Data Detective: Cracking the Code of Customer Behaviour with Jim Harenchar

[00:00:01] If you're wondering where your customers are coming from and if you're thinking you've got all these different channels on Social and they're all working for you, but you just don't know which ones

[00:00:11] My guest today is going to be fantastic for you because the answer he tells me lies in the data Your question back to me will be great. I've got so much data How on earth do I possibly understand any of it? And that's why we brought Jim Harenchar

[00:00:27] Who is the CEO of a company called Response Marketing Group joining us from Richmond, Virginia because He's got the answers got clients including the Ritz Carlton who rely on him for response attribution Jim, welcome to the show

[00:00:41] Thank you, Jim. Good to be here. It's good to have you because let's face it We've got more and more data and there's entrepreneurs. It feels like we've got data overload or certainly data overwhelm Facebook, LinkedIn, TikTok

[00:00:57] How on earth do we know which ones are working? So Jim tell us about a little bit about RMG and how can we know and plan our marketing activities Sure, absolutely. So Response Marketing Group was founded in 1986

[00:01:16] So in October we will celebrate our 38th year anniversary. I guess congratulations. That's some real data. Yeah Yeah Very true. Thank you and We started in an era gym when there were really only two forms of direct-to-consumer marketing There was telemarketing

[00:01:36] Which everyone hated because the phone call came in between five and seven o'clock at night and the other was direct mail So I think we were slightly less hated But we were very very heavily leveraged into the direct mail business

[00:01:49] We would mail hundreds of millions of pieces of direct mail But that was an output of our focus on data as a foundational aspect to marketing And so we first started in the business with financial services companies because back in the mid to late 80s and early 90s

[00:02:07] Banks were very acquisitory. They were very aggressive in terms of recruiting new clients into the market space and Telemarketing was a piece of that Direct mail was a huge piece of that And so we would use the data that our clients maintained and we would build predictive models

[00:02:25] So if Jim James was an existing client of XYZ Bank and we wanted to find more Jim James We would use all of your demographic attributes your age your income presence of children the car you drive One never knows what turns out to be predictive

[00:02:42] And we would load that into a model to find more Jim's and then we would do direct mail to everybody that looked like Jim and Hope that just like Jim they they took that product or service

[00:02:52] And so that was as I say the foundational aspect to RMG in in the 80s in the 90s As we had a Expansion of the available channels that were available for marketing. We grew with those

[00:03:06] And fast forward to today. We have more channels than we ever had before and so we're believers And advocate in our engagements that nothing has changed as it relates to data being the foundational aspect of that

[00:03:21] Whether it's the data you have many of our clients are overwhelmed with data Or the data you don't we have some very small clients that We refer to it is a digital shoebox, right?

[00:03:34] They're collecting names and putting them in Excel spreadsheet and keeping that on a laptop computer that works too So there is quite a span on the landscape of sophistication around database marketing and specifically marketing in the mid-2000s

[00:03:50] Well, Jim what we'll do is we'll go through some of the technology and Keep it so that for those of us that are not tech heads. We can understand where you're coming from And then we're going to look at some customer segmentation

[00:04:04] Which we know is so important and went over the Ritz Carlton, which you helped improve their Room stays by 33% by some of your attribution. So it says on your website know every visitor And I'm assuming that means to your website or to any social channel you've got Jim

[00:04:22] So I thought that in this age of GDPR and crookulous Marketing that as a consumer I was anonymous Are you saying that that's not the case? If so, what's happening? Well, I think that you're probably less anonymous than you think you are Jim and most of us

[00:04:43] And we find that typically when we walk through with clients what our capabilities are and what they're exposed to without knowing Most are shocked to be quite honest Obviously, I'll speak to us compliance and regulatory requirements, but appreciative of GDPR

[00:05:00] We have been fortunate to build a robust database over our 30 plus years And so we have nearly a hundred and fifty million households in the US or individuals where we're tracking some level of information When I say tracking we've either purchased Acquired or licensed publicly available information

[00:05:19] And so there are technologies like what we offer like what our peers and others offer that certainly now Deanonymize you to your question Regardless of whether whether or where you are So if you're on a website, you may think you are not being tracked

[00:05:36] And it is possible that you certainly can remain anonymous Depending upon, you know, whether you have rejected cookies or pixels or anything more if you've rejected location tracking though That anonymity still does exist But what we have found in in I think it was 2023

