Automakers and other troubled companies must cease pouring billions into ineffective marketing channels.
Like you, I continue to watch the news and read the headlines as industry after industry makes its pilgrimage to Washington, DC, with its bailout bags in tow. First the financial services industry, then the automakers, plead with the federal government for relief during these difficult economic times.
Just yesterday, the Tribune Co. announced it was filing for Chapter 11 bankruptcy. Is the day coming when major newspaper and publishing companies will take an Amtrak to the nation's capitol and plead their case? What about the advertising industry or retail sector? Are they waiting until after the holiday season to assess whether they too are in need of federal aid? The other day, U.S. Senator Christopher Dodd and several other freshly spirited senators proposed that the government appoint a car czar before handing over $15 billion in aid to GM and Chrysler. Finally, someone in government realizes that placing good money in the hands of the folks who got the industry into this mess isn't exactly the right idea.
Keep in mind, the misallocation of marketing dollars over the last decade coupled with a lack of clarity and vision about changing dynamics in media consumption patterns aren't the sole culprits for troubles in industries such as automotive and publishing. Mistakes, the head-in-the-sand mentality, and dinosaur leadership in these sectors are truly to blame for this mess. It's time to replace current leaders with new ones who understand and embrace the new world-communications reality. It's absurd that so many people didn't look at the mounting evidence that showed consumers were moving away from legacy media and embracing interactive platforms. It's insane that just 12 months ago private equity companies continued to bid up the purchase of print publishing assets in the vain belief that these content and advertising platforms were any match for the new world of user-generated content and blog publishing.
Against this backdrop I announce today to Congress and our president-elect that I would like to hold the position in the new administration of e-mail czar. Before you chuckle too quickly, think about it. Is there any doubt in your mind that e-mail has been and continues to be the most cost-efficient, effective, and vital communications channel in the world economy today? We all agree that the economic times ahead are going to be the most challenging in generations. Never before has there been greater pressure on business operations on all levels. Never before has there been a greater need to scrutinize the relationship between dollars being spent and the exact return on those dollars in every area of business. We are in a crisis that demands an objective, dispassionate analysis of the way in which we market products, the costs involved in acquiring and retaining customers, up-selling and nurturing those customers, and winning back lost customers.
As e-mail czar, I pledge to assemble a team of the industry's top interactive minds and provide direction to troubled companies on ways they can transform their marketing and communication strategies.
Take the automotive industry as an example. Several years ago during a meeting with one of the major automakers, the head of customer relationship management for this company said, "Eighty percent of people who will purchase a new car from our company...have already purchased a car from our company...In fact, we know the VIN number of the car, we know the term of their lease, we know their name and where they live." Outstanding. Then I asked the auto maker this question: Why on earth are you spending billions of dollars in broadcast, print, and other mass reach vehicles to speak to customers who already know you and your products? Why not build an e-mail database with all of this information and establish ongoing dialogues with customers? When you're ready to introduce a new model or line of car, e-mail your loyal base (the folks who represent 80 percent of your sales opportunity), informing them of a great new line of cars and linking that messaging to your dealer network to arrange a test drive for them?
The response was a chuckle and the retort: "You don't understand Detroit. We have legacy relationships with print titles, broadcast media outlets...It's a machine. We can't stop it." That kind of thinking has wasted billions of dollars that could have been used to transform manufacturing, repurpose employees, fund new developments, and so on. That thinking is broken. The leaders who thought that way must leave now. How many more union workers will be laid off before the folks in Detroit get it? Stop thinking that givebacks, rightsizing, and bailouts are the answer. The auto industry must change the way it markets its products. Email must be the primary acquisition and retention communications channel that carries these messages in a relevant, targeted, and personal manner. Likewise, the e-mail czar and his team could have substantial impact on other sectors such as publishing, retail, and direct marketing.
As e-mail czar, I would advocate the launch of a massive government-supported massive retraining and education initiative for our country. There are obviously sectors in our economy that are in desperate need of skilled professionals. Many jobs are going offshore due in some part to the fact that American employees are ill-equipped to handle this work. The government should work with the major online educational organizations in this country and provide unemployed people with the ability to take retraining courses and programs online. The feds should work with computer makers to provide low-cost computers with wireless networks that provide the unemployed with the opportunity to learn new skills via online universities. There should be incentives paid to online educators, the likes of Kaplan University and others, to build e-mail curriculum and courseware. Companies that employ graduates from these online degree and certification programs should receive funding from the federal government to assist in the acclamation of the new employee to their company.
It just makes so much sense. Establish the office of e-mail czar to leverage e-mail and interactive technology to create solutions to our country's most challenging problems. I'm not naive enough to think that the czar and e-mail can solve all of our problems. But the tactics currently being utilized to sell products and services must be changed dramatically. Change in this area is good for our country. The adoption of the e-mail and interactive channel will mean that new jobs and small businesses will be created to help transform every area of our economy.
We can sit by the sidelines and lament the current economic climate. We can watch the doom and gloom of the nightly news and their respective pundits, or we can take action before the inevitable happens. I have been beating this drum for many years and years ago predicted that this day would come. It's incredibly frustrating to watch so many good people lose jobs and hope because in our area of concern -- communications -- so many missed the e-mail alert.
If any of you guys in Congress are reading Click Z and want to give me a call, I'm ready.
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Long recognized as one of the direct response industry's premier innovators and a pioneer in e-mail communications, Al DiGuido brings over 20 years of marketing, sales, management, and operations expertise to his role as CEO of full-service digital marketing company Zeta Interactive. Formerly Epsilon Interactive's CEO, DiGuido also served as CEO of Bigfoot Interactive, CEO of Expression Engines, EVP at Ziff Davis, and publisher of Computer Shopper, where he launched ComputerShopper.com, a groundbreaking direct-to-consumer e-commerce engine. Prior to Ziff Davis, he was VP/advertising director for Sports Inc. DiGuido also serves on the Direct Marketing Association's Ethics Policy Committee.
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