Devil's Dictionary Part 2

JIM ROSENFIELD'S "DEVIL'S DICTIONARY OF MARKETING"
PART 2

James R. Rosenfield

An irreverent look at some of the "real" words that are used everyday in the marketing world.

LIST BROKERS: middle-people between the mailer and the list compiler or owner. The mailing list business in the U.S. is huge, complicated, and often characterized by a conspiracy of silence. There's lots of trading in slightly old names and addresses, for example, especially on the business-to-business side of things. Lists age in a hurry, so this is not a good thing unless you are a list owner or list broker.
It has been many years, thank the Lord, since I have had to deal with the actual rental of mailing lists. Back then, though, on more than one occasion when I asked a list broker the source of the names, shoulders were shrugged as an eye winked.

Caveat emptor.

On the other hand, if you're doing direct mail, a good and honest list broker is worth his or her weight in gold. When you find one, cling to her as if she is a goddess, for, indeed, she is.

LOYALTY: the great head-nodder of the 1990s and early 21st Century. If you mention loyalty in any kind of business environment, everyone nods their heads. How can you not agree that loyalty is important?

But do we really know what loyalty is? If I may ponder…

1) Loyalty is a misapplied concept in business. You can be loyal to a country, a spouse, a church, or a concept, but how trivial it is to be loyal to a brand or a company. In truth, no one is really "loyal" to a brand. That's just ad agency talk. People are comfortable, familiar, satisfied -- all of which are good things, but none of which have the emotional charge of loyalty.

2) I have personally quoted Frederic Reichheld, the loyalty guru, many, many times, but I'm no longer sure that what he says holds water. "Loyal" customers contribute a disproportionate amount to the bottom line, he tells us. This is quite visible in companies with decent information systems, and certainly consistent with the Pareto Principle, so no argument there. The argument, to me, lies again in the word "loyalty." Does their behavior make customers "loyal," or does "loyalty" create their behavior? Something circular is happening here, and it makes me intellectually uncomfortable.

3) No one knows the differences between loyalty, necessity, bribery, inertia, and habit. Loyalty has become a conceptual sponge over the last ten years, soaking all these other things up. But a "loyal" person will theoretically behave much differently from someone who has been bribed or is a customer merely through necessity.

4) Or does it make a difference? Most companies go their merry way without suffering much harm. And of course there are numerous hateful companies - banks, airlines, telecoms - that no sane human being would ever be loyal to, that do quite nicely, paying lip service to "loyalty," but treating their customers like insects.

5) Loyalty programs have been very good for the providers of loyalty programs, as well as for very heavy users of products and services, who probably would have been heavy users even without the loyalty programs. And that's the biggest rub of all.

6) Loyalty programs began as a mode of differentiation, but soon plunged to a commodity level as everyone in the category came up with equally valuable programs and rewards. The result, as most clearly seen in the U.S. airlines industry, is an enormous layer of incremental costs, without a compensating growth in market share and revenue. In effect, they're all back where they started from, but it's costing them a lot more.
MARKETING: 90% of the time, selling stuff and collecting money.

NEGATIVE OPTION: a marketing mode where customers receive monthly product shipments, which they have to return if they don't want. (See CONTINUITY PROGRAMS.)

Years ago I joined the Time-Life (now AOL-Time Warner, the media octopus) "History of Rock 'n' Roll" CD club. The stuff at first was good: Dion, Elvis, et al. Then they started issuing B sides of 45s that had never made it in the first place. (If you're too young to understand the lingo, skip this entry.) Then they started sending total junk, stuff that I swear they must have commissioned from the guys who write radio jingles to do.

So I quit.

But they wouldn't let me. No matter what I did, I still got a CD each month, which I laboriously had to send back to Time-Life, at my own expense.

It took me a full year to quit. It was like overcoming an addiction, except I wasn't the addict.