[00:05:55] Deloitte actually published a fascinating survey of when exposed to an opt-in or opt-out To someone who lands on a website 82 percent of people choose to do nothing And so in the US we work off of implied consent

[00:06:12] So that means that most companies are then assuming that you chose to be tracked And they're getting a lot more information on you and you're no longer anonymous So the Deanonymizing as you say so we leave digital footprints and digital crumbs all over the place

[00:06:33] for a smaller business How does this work Jim and you know, what can we do? What guidance do you give at RMG when it comes to if like the thinking About data because we could talk about the management of data maybe

[00:06:50] Next but what about just the mindset the approach because we we do have this kind of overwhelm I Certainly do with all the different channels and the analytics So where do you help people to start Jim with there with their approach? Let's start there

[00:07:06] Well, I think it from our perspective Jim It's critical to understand that where others may see data as throwaway meaning it's not meaningful We think that everything may very well provide some sort of insight to an individual We do a lot of work in the tourism industry

[00:07:23] And I'll give you again a fairly crude example But in a conversation with one of the southeastern states We were talking about data that they maintain and they say well We just don't really capture that much information

[00:07:34] We have people that walk into a visitor center and say hey I'd love to get a visitor's guide or can you tell me something or we have someone that goes to a website?

[00:07:41] It fills out a form and says will you send me a printed visitors guide or can I download a digital visitors guide? Because I'm thinking of coming to New Orleans for example This particular state happened to have a good old-fashioned Three-ring binder at visitor center

[00:07:58] And so when you entered and at the state and you got off you might be buying a refreshment You might be going to the restroom whatever the case might be It was an opportunity for people to enter their name their address

[00:08:10] Where they were going in the state and how long they were staying and I said well How many of those do you have and in my context that well probably about 700,000 from last year. I was like 700,000 people have voluntarily provided you with information

[00:08:27] They considered that a throwaway but to us my goodness if we can enter that even into You know a crude spreadsheet we have information that tells us who is visiting your state where they're coming from

[00:08:39] How long they're staying where they're going to more than surveys or research or anything else could provide us so Point being what you might think is a throwaway Actually is valuable information that you ought to say to your point every crumb of

[00:08:56] Information that you can may lead to building a more robust profile of your customer so to that point then Jim if you like a Even just a simple rudimentary offline survey in a store With or without an incentive to fill in the form

[00:09:15] Could be a value right which you could then I guess scan into your database Absolutely. Yeah, absolutely. You know that we've advised some clients from time to time who want to build

[00:09:27] Their e-newsletter audience or they want to identify people that would like to sign up to receive promotional sale Opportunities and things of that nature. We've told them create just a small little a little postcard Size piece that sits next to your I call it a cash register

[00:09:44] No one uses cash anymore, but deep to your checkout area and they can voluntarily take that It has a QR code on it You're not asking them to collect information because if you're like me Jim anytime

[00:09:55] I show up at a retail store and someone says can I have your email address 90% of the time? I say no, I'm not going to give that to you. I don't I don't need more email

[00:10:03] But if a person is interested they can take a postcard it has a QR code on it They can then with their phone snap it they can sign up for any newsletter to receive your promotions

[00:10:12] All that's cost you is literally less than a hundred dollars to print up Maybe a hundred small postcards with a QR code that you keep live That's a really really good piece of advice And Jim just for those people that don't know that's quick response

[00:10:27] Code isn't it when you can make them with the QR generator or even can for now? Actually, you can put in the URL and it's very very easy to do So this is really important as you say to gather data

[00:10:41] Even at a small amount. What do you do at response marketing group with helping people to understand customer journeys because You talk about someone coming in the store That's part of their journey isn't it and as a as a company online or offline profit or non-profit

[00:11:00] We know that the customer is on a journey not always to purchase but sometimes to investigate to research Jim her and show what what do you guide your clients to do to think about that customer journey from a data perspective?

