Adam Torres and James Harenchar discuss using data.
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Show Notes:
How can business leaders make better business decisions utilizing data? In this episode, Adam Torres interviews James Harenchar, CEO of Response Marketing Group. Explore the evolution of marketing and current trends.
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About James Harenchar
James is the President & CEO of Response Marketing Group, a consumer-data focused marketing agency. His responsibility is the relationship development and account strategy at the independent agency that offers marketing strategy/planning, data analytics and interactive services. In addition to being a CEO, James leads the Travel and Tourism practice for RMG. He is also a thought-leader within the tourism sector and frequent speaker at the Southeast Tourism Society conference, Forrester Marketing Conference, Ad Federation, DestiCon and Gartner. Prior to Response Marketing Group.
James was Senior Vice President at The Allant Group in Chicago, IL from 2010-2014. He led the Strategic Consulting practice that offers marketing strategy and high-level research to CMOs and brand managers at clients such as GM, Comcast, Nationwide Insurance, US Tennis Association, US Cellular, Blue Cross/Blue Shield and Wells Fargo.
About Response Marketing Group
Response Marketing Group (RMG) was founded 30+ years ago to bring rigor and analysis to brand awareness ad campaigns. Since then they have stayed ahead of the technology and have embraced every opportunity to dive deeper into the data and deliver more capability with every advancement in the industry.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to missionmatters. com and click on be our guest to apply. All right. So today’s guest is James Harenchar and he’s CEO of Response Marketing Group.
Jim, welcome to the show. Thanks, Adam. Good to be here. All right, man. So I’m excited to pick your brain today. We’re going to talk about how to utilize data to influence behavior. A lot of business owners, a lot of entrepreneurs, a lot of execs that listen to this show, and let’s just, let’s just all be upfront.
We love data. That is if we like making money. So we’re going to, we’re going to get into that and and more, but before we do, we’ll start this episode, the way that we start them with what we like to call our mission matters minute. So, Jim, at Mission Matters, our aim and our goal is to amplify stories for entrepreneurs, executives, and experts.
That’s what we do. Jim, what mission matters to you? Yeah, I would say, Adam, for us you know, probably a year ago, we set out to, to try to discover a holy grail, helping all companies leverage data better to get a ROI. I think what we found is that we want everyone to know that no matter what your size of your company is, you don’t have to be super large to be able to get deep into data.
You can be the smallest type of company with nothing more than a bunch of names in an Excel spreadsheet, but we believe you can still be highly successful. So we want to partner with clients that allow us to be able to work with them in learning a lot more about who their customers are, how they can use that data to be successful and measure success.
Their, their advertising spend. So first off, great to have you on. And to me, this is, I mean, I’ve, I’ve done a lot of episodes, a lot of shows, but when we were getting ready for this, I was kind of like chomping at the bit because I’m like, man, I get to pick this guy’s brain. And for everybody listening, they’re like, what is that I’m talking about?
Now you like this business been around for what? 38 plus years, like response marketing. You’ve been so. Talk to me a little bit about that and the, and the roots of that. Cause it’s like, that’s, that’s a big deal. Like you’ve seen in the last, you know, 40 years, let’s call it for decades of transition, not just a digital, but way before digital for all the, for all the youngins here, there was a time before digital.
So talk to me a little bit about, about that. That makes, that makes me feel old. Adam. No, it’s not about making, I try not to do it. I was, I was, I threw out the horse and buggy analogy. Like I was going to be like, what were we selling stamps? And I’m just, come on, man. Go ahead, please. Thank you for that.
Yeah. October will be 38 years. The response marketing group. And to your point, congrats, man. That’s amazing. I actually joined the firm in 1994. So they had been around eight years before my arrival. And. Our primary audience was financial services companies, because those that are almost as old as me can can remember a day in which you would show up in your mailbox every day.
