Boost Returns on Your Direct Response Investment Carrie Hoye LLC For ASTECH Strategic Marketing Roundtable August, 2005
The Marketing Landscape Has Changed <ul><li>Proliferation of media and distribution channels </li></ul><ul><li>Declining t...
Why Direct Marketing? <ul><li>It is a measurable, tested marketing method </li></ul><ul><li>It is a $1.9 trillion business...
#1  Start Your  Direct Marketing Plan by Starting Over <ul><li>Define (or redefine) your strategy </li></ul><ul><li>Determ...
#2  Do A Baseline Evaluation <ul><li>Run an asset / liability assessment of your circulation and marketing organization: <...
<ul><li>Encourage your staff to constantly challenge current approach </li></ul><ul><li>Overtly recognize and reward seeke...
#4  It Takes a Village <ul><li>Growing readership isn’t just a Circulation issue </li></ul><ul><li>Find your Editorial adv...
#5  Speaking of Branding… <ul><li>What is your customer’s perception of your newspaper? </li></ul><ul><li>Capturing the Vo...
#6  It’s true:  Keeping Customers is Cheaper.  <ul><li>Focus on the call center </li></ul><ul><ul><li>It’s where the major...
#7  One to One Marketing May Not be Your Goal… <ul><li>…but understanding clusters of customer behavior should be! </li></...
# 8  What Drives Response? Remember the Fundamentals Creative 30% Offer 30% List 40%
#9  Planning Your Campaigns <ul><li>First things first… </li></ul>LIST:  Who do I want to reach? OFFER: What  will be most...
#10  The Power of the Outer <ul><li>When developing creative, start with the customer’s first impression: The Envelope. </...
#11  Test a New Kind of Premium <ul><li>It doesn’t need to be expensive, but it does need to have perceived value </li></u...
#12  Don’t Squander a Sample <ul><li>A sample is a powerful selling tool </li></ul><ul><li>If you are spending $$$ on a sa...
#13  Know Which List  Meets Your Needs <ul><li>Sources: </li></ul><ul><ul><li>Compiled -- best for gathering large quantit...
#14  Handle Your Database With Care <ul><li>Develop and adhere to: </li></ul><ul><ul><li>a strict maintenance schedule </l...
#15  Borrow From the Experts <ul><li>Many control packages have been in use for years </li></ul><ul><li>If you’ve seen a p...
#16  Hire a DM Expert <ul><li>Save money through an understanding of: </li></ul><ul><ul><li>Postal sortation </li></ul></u...
#17  Respect the Science <ul><li>Use past marketing results as your guideline for response projections </li></ul><ul><li>U...
#18  Use Online Communications as Your Test Kitchen <ul><li>Easy to implement </li></ul><ul><li>Immediate results </li></u...
#19 Manage Your Vendors <ul><li>Develop pay for performance partnership agreements </li></ul><ul><li>Don’t let your consul...
#20  Follow Through on Your Investment  <ul><li>Stay the course </li></ul><ul><li>Build upon your successes, analyze your ...
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Boost Returns on Your Direct Response Investment

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  • Time-honored ways of getting messages to consumers through TV commercials are less effective, and in some cases a waste of money Marketers need to get more sophisticated about their marketing mix models. And that means direct response needs to play a prominent role in your sales and marketing plan.
  • Well, the obvious answer of course…because it works. Direct marketing is measurable. It is time-proven. It is a precise, competitive science. And it’s still the most viable way of growing customer bases. So what do you want to do to get in the game? Or if you’re already in it -- to improve your game. Today we are going to briefly touch on 20 ideas designed to improve your direct response ROI. We’ll start with high level strategies, then move into some proven tactics.
  • Here’s the critical question: do your Publisher and senior managers understand the value of direct marketing investment? Improving direct response is a long-term journey. It costs more to acquire through direct mail than through telemarketing or crews, it takes more time to build mass. You will not see retention pay-off for six to 12 months.
  • It is critical that you are brutally honest when you undergo this exercise. Remember, the three key reasons most strategies, no matter how well developed, will fail: capability, capacity and focus. Assessing your organization and your sales budget requires brutal honesty and some hard decisions.
  • Remember, you are not on your own when it comes to developing new and winning ideas. There is so much free information available to you and your team: websites, online newsletters, classes, consultants, direct marketing organizations. You will find that many ideas are transferable across industries, and tests are replicable. One final piece of advice -- people learn most rapidly when they have a genuine sense of responsibility for their actions.
  • Take responsibility for expanding an understanding of the science of direct marketing throughout your organization.
  • Remember, brands are defined by consumers, not by marketers. You probably wouldn’t be surprised if it isn’t your great TV spots, or even your award-winning journalism. The only way you will know is through a rigorous evaluation of your customer’s opinion
  • Before we get into acquisition tactics -- let’s remember that this is more about keeping current customers than getting new ones. So look to the obvious places for customer discontent because there are areas of enormous opportunity.