[00:11:15] Well, we've developed technology Jim that allows us now when someone is on your website to be able to better understand where you came from And and what pages you're viewing on our site

[00:11:28] So, you know, we've all had access to Google Analytics and that has been the de facto reporting and measurement tool for success of any type of web-based activity But that tool granted it has been updated with GA4 But it still has a legacy to 1990 or 2000

[00:11:49] 1994 I think believe it or not so There are better ways. So we happen to have a product and I Won't go too deep into that at this point in time But the technology exists to de-anonymize website visitors

[00:12:03] So, you know what you can do in tracking that customer journey is Validate the dollars that we're spending across all of the different channels that we have to choose from Actually driving return on our investment

[00:12:16] Which we see as a critical element of what everybody should be doing whether you are elementary in your marketing capabilities or whether you are ultra sophisticated Making sure that you are ascribing some level of response attribution

[00:12:29] So that you understand that the budget that you have available is being used to generate the greatest return on investment And so for us, it's deploying whether it's ad technology products We have smart pixel as you you have up on the on the site now

[00:12:44] Bullseye is another product of ours where we're actually capable of building a geo frame around a space That would identify the people that are inside that space So with this image here for example, we can geo frame that tennis facility and and we can tell

[00:12:59] The promoter or the sponsor or the owner who those people are who are actually sitting in those seats That's very powerful and all of that is done with compliance Jim. I just to clarify that this is all Not in in some way black hat or diet web

[00:13:18] Stuff, I mean you look at like a perfectly respectable man And you've been in business for a long time all the the tracking that you're doing RMG is Just using obviously proprietary technology But within the compliance of US regulations Absolutely, yeah, you're spot on Jim. So

[00:13:40] In the US we have a we have a small team of attorneys which are following Regulatory changes that occur and from year to year states roll out different types of requirements We have 12 states in the US which have a higher level of compliance requirements than others do

[00:13:57] But there is a baseline and so yes, I mean we are dealing in what we call publicly available information We're not dealing in PII whether that's information that we have Subscribed to or licensed whether that's collection of publicly available information for example

[00:14:13] DMV data division of motor vehicles, right? So so driver information That's publicly available information so we can get VIN data. We know what kind of car you drive We know what make model and year of that vehicle There are subscriptions to magazines those publishers resell that information

[00:14:30] So we know that Jim is a golfer and we know that he subscribes to golf digest and golf magazine so all of that information is publicly available and that is what we use and that's what our 150 million databases comprised of wow that is so smart. I'd never

[00:14:46] Really thought about how you can map all the data from these different publicly available datasets and Overlay them Jim Let's just talk about a case study because you did mention the case study or fairly famous hotel and just to give people an idea of what data could

[00:15:11] sort of Help in terms of looking at market segmentation and also really campaign planning because Segmentation is upstream and then it's about campaign planning, isn't it? Do you want to just take this through the Ritz Carlton? Okay, so what did you guys do for them there?

[00:15:26] Yeah, so we were we were invited in one of the things that they recognized was there was a real challenge in the ability to be able to identify their most profitable customer segments and so we were fortunate to get several

[00:15:42] Million guest records that they shared with us just simple information name address We overlaid that against our database to understand what we were able to track And so then we ended up identifying nine total customer segments and each of those segments got a name and

[00:16:01] We identified that the top three revenue generating segments were all unique And you can see, you know here that what we're trying to find out is of those people that are business travelers For example is their booking behavior different than the person who might be a celebrator

[00:16:17] The celebrator is somebody that shows up on a Thursday or Friday and stays till a Sunday or Monday And they're celebrating something could be an anniversary of birthday ten years clear cancer. Who knows whatever

[00:16:27] And so we identified those top three revenue generating segments and the uniqueness of each of those to understand What are the specifics that we can incorporate in our? Advertising and even going so far as develop custom landing pages for each of those segments

[00:16:43] So if I serve Jim James who falls into a let's just say empty nester, you know, no kids Over the age of 60 income of this level well that person is going to get exposed a certain type of ad that others will not and so

[00:17:02] We identified those segments and the lift in Booking rates that I mentioned was a result of recognizing that a celebrator Books within six months before an event And we serve him a particular type of messaging and he lands on a particular landing page that is

[00:17:20] Representative of most likely what he is like same thing with a what we call the well-traveled executive the person that would book 60 days or or less from their arrival date and then last was A Sunseeker so a person that went to a beach location every year booked

[00:17:39] 11 months or more in advance and we showed kids on stand-up paddleboards kids building sandcastles Which traditionally you would have never seen in a Ritz Carlton ad So it was aligning what we identified in the segments with the copy the creative and the messaging that

[00:17:58] resonated with that audience and for those people that want to go to the website its RMG dash USA Dot-com and you can see the case study in the numbers for example. They've got a 10% improvement in engagement they analyzed 3.3 million guest records and

