Posts filed under Direct Marketing Strategy

The Arrogance of the Digital Only Crowd

Digital marketers arrogantly believe that the Internet has taken over the marketing world by replacing proven marketing principles and traditional media. They lead their companies to loose market share by neglecting moneymaking opportunities offered with direct mail, print advertising and Direct Response broadcast.

Digital marketing is not a strategy. It is nothing more than an emphasis on the Internet channel. Such a belief overlooks a large body of proven marketing knowledge that has earned it's standing through rigorous and ongoing testing.

I think another reason for this narrow minded reasoning exists because younger marketers in particular know little if anything about how traditional media works.

It's not that the Internet does not play a major role in the marketing mix. But ROI alone does not achieve top line sales objectives.

I receive regular requests from companies that use digital media alone. They ask for help in reaching their sales volume goals. They are usually making money. But they cannot penetrate their target markets deeply enough to crowd out competitors using digital marketing alone.

Here's the telling question.

Would you rather get a 40% margin on $1,000,000 in sales using the Internet alone or earn 20% on $10,000,000 using all available channels? Almost without exception, the Internet alone cannot meet the top line sales goals of most organizations. 

Digital media alone does not replace traditional media and never will. Digital marketers simply specialize in a single medium ignoring profitable channels that grew out of proven advertising strategies.

And here's the larger issue! It's not just about digital marketing versus traditional marketing or even omnichannel marketing anymore. It's about what I call omnistrategy marketing.

Positioning and direct marketing strategies present the principal two marketing approaches for achieving company sales goals. They can work independently of each other. But I have always believed they work better together than alone.

The rationale for this perspective looks something like the flow chart below. Notice how both traditional and digital marketing flow beneath the overarching positioning and direct marketing strategies.

Omnistrategy Marketing.jpg

Notice how the two overarching strategies use all channels to achieve your sales and profit goals. Positioners (often referred to as awareness advertisers) and direct marketers wield all channels to leverage their campaigns. 

Positioners often use only traditional media or only new media (digital). They also combine traditional with new media. Direct marketers have the same options.

Response rates climb with omnichannel support. Response also climbs when general advertisers build product demand through skillful positioning.

What is missing is a clear understanding about how these two principal strategies differ and how they can work well together.

The telling characteristics of positioning only advertising include the following.

•    No database

•    No analytics of customer data since there is no database that relates response to individual records

•    Reliance on primary research rather than response or behavior data

•    Creates demand by often ineffective mass marketing rather than accurate targeting 

•    Tests the market for product design, but it is not based on projectable sampling

•    Awareness advertising positions the product creating product demand

General advertisers sometimes integrate direct response marketing. But they usually do it poorly. The points listed below show how general advertisers practice direct marketing.

•    Direct marketing considered a tactical, “under the line” activity

•    General advertisers do not see direct marketing as a multichannel strategy or overarching advertising approach

•    Little attention given, if any to the offer

•    Awareness advertisers wrongly consider asking for the order as counter productive to product positioning and branding

•    General advertisers do not want to make their activities directly accountable for sales and fear the accountability for sales

Sometimes, companies use the direct marketing strategy without awareness advertising support. They count on the direct response advertising to create demand and sales simultaneously. In most cases, all channels promote the company's services and products. It is not uncommon for the Internet or even direct mail to emerge as the core medium when substantiated by appropriate testing.

These are the characteristics of direct marketing when used as the primary marketing strategy.

•    Positioning often poorly defined

•    Look and feel takes a lower priority than response

•    Customer data analyzed for targeting by demographics, lifestyle and behavior characteristics

•    Primary research not considered helpful except for unveiling new creative concepts or product design

•    A/B split testing key part of the direct marketing discipline that continually strives to exceed past results (testing uses controls to make the response analysis scientifically reliable and scalable)

•    Direct marketing goes well beyond direct mail to include any channel that improves both top line and bottom line sales results

•    Direct marketing is the only marketing strategy that allows true accountability for sales results

Modern direct marketers understand how positioning and awareness improve response rates. 

The bottom line -- improve your results through omnistrategy marketing that merges the best of positioning and direct marketing strategies. And yes, you do want to incorporate new media in your mix.

Posted on August 25, 2015 and filed under Direct Marketing Strategy.

