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Direct Response Marketing

Powerful Triad Helps Create Successful Direct Campaigns

1 Aug, 2013 By: Bridget McCrea Response

Fulfillment, teleservices and payment processing continue to play an unheralded but crucial role in the success of marketers across the board.

Historically referred to as a campaign’s “back end,” the fulfillment, teleservices and payment processing provider “triad” that supports a direct response marketer’s efforts has moved to the forefront. These are the firms that talk to the consumers first, let them know when their packages will arrive, take their payments, and then deal with any post-sales issues and follow-up. As those touch points gained value, so too have the very companies that help marketers that must go beyond TV-only sales to maximize multiple selling channels and opportunities.

Here’s what some of the top players in each sector have to say about their respective roles, the changing tides of DR marketing — and the future.

Fulfilling Their Every Need

Ask Loren Crannell what’s driving the fulfillment environment right now and he’ll say, “Information, information, information.” Consumers expect information about their orders in near real-time, says the vice president of sales at Van Nuys, Calif.-based Moulton Logistics Management, and marketers turn to their fulfillment partners for near-real time information about order status.

Alerts such as, “received your order,” “back-ordered,” and “shipment delays” (on the carrier side, due to bad weather, for example), are just a few examples of the touch points consumers are demanding, Crannell explains. “Empowering the consumer to not only track but manage their continuity campaign via the Web,” he adds, “is just one example of how technology and information are changing the fulfillment landscape.”

As consumer demands around information have heightened, the actual role that fulfillment plays in the smooth running of a DRTV campaign has also changed. Communication between the fulfillment provider and both the marketer and consumer has become a critical lifeline, for example, and shopper “self-service” tracking of orders and future shipment management have come to the forefront.

“There’s still demand for traditional order status updates, such as E-mail alerts,” says Crannell, “but the savvy consumer is looking for status updates in a near-real-time format. In most cases, the fulfillment company is the ‘system of record’ regarding consumer data; the ability to clearly and quickly provide data is become increasingly critical.”

Reporting demands have also changed during the past few years and put even more pressure on fulfillment companies to report not only what is happening with physical goods, but also on what is occurring with the consumer. “Back-end reporting, such as continuity — stick-rates, life-time value of a consumer, and many other financial reports — are standard offerings for today’s fulfillment companies,” Crannell explains.

At Thill Logistics Inc., in Neenah, Wis., Brian McGarry, vice president of business development, says he’s seeing more marketers looking to align the front ends of their E-commerce platforms with their fulfillment providers. “A fully integrated solution with a proven track record leaves one less moving part for them to worry about,” says McGarry, who is also seeing more DR marketers taking an interest in “dedicated facilities management.” At a very high level, he notes, this is the process of creating mini-warehouses within the fulfillment provider’s facilities in order to maximize the pick, pack and ship operations. “In some cases this involves acquiring brick-and-mortar specifically for one marketer or E-tailer,” McGarry adds.

In today’s competitive business environment, fulfillment providers are also being asked to play more of a consultant role. It is no longer just advising on best packaging or shipping options, McGarry points out. “The successful logistics firm provides best practices on warehouse setup, customer service policies, upsell opportunities, credit card declines,” he says, “and a number of other activities in which they are involved.”

Another trend currently taking shape in the fulfillment arena is the move from “free shipping” to “fast shipping.” In other words, consumers want their stuff fast and they’re willing to pay a little money to make that happen. “The days of the 2-4 week delivery are over,” says Ayal Latz, president of a2b Fulfillment in Greensboro, Ga. “Even one week is pushing it in today’s marketplace. Marketers need to adapt to this new trend and take steps to reduce turnaround and delivery times. Those that make this move will not see higher abandon rates.”

In assessing fulfillment’s evolving role in the DRTV campaign, Latz says its function is more complex than ever — namely because marketers can’t keep pace with the changes in technology and the growing complexities of carrier programs.

“An experienced fulfillment partner is constantly studying and implementing innovative ways to efficiently support the back end,” says Latz, noting that marketers should go beyond warehousing and shipping when selecting a fulfillment partner. Look for services like complex kitting and assembly, returns management, product refurbishment, electronics testing, and even social media. “These may not necessarily be new roles for all fulfillment providers, but certainly could be new to marketers.”

Also new to some marketers — but certainly not to the seasoned fulfillment companies that have handled myriad DR campaigns — is the need for early involvement on the back end. In fact, Bob Formica, vice president of operations at Wallingford, Conn.-based Fosdick Fulfillment Corp., advises marketers to involve their fulfillment partners in the early stages of campaign development and the production phase — including script, commercial, media placement and manufacturing.

“Whether they are making the decision to ship from both coasts, use package and postage optimization, or create important customer service policies, such back-end strategies frequently get put on hold and wind up impacting the overall campaign,” says Formica. “These issues can be avoided by simply involving the fulfillment company early on in the planning stages.”

Can You Hear Me Now?

As DR campaigns have evolved, the teleservices that support them have also improved and matured. At West Direct in Omaha, Neb., Jim Speidel, vice president of new business development (and a member of the Response Advisory Board), says he’s seeing a resurgence in the use of outbound telemarketing even as the Internet, automated transactions using IVR, and social media reign as the “hot topics” in the teleservices space.

“With outbound, you have the ability to capitalize on the initial timeliness of a consumer interaction in order to increase unit sales or lead acquisition,” says Speidel, who points out that — when blended with an inbound campaign — this also leads to clients being able to maximize revenue potential for product sales. And while FTC rules and regulations concerning outbound calling are strict — and those centered on cell phones are ever-changing — the successful outbound vendor who adheres to these rules will see positive results from the effort.

