10 Principles of Direct Marketing

17 April 2011

Direct Marketing Business and Marketing Strategy

The basic fundamental principles when planning your direct marketing campaigns. A new customer is the most meaningful financial transaction you can make - instead of thinking of the profit you make on a single sale - think instead of the annual worth of a new customer to you. When your thinking is restricted to the profit you make from a one-time sale there is insufficient encouragement for you to invest in the necessary campaign budget(s) to win new customers. When you think in terms of the continuing annual value of the new customer, you will have every encouragement to invest in winning more customers. 'Viewing customers individually - is the key to relationship marketing.' Principle 1 - The right objective

Set specific objectives for your short and long-term plans, because if you don't, you have no yardstick with which to measure its success or failure.

Quantify your objectives. When your objectives are clear, every element in your campaign or package should be designed to lead the prospect towards the very action that you want him to take.

The method you employ to achieve your objectives will depend on the nature of your product or service and the target market you want to reach.

Principle 2 - Your target market

It is the most important ingredient in your campaign?

Select your prospects with care, and select them with the same or similar profiles as your present customers. The closer you are to your profile and target market, the more successful you will be. It is better to send a poor package to a good prospect, than a good package to a poor prospect.

"Don't sell to everybody; sell to somebody!" (Bodyshop).

Principle 3 - Your offer

The fist step in planning an offer is to think about the objective of your campaign. What do you want your present/past/prospective customer to do? Buy your products, use your services, build traffic into your stores, ask for a sales representative to call, enter a competition, etc.?

Always ask yourself - what is the big benefit my customer will gain from using or even owning my product or service?

The right offer will get you immediate and more results. Select the most attractive offer you can afford. Not all good offers are expensive.

Principle 4 - Your communication

Every part or element of your communication package (personal visit, phone call, letter, fax, E-mail, whatever') must look and feel right to your customer.

'Dress it up.' Use the AIDA principle: Your message must gain the customer's Attention from the start. Involve him and arouse his interest. Develop that interest in to a strong Desire for ownership and usership and get the desired Action.

Principle 5 - Test/analyse and evaluate

You will never know how successful you are going to be. The only way is to test and test continually.

Develop a control strategy or package, test, improve, analyse, improve, test, analyse, etc. It is not the percentage response, which matters; it is the conversion of responses into sales and the profit you generate from this contact.

Take time to ensure that you learn from all your experiences, good or bad. Jock Falkson from Effective Letters always said: 'Remember you cannot bank a response.' Analyse the right things - and analyse it against your objectives.

Principle 6 - Costs and Budgets

Most, if not all, direct marketing activities are expensive and can erode profits quickly unless kept under tight financial control.

Very few companies know what their cost per customer is. If you don't, it is essential that you do so.

You may find that you have lost money on your first sale. But if you pursue it and go after your customers and try to maximise their purchases you will win.

It is the lifetime value of a customer that is important. The cost of servicing customers decreases over time. The cost of each and every contact should be budgeted for (fixed and variable costs) in advance, so that you can tailor it to maximise value for your rands invested.

All customers should have a profit and loss account with you. What he has spent with you and what you have spent on him.

Principle 7 - Training of employees

All your employees should be briefed on all your marketing and advertising activities, in order that they understand why you are doing it and what results you are expecting and what results you have achieved. This is the only way that they will play their part to the full.

Employees who is not adequately prepared or trained to support your programme or handle your responses have ruined many successful contacts.

Loyal employees are linked to loyal customers. Employee loyalty increases business profitability, competitiveness and market share.

Principle 8 - Co-ordination and communication

Successful campaigns depend on proper planning, co-ordination and communication of all activities of all departments and divisions, which are likely to be involved in the process.

Principle 9 - Programming and planning

Allow sufficient time for planning and execution. Plan ahead, but be flexible. Percy Barnevik - Chairman, ABB Asea Brown Boveri, Zurich, said at a conference on global competitiveness: "We don't need any more bright ideas. There are lots of them around. In business, success is 5% strategy, 95% execution."

Take into consideration your company's policies, philosophies and activities. Take into consideration all your employees and your team. Do not forget your competitors. Analyse and evaluate your programmes. Remember that every mistake has a score and a cost.