What is Direct Marketing?

For people who aren't familiar with the term, this post describes what direct marketing is. How is it advantageous for a company?

Marketers typically view the world through two lenses. And both are valid even though they do not easily merge for most clients. One is the brander and the other, the direct marketer.

The best marketers fuse these two strategies to maximize advertising budgets. Nevertheless, direct marketers demand a given return on their marketing investment to deliver the company's financial objectives.

Let's address what direct marketing is not

It is not just direct mail or any specific channel. Direct marketers (often referred to as direct response marketers) believe that advertising should contain a clear call to action and that the program lives or dies based on results.

In direct marketing campaigns, all channels in both traditional and digital receive the same treatment and evaluation process.

Effective direct marketing strategy must consider the big picture

Direct marketers further believe that the targeting, offers, channels and integration of channels should be tested on a regular basis to deliver the lowest costs-per-lead or costs-per-sale. 

In direct marketing, one strategy combination might yield 20,000 new customers whereas the same budget through skillful tested can eventually yield two, three or even four times as many customers.

Getting back to branding, one brand advocate, Walter Lander once said "...a brand is a promise. By identifying and authenticating a product or service, it delivers a pledge of satisfaction and quality."

Another way to look at it  -  
Branding is more about the company and direct response revolves around the product.

Direct marketers are concerned about the total selling process and not just the communications. For great results, they know that leads that are not followed up immediately decrease sales and a poorly written phone script with poorly trained telesales people cause many great programs to fail.

For direct marketers, success demands that all selling steps are planned and carefully implemented. General advertisers or branders, on the other hand, typically consider these somebody else's responsibility.

One of the key services offered by direct marketers is direct marketing planning

The content of the direct marketing plan depends upon the objectives of the campaign. It most often involves new customer acquisition or direct response strategies to generate leads.

Lead generation requires several steps to close the sale and incorporates a sales team and a telesales support group. A direct sale "off-the-page", on the other hand, depends solely on single or repeated messages that sell the product without external sales support.

If a new and untested campaign is designed to help the company enter the direct response world or an experienced direct marketing company, the plan always presents the campaign in test mode. This limits the exposure to failure and attempts to find a winning campaign quickly by testing several things simultaneously.

There is no such thing as a one-off campaign in winning direct marketing efforts

Winning direct marketing programs require accumulating learning through ongoing testing always attempting to beat the control (that is, the winning direct mail package or an entire omnichannel campaign).

Testing never ends. Without it, direct programs either never roll out or loose their effectiveness by wearing out the target audiences with too much of the same thing.

What wins today may not win tomorrow. 

Direct marketing plans guide clients to financial success by developing a financial proforma. This proforma works back from the acceptable cost per sale to determine whether the response rates needed to win are within reach.

Direct marketing lives or dies by its results

Direct marketing budgets never look solely at projected response rates, a media plan or some other incomplete approach. Recommended tests campaigns revolve primarily around the allowable cost per sale.

Success equals the plan's ability to acquire the desired sales volume at the allowable cost per sale. 

The client must develop or share their allowable cost per sale (or allowable cost per customer) with the direct marketer before (s)he writes the plan.

The plan includes the product description, the target audiences, the competitive environment, the creative strategy, the channel selections, tracking requirements, digital support, telesales/sales support, audience target list counts and so forth focusing on the budget for the test implementation.

If the company assigns the planning task to dmcg, we can implement all phases of the plan assuring the best possible environment for success.

There are other aspects to direct marketing not discussed here. Which ones does your company ignore in your direct marketing strategy?

Ignoring this Key Direct Marketing Strategy Assures Failure

Nothing baffles me more than seeing clients refuse to test their direct mail creative work, offers and mailing lists. It borders on stupidity. After testing several thousand direct mail packages during my long career in this business, clients refues to test when they could improve their response rates by 200-600% with smart testing.

7 Ways to Avoid List Related Direct Mail and Email Disaster

Other than the product itself, no single component in your direct response mail or email mix comes close to rivaling the importance of the mailing list. If you go to poorly selected names consisting of individuals who do not need your product, can't afford it or care little about it, then the best offer or creative execution in the world will not make the program successful.
Posted on January 24, 2015 and filed under Direct Mail, Direct Marketing Strategy, Email.