NETWORK SELLING: the original "viral marketing," and perhaps the most socially corrosive form of marketing ever created. You sell to your friends and family, who will buy the cosmetics, vitamins, whatever, but hate you for taking advantage of them. You then try to recruit these same unfortunate friends and relatives into becoming salespeople, so that you can really exploit them by turning them into your "downline." That's how you make money: Not by selling products, but by recruiting people to sell products. You get a big monetary slice of every product sold.

I once spoke at a convention of these people, an action for which I will pay the price in Purgatory. Most of them were losers, in the sense of life's losers, looking for that perhaps last, elusive chance to make some easy money. The leaders - the real moneymakers, who had the most extensive "downlines" - shared a sort of sleazy charisma. The president and founder, a persuasive sales-type, was looked at with a disturbingly quasi-religious regard by the multitudes.

There are "respectable" companies in this kind of business: Mary Kay, Avon, Amway, and maybe a few more. But these guys are just as socially corrosive as the many fly-by-nighters, since the corrosion is embedded in the exploitative methodology.

Network selling is particularly successful right now in many parts of the Third World. The Amazon area of Brazil, for example, is a network hotbed, with Avon ladies in boats calling on remote villages. I myself (more Purgatory!) worked with a large Peruvian cosmetics firm, Yanbal, whose representatives penetrated the rain forests, haunted Andean mountain aeries, and slogged across the Great Desert in their sales mission, marketing beauty, but also and more importantly, opportunity: Join the downline!

OFFER: the precipitator of action in a direct marketing program, that which creates the necessary behavior.

The most common offer is a discount, with a time limit: "Save 25% if you purchase by June 30!" This kind of imperative would be scorned by any self-respecting Madison Avenue agency, but in it lies the motivating core of so many sales transactions.

There is an inherent, and almost pathetic, irony in offers: The better the offer, the worse the customer. Too steep a discount, for example, brings bargain-hunters whom you may never see again.

OUTBOUND TELEMARKETING: a social scourge in the U.S. You cannot sit down to dinner without being interrupted. You cannot answer your phone without a beaten-down unfortunate, commanded and controlled to the end of her tether, mangling your name and trying to sell you something that you emphatically don't need.
(See TELEMARKETING.)

PERSONALIZATION: addressing me by name, which can only be done via telemarketing, direct mail, and the Internet.

Names are powerful. A name is a personal icon. People don't read their own names - they absorb them instantaneously as a visual unit. That's why personalization is so important to direct mail: It's a way of guiding the eye into the copy.

By the same token, getting the name wrong is a terrible thing to do. And it's impossible to avoid. Any large database is going to have from 10 to 15% of the names incorrect.

What can you do about this?

Simple. Whenever you send out a mailing, include some copy asking customers to call an 800 number if their name or any other information is incorrect. This will make your database self-cleaning, make your customers happy, and make you money, since 10 to 15% of your customers are currently being offended - and not responding - whenever they get your mail.

I have been advising companies to do this for 20 years. To my knowledge, only one firm has ever taken my advice, National Bank of Australia, back about 10 or 12 years ago. They found out that nearly 15% of their customers had their names misspelled.

I'm sure, though, they haven't done it since, which means they're back up to the 15% again. What a pity.

POSITIONING: a jaded old 1980's concept that rears its head every once in a while. It has to do with the "position" you want to occupy in the consumer's mind. It's based on the tabula rasa theory of communication that I personally find tiresome beyond words.

BMW's "position" as a nimble, powerful driver's car is not based on any kind of brainwashing hocus pocus. It's based on the reality of the drive.

I must comment that I once shared a speaker's podium with Al Ries, the father of "positioning." He was quite a nice man. When he began to speak, someone in the audience began to heckle and hector him unmercifully, and poor Al lost his composure.

I was to speak next, this was early in my speaking career, I was not nearly as experienced as Al Ries, so I was dreading the treatment I expected from the nasty guy in the audience. To my surprise, he was quiet as a lamb, approached me afterwards filled with praise, gave me his card, and told me he wanted to do business with me. He did, and skipped town without paying his bills.

