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Latest Issue: Sept/Oct 17

Marketing statistics & alternate facts

We are all familiar (or you should be) with Captain Renault’s famous line in the movie Casablanca, that he is “shocked, shocked to find that gambling is going on in here”, at which point a croupier hands him a wad of money and says “…Your winnings, sir.”

I’m going to share with you some insight I received via an email recently from a longtime reader of this blog, and longtime friend in the catalog industry. His comments and concerns are a perfect encapsulation of an issue which I hear too few of you discuss, and echo Captain Renault’s famous line.

His email was one of several I received from readers regarding a posting I wrote a few weeks back on the death of the catalog media, and the independent voice which publications like Catalog Age used to bring to our industry. I will share several of the other comments I received from readers over the next few weeks. They all had a common theme, and surprisingly, it was not a wistful, nostalgic yearning for cataloging’s Golden Days. Rather, they all acknowledged that the industry has lost a great deal of knowledge, and basic common sense.

My friend wrote that he was “shocked, shocked” that there could be such a thing as ‘fake news’. He felt that “the people who value this drivel do so because it either reinforces what they already believe or they don’t have a framework for evaluating the ‘facts’ in the story.”

“Which brings me to marketing statistics. Every email service provider, personalized shopping experience vendor, cloud web service seller, total marketing integration service seller with whom I’ve talked has an easy to install, comprehensive reporting suite that will produce pretty graphs showing how effective their product is. How else can I get email, affiliate and PPC services claiming to produce 121 per cent of my total revenue?”

“Without a business strategy the numbers are hard to evaluate and can be used to tell stories that don’t reflect reality. Our company likes to make a profit so we look at order contribution at a business level. If we are not making money on the orders we take in it doesn’t matter what the “reports” say. We also do an analysis by channel but that is secondary. I often wonder whether people who are looking for ‘good marketing statistics’ have a framework for evaluating fake news. That’s really the issue. Without a framework and context numbers don’t matter.”

Mark Twain used to say there were lies, damn lies and statistics. Today he might say there is fake news, alternate facts, and marketing statistics. They all sort of fit together.

My friend’s email reminded me how much I enjoy his wisdom, and his ability to see and state the obvious to which so many other marketers are blind. He is the Sage of Spokane.

His comments reminded me of a speech that a VP of Sales for one of the co-ops gave at NEMOA a few years ago. She was presenting a talk on new customer acquisition, and she used projections from the DMA to show that direct mail was trending to grow in the next 3 years. I remember thinking to myself – now, who is better qualified to project where catalog volume is going? Who would you put your money on? The co-op, a company that has millions of transactions from thousands of catalogs, and who knows every catalog’s mailing trend for the past 20 years? Or, would you put your money on projections from the DMA, a trade lobbying group which has access to no company mailing information, only self-reported survey data? Hmmm…., why would the co-op use the DMA’s projections, and not their own? Maybe because the DMA’s projections are always overly optimistic, and were a better fit for her narrative that day.

How many others in the room came to that conclusion? How many were “shocked, shocked” that she would cite so shallow a source as the DMA, when her own company was sitting on more data about the catalog industry than any other source available?

The issue is not so much being able to evaluate fake “marketing” news. The issue is the brain drain and experience drain our industry has suffered. There are very few people left in our industry that can even execute a really good direct mail campaign. When was the last time you received a piece of mail at work – not an email, but something that went through a postage meter or that had a stamp? No one does it anymore, because they have been lead to believe it no longer works. In their rush to show that they are not email and social media Luddites, and that they can embrace “Millennial marketing”, catalog marketers have dismissed efforts to make their base books stronger and more appealing. In my opinion, catalog marketers today are not creative, they are lemmings.

Yes, I believe that consumer behavior has changed, and is shifting ever more toward mobile – I see it on an individual level when I watch my wife shop from her iPhone. Yes, I believe that websites need to be stronger than catalogs.

But to ensure catalog survival, we must separate fad from trend, statistical fact from marketing fantasy. To my friend’s specific point about every vendor supplying an easy solution, I encounter this phenomenon frequently with clients that are being told by other vendors how easy it should be to “dial up their marketing”. But, these same vendors never ask the client to provide all costs associated with the marketing – the way I do and the way most list brokers would do – to calculate the marketing program’s profitability (or as the my friend stated, “order contribution at a business level”).

Sadly, I still encounter mailers for whom the concept of calculating profitability on a mailing is a new concept. The thought of assigning profitability to other, less tangible marketing is out of the question. (Errors committed by the new generation of catalog mailers will be the topic of a future posting).

The irony of all this is the second part of that famous scene from Casablanca. Renault is shocked, but then he turns around and accepts the cash from the croupier. In the catalog world, many of us know how to detect when data is wrong/ missing/ misleading/ fake, but we smile, accept the report and say “thank you very much”. We don’t push back enough and say “Your data is crap, and your assumptions are misleading.” Although, I have no doubt that some of you tell your internal analysts that, and especially tell it to your vendors, not enough of you do, because you lack the insight to know what is real and what is fake.

Wisdom is an asset that often comes only with time and maturity. Don’t overlook it, and don’t under value it. As Lord Tennyson wrote “Knowledge comes, but wisdom lingers.”

PS: In case you are interested, Casablanca’s Captain Renault has a connection to New Hampshire, where I live. Claude Rains, the actor that played Captain Renault, is buried in Moultonborough, NH. Bet you didn’t know that.

by Bill LaPierre, Datamann Blog