Commentary & Recap: Futurist Libey Examines the Present at MeritDirect Event, Part 1 of 2

July 9, 2009 By Paul Miller, editor-in-chief, All About ROI

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Marketers are taking costs out, but margins, he observes, are still dropping. “When recovery begins,” he said, “stand back, because it’ll be roaring inflation. Right now, in a period of deflation, you can’t raise prices.”

2. Leakage. Libey noted how much revenue or profit can leak out of multichannel organizations. “It’s everywhere. It’s a forensic audit. You have to know your marketing and know what works and what doesn’t work, and demand profitability analysis like never before,” he said.

To do so, introduce cost accounting, he advised. Study every bit of every transaction in the company. Get into the real accounting world, he noted. “We’ve always been in the pseudo accounting world,” he said. “Build a foundation of a well-managed business. Our businesses have managed well for direct marketing, but they’ve never been managed well for businesses” in general.

3. Systems. Over time, catalog management systems have been layered with newer systems to accommodate online and other channels. The problem is, many of these systems don’t communicate well with one another, Libey said. Opt for newer systems so you don’t constantly have to pay your vendor to fix bugs.

4. Analytics. Marketing has its number, fulfillment has its number and so forth, Libey said. There are more than 6,000 individual measurements. “Until we get to the point where we’re discussing the same number in the same way every day and have continuity,” he said, “we can’t win the analytic battle, and will leave money on the floor.”

5. Multichannel circulation. Circulation needs to involve the oldest, most experienced person who knows direct marketing, Libey noted. “It’s a profession, and in our quest for all things online, we’ve given circ to young, entry-level people. What do they do? They go to Abacus and say, ‘You do it,’ because it’s easier. So we have two 23-year-olds running the most important thing. Get it back out of the black box and into the hands of professionals.”

6. Customer service. This seems to be the first place to cut staff, Libey said, and that’s a mistake. “They’re the front-line people and can tell you what’s going on with the customer. There are 36 things a dynamic call-center person can do besides taking orders.”

Libey advises hiring the most intelligent call-center people and paying them well. This will make your customer file the very best, totally up-to-date file. This way, “you know who to call and send stuff to,” he said.