PREDICTIVE DIALING: the most loathsome and socially disruptive of all marketing technologies. It enables call centers to rifle through an entire telephone exchange with blinding speed, hitting every number, including unlisted ones, like a runaway lawnmower.

These systems are equipped with a sinister intelligence that enables them to learn how to maximize callers' contact rates. This results in frequent hang-ups after one or two rings, causing millions of Americans each evening to fear that their homes are being cased for a burglary. This particularly affects older people who might lack the nimbleness to dive for the phone at the beginning of the first ring.

PRIVACY: at this point, one can write an encyclopedia about it. To me, it's the right to be left alone, and the ability to control information about myself. Unwanted junk mail, junk calls, junk e-mails fail to leave me alone. Use of data about who I am and what I do, whether gathered from Internet cookies or more traditional means, should be under my control.

I am in favor of opt-in, at every significant information-gathering juncture. This will be a boon to marketers and consumers both:

· Opt-in ensures an interested audience, which means higher response rates. Wouldn't 10% to 2,000 engaged parties be better than 1% to 20,000 disengaged parties, 19,800 of whom will probably dislike you for sending them junk mail?

· Opt-in will probably spell the end of mass, predictive-dialing driven outbound telemarketing. Even though companies make money from this, it so irritates most people that a huge price will ultimately be paid in frayed relationships and shattered images. Selective, intelligent telemarketing to opt-ins? Nothing but a good thing. The end of mass telemarketing will make the telemarketer's job easier and more benign, which means more capable people will be willing to take telemarketing jobs, which in turn means an improvement in the telemarketing experience.

Underlying the U.S, direct marketing community's frenzied opposition to opt-in is a disbelief in themselves as marketers. If you're a good marketer selling a worthwhile product or service, shouldn't you be able to convince your customers to opt-in?

PRODUCT PLACEMENT: a really sneaky form of marketing. It pops up in movies and on TV, where the leading man drinks a can of Coca-Cola or some such.

The idea: People will see an admired figure drink a Coke, and they'll go out and drink a Coke also. In addition, they'll identify the admired figure with Coke.

I sort of think this is nonsense. I'd like to see some figures proving that product placements actually create sales.

I also think the poor consumer deserves, at the very least, to be put on notice when he or she is being exposed to advertising messages.

(See PUBLIC RELATIONS, the next entry, for more on this subject.)

PUBLIC RELATIONS: a euphemism for propaganda. The blackest of marketing arts. Also the softest: How do you measure it? Also the most effective, when it's done brilliantly. Carefully placed articles in newspapers and interviews on TV are worth more than tens of millions of conventional ads. The illusion of disinterestedness is priceless.

When you gaze inside the PR beast, you start to realize that lots of articles in respectable publications - and I'm talking about The New York Times and Wall Street Journal - are
actually PR placements.

The most egregious one of these I've seen lately was a year or two when Business Week ran a long cover story about General Electric CEO Jack Welch. There's no doubt that Welch is the premier CEO of our era, but my gosh - this piece made him out to be a virtual deity. There were even carefully planted warts, minor faults that were virtues manques, just to enhance credibility.

Edward L. Bernays was the progenitor of modern PR. There's a good book about him, The Father of Spin, by Larry Tye (Crown Publishers, 1998). He was Freud's nephew, and spent a summer in Vienna with Uncle Sigmund. I think the superficial depth psychology (yes, an oxymoron) one finds in marketing can be traced to this particular summer abroad.

Bernays later repented when cigarette hucksterism became politically incorrect, but in earlier years he took credit for single handedly breaking down the taboo in America against women smoking. On March 31, 1929, debutantes and socialites marched down Fifth Avenue in the Easter parade, defiantly puffing away. Bernays pulled this off so masterfully that no one knew that he and the American Tobacco Company were behind this stunt.

And that's what's dangerous about public relations, the illusion of disinterest. Fortunately, not many PR people are adept enough to pull this off.

REGRESSION ANALYSIS: a high-tech way of finding out things that common sense should already tell you.

