MindWorks Marketing Communications

Are Direct Marketers failing to ‘measure up’ to direct marketing?

2009-12-07T20:50:00.000-08:00

One of Direct Marketing (DM) key benefits is its measurability. Marketers know whether the campaign has been a success or failure very quickly – almost instantly for some online campaigns – by measuring the ROI. In most cases the key measurability of DM is sales - did the revenue generate a profit after costs.

However there is a growing acceptance that as markets become more cluttered and consumers more targeted other metrics need to be considered when determining campaign success or failure.

The challenge for marketers is to broaden their view beyond measuring just the ROI on each and every DM campaign.

A number of scenarios may exist which drive marketing decisions to only focus on ROI:

Marketers are focused on the virtue of their products and the reasons why they believe the product will benefit prospects
Marketers are pressured in today’s market to strive for short-term goals ie sales
Marketers may view the fact that product has been previously purchased suggests ‘it will again’ and it is as simple as finding more of the same ‘best customers’

So what can happen when direct marketing fails to ‘measure up’ to marketer’s expectations? And how can this be improved?

Generally there are two scenarios faced by marketers who may become disillusioned with DM:

Tried DM but didn’t get the ROI required
Initially enjoyed positive ROI but it didn’t last

To gain consistent ROI over a longer term marketers must make it a rule to establish other objectives during their initial planning to better maximise the measurability capabilities that a direct marketing channel has to offer.

Setting these objectives should ideally be part of the initial direct marketing plan and could include a strategy to determine:

What kind of market intelligence is required (to assist better proposition the product to prospects)
How to obtain this market intelligence (online/offline surveys, loyalty programs, competitions etc)
How can this market intelligence be captured so it is accessible for analysis (CRM)
How will the market intelligence be used to increase sales

Is the extra effort and cost worthwhile? Pioneers of the DM industry, publishers Readers Digest, utilised customer questionnaire and customer (transactional) response so accurately that they knew exactly how many orders of a new product to expect before the product was even produced. They knew this because their customers would tell them exactly what they wanted and how much they would pay.

The following are a couple of suggestions to help marketers better ‘measure up’ when applying DM to their businesses:

Ask what your customer wants and give it to them
Commit to best practice

Ask what your customer wants and give it to them
'Not now, maybe later' theory – as the bulk of your list may not convert to a sale give them a reason to respond anyway. Run a competition (to win your product) with three insightful questions to be answered prior entry submission; Develop a stand-alone ‘survey/questionnaire’ with an online/offline response device (with an incentive); If Telemarketing is used to convert leads ask 3 questions on the conclusion of TM call. Make sure to use a robust sample size of current and non-current customers (previous non-responders) from list; Keep survey simple; Three or four questions answered is better than 20 questions getting no reply.

Note: A short-term option if cost or other reasons are a deterrent then conduct an in-house workshop to identify assumed Customer Insight (see MindSearch® as a guide).

Commit to best practice
DM has always been a blend of Art and Science.

Marketers who choose to ignore one or other of DM techniques are not really following best practice. Simply stated a great idea well executed sent to the wrong list OR a mathematically sound ‘break-even’ equation without a cut-through creative message are always going to perform below their potential best.

Testing is another such key element and every customer contact should be viewed as a test with clear objectives that will lead to future improvement.

Remember ‘not now may be later’! Determine the ‘life time value’ of a customer, it may pay to have the first few contacts as loss generating because when you do capture the customer they will make up for the loss quickly.

Did the pioneers of Direct Marketing know where the road would lead?

2009-11-23T17:57:00.000-08:00

When Drayton Bird, David Ogilvy and Bob Stone started to talk about direct marketing would they have imagined an employee writing a 140 characters in a social network could help a company connect with millions of people – instantly. And that a lone consumer with a video camera and a sleeping ‘cable guy’ could turn public opinion away from one of the worlds biggest communications companies – in the comfort of the consumers living room?

So who is using what?

Twitter’s traffic has grown tremendously in the past year, but how many people are actively using the service versus casually passing by? According to the latest research from eMarketer, that number will be at around 18 million by the end of 2009.

eMarketer considers “users” as people who access Twitter via any platform – Web, client, mobile or otherwise – at least once per month.

The study was also US-only, and the research firm calls its estimates “conservative” in light of other stats that show Twitter has a high abandonment rate (see: 60% of Twitter Users Quit Within the First Month). 

Nonetheless, the numbers are 50 percent higher the estimates that eMarketer made earlier this year, when they projected that Twitter would have just 12 million users at the close of 2009. Looking to 2010, the current estimate is for 26 million users.

Even so, Twitter remains just a fraction of the size of Facebook, who counts more than 250 million active users, 120 million of which they claim login at least once daily.

Meanwhile YouTube get serving well over a billion views a day.

Why does it look so complicated?

2009-11-08T15:49:00.000-08:00

If you want to have a relationship with another person then you need to introduce yourself first. Ask some polite questions to get a sense of the other persons interest's and overtime decide whether you can both get along.

The above is a technique I learnt from a sales course many years ago. I have used this over and over agin for 25 years and regardless of the situation I find myself in it seems to work.

Why then do we try to complicate the process.

One reason could be the obstacles of our own life learnings. That is whatever we have learnt, through experience or observation or teaching adds layers of considerations, uncertainity and doubt - so our thought processes become more complicated.

The result generally mean realtionships are much harder to develop than we would like.

Take an example of a child with a ball. All they need is someone else and they can play a game. So they ask another kid 'do you want to play with my ball'.

Next thing you know is game on.

A day in the life…

2009-11-04T18:06:00.000-08:00

I have been contemplating starting a Blog - this Blog - for a few years. At last I am doing it!
Why?
Direct Marketing has taken me on a journey for the last 10 years. During this time I have been inspired by the opportunity to directly market to people (in business or in their homes) in the most personalised, considerate, transparent and responsive way.

I also saw an opportunity to combine both my strategy and production skills.

However my experiences during these years have suggested that direct marketing is often used by marketers (agency and client) to describe a 'channel of communication' rather than a series of techniques that should be adhered to when classifying a promotional piece as being direct marketing.

My understanding - and my observation from various direct marketing text books - is that direct marketing is a series of techniques. That is a sum of its parts makes up the whole.

So why is a 'brochure in an envelope', an 'email with an attachment', an 'advertisment with a coupon' all labelled direct marketing? Yes these promotional pieces do 'look like direct marketing' that is they are being sent to an individual on a list, however how many are using all/many the DM techniques in unison and how many are simply attempts to meet a short term (agency) need to generate revenue for its own business bottom line at the expense of the clients marketing budget.

We as an industry have sold the key benefit of direct marketing to our clients as being 'measurable and accountable'. No one would doubt this. However how many users (clients) of direct marketing are truly getting the 'real deal'. Afterall being called a DM piece doesn't guarantee success (whichever way it is measured).

I don't have an answer however over the coming months I will share my thoughts, learnings and experiences and try to better understand why direct marketing takes on so many different forms.

Until then