  • I’d like to dispel a common theory. While target marketing is appropriate for every marketer, the nirvana of one to one marketing doesn’t make sense for most. One to one marketing makes sense where you either have a great deal of information about your customer usage patterns, such as in retail, or when you have many relationships with your customers -- such as banking. I think the sweet spot that newspaper marketers ought to try for is in the efficiencies of segmenting like groups of behavior and developing offers for those groups. There are so many ways to segment a customer file.
  • The reason I bring this old standard up, is because many marketers get caught in the trap of creative development driving direct response testing. It is probably your largest expense as a test variable, but seldom the largest response driver.
  • I’ve conducted “openabilitiy” tests that suggest that 92 to 95% of direct mail offers don’t get opened.
  • With ABC limitations on premium spending in this industry, the good new is…cheap premiums, or even those that are free, can work!
  • When Art Fry invented the Post-it note, it was a huge hit in the 3M offices, but the product wasn’t catching on. So 3M sent out hundreds of samples to secretaries of CEOs, with a letter signed by the secretary of 3M’s chairman. The product took off. So if you are spending the money on newsprint, ink and delivery -- be sure you’re also investing time in developing a topper that highlights the competitive advantages of your newspaper and gives folks some compelling reasons they ought to check it out.
  • When purchasing lists, look for a unit sale about equal to your own.
  • Clean, current data is the most important component. Your investments in modeling and analysis will be lost otherwise, as inaccurate data can lead to depressed response rates at the household level and doesn’t allow you to read back-end results
  • While some intuition will always be a part of your marketing effort -- respect the discipline. These are a few of the most common mistakes I’ve observed in structuring direct marketing campaigns.
  • This used to be the domaine of telemarketing -- quick and easy testing. But online has the advantage of removing the variable of TSR performance. Online allows the greatest level of targeting with the lowest expense.
  • Find ways to institutionalize knowledge from vendors
  • Boost Returns on Your Direct Response Investment

    1. 1. Boost Returns on Your Direct Response Investment Carrie Hoye LLC For ASTECH Strategic Marketing Roundtable August, 2005
    2. 2. The Marketing Landscape Has Changed <ul><li>Proliferation of media and distribution channels </li></ul><ul><li>Declining trust in advertising </li></ul><ul><li>Multitasking by consumers </li></ul><ul><li>Digital technologies have turned control over to the consumer </li></ul>
    3. 3. Why Direct Marketing? <ul><li>It is a measurable, tested marketing method </li></ul><ul><li>It is a $1.9 trillion business, growing at 9.6% annually </li></ul><ul><li>And there’s still a responsive audience </li></ul>In 2002, over 60 percent of the adult U.S. population were Direct Marketing consumers
    4. 4. #1 Start Your Direct Marketing Plan by Starting Over <ul><li>Define (or redefine) your strategy </li></ul><ul><li>Determine your critical success factors </li></ul><ul><ul><li>What determines your business success? </li></ul></ul><ul><ul><ul><li>Circulation </li></ul></ul></ul><ul><ul><ul><li>Circulation Revenue </li></ul></ul></ul><ul><ul><ul><li>Topline Organization Revenue </li></ul></ul></ul><ul><ul><ul><li>Cash Flow </li></ul></ul></ul>
    5. 5. #2 Do A Baseline Evaluation <ul><li>Run an asset / liability assessment of your circulation and marketing organization: </li></ul><ul><ul><li>Do you have the tools you need to be successful? </li></ul></ul><ul><ul><li>Can you achieve your goals with your current budget, org structure, talent? </li></ul></ul>
    6. 6. <ul><li>Encourage your staff to constantly challenge current approach </li></ul><ul><li>Overtly recognize and reward seekers of new ideas </li></ul>#3 Develop a Learning Culture Remember, you’re not on your own. This is a replicable process and ideas are transferable. Helpful Hint!
    7. 7. #4 It Takes a Village <ul><li>Growing readership isn’t just a Circulation issue </li></ul><ul><li>Find your Editorial advocates who have a desire to grow readership </li></ul><ul><li>Collaborate with Brand Marketers </li></ul><ul><ul><li>Develop job sharing opportunities </li></ul></ul><ul><ul><li>Set goals in tandem and share accountability </li></ul></ul>
    8. 8. #5 Speaking of Branding… <ul><li>What is your customer’s perception of your newspaper? </li></ul><ul><li>Capturing the Voice of the Customer eliminates the guesswork </li></ul>Brands are defined by consumers, not by marketers!
    9. 9. #6 It’s true: Keeping Customers is Cheaper. <ul><li>Focus on the call center </li></ul><ul><ul><li>It’s where the majority of your cancellations are captured </li></ul></ul><ul><ul><li>It’s the best source of VOC </li></ul></ul><ul><ul><li>Get aggressive with test cells -- find out what it takes to keep a customer </li></ul></ul>Look to the experts. Credit card issuers have the best call center retention practices. Helpful Hint!