REWARDS: what you get for using my product, because, for the life of me, I can't think of any other possible reason to use my product as opposed to a competitor's.

Rewards reward marketers for being lazy.

SALES: Is marketing part of sales, or is sales part of marketing? Well, it depends on who you are and what your company does. I certainly regard sales as a sub-set of marketing, but every insurance company in the world would argue with me, not verbally (they'd nod their heads at what they think is the right answer), but behaviorally. Insurance firms always put a top sales guy in charge of marketing, which ruins both him and the marketing department.

There's a huge difference between the sales mentality and the marketing mentality.

The sales mentality is reductive, the marketing mentality is expansive.

If someone spends $50, thinks the salesperson, that's $50 I will never get again.

If someone spends $50, thinks the marketer, that opens the way for $500, $5000, who knows what, into the future.

More turns into less, thinks the salesperson.

More turns into more, thinks the marketer.

That's why marketing people and sales people often hate each other.

I grew up working with salespeople, in what you would consider benign industries, publishing being one. I still shudder when I think of the Darwinian thirsts, the territorial imperatives, the jaundiced sluices of primordial money-lust to which I was exposed while still at a tender age.

SECRET CODE: a way of making people feel secure about using the Internet.

Hackers gnaw through secret codes like wolves lunging at lamb chops.

SELF-REGULATION: the American Direct Marketing Association's answer to privacy concerns.

Far be it from me to be cynical, but self-regulation has always, for the entire history of the world, been a disingenuous, nod-and-a-wink way of doing what you damned well want to do.

It has never worked, ever. When the fox guards the henhouse, chickens disappear.

SEX: that without which above-the-line general advertising cannot market a product or service.

During the early days of AIDS in the U.S. there was much hand wringing among agency types about overuse of sex. They repented of their sins, and promised to be more responsible. That lasted maybe ten seconds.

The important thing is that you will become irresistible to the gender of your choice if:

· You drink Budweiser, Coors, Miller, Heineken, or Foster's.
· You smoke Marlboro, Winston, Camel, Kool, Misty, Tareyton.
· You clad your feet in Nikes or Reeboks.
· You drive a Buick, a Chevrolet, a Ford, a Mercedes, an Audi, a BMW, a Lexus, a Pontiac, a Lincoln.
· You wear Levis, Gap, Banana Republic, Tommy Hilfinger, Guess? You drink Coke or Pepsi.

This is where advertising is at its most insidious, and where my point that ads don't work, but advertising does, is most instructive.

Only the most immature and weak-minded among us would believe any of these ads. After all, beer makes you bloated, fat, sloppy, drunken, and flatulent, hardly attributes conducive to attracting romantic partners. But the sheer inexorable weight of all of this advertising in all media sends the message that creates the consumer society: Buy, and you will be happy. To quote Marshall McLuhan again, "Advertising makes you sick, then sells you the cure."

SPAM: junk e-mail.

I don't get too much spam, but the spam I get is almost entirely from the Direct Marketing Association, direct marketing trade magazines, and direct marketing conferences.

I guess that's what the DMA means by self-regulation.

STATISTICS: numerical quantification, often tangled up with self-interest,
and almost never analyzed. A ridiculous "statistic" that's constantly
bandied about claims that Americans are exposed to over 1500 advertising
messages per day. True, advertising saturation in the U.S. is near maximum,
but 1500 per day, assuming 16 waking hours, would require every American to
be exposed to 93.75 messages per hour, or 1.56 messages per minute, every
minute of every waking hour. Nope, it ain't that bad.

STICKINESS: a really, really offensive buzzword that for a while was used epidemically by CRMers. It conjures up very unpleasant images. It seems to have disappeared.

STRATEGY: somewhere in the Tao Te Ching, Lao Tzu says "Beware of rectitude." I feel the same way about strategy and, especially, strategists. If strategy is detached from the innards of an organization, it can end up with a force-fit sort of character, driving everyone crazy as a result.