And there was a direct mail piece from probably a financial institution, a bank of some sort that you never heard of before that was offering you a line of credit. Or a home equity loan back in the late eighties and basically all through the nineties really, there were only two primary channels for marketing and advertising in what we call below the line.
Right? So there was radio, TV, billboard and all of that, but below the line advertising was, was really focused almost exclusively on telemarketing and direct mail. And so back in that late 80s to late 90s, we were mailing hundreds of pieces of direct mail on behalf of financial services companies. And the reality is what we brought to the table, our USP, if you will, was predictive analytics, right?
And so in a world where people would say, I’m going to mail, we’ll make it simple math, I’m going to mail a million pieces of direct mail. Yeah, to try to get credit card acquirers new credit card customers. We said, well, why don’t we take existing clients? Why don’t we build a clone or a lookalike model so that we can identify those that already have your product?
And then let’s overlay that on your broader acquisition prospect market. Rather than mail a million pieces, you can make mail 600,000 pieces. You can get a higher response rate and a lower cost per acquisition. That’s really what was the underpinnings and foundational success of RMG. And so looking at like and those early days, what made, I want to stay there a little bit longer because I see some similarities to digital, but I want to make that connection because I don’t think it’s intuitive.
Like, what made the data so robust and what made direct mail so effective then? And actually some, for some things, it’s like, still super, super effective, but what made the data so robust? Like what made it work? Well, I think intuitively we all would say, well, there’s certain criteria that are always going to be highly predictive, right?
So if you’re selling a financial services product, income net worth, whether you’re a homeowner, whether you already have a credit card, all of those things are well known. To your point, I think what’s very different in today’s world is that’s become 30 year olds or older that don’t own a home. Some people are credit and risk averse, so they don’t even have a credit card.
So having those type of criteria to make audience selections has become harder and harder. But I think what we’ve done is we kind of said, let’s expose an audience to all the different variables that exist, which are, you know, roughly 700, regardless of who you use, Axiom, Epsilon, you know, all those different companies.
Let’s look at, at What might be predictive. And in some cases, what we found Adam from doing some home equity lines of credit, no one would have ever predicted this was. If you owned an SUV it was highly, it was like 70 percent likelihood that you were going to accept a home equity line of credit offer.
And who would have thought that was a correlation, right? So rather than presume anything, let’s let the data tell us who the best audience is. And then mail that out or, you know, today’s world, right? Whether that’s electronic communication or whether that’s traditional print communication, let’s wait and see who responds.
And then we’ll go back and we’ll assess what the key variables are that are driving response and interest. Yeah, it makes so much sense. And one of the things that I also think is interesting is kind of like the, the evolution. Of, of, of the company and what, and how you’ve gone further to digital. So how did that, cause, and the reason I’m asking you this question is because there’s other companies out there that are in marketing or that may have other lines of mark, they may not be 38 years old, right?
And they may not have that robust bench, but they’re still facing some of the same challenges that even they’re. Large companies like yours face, which is okay. The landscape’s constantly changing. How do we make better decisions? How do we serve our clients better? So that’s the, that’s the context behind the next question, which is how did you kind of, you’ve been there a long time.
How did you navigate some of these changes into digital and otherwise to best serve your clients? Like what were some of those core things that, that still make it work? Well, I will tell you, some of it was. Was hard. So it wasn’t always, you know, it wasn’t always a smooth migration. You know, I think we still struggle with some aspects.
For example we don’t do media buying. So we leave that to the experts. We kind of focus on what the data tells us and use that from a predictive perspective. And so a lot of clients get caught up on, Hey, we’re very close with our media buying agency. We want to make sure that we’re spending, you know, whatever the full budget is that we’re allocated.
And in our case, we come in and we’re completely agnostic, right? To me, I don’t care what channel you use, right? So if radio is working phenomenal, if direct mail is working great, if social influencers is working wonderful, let’s let the data though, be prescriptive in telling us where we need to target.
