Using Direct Marketing to Boost Revenue

1. Using Direct Marketing to Boost Revenue

2. What is Direct Marketing? • Direct Marketing is both marketing and sales. Direct Marketing is the translation of one-on-one, face-to-face selling into broad reach media.

3. Always be Selling • Product / Service / Next Step • Response • Continued Engagement

4. General Advertising and Direct Mail – A Simple Comparison Advertising Direct Marketing • Mass • Targeted • Competitive Attention • Selective Attention • Breadth • Depth • Remember • Respond • Impression • Decision • Pay for Everyone • Pay for Targets

5. The Two Most Important Factors in DM • Pre-selection • Refining the target based on pre-existing level of interest • The Offer • What does it take to provoke response?

6. The Relative Power of Media Strengths Weaknesses • Sight • Likeability • Sound • Demands Time • Eye Contact • Expensive • Body Language • Interaction • Demo Ability • One-to-One • Provides Time • Pre-selection • No Attention Competition • Chemistry Face-to-Face

7. The Relative Power of Media Weaknesses Strengths • Easy not to engage • Sight • 4 seconds to involve • Pre-selection • Low attention competition • Postal system dependent • List dependent Direct Mail

8. The Relative Power of Media Strengths Weaknesses • Sound • Interruptive • Some Chemistry • Requires Time • Interaction • Annoying • One-to-One • Pre-selection • Low Attention Competition Telephone (Outbound)

9. Some Unfortunate Truths About Direct Marketing • The more we need people to read (listen, watch), the less willing they are to do so. • The more resistant the universe, the more expensive the cost of buying sales time (choice of medium, and devices within each medium; offer) Cost of persuasion power is inversely proportional to the level of pre-existing interest within a prospect universe • The more it costs to acquire a customer, the less valuable the customer.

10. Sales Support – The Sales Sequence • The sales sequence is the set of decision steps necessary to close a sale matched with a set of communications designed to provoke each step. • Direct Marketing tools are typically used to narrow the universe to “qualified prospects” . • DM sells the next step in the sequence. • The cost of acquisition is the total cost of all the contacts at each step necessary to provoke a single decision to the next step.

11. The Cost of Acquisition in a Sales Sequence Total Cost of Acquisition = $20 + $100 + 770 = $890

12. Common Sales Sequences Sell the next step.

13. Qualified leads are based on need – not interest Ad Generated Interest Need Generated Interest Ad Ad

14. Selection Factors • Consumer Lists • Age • Income • Gender • Marital Status • Homeowner • Dwelling Type (home or apartment) • Mail order buying (by product type) • Interests • Presence of children • Geographical (zip, SCF, county, state, carrier route) • Business Lists • SIC (Standard Industrial Classification) • Employee Size • Annual Sales/Revenue • Title • Any other information captured on subscription form (publications) • Corporate linkage information • # of years in business • Geographical (zip, SCF, county, state) • Credit information

15. Outer Envelope Formats • Window Envelopes • Plastic Card • Invoice • Personal • Odd Size (9x12; 6x9) • Offer Disclosing • Lumpy • Certified

16. Outer Envelope Formats • See Through • Dimensional • Tactile Devices • Teasers • 1st Class vs. Third • Stamp vs. Meter • Handwritten • Invitation

17. Letter Planning and Structure The Opening The Body The Close The Signature The P.S.

18. Writing Leads for Letters – How to Start • A strong, startling fact, research result, something true of their industry • Establish a connection • referral • similar occupation • status as a customer, etc. • recognition of status as a donor/contributor • Tell a story • A quote • Reference a competitor Drop Paragraph One

19. Post-Call Follow-Up • Letters/email from the rep • New information (pricing, research, etc.) • Discount • Appeal rotation • Decision cycles

20. The Three Phases in the Lifetime of a Customer Phase Phase Phase 1 2 3 Relationship Formation Reinforce Decision Key to Source and Channel Relationship Cultivation Personalize Build Trust Quantify Potential Relationship Management Cross-Sell Fit Value Proposition to Customer Needs

21. The Second Transaction is Critical • Customers are converted or lost in the first 30 – 120 days • Create positive early experiences that cement the relationship • Fast shipping, delivery • Project LTV from early behavior • Provide opportunities for additional transactions while interest is high • Use communication to drive behavior and the relationship

22. FAS Management – Retaining/Growing the Relationship at the Lowest Cost

23. The Issues in the Management of FAS • Relationship retention • Relationship growth • Matching cost of retention and growth stimulation to LTV • Retention and growth are accomplished by frequency of contact and power of contact • It is easier to convert ‘B’ customers to ‘A’s’ than D’s to C’s

24. FAS in a Sales Support Situation

25. The Last Premise Focus on Them “You can make more friends in 2 months by becoming interested in other people than you can in 2 years by trying to get people interested in you.” Dale Carnegie

26. Thank You

27. Recipients of Direct Mail • Customers • Have pre-existing interest • Will read more copy • Require less costly mail • Mailing to customers generates $ and improves retention • Frequency tolerance • Prospects • Pre-existing interest is “likely” • Requires more expensive mail to buy readership • Resistant to reading (looking for a reason to stop) • Relevance is key • Influencers • Gatekeepers/Saboteurs • Mail Room • Administrative Assistant • Spouse • Post Office

28. More Unfortunate Truths - Direct Mail • People read direct mail, looking for a reason to stop • The margin of error on direct mail is greater than in any other medium. • Special interest offerings tend to do best in direct mail, but the more specialized the interest, the more limited the growth potential (requires product proliferation – old/new/same). • There is an inverse relationship between degree of pre-existing interest and cost per response. • There is a direct relationship between readership and response. • People are not dying to hear from you. • Very little body copy is ever actually re-read.