Principle 10 - Frequency and priority

How many times do you have to see the same person to get a reaction, or how many times do you have to mail to a person to get a result?

Nobody knows! What we do know is, that if you see 10 people and 1 reply, you have 9 uncommitted people.

There are various reasons why they haven't responded - circumstances, did not need your product or service now, your approach, your package, etc.

All we know is - contact them again, and again, and again! It is important to remember - if you have set clear objectives and you have qualified these objectives in terms of numbers, you will know when to contact them again.

The longer you retain customers, the more profitable they become.

Your checklist: 1. Set clear objectives and quantify them; 2. Define your primary and secondary target markets 3. Set your budgets (costs and expenses) 4. Allow sufficient time for planning and execution 5. Your modus operandi 6. Conclusions - evaluation and analysis. The combination of all the above disciplines, ideas and involvement should result in a brighter approach to business, better sales, profits and the occasional failure. Learn from all your experiences, good or bad. You're in business today, for tomorrow!

Take the short and the long-term into consideration: Your business is to satisfy customers;

You must prefer to make a customer than to making a sale; You must cultivate your present customers You must re-activate your past customers You must reach our for new customers You must know what your natural means of communication is. All your efforts are a 50/50 combination of disciplined effort and creative fun.

Here are 30 timeless direct marketing principles he discovered over the course of his long career: 1. All customers are not created equal. Give or take a few percentage points, 80 percent of repeat business for goods and services will come from 20 percent of your customer base. 2. The most important order you ever get from a customer is the second order. Why? Because a two-time buyer is at least twice as likely to buy again as a one-time buyer. 3. Maximizing direct mail success depends first upon the lists you use, second upon the offers you make, and third upon the copy and graphics you create. 4. If, on a given list, hotline names dont work, the other list categories offer little opportunity for success. 5. Merge/purge names those that appear on two or more lists will outpull any single list from which these names have been extracted. 6. Direct response lists will almost always outpull compiled lists. 7. Overlays on lists (enhancements), such as lifestyle characteristics, income, education, age, marital status, and propensity to respond by mail or phone will always improve response. 8. A follow-up to the same list within 30 days will pull 40 to 50 percent of the first mailing. 9. Yes/No offers consistently produce more orders than offers that dont request No responses. 10. The take rate for negative option offers will always outpull positive option offers at least two to one. 11. Credit card privileges will out-perform cash with order at least two to one. 12. Credit card privileges will increase the size of the average catalog order by 20 percent, or more. 13. Time limit offers, particularly those which give a specific date, outpull offers with no time limit practically every time. 14. Free gift offers, particularly where the gift appeals to self-interest, outpull discount offers consistently. 15. Sweepstakes, particularly in conjunction with impulse purchases, will increase order volume 35 percent, or more.

16. You will collect far more money in a fund-raising effort if you ask for a specific amount from a purchaser. Likewise, you will collect more money if the appeal is tied to a specific project. 17. People buy benefits, not features. 18. The longer you can keep someone reading your copy, the better your chances of success. 19. The timing and frequency of renewal letters is vital. But I can report nothing but failure over a period of 40 years in attempts to hype renewals with improved copy. Ive concluded that the product the magazine, for example is the factor in making a renewal decision. 20. Self-mailers are cheaper to produce, but they practically never outpull envelope enclosed letter mailings. 21. A pre-print of a forthcoming ad, accompanied by a letter and response form, will outpull a post-print mailing package by 50 percent, or more. 22. It is easier to increase the average dollar amount of an order than it is to increase percentage of response. 23. You will get far more new catalog customers if you put your proven winners in the front pages of your catalog. 24. Assuming items of similar appeal, you will always get a higher response rate from a 32-page catalog than from a 24-page catalog. 25. A new catalog to a catalog customer base will outpull cold lists by 400 to 800 percent. 26. A print ad with a bind-in card will outpull the same ad without a bind-in up to 600 percent. 27. A direct response, direct sale TV commercial of 120-seconds will outpull a 60-second direct response commercial better than two to one. 28. A TV support commercial will increase response from a newspaper insert up to 50 percent. 29. The closure rate from qualified leads can be two to four times as effective as cold calls. 30. Telephone-generated leads are likely to close four to six times greater than mail-generated leads.