That doesn’t mean that we don’t want to have an element of kind of crawl, walk, and run, right? We may want to experiment with a Facebook ad campaign using a lookalike clone model. Or maybe not. So we’ve just tried to be very open and not presume anything as it regards to what channel might work well, because for one client, it could be one application, one platform, one, one, you know, particular utilization.
And for another, it could be something completely different. Hmm. Yeah. And I’m glad to hear you struggle. Not because I want you to struggle. By the way, Jim, it’s just because all of us do like things are moving so fast. And I mean, if you add in some of the other things with A. I. And otherwise, and some of the other like the platforms that are coming up daily.
What I like, though, about your process in the company’s process is if you’re letting the data kind of do the talking, then the and being agnostic, then the tool we already knows going to change over time. But the methodology and even I say this, you know, in a nice way, but the training and I don’t mean just the training of your staff and your company culture.
But I mean, also the clients that are used to working with you so that they know that if you’re moving and you’re testing one platform versus another, it’s not because you don’t know what you’re doing. It’s because it’s in the culture. We want to see what that data is going to do, or we want to see what the what the effect of running that particular campaign is going to be.
Yeah. Am I off on any of this? I don’t want to put words in your mouth, but am I off on this? I think you’re spot on. You know, one of the things I would tell you, Adam, that is probably a conversation we have frequently. And that is from a lot of, I’ll call less mature immature marketers or clients new to database marketing.
And they’re trying to figure out, you know, Hey, this is intimidating. And the landscape is shifting and moving so fast. I don’t know what the proper allocation of budget is across all the different channels that I can choose from. And so they, they end up taking no action or they default back to what they’re comfortable with.
And I’m not saying that I would advocate anyone to increase their risk factor. But what I would tell them is, you know what you can, we’ll call it dabble. We’ll call it experiment, we’ll call it test and learn whatever you want. I think I like exploratory budget. That’s my life. Yeah. Use, use, use 10 percent of your exploratory budget and test a channel.
And the great thing about digital in this environment, which is dramatically different from the eighties and nineties. Is that we can get a read in 24 to 48 hours. And if our campaigns are achieving the results we want, if the audience that we are trying to target is the one that’s responding, then great, we know that.
And, and we may go, you know, a little bit more in beyond our exploratory budget if things are working and if they’re not, we can pull back and we haven’t, you know, lost that initial investment. It’s never too late to be able to do some shifts. Yeah. And the, and the response time and to know if something’s working, if you think about what you say, 24, maybe 48 hours, depending, right?
Not depending on what you’re doing, depending on the line. I mean, I know there’s a lot of variables, but any of those variables are going to be probably better than what we think about when we thought about the, like on advertising, the beginning days where we’re talking about, let’s run this new place, newspaper ad and let’s collect those coupons and let’s clip them and let’s, let’s count, let’s get to counting.
Yeah. Sit by the phone and hope it ranks. The origins of it all right, but this is this is the progression of it to be able to see now and so now when you think about like working on a campaign or something else and to know if it’s working like that much faster, like I gotta get into my these kids nowadays, Jim, and they’re done.
That’s me saying it, not you.
Oh, I couldn’t help myself. Okay. Want to, I want to get into some of the just some of the niches that you work in and over. I know, I know you, by the way, I know as a company, you’re large, you can work with a variable in a lot of different clients from business owners to, to governments. I mean, I think you literally work even in tourism and things like that.
Like, like talk to me a little bit about that. Yeah. So we do work with a span of clients, you know, fortune 50 companies. And then we work with very small companies that are relatively new and trying to get their arms around ways that they can grow acquisition and things of that nature. So to us really, Certainly, budget’s a factor.
That’s always one of the main qualifiers, right? So if someone says we have X to spend, we view our goal as spending that money as if it was our own, right? So we’re stewards of that budget. I wouldn’t want to recommend anything to you that I wouldn’t do myself. We are adamant, Adam, that it’s all about measuring ROI.