Specific to DR, Speidel says one of the most notable evolutions in teleservices in recent years involves the rapid rate at which marketers move products to retail. What used to be a three-to-four month process to move products from DR to retail, he says, has been truncated to less than 45 days. In fact, many times retail campaigns are launched simultaneously with the direct response campaign.

These tighter timelines have put new pressures on teleservices firms. “In order to be competitive today, providers need to be more nimble with setups and changes,” says Speidel. “Additionally, it is critical to provide comprehensive reporting in order to give marketers the ability to drill down into metrics in order to make fully informed decisions around the data.”

Teleservices firms have also stepped up their game when it comes to answering consumer questions and dealing with concerns and problems. “Shoppers calling for products are expecting a great deal more from the call and the agent than they ever have in the past,” Greg Sarnow, CEO at Allegro Response Teleservices in Austin, points out. “The positive or negative experience the caller has impacts not only the sale made, but also the communication on the Web (social media) and the brand’s reputation in retail.”

According to Sarnow (a member of the Response Advisory Board), that trend has placed the call center squarely at the forefront of the branding experience. Whether on an inbound call or a customer service call, he says, the first real high-touch experience a consumer has with a company is frequently with a call center agent. “Making sure that agent is certified in all aspects of helping that consumer have a good experience while on the phone impacts all sales channels,” says Sarnow. “Brand stewardship has come to the call center.”

Scott Swanson, Phoenix-based CEO of Expert Planet, sees technology as a great enabler for marketers looking to streamline their campaigns’ teleservices components. Cloud-based routing platforms that channel call volumes to multiple, highly-specialized call centers, for example, can boost conversion rates and improve average order values for campaigns.

“Rather then depending on one large center to just handle calls and hopefully perform,” Swanson explains, “advances in call routing technology now exist that allow a marketer to take advantage of having multiple highly skilled centers and their well-trained agents involved in the campaign.”

Other key changes taking place within the teleservices sector include the use of centralized scripting (for reading, changing and updating scripts across the entire system) and centralized reporting (for amassing call center data in a central location). “Clients no longer have to sift through several call center reports,” says Swanson. “Key performance data is at their fingertips and most likely in real time.”

Expect call routing to become even smarter in the future, according to Swanson, who says a caller’s personal phone number (ANI) information on past buying habits are becoming more and more readily available. “Centers can now priority-route callers that are known buyers to agents,” says Swanson, “while callers with less-known qualifications can be put to the ‘end of line’ in heavy call spikes.”

As consumers are given more interaction options, Swanson says marketers will need to strike the balance between placing a high focus on the next generation of consumers while not losing sight of today’s consumer. “Whether you refer to them as Millennials or Generation Thumb, DR is moving into their neighborhood using social media, texting and MMS,” says Swanson. “Teleservices companies need to lead the charge into these new services so consumers gain access to the products and services they want using the devices they are most comfortable with.”

Paying Their Dues

The Holy Grail for all DR marketers — the point of payment — is a critical juncture that all campaign roads lead to. Done right, the payment process results in not only a single purchase, but also the promise of future sales. Done wrong, it can derail a deal and send a consumer off to the nearest competitor. To keep that from happening, companies like Litle & Co., in Lowell, Mass., work closely with their marketer-clients to ensure that they are leveraging the latest payment processing tools while also following the rules and mitigating fraud.

The last two goals are getting a bit more onerous in today’s regulatory environment.

“We’re seeing an increasing amount of FTC scrutiny in terms of how marketers handle their online payment pages and portals,” says Chris Reinmuth, Litle’s vice president of direct response. Interactive voice response systems (IVR) have also come under more scrutiny in the past year, particularly when it comes to product returns and chargebacks.

“That puts a big burden on clients,” says Reinmuth, “and also on us to continue to underwrite customers the best way possible while also protecting consumers.”

With consumers still shaking off the effects of the national recession, credit card declines are another issue that payment processors continue to grapple with. Fraud also comes into play as hackers become increasingly savvy on the fine points of stealing and using ill-gotten credit card information to make online and offline purchases. “The more we can help marketers process more payments while alleviating fraud,” says Reinmuth, “the better.”

Curtis Kleinman, vice president of business development at Swipe Payment Solutions in Los Angeles, says one way marketers are achieving a higher processing volume is by maintaining multiple accounts. “This will assure that high chargebacks on one account don’t wipe them out,” Kleinman explains, noting a good, thorough payment processing partner will be proactive about minimizing both chargebacks and fraud.

At Swipe, for example, he says customers are urged to issue quicker refunds, use a proper billing descriptor, keep their cost of goods down, make efforts to increase client sales, choose suitable business partners, and ask for a proper processing volume to complement their business.

Marketers also need to be aware of the impact that mobile, social and other technological innovations are having on the payment processing industry. Sometimes these new opportunities are double-edged swords. The ability to accept mobile payments, for example, expands the number of payment gateways but also presents more opportunities for credit card fraud. Mobile payments also necessitate website interfaces that are appropriately designed for display on a phone screen and not “crunched down” to fit on the smaller format.

“Payment processing is becoming more mobile-driven, with marketers striving to give consumers a positive experience and smooth functionality,” says Kleinman. Other technological changes that are impacting DRTV marketers’ payment processing strategies right now include: digital signatures for applications and account changes (which are commonplace now and legally binding, according to Kleinman); online reporting; and the use of E-mail and/or mobile text receipts.

In the near future, marketers should benefit even further from technological advances in the payment processing world. That could mean gaining faster access to international processing with quicker approvals and less paperwork, easier integration among multiple payment processing vendors and, Kleinman says, “a one-stop shopping environment where a merchant will be able to process from a mobile device and the Internet at the same time.” ■

About the Author: Bridget McCrea

Bridget McCrea

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