analytics strategies. Our head of analytics, Steven Shaw, wandered over to put in his two cents in.  Of course he is a little biased in his point of view but his opinion is that the relationships between ideas, objects and numbers are all predetermined in one fashion or another.  There are no truly new ideas. What we represent as new is really the discovery of something that was already there.

So I asked what does that mean in the end or is this just the blather of three agency hacks. Oops, sorry Steven I shouldn’t have included you!  Brian, my partner, jumped in to say that none of this is really meaningful in that the new idea or the idea of the moment is just that. Where it might have emerged from or been adapted to is more often forgotten or simply considered old fashioned news of another generation.  We’re cool aren’t we?

Steven brought us back to reality and an analysis we were working on for Holt Renfrew. The objective was to understand the characteristics of best customers. The strategy was simple – figure this out and find more.  Not complicated from an analysts perspective but a challenge in the Toronto market where the top end of the file is measured in tens of thousands rather than 100s.  The approach he followed was to first cut the file based on an Arthur Hughes standard view with a ranking of Recency, Frequency and Monetary.  But he knew, in and of itself, that wouldn’t be enough to meet the objective of the analysis.  What emerged was a three step approach: first with RFM; second, to build persona on RFM and third, enhancing the result with modeling to asses specific points of propensity within the best customer group.  He asked the question whether there was any innovation in the process.

My quick off the mark response what that the steps in isolation were standard stuff of our business but the integration of the steps into a strategic progression of understanding of a group of customers behaviors is a significant innovation.  It’s the process that’s the innovation not the parts and pieces.

Brian jumped in to add that as corporate culture continues to degrade from the disciplined strategic planning methods lead by the packed good industry to something closer to organized ad hoc decision it’s the creation and management of process that will deliver a company a strategic point of difference.

Steven and I laughed but we knew he was right!

Things in Toronto were changing and changing rapidly. Business as moving south as quickly as it once came to the city.  Marketing departments were being dismantled with the center of gravity moving to New York and Chicago.       With change came ambiguity and dysfunction to a marketplace that was, frankly, the best run in North America.

Steven again pulled us back on track. We had executed the RFM analysis for Holts. Brian and I both wondered why they hadn’t done this themselves.  Is it that hard? Steven laughed and said no not hard but complicated.  It’s not so much the analysis that’s the challenge it’s the application across customer tough points that’s the problem Holts was a little more confused than most retailers because they believed that monetary was the key driver of next purchase rather than recency.

Steven then remembered a story from his good friend Lester Wunderman – there are a multitude of steps in any direct to consumer program but success isn’t in any one single step but is in the collective.  In other words it’s a successful process that delivers profitability.

Planning - core CRM strategy overview

So the process becomes the innovation today.

Our ramble ended at about 1AM. We know that the Holts project would work.  We were less optimistic about where the practice of business was headed.

Privacy at any price! Strategy Magazine March 05, 2002

Anybody here seen my old friend “accountability”?

The one thing traditional direct marketers can now say about the dot com world is that it provides an opportunity to validate many of the strategies and policies that have guided profitable companies for many years. Now that profitability is coming back into fashion, maybe we’ll start to hear more about how that happens. In the meantime, the dot coms are learning  some old lessons the hard  way. Lessons learned long ago by traditional direct marketers and list owners. Such as privacy policy. The difference now is that the issue of customer privacy is further complicated by the issue of company bankruptcy.

As a consequence,  it may be time to really start seriously worrying about the potential for government intervention in privacy. But, guess what, it may not be in the form of legislation. The government may just sue you. That day came recently for toysmart.com.

In early June, the company filed for bankruptcy protection and authority to sell its assets by public sale. The assets were split into the expected categories including leases, furniture and equipment, software and operating systems. An additional category included web site applications, trademarks, product designs and customer lists and related information. Because this was a public sale, the assets were listed in the Wall Street Journal and….  The public nature of the process brought the issue to the attention of the companies own privacy …mark licensor, Truste. With overtones of government sanction, Truste  has established itself as a leader in authenticating the privacy polisies of the companies whish are licencees. By offering the customer list and related information as part of a public sale of assets of the bankrupt operation, toysmart.com  stumbled over their own privacy policy, the policy they had paid Trustee to endorse. Truste, viewing the sale as an attempt to pass customer information to a third party without customers’ consent, began its stated process of dealing with the situation. First, trying, unsuccessfully, to make contact with toysmart executives. In the frenzy of dealing with a crumbling company, no doubt toysmart executives thought messages from Trustee were the least of their worries. Their mistake was forgetting the process their license gave leave to Truste to pursue….alerting the FTC and suggesting that the potential sale mioght be classified as unfair and deceptive marketing practices. The FTC agreed, and sued to prevent the sale of the database.

Parent company, Disney, has very quickly stepped in to stem a potential public relations nightmare resulting from the situation. But, let’s look at what went wrong.