We hold ourselves accountable. We expect our clients to hold us accountable. If we’re not achieving what we had stated as the ROI, or we’re not helping you to better define your ROI, then we’re not doing our job properly. But it’s amazing to me, the number of clients, large and small that have gotten away from, or are failing to recognize ROI.
And you, I’ll give you an example. You talked about tourism. What drew us to this space in the late two thousands was the fact that so much money was being spent by state tourism offices without any ROI. And so I don’t want to pick on my home state. What does that look like? By the way? Like when you say that I want, we’re using a little bit of jargon.
So I just want to like, what does that look like when, or what could it look like? So, so if you take a, you know, I’m from Virginia and the Virginia tourism corporation spends a healthy amount of money, it’s not a uncommon for most of our States in the U S to be spending certainly north of 10 million.
You know, visit Florida spends 40 million. So not insignificant sums of money. And so how are you, and especially in an environment like tourism where many of the entities, Be they at a local level or be they at the state level are funded by legislatures and those legislatures. It’s been surprising to me again, why we were attracted to the industry.
I’ve been really good about not holding their entities accountable. They’re a CBBs, DMOs, you know, state tourism offices. So good at spending the budget, not good at seeing, is it working? Go ahead. Continue. I said that not you. There is, there is. There is not as much of a focus on ROI. I don’t want to make a sweeping generalization.
And the next thing you get is a bunch of state tourism directors who said that guy had no idea what he was talking about. I’ll take that. That’s okay. No, I’ll take that. They’re not listening. It’s fine. Go ahead. Well, there is, there is measurement. I don’t want to infer that there is no measurement. I just don’t think it’s as accountable as it is.
Some other traditional agencies where if we spend a dollar and we expected a three X return on that investment, how are we measuring that return? And part of the problem in tourism is because I, as a state can market how wonderful my state is and how you, Adam, ought to come visit me, but it’s very, very difficult for them to understand.
Does Jim Horenshaw ever show up in state X, Y, Z. It’s hard to close the loop in tourism. Unlike on the hotel side. Adam makes a reservation and we know that there was a head in the bed. For sure. But the state of Virginia might, you might have loved their ads and said to your, you know, whomever, friend, spouse, significant other, Virginia is cool.
We’ve never been there. Let’s go, you know, check out all these different things we can do. But the state of Virginia never knows if you’re there. Hmm. Yeah. We’re trying to change that. We’re trying to change that. And so what does that look like changing it? What does that look like? What’s the difference?
We’ve been very fortunate. post I’m sorry, pre working with several tech ways to be able to help e destination. So anybody c deploying two types of te is something we call a sm ability to place a pixel And then de anonymize, some people roll their eyes when I say that word, de anonymize your website visitors.
So we have the ability to be able to match that inbound visitor using a proprietary technology to say that that was Jim Hrenshar. Jim was on our website at 9 PM last night. Here’s the seven pages that he looked at and then overlaying normative demographic data on top of that. So we can add age, income, presence of children, type of car you drive in the house areas.
Do you make philanthropic contributions and interests? 200 different variables that we can overlay on top of that. So now we are removing that anonymity around are the people we are trying to drive to our website, actually the ones that are coming to our website. And we have, we have dozens of examples, Adam, Adam.
Where the two didn’t correlate, some was, someone was going after a 65 year old male in a household that made over 200, 000 and in fact was getting a 35 year old female that made 75, 000 or less. And so, you know, where is the accountability in terms of, is our media plan working? Is our targeting working?
Is our messaging wrong? Is our ad creative wrong? The other thing that we’re doing is, Using geo framing or geo fencing to be able to identify a mobile device as it walks inside that frame. So again, I’ll use the state of Virginia, whether that’s the entire state, whether that’s Richmond, where I live, whatever the case might be the potential to build a geo frame and determine, Hey, we’ve got this massive music festival that occurs in the fall, and it goes for three days, but it’s a free event.