[00:18:16] Identified three top segments driving 72% of revenue So we kind of got that 80 20 rule that sounds as though Pareto is at work there as well Yeah, but Jim then are you saying that Company can have more than one avatar because we often are

[00:18:38] cajoled into thinking that we should niche niche niche and That a company whatever the size Ritz Carlton or a small motel should really be focused on one customer avatar and what you've Really detailed there is that there are multiple

[00:18:55] Customer avatars segments going to the same place, but for entirely different reasons How do you reconcile? that a company has multiple segments Well, I think as consumers we all view Those companies that we do business with through our own lens whatever our point of engagement is and

[00:19:19] That is typically predicated on kind of where you are in life, right? If you are 35 years old with three kids You view life differently than 65 years old with no kids And so we're just advising clients to recognize that's the case

[00:19:35] It is not a one-size-fits-all and if you know there's been so much talk over the last 15 years about the user experience customer experience and making sure that the

[00:19:48] Marketing touches that we have an opportunity to have with our prospects and our clients align with the way they want us To understand them and communicate with them and and to me You know the cake the cable business I credit I find fascinating they

[00:20:06] They developed something called advanced advertising years ago where you and I could be neighbors Jim and at the simultaneous time We're watching the exact same program and we're served two completely different ads

[00:20:16] And so to your question, I think that it is I think it's responsible on the part of the companies to recognize that Their consumers look all sorts of different shapes and sizes

[00:20:26] And so the better that we are at understanding what those profiles and segments are so that we can deliver messaging That's relevant to them. You know I'm I'm far more likely to open an email that speaks to me based on knowing who I am and with something

[00:20:40] That is that is interesting to me as opposed to something that's absolutely not I'm not buying bite baby diapers anymore. So No, you and me both although I'm only a bit alarmed that Jim has thought I'm over 60 with no children I am actually still just under 60

[00:21:01] Don't I could have been the 35 roll with a cup but I'm not I recognize that but you're also what you've what you've identified there is Other than my age of course is the impact of Kind of customer responsive Marketing platforms for example where websites can serve up

[00:21:25] individual pages. I Had a guest called sand and act all from Holland for example serving up From his company serving up unique web pages according to as you say geography age and all the demographics are the same the same organization

[00:21:44] Healthcare in this particular case we talked about we're serving entirely different pages of content Depending on the demographic that was reaching the the pages was during COVID. So it's very interesting Jim let's we can't get away from a question about budget

[00:22:01] I'm not gonna ask you for a quote by the way because that'd be pretty unfair, but how affordable is Not so much Response marketing group because obviously you're dealing with big and small companies but

[00:22:15] And people can come to you for a quote, but are the kind of technologies and approaches that you talk about Only accessible to big companies or is this something that now people Running a medium-sized organization or even a solopreneur can access We'll be back after a quick break

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[00:23:13] Yeah, I would say Jim like all things I'll give you a probably an inappropriate or crude Comparison but you know we can all buy a car

[00:23:23] And we can buy a hundred thousand dollar car, but we can probably also I think they I think you can still buy cars in the $20,000. I don't know but we'll use that as our example and you know, you're not gonna get the same thing I know one yeah

[00:23:39] Very true very true But but point being that I think there's a there's a wide range and depending upon what your investment level is, you know I can't I Can't advocate strongly enough Jim for the fact that that folks just recognize that at any price point

[00:23:54] You're capable of being able to understand where the dollars are being spent and to measure that effectiveness And so for us we feel like we're highly competitive. We're a small privately held company We feel like we've got a very competitive price point based on what we're delivering

[00:24:12] We tend to focus on on really, you know, just a small set of things We're not we don't want to be everything to everybody We are kind of data geeks if you will a data boutique as some refer to us

[00:24:24] And so I think that depending upon a size of a company and their range of services and where their expertise is you can Absolutely find something at an affordable level and you can then go up market as much as you as you desire

[00:24:40] That's good to know so data is Universal but it's also universally accessible just probably with different levels of data management and Analysis and some of these tools as well are very affordable now in terms of delivery of content

[00:24:56] Jim I couldn't ask someone that knows so much about data I couldn't let you go on without asking about AI Jim, what's your view of the impact of AI on the entrepreneur's ability to manage data Well an oversimplification from my perspective Jim, I think AI allows

