Adapting to the present situation

While our economy is doing better than the pundits and talking heads would have us believe, we're still dealing with the realities of a more challenging environment. InformationWeek released a report that shows how some technology leaders are dealing with market conditions, and I find the news quite encouraging.

The majority of respondents are either holding steady with IT spending (28%) or increasing (33%). That means that less than 40% of the industry is actually reducing technology investments over last year. Of the projects that are being cut, the respondents' remarks suggest that they generally be described as really good ideas, but not critical to the firm's success. This is supported by the fact that only 23% of the respondents say that customer-facing projects are the targets of cutbacks. Rather, the main targets seem to be new hires and infrastructure upgrades. Of course, since personnel costs are traditionally the biggest line item on any departmental budget, it makes sense to hold the line there. And infrastructure upgrades are not as critical now as they were 3-5 years ago, when so many changes were taking place in that space.

The opportunities in this market, then, are competitively priced software development focused on customer-facing applications. So that's where I am targeting my efforts.

For more information, read the article: How CIOs Are Dealing With A Tough Economy

Testing research methods

I found an interesting article on CRM Daily that seems to up-end one commonly held belief about personalization. Normally, personalized pieces (Dear Bob) tend to get slightly better response rates than non-personalized mailings (Dear Neighbor). The next logical step would be try and deepen that sense of relationship by making the sender more human. The theory would be that response rats will improve if the potential respondent feels like they somehow "know" the one making the offer.

One researcher tested this theory by putting a photo of the "researcher" on the cover letter of his piece. He found that recipients who would have seen a picture (he used 4 different photos) responded at the same rate as those who would not have seen any photo at all.

My only issue with the research is that it does not address the most difficult hurdle in all of direct-mail: Getting the person to open the envelope. My theory is that his response rates weren't different because what's inside the envelope is irrelevant until they open the envelope. If the recipient opens the piece, they have self-selected themselves into a group that already has a higher propensity to respond to whatever is inside.

Is his research completely useless? No, because it shows that personalization does not necessarily improve response rates for those that get past the first obstacle. But I would really like to see if personalizing the outside makes a difference or not.

Link to the article on CRM Daily: Putting a Face on Market Research.

Apple gets stronger

According to a press release issued today, Apple sold 2,496,000 Macintosh® computers during the quarter just ended. That's a 41% jump over the same quarter last year. To me, this result is a combination Microsoft's Vista blunder and Apple's brilliant ad campaign which capitalized on that blunder. Combined with really strong iPhone sales - almost three-quarters of a million units shipped in the quarter - we could be witnessing the makings of a sea-change in corporate desktop computing.

It's not just consumers buying those machines, after all. And when the CEO buys an iPhone, she's going to demand that it work seamlessly with her laptop. We saw this start to happen a few years ago, but Windows XP was still the gold standard for desktop operating systems. So, the conversion stalled. But now, Vista has opened the door for IT departments to rethink their O/S strategies. And once they overcome their fear of supporting a mixed environment, anything could happen.

Apple's press release can be found here: Apple Reports Record Third Quarter Results

No blank spaces

It appears that the airlines are poised to sell advertising space on self-printed boarding passes. Consider the power of knowing exactly who is traveling to Dallas, and when. Based on some fairly easy to see patterns (time of day, number of people traveling together), it's easy to figure out whether that individual is making the trip for business or pleasure. These make for very targetable* groups, with individualized advertisements printed for virtually no incremental cost. Analyzing the data, implementing the targeting, updating the software, and, of course, selling the ad space aren't free. But, once you've done that for one client, it's easy to do it for many.

Who will be the first jump in? Restaurants? Entertainment?
What kind of business will this spawn? Data mining and analysis? Graphics with customizable elements?
Who is going to freak out with so-called privacy concerns? and how will the airlines respond?

No matter what, this is definitely something to keep an eye on, because it will change the nature of travel-oriented marketing. And it will have an impact on the airline industry's top-line performance.

I learned of this on the CRM Daily website, in an article published on July 21, 2008: Airlines to begin selling ads on boarding passes.