And we have no way of being able to know who really comes to that event. So destination marketer, you have the potential to build a frame around where that event is, is being hosted and and going on and then de anonymizing those visitors. Again, we’re not talking about matching a hundred percent of the audience, but we’re, we’re talking about matching north of 30 percent and in some cases over 50 percent world where historically people that says, Historically, what was nothing, right?
Like you could zero. So now you have the ability to be able to identify who those folks are, which is tremendous for building engagement with locals, with those that are from a long way away, across all kinds of different segments that we can build and all kinds of different demographics to be able to customize the creative, the copy, the offer, the time of mailing anything.
You mentioned you mentioned that first off that’s phenomenal. Cause to go from zero to 30 percent or sometimes 50, as you mentioned, whatever that amount is to be able to be attribute that back is it lets you know, now you know where you can continue to invest spend and now you have something to, something to shoot for you mentioned, you mentioned heads in beds and tourism from another side of things like the hotel side of things.
Do you do anything in kind of that space as well? Just curious. We do. Yeah. We work with a lot of the major brands that you would know of. And in particular, we had a great opportunity to apply these types of learnings to do segmentation for one of the, you know, probably the most renowned and respected brands.
Two time Malcolm Baldrige award winning hotel chain. You want to hear more? I want to hear. Well, well, first off, do I get a discount? I mean, we’re friends. If I could control that, Adam, you absolutely would. All right. Thank you. Hey, my mom told me you don’t ask, you don’t know. Go ahead. Exactly. Exactly. We were very fortunate to have been introduced to the folks at Ritz Carlton.
And one of the things they wanted to try to understand was does the booking process of their guests vary based on the type of guest or the behavior of that guest, meaning that they have business traveler. So we, we took quite a large data set of past guests that they had a stay at their resort plus survey data.
And we, we performed some analysis on top of that. And what we were able to define was nine different distinct segments of their data and the top three, cause it’s hard to really action against nine segments. We decided to action against the top three and they were three distinct segments. One was the, the well traveled executive.
It’s the person who stays at a Ritz Carlton typically in a downtown setting for business. They typically book 60 days or less in advance. So the whole, Creative copy messaging strategy around that was very different from the opposite end of the spectrum Which was the person? That was a resort. We called them a Sun seeker The Sun seeker came for a week every year to almost the same resort or some other seaside resort, and they would book 11 months in advance.
And so again, the behavior of serving messages up and and creative. The other thing that we found, which is which was, I think, a really neat kind of one of those things you stumble upon not by intent, but but more by sheer luck. Had you thought about rich Carlton in the past, they’re advertising typically skewed towards the older upper income type individual.
You might see, you know, a husband and wife and a beautiful seaside scene. And we found in looking at the data that 72 percent of their audience had a child in the household under 18 years of age. Interesting. So we said, let’s do some testing. Let’s show kids on stand up paddle boards. Let’s sandcastles at a resort destination, a beach destination and it dramatically.
Increased the booking rate and, and the frequency for that audience. So it was a great test. They ended up love to take credit for this, but they had a fabulous agency that they worked with. Ended up developing all of the custom landing pages for each of those different segments that we were able to define.
So the Sunseeker got a very different landing page than the well traveled executive, because the need for both of those segments is insane. like it, but smart, but smart. I mean, yeah. And this is, you know, that is something that anyone can do. That’s, that’s kind of why we underscore the value of data. Yeah, it does.
As I said, it doesn’t have to be super sophisticated data. Yes. You can have, you know millions of data bits in, in a, in AWS or Azure cloud. But by the same token, if you just have an Excel spreadsheet of a couple hundred, you’re a small little boutique in bed and breakfast. You can still do that same exercise by creating segments based upon publicly available data and demographics that you can overlay on any type of file that you maintain.
