Helping Small Business Use Email to Improve their Direct Marketing Success

1. Helping Small Business Use Email to Improve their Direct Marketing Success Wendy Lowe Regional Development Director Protus wlowe@protus.com

2. Agenda Overview – Small businesses marketing challenges • Creating an integrated multi-channel direct marketing program Tips and Tricks: How email marketing can complement your direct marketing plan • What is Direct Marketing?

3. Top 6 Small Business Marketing Challenges • Defining target markets