The Principles of Direct Marketing are More Relevant Than Ever

Times change, economies change, laws change, rules change, everything changes. We go from Bust to Boom and Boom to Bust. Brands change, consumers change marketing and media channels change. We move from the marketing age to the Digital age. Always moving always changing and regrettably making the same mistakes and errors as before. History says we should learn from our mistakes, however as we all know to our detriment here in ireland, it seems we do not learn. We have seen AIB nearly bring down the economy with the Insurance Corporation of Ireland debacle in the 70s only for the same thing to happen us again, this time with more banks being involved and the scenario much much worse. What these two disasters have in common is a reckless neglect of accountability. We allowed Bankers run wild without proper checks and balances being implemented, we did not hold anyone accountable. Accountability did not matter, however it always should. Now what this got to do with Direct Marketing? Well simply put, one of the main principles and cornerstones of Direct Marketing as a disclipline is the principle of Control. Control ensures and enforces accountability. If we are in control of our targets and budgets we are ensuring accountability. We want action, we want clear propositions, we want value, we want return on investment, we want results. We want accountability, we demand it. If we demand accountability we nearly always get results. As Direct Marketers we are in the results business. Our business focus should always be on making sure our share of the marketing budget is spent in a way that is Targeted and accountable. In this current economic climate results matter more than ever. Brands are under such market share and margin pressure that they can no longer afford to spend money just on warm fluffy advertising and marketing campaigns. Brands also need results. Brands can no longer afford to spend huge amounts of money on what was loosely called Awareness advertising. Awareness advertising is in lots of cases another description of spending advertising budgets on something that is very hard to monitor and difficult to evaluate, in others words it lacks accountability. The concept of awareness advertising is something, that as an experienced and grizzled marketer, I have always struggled with. You see, awareness is after all an involuntary act, once you become aware of something it is very difficult to make yourself unaware of it. So if a brand keeps spending lots of money making people aware of something they are already aware of, well that seems to me to be a waste of money and why?, lack of proper accountability. If a person is already aware of a brand then surely the brand should be spending money

persuading that person to buy that product or service. Thats where accountability and direct marketing come in again. Direct marketers use persuasive marketing techniques and strong and direct calls to action to get those consumers to buy. In this digital age the principles of direct marketing, namely, Targetting, Interaction, Continuity and Control are particularly relevant. Digital marketers really need to up their game in the whole area of targeting. Proper targeting will make the message more relevant and relevancy is the key driver in getting consumers to engage with a message. If the message is not targeted it is not relevant. If a brand can develop a targeted and relevant messaging program for its consumers through the various digital media, it is on its way to building a dialogue with its consumers that becomes anticipated by the consumer. Imagine consumers waiting in anticipation for brand messages, now that surely is the Holy Grail. And all this is possible in the digital age through the use of all the various democratised digital media channels such as Facebook, You Tube, twitter, etc. But please for Gods sake be relevant. Relevancy comes from proper and relentless targeting and data analytics. My biggest bug bear right now is all the crap we have to get through digitally in order to get relevant and engaging messages. Also a lot of Digital marketers forget to plan for what comes next after they send their message out there into the ether. There is a big gap in Continuity planning amongst Brands and people using digital media. The consequences of using digital as a channel have never really been thought out in great detail, thence all of the stories we hear about Brands engaging in damage limitation exercises because a digital communication has backfired or has been hijacked by consumers are all too frequent. This is particularly relevant to App development and creation. Remember once you send that digital message or device out there you are in fact ceding ownership of that piece. Consumers will interact and deal with it as they see fit, they will like it, loath it and in some cases change it, and you know even thats not bad if they have gone to the trouble of engaging with it. Its all of the consumers who do not engage with our messages we never think about. Its funny how we never measure the amount of people who never engage with our communication