Man, that makes so much sense when you say it. And, and what’s interesting to me is I think about it for a company as big as Ritz Carlton, but that same concept, just like you said, can be used by a small business owner if they have the right data, if they have the right thing. So maybe there was X amount of, of of different landing pages that were made because they, you know, of the segmentation there, but even, you know, what’s, what does that increase for the small business owner that has, that has maybe two or three that they kind of narrow down.
It’s, it’s, it’s not that much more work when Once you got the work, once you got the data and once you know what you’re doing, like you’re just doing, you’re, you’re obviously creating different campaigns, but you’re like already there. Yeah. No, you’re, you’re absolutely right. I mean, the only difference, honestly, Adam, is that you’re looking at potentially millions of records versus hundreds or thousands, but you know, the, the, the data remains the same in the sense of you have the ability to look at things like age, income, you know, net worth type of car you drive, type of, do you rent, do you own, you know, all of those are publicly available data points that you can go to any data compiler request and overlay on your data.
It’s all publicly available. So we’re not talking about PII, right? Nothing that’s not compliance and meets regulatory requirements in, in any of our 50 States. So anybody can do that. Jim considering your knowledge, how long you’ve been in the industry and and the name of the company, like how many clients you’ve worked at the size of clients, otherwise what excites you right now, just in your industry in general, in direct marketing, like what excites you?
Like what, what’s got you fired up right now? It could be technology. It could be anything. Yeah, I think from our, from our perspective one of the things that we’re always asked when I, when I speak, I’m asked, you know, kind of to be a futurist. And I, and I wish I had that crystal ball, Adam, because I I’d like to think I’d probably be a wealthier person.
I don’t know if I, if I could predict the outcome of a lot of different things, but I find, you know, where we’re going with AI to be both. Extremely enticing, but also a bit scary. I’ll tell you, you know, when we talked about our technology, smart pixel and bullseye, I have a lot of people that say to me, you know, they called out the creepy pixel, right?
They’re like, oh yeah, I’ve heard about you guys. Creepy pixel technology. And. That’s cold, man. That’s bad branding. I don’t like it. I know. No. How about the precise pixel? Go ahead. Yeah. Well, I like the precise pixel and we’re going changing it. Go ahead. So I think that, that what excites me is the fact that.
you know, we have so many different channels now. What, what works for you may not work for me in terms of our two companies, right? And so if I find that social influencers are highly effective for me now, we can do the analysis to determine that we could still segment our audience and we can figure, okay, which of our audience segments is going to best relate to a social influencer.
And that’s how we’ll, we’ll, we’ll heavy up in there. So being able to better utilize and kind of build the word around what’s working for us with these technologies and not be afraid of them. AI is, you know, just another really, I mean, if, if we think about words that we’ve used in the industry for a long, long time you know, machine learning was before AI and before machine learning.
It was big data. Yeah. And so we just kind of rebrand a lot of these technologies. I do think. A. I. Will take us beyond what those other things. But I also think there’s a scary side to a I too. So I think as an industry marketers collectively, we need to be very careful of that. Amazing. Final question, Jim.
If somebody wants to continue the conversation, follow up with your team, learn more about the company and and think about marketing and what they could, how they could benefit. What’s the best way for people to reach out? Yeah, great. Thanks Adam. So what we’ve actually put together is a landing page for your audience with a available discount for Mission Matters viewers and, and subscribers.
You can find that at www dot or slash RMG. As in robertmarygeorge usa. com with a forward slash Mission Matters. So rmg usa. com forward slash Mission Matters. Perfect. And for everybody listening, just so you know, we’ll put that link in the show notes. So you can just click on the link and head right on over.
And speaking of the audience, if this is your first time with Mission Matters and you haven’t hit the subscribe or the follow button yet, we welcome you to do so. This is a daily show. Each and every day we’re putting out new content. and hopefully new entrepreneurial stories that are going to help you along the way in your journey as well.
So again, hit that subscribe or follow button and Jim again, really appreciate you coming on and, and, and sharing all that knowledge with us. So thank you so much. Thanks Adam. Been a lot of fun.