[00:25:20] Let me tie it back to your previous question It allows the smaller business that doesn't have an unlimited budget has a finite budget To be as effective and to write copy and to develop creative as if they worked with the Martin agency

[00:25:35] One of our great agencies right here in Richmond, Virginia Known worldwide AI presents the opportunity to do these things that otherwise folks would not have had access to they They didn't have the staff. They couldn't afford to hire an expensive agency

[00:25:50] And I think AI also makes the job easier such that you can now plan in advance So, you know we use it in in the Application of we want to continue to engage with our customers and our prospects We've built out a robust CRM of our own

[00:26:07] and so If we can find and deploy AI to help us in terms of writing those emails faster doing more Work in terms of research We often use it. We're actually including it in our normative database such that if you for example

[00:26:25] Let's go back to our Ritz-Carlton example. If you say I'm looking for 35 to 45 year old women who have kids and live in a household that makes more than a hundred thousand dollars AI now gives you the ability to do an infinite number of searches to identify

[00:26:40] What markets have a similar representation of those folks and then you can drill down even deeper to find those individuals? So I think it's been exponentially helpful. I don't think it's the panacea

[00:26:53] It's it's a glorified firm of a form of machine learning to some degree, but it allows us to be able to crunch huge And vast arrays of data far faster than ever before and deployed appropriately. I think is highly successful

[00:27:12] That's wonderful news and I think my experience as well is that it really does It gives us superpowers, but it doesn't rob us of our powers, right? Which has got to be a good thing. Very true Jim Harenchar with your

[00:27:26] You know long-standing from 1986. That's a credit you to keep a business going for that long So you've got a lot of history, but also what would you say is your view on the trends?

[00:27:36] What would you say is one hard trend that you see taking place over the next three to five years? What should entrepreneurs be looking for when it comes to data attribution? Well

[00:27:50] To your last point Jim, I think AI is the wild card in that how much it's going to change the marketing and advertising business Let me speak to that in general right. I think that you know we've

[00:28:01] We now have data systems that can process data so much faster We can deploy things like artificial intelligence at the end of the day. I'm going to be curious to see and I'm not a futurist

[00:28:15] Unfortunately, but but I'm going to be curious to see how much we migrate ultimately back to The sincerity of marketing and advertising taking all the information that we're able to glean from the data sources from the AI

[00:28:28] That'll help us to understand the Jim James and Jim or inch ours better and Making it as much of a personal experience as it possibly can be I think that's where folks are migrating and companies are trying to figure this landscape out

[00:28:43] So that my user experience whether I'm booking an airplane flight whether I'm booking a hotel room Whether I'm going to buy a car whether I'm choosing to decide what TV program. I'm going to watch tonight It's customized to me and it's relevant I think we'll continue to see

[00:29:00] new technology emerge and customers and and all of the The infrastructure that supports marketing continue to work around that Jim I agree. I think we might move from personalization to at scale to authenticity

[00:29:19] At scale Jim what about a podcast or a book because you're playing me someone who is Thinking a lot and reading a lot. What would you what would you refer to us to read or to listen to? so I Recently this summer on a beach vacation

[00:29:39] Read a book called trillion dollar coach Which was written by May Habib and it's a story about Bill Campbell one of the great Silicon Investor Silicon Valley investors Who kind of created the whole concept of private equity and investment in small startups? I found it fascinating

[00:30:02] And so something I would definitely recommend Jim wrench I'd recommend anyone interested in data to come and talk to you if people want to come and Find you Jim. How can they do that? Sure, so our website address is RMG

[00:30:23] Dash USA so Robert Mary George dash USA comm And on that is my email address our team's email address and our phone numbers That's one of them, of course will include those details in the show notes Joining me all the way from Richmond, Virginia

[00:30:43] We've had a very very interesting talk and really Give me some insights, but also some inspiration Jim that data can be managed But also data is enabling us to unlock multiple Custom profiles for one business and things actually very liberating their insight

[00:31:02] That also it's helping us to efficiently allocate our time and money To the marketing using data that's readily available and legally available as well So Jim, thank you so much for sharing so many wonderful wonderful insights with me and my fellow unnoticed entrepreneurs today

[00:31:20] Absolutely Jim. Thanks for having me You be listening to me Jim James in the UK talking to Jim Harencha Who is the founder and CEO of a company called resource marketing group?

[00:31:35] And of course as always I will put his details in the show notes and until we meet again I just encourage you to keep on communicating