INTERNET MARKETING Strategy

Internet marketing can attract more people to your website, increase customers for your business, and enhance branding of your company and products. If you are just beginning your online marketing strategy the top 10 list below will get you started on a plan that has worked for many. 1. Start with a web promotion plan and an effective web design and development strategy. 2. Get ranked at the top in major search engines, and practice good Search Optimization Techniques. 3. Learn to use Email Marketing Effectively. 4. Dominate your marketing niche with affiliate, reseller, and associate programs. 5. Request an analysis from an Internet marketing coach or Internet marketing consultant. 6. Build a responsive opt-in email list. 7. Publish articles or get listed in news stories. 8. Write and publish online press releases. 9. Facilitate and run contests and giveaways via your web site. 10. Blog and interact with your visitors.

Definition: Internet Marketing is an all-inclusive term for marketing products and/or services online and like many all-inclusive terms, Internet marketing means different things to different people. Essentially, though, Internet marketing refers to the strategies that are used to market a product or service online, marketing strategies that include search engine optimization and search engine submission, copywriting that encourages site visitors to take action, web site design strategies, online promotions, reciprocal linking, and email marketing and thats just hitting the highlights. Online marketers are constantly devising new Internet marketing strategies in the hopes of driving more traffic to their Web sites and making more sales; witness the increasing use of blogs as marketing tools for business, for instance. (For more about creating a blog and how to use blogs as an Internet marketing strategy, see my Blog FAQ For Businesses.) If youre new to Internet marketing, I recommend focusing on web design and search engine optimization as a starting point; for most sites, the most traffic still comes from search engines and directories. Also Known As: Web marketing, Web site marketing, online marketing. Common Misspellings: Intrenet marketing, Internet marketting

INTERNET MARKETING FOR SMALL FIRMS STRATEGY

An internet marketing strategy is an important part of the overall marketing strategy of a business. This is true whether or not a company is doing business online. It is also true for a small, medium or large size company but especially true for a small company. Small business marketing for a local company can include many offline local advertising methods but needs to include a healthy portion of internet marketing strategies to be successful and maximize sales in today's economy. A small business that is doing most or all of its business online, needs to embrace an internet marketing strategy that helps it be seen by online users. There are five main areas of online marketing that are of interest to a small business. Some of them are more important to local, offline businesses, while others are more effective with online businesses. Many businesses engage in all five areas of small business marketing on the Internet. Search Engine Marketing This portion of marketing is critical for a small business. It gives you a chance to compete with larger companies by being visible in search engines. Since people use search engines to find products both online and locally, it is important that your company place high in search results for words that relate to what you are selling. Professional Internet marketing firms offer this service under the name of search engine optimization. They can make sure your site is visible to those looking for your product when using a search engine. Local Search Marketing This includes website optimization for search results, but in addition, integrates a search engine's function of maps. This is especially true with Google, where your business can be listed with mapping and address information, giving a prospective customer what they need to visit your establishment. Your phone number and website address can also be listed. Customer services will often be available to help someone decide if they are interested in your product or service. Content Marketing This strategy revolves around giving a prospective customer information about your product or service, as well as information in general. Everyone is trying to sell, but those that can inform are more likely to get sales. People will attribute a certain level of expertise to a company, and this instills confidence in the consumer. Content marketing in the past was often done with printed brochures and guide books, but today, this can be done with articles and other forms of information on a business's website. Social Media Marketing This type of marketing can be tricky. Everyone talks about social media, but the truth is, it can be difficult for companies to integrate social media with their business. The type of media used, as well how it is used, is dependent upon the type of business you have. For some companies being in touch with their customers and giving them breaking news can be an important element of success. Other business, such as a local restaurant, have seen success using social media by letting customers know of the latest specials and new additions to their menu. The most important aspect of social media is to use it to strengthen your customer base to achieve repeat sales. Email Marketing This form a marketing is crucial to a small business online or offline. Essentially email marketing is about building a list of customers and prospective customers. This list of names and emails are people who are interested in you business, and you know this to be true because they have opted into this list themselves. Perhaps they were offered future updates on products as well as coupons to sign up.

As this list grows, it becomes more valuable. In fact, many marketing professionals consider this to be, in the long run, the most important small business marketing strategy in the long run.