    10. 10. #7 One to One Marketing May Not be Your Goal… <ul><li>…but understanding clusters of customer behavior should be! </li></ul>LIFESTAGE DEMO EX vs NON GEO ETHNICITY LIFESTYLE
    11. 11. # 8 What Drives Response? Remember the Fundamentals Creative 30% Offer 30% List 40%
    12. 12. #9 Planning Your Campaigns <ul><li>First things first… </li></ul>LIST: Who do I want to reach? OFFER: What will be most compelling? CREATIVE How can I communicate?
    13. 13. #10 The Power of the Outer <ul><li>When developing creative, start with the customer’s first impression: The Envelope. </li></ul><ul><ul><li>Stamp vs. indicia </li></ul></ul><ul><ul><li>Bold headlines </li></ul></ul><ul><ul><li>Amusing or teasing </li></ul></ul><ul><ul><li>Visually engaging </li></ul></ul><ul><ul><li>Unique paper stock </li></ul></ul><ul><ul><li>Laser personalization </li></ul></ul><ul><ul><li>Closed outer with “hand lettering” </li></ul></ul><ul><ul><li>Clean white, no return address </li></ul></ul>
    14. 14. #11 Test a New Kind of Premium <ul><li>It doesn’t need to be expensive, but it does need to have perceived value </li></ul><ul><li>Take what you already have, and position it as a unique premium: </li></ul><ul><ul><li>Access to editors and columnists </li></ul></ul><ul><ul><li>Repurposed content </li></ul></ul><ul><ul><li>Past editions online </li></ul></ul>
    15. 15. #12 Don’t Squander a Sample <ul><li>A sample is a powerful selling tool </li></ul><ul><li>If you are spending $$$ on a sampling program, be sure your topper has a strong offer: </li></ul><ul><ul><li>Competitive differentiators </li></ul></ul><ul><ul><li>Simple, compelling offer </li></ul></ul>
    16. 16. #13 Know Which List Meets Your Needs <ul><li>Sources: </li></ul><ul><ul><li>Compiled -- best for gathering large quantities of names $ </li></ul></ul><ul><ul><li>Direct Response -- proven responders, hotline respond best $$ </li></ul></ul><ul><ul><li>Your Database -- enhanced with purchased household information </li></ul></ul>Email lists are more unpredictable than mail lists, because they deteriorate faster.
    17. 17. #14 Handle Your Database With Care <ul><li>Develop and adhere to: </li></ul><ul><ul><li>a strict maintenance schedule </li></ul></ul><ul><ul><li>frequent updates and appends </li></ul></ul>You won’t get accurate knowledge from inaccurate data Helpful Hint!
    18. 18. #15 Borrow From the Experts <ul><li>Many control packages have been in use for years </li></ul><ul><li>If you’ve seen a package more than once -- chances are it’s working </li></ul><ul><li>Have your staff “dissect” direct mail packages for copy & creative and find winning themes </li></ul>Good News! Positive results are often replicable.
    19. 19. #16 Hire a DM Expert <ul><li>Save money through an understanding of: </li></ul><ul><ul><li>Postal sortation </li></ul></ul><ul><ul><li>Envelope aspect ratios </li></ul></ul><ul><ul><li>Paper weight </li></ul></ul><ul><ul><li>Ink color </li></ul></ul><ul><ul><li>Print run size </li></ul></ul><ul><ul><li>Agency fees </li></ul></ul><ul><ul><li>And a general understanding of appropriate CPM’s for envelopes, letters, BREs, FSIs, etc… </li></ul></ul>
    20. 20. #17 Respect the Science <ul><li>Use past marketing results as your guideline for response projections </li></ul><ul><li>Use statistically significant sample sizes </li></ul><ul><li>TEST ONE VARIABLE AT A TIME </li></ul><ul><li>Project CPOs at rollout quantities when determining campaign success </li></ul>Direct response test rules apply to telemarketing and internet!
    21. 21. #18 Use Online Communications as Your Test Kitchen <ul><li>Easy to implement </li></ul><ul><li>Immediate results </li></ul><ul><li>Inexpensive </li></ul><ul><li>If done right, online communications can be your greatest path to loyalty </li></ul>
    22. 22. #19 Manage Your Vendors <ul><li>Develop pay for performance partnership agreements </li></ul><ul><li>Don’t let your consultant “move in” </li></ul><ul><li>Limit number of partnerships to maximize influence </li></ul>
    23. 23. #20 Follow Through on Your Investment <ul><li>Stay the course </li></ul><ul><li>Build upon your successes, analyze your failures </li></ul><ul><li>Recap EVERY campaign for key learnings and strategy adjustments </li></ul><ul><li>Start mapping out your 2006 multi-channel, multi-variate test plan today! </li></ul>

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