  1. Remember to never say never — Users have a right to informed consent; and   No single privacy principle is adequate for all situations Two cornerstone principles that govern the TRUSTe program: Let your own self-regulated privacy policy back you into the corner of unfair and deceptive business practice
  2. Right hand/left hand     One size rarely fits all. One of the two cornerstone principles of Truste is that “No single privacy principle is adequate for all situations”. While toysmart’s policy worked really well to bring    Self-regulation in response  to fear of legislation      “When you register with toysmart.com, you can rest assured that your information will never be shared with a third party.”
  3. “All information obtained by toysmart.com is used only to personalize your experience online.”
  4. Stating a privacy position
  5. It’s not about protecting customers’ privacy. It’s about ethics. Now, there’s a concept.
  6. Jumped on the TRUSTe bandwagon but didn’t read the fine print
  7. Need to overcome consumers’ reluctance to purchase on-line
  8. Privacy policy for the wrong reasons
  9. And, now a few short years later, enter the privacy policy backlash.
  10. Closely followed by the Truste initiative, which, as the name suggests, was designed to provide a “seal of approval” around a licensee’s treatment of customer information. And, conversely, provide reassurance to consumers that certain expectations would be met.
  11. Treat privacy as policy not promotion.  In the headlong rush to e-commercialism, one of the early dot com challenges was overcoming consumers’ distrust of doing business online. Enter the notion of privacy policy. The thought was it would encourage people to buy—didn’t .
  12. Toysmart.com’s mistake was 2-fold. Tried to package up the customer list with its trademarks, goodwill, URL names
  13. Honor your  stated privacy policy

How many retailers are really concerned?  Now, many many more.

Charles de Gruchy remembers how it was

Relationship marketing…is it relevant Strategy Magazine January 06, 1999

I get a lot of mail. Probably because I go out of my way to get mail. But, I can count on one hand the number of commmunications I’ve ever received that you might call “relationship building”. Sure, I’ve had lots of newsletters and sample packs and special offers and shiny plastic cards and mailings trying to sell me more stuff.

But, remember we’re now dealing with consumers who are reducing the contents of their wallet to one piece of plastic and spending more time thinking about how to cheat on the next round of tax grabs rather than figuring out how many points it will take to “earn” a new set of tires?  Think about it. What’s the key to a good relationship? For starters, there’s the issue of what kind of relationship the two of you want. And, isn’t it also about conducting yourselves in a way that is relevant to what you’ve agreed the relationship will be?

I’ve often used the following bell curve to illustrate the different points in the “lifeycle” of customers during their tenure with a company. The relationship they have with you depends on where they “live” on the curve at any point in time. In a multi-product or services environment, a customer could be living at multiple stages. The problem is that most companies treat all customers the same. The solid line represents the current value of customers. The dotted line represents the objectives in targeting communications to each stage.

Here are some simplified examples of customer communications that address the stages on the curve. I don’t know about you but I’ve never received letters like these:

  1. Activation–

“Dear New Customer–

Thank you for selecting your new XYZ product model. We hope it performs to your satisfaction and you enjoy it for many years to come. Please remember that if you have any difficulty of any kind all you have to do is call 1-800-###-#### at any time. ”

That’s it. No sales pitch on more products, no special offers, no envelope bulging with irrelevant paper.

  1. Grooming–

“Dear New Customer (who matches the profile of your best customers)

(Starts with the same first paragraph, as above).

It might interest you to know that, along with the XYZ product you purchased, we offer a complete XYZ family of products. We’d be happy to send you more information about them. Just give us a call any time at (the same toll-free number) or return the enclosed postage paid postcard”

This way the customer let’s you know whether they want those glossy brochures…instead of wasting money (and trees) just mailing them out.

  1. Maintenance/Loyalty–

“Dear Best Customer

Thank you! We really appreciate the business you’ve given us over the past year (or six months or five years or whatever relevant time frame). To show our appreciation, we invite you to accept the enclosed gift (no strings attached and it’s not a coupon). You’re also invited to receive the following Best Customer benefits for the next 12 months. (Here’s where you can profitably give away all those goodies you’ve been wasting on the undeserving masses–newsletters, special services, gift with purchase offers, etc.–go ahead be generous). Only people like you, who have spent $500 per month for the past five years (or whatever you calculate as the appropriate criteria) will be eligible to receive these special offers and services. Because we only want to give these benefits to customers, like yourself, who truly deserve special attention, we invite you to call 1-800-###-#### today to let us know what you think of the Club and its benefits.”

Don’t you think this might get a customer’s attention better than one more tedious points program for everybody giving away nothing but margin in the end? And, what a great way to gather positive customer comments for future use in testimonials.

  1. Retention–

“Dear Customer (who matches the profile of best customers who’ve stopped buying at this point in their tenure)

Thank you! We really appreciate the business you’ve given us over the past “x” period of time. We hope you’ve enjoyed being part of our Best Customer Club and we hope you want to keep your special privileges. Remember, only people who have spent $500 per month for the past five years (or bought from you 35 times and spent at least $100 every time–or whatever you calculate as the profitable criteria) are eligible to receive the special offers and services in our Best Customer Club. To show our appreciation for your past business, please accept the enclosed special offer (this time it is an incentive to buy again) which you can use any time before (deadline date). If there’s any other way we can be of service, we’d love to hear from you at 1-800-…”

By the way, I’m curious whether any one else out there had the same problem recently as a friend of mine. He received a fancy new plastic card in the mail from Petrocan. He promptly, cut up his old Petrocan credit card (Isn’t that you’re supposed to do?) and next day found himself in the embarassing position of trying to pay for gas with a points program card. Why would any company (unless it also likes to burn money) decide it needed a separate points card for its credit card customers?

Charles de Gruchy remembers how it was