With a wider variety of companies turning to direct marketing and technological advances presenting opportunities for communicating with customers in new ways, some in the industry say it's time for a name change.
In what they call an effort to emphasize the essence of the business, the agencies formerly known as McCann Direct, New York, and Miller/Huber Direct & Interactive, San Francisco, have dropped the direct marketing phraseology from their names in favor of the term relationship marketing.
Looking historically at the industry, direct marketing pioneer Stan Rapp, chairman and CEO of McCann Relationship Marketing Worldwide, said his agency decided formally to change its name Jan. 1 because direct marketing no longer covered the different capabilities of agencies that work on cultivating one-on-one relationships with customers.
“It's outdated and confusing because it still has the double meaning of selling direct,” Rapp said of the term direct marketing. “Initially, we started with direct order, then we moved to looking at what happened after we got the customer.”
Running down a list of services — including direct response television, direct marketing, database marketing, interactive communication, integrated marketing, custom publishing, loyalty programs and telemarketing — Rapp noted that it may not be apparent to many clients that all these services fall under the name direct marketing.
“The relationship is the benefit, and we decided to focus on what we deliver our customers,” he said.
Rapp and Miller/Huber Relationship Marketing's vice president of client services, Scott Waltz, acknowledged that the term relationship marketing is sometimes used in reference to loyalty programs, but they said that it encompasses much more than that.
“Loyalty is only one part of it. To begin the relationship you have to acquire the customers, and we're interested in every aspect of relationship marketing,” Rapp said.
“A large percentage of a company's revenues comes from a small percentage of the customers, and we want to strengthen that relationship — but it's much more than that,” Waltz added. “We don't only look at maintaining that loyal following, it's about how we look at the customers and clone them so we can recruit the types of people who would develop that loyal following.”
For Miller/Huber, which announced its name change Jan. 23, the term relationship marketing reflects the new insights into customers that technology has allowed.
“If you know the transactional history of a customer at point of sale, you can leverage that information to develop a more meaningful relationship,” Waltz said.
As an example of what relationship marketing means to the agency, Waltz described situations in which it markets software to different types of executives within a company.
“What a CFO and CEO will want to know is very different from what a database analyst will want to know,” he said. “What we do with the executives is invite them not to a technical forum but to a seminar on one-to-one marketing by [marketing books author] Don Peppers to demonstrate the opportunities the software presents for the company. It's what we call chain-of-influence sales — knowing who's involved in the decision process and what's involved in their decision.”
Waltz also noted that although relationship marketing is targeted, it's not associated with companies that only market to niches.
“Levi's is a multibillion-dollar brand. We will be leveraging customer loyalty and how customers feel about the brand to develop relevant and personal communications programs,” he said.
Miller/Huber Relationship Marketing has billings of more than $120 million, and its client list includes Sun Microsystems, Cisco Systems, Netscape, Levi Strauss & Co. and the Robert Moldavi Family of Wines.
McCann Relationship Marketing Worldwide had 1997 billings of about $500 million, has 31 offices in 28 countries and lists among its clients, Johnson & Johnson, USAirways, Buick, Nestle and Lucent Technologies.