In my travels, I've not seen much strategy. Maybe the now-scorned dot-coms were the great strategists of our era: Suck up money, spend it, make promises, inflate share value, and bail out. (Of course very few bailed out, and even fewer bailed out at the right time.)

In my dreams of reincarnation, I sometimes want to come back as a general above-the-line ad agency guy, schmoozing with other guys at the country club, and never being held to account. Coming back as a strategist would be nice also, thinking big thoughts in a corporate ivory tower somewhere, watching the lower levels trying to figure out what in God's green earth I'm trying to accomplish

SUBLIMINAL ADVERTISING: a theme that has recurred at various times since at least the 1950s. It's the belief or fear or idea that product messages can be invisibly embedded in movies or TV shows, so that there's no conscious awareness of seeing a commercial message, but nonetheless a strong desire to drink a Coke somehow wings its way up from one's innermost depths.

The reality of subliminal advertising would seem ludicrous, based as it is on two foolish assumptions: 1) The mind is a blank slate, subject to the most simplistic kinds of hypnotic manipulation. 2) Ads work. (N.B. See entry for ADVERTISING for more information on why advertising works, rather than ads.)

There's one nagging reason, though, to suspect that subliminal advertising exists, and that's the passionate denials about it made by the advertising industry over the years.

SUITS: a demeaning term used by ad agency "creatives" to describe account executives, who sometimes wear suits, and sometimes even fill them.

I like neither of these groups, for the most part, but I must defend the "suits" by saying that they are less delusionary than the "creatives." They know they sort of have to make money, and that there's actually a sort of business they're involved in. The "creatives" think that they're artistic, which would be laughable except for its sadness. "Creatives" are so co-opted by the system that they don't even know they're co-opted. Which, of course, is the very definition of successful co-optation.

SURFING THE 'NET': a really dumb way of talking about the Internet, which fortunately is already archaic. The Internet is not about surfing; it's about searching.

All early-stage technologies are misunderstood, and have to be analogized to previous technologies. "Surfing the 'net'" implicitly identifies the Internet with television, with which it shares a screen and just about nothing else. Advertising agencies, of course, would like to see the Internet turn into television, because it would then be something that they would understand and could make money on.

TEASER ADS: an authentically moronic way to do advertising. This is when a campaign names neither a product nor a company nor a benefit, but tries to intrigue the consumer through mysterious words and images.

The most famous - and costly - of all teaser campaigns occurred when Nissan's Infiniti brand was introduced into the U.S. in the early 1990s. Instead of automobiles, ads consisted of trees and rocks, and the copy was gnomic and Zen-like.

Lexus came out at the same time with straightforward campaign telling people that Lexus made good cars.

Infiniti, a perfectly fine luxury vehicle, has never recovered.

Alert readers of this Dictionary might spot a contradiction here, since I've said several times that ads don't work. True, but remember, advertising works quite well, in the sense of creating consumerism, i.e., generalized demand. One can posit a theory, based on Lexus and Infiniti, that when a new category is introduced (Japanese luxury cars), good advertising will feast on the carcass of bad advertising. I suspect if you look at the early days of Nike vs. Reebok et al., the same principle will obtain. But the theory is contingent on an almost Manichean bifurcation into good and bad, which seldom happens - most ads are simply mediocre.

Teaser ads are moronic because they're based on the following ridiculous premises:

· The consumer is a blank slate.
· The consumer has nothing better to do than muse and ponder about mysterious ads.
· The consumer cares.

TELEMARKETING: a euphemism for "junk calls." Aided and abetted by predictive dialing, it's the most intrusive, obnoxious, and socially destructive form of marketing in the United States.

When the phone rings these days, your choices are not to answer; to answer and be polite, which is difficult when you get 3 junk calls in a half hour; to answer and be confrontational, which makes you feel bad; or to be prankish.

There's a Seinfeld episode where Jerry asks the telemarketer for her name and number, so that he can call her in the middle of dinner.

A few days ago, I began telling telemarketers that I wasn't home. "Hello, is James there?" "Who's calling?" "Joe Smith from Paine Webber, with some important investment…" "I'm sorry, I'm not home." "Click."

Direct marketing trade magazines are filled with articles by telemarketing executives, some of whom can evidently read and write. All of them wring their hands at mass junk calling, and all of them do it. Did they study the tobacco industry for lessons in crocodile tears?

I am for banning outbound telemarketing unless customers have explicitly opted in. (See PREDICTIVE DIALING for some of the reasons.)

TELESERVICES: a euphemism for "telemarketing."

TESTING: one of the most important things in direct marketing. Direct mail in particular lends itself to testing, and the annals of direct mail are filled with unbeatable control packages that withstand test after test, as well as occasional - and occasionally surprising - breakthroughs.

There's a fly in the testing ointment, though. I've looked at thousands of direct mail tests over the years, and most of them strike me as being statistically invalid. Most direct mail tests suffer from:

· Failure to isolate variables. As easy as it sounds, it's actually quite difficult to focus in on just one variable, so marketers frequently don't really know whether it was the letter…or the list…or the time of year…or the postal rate…that made the difference.

· Inadequate sample sizes: Many direct marketers use rules of thumb, e.g., you need 50 or 60 or 100 responses from a cell before you have a substantial confidence level. The problem is, none of these formulations work, which almost requires you to find a statistician, who do not historically grow on direct marketing trees.

· Failure to recognize the increased velocity of life in the 21st Century. Whatever the reality, people certainly think that things have speeded up. Therefore, echoing Heraclitus, it's impossible to mail into the same world twice. Remember, traditional direct mail testing methods evolved in a quieter epoch.

· Failure to recognize regression to the mean. That's why a winning test seldom does as well in re-test. That's why you should never run with anything before careful re-testing. Exception: total blow outs, e.g., panel "a" producing three times the profits of panel "b." Get out there again with "a," but have a small sample of "b," just in case.

Testing methods evolved in an era when direct mail was much cheaper than it is today. This helped create a "test, test, test everything" mentality. This no longer works. It's too expensive. Experience and intuition should allow you to cut down on lots of testing, and only test things that are likely to make a big difference. The late Dick Benson said "Test for black or white, not for shades of gray."

Non-direct response advertising can't be "scientifically" tested. There is, though, an enormous pseudo-scientific industry that will "test" your TV commercials to a fare-thee-well, and for a pretty penny, indeed!

TOTAL CRM: "…the optimization of all customer touchpoints by distributing and applying contact data throughout the company. It's a corporate promise put into action."

I am not making that up. It's a verbatim quote from the June 2001 issue of a U.S. trade publication. I defy you to tell me what it means.

UNIQUE SELLING PROPOSITION: The good old USP was developed ages ago by Rosser Reeves. It still holds water: Unique - hey, that's pretty good! Selling - whoa! That's kind of what it's all about! Proposition - now you're talking! Make someone an offer, and they may buy from you.

The problem with USP in these Millennial years, though, is the "Unique" part of the equation. Your competitors are probably as good or as bad as you are, which means you have to be imaginative when it comes to "Unique." Of course, you can always lie; something your ad agency will be pleased to help you with!

WAP: Wireless Application Protocol, something that will change the world, we think or hope or imagine or feel, today, tomorrow, the next day, or at some point. (See BROADBAND.) The WAP people have a vision of folks walking around buying things from their mobile phones. Possible problems: tiny screens, tiny keys, and people running into things.

VIRAL MARKETING: with the possible exceptions of network selling and outbound telemarketing, perhaps the single most offensive marketing technique ever developed. It's a way of co-opting you into being an implied endorser of a product. Rob Wipond, in the July/August 2001 issue of Adbusters, suggests "Viral marketing has…become a metaphor for our times. There are matchmaking, sweepstakes, bulk buying and countless other web services that increase in value to you if - and only if - you convince others to log on as well."

This guarantees that your personal relationships will become contaminated by commerce.

If you can contemplate viral marketing without getting worried about the state of our culture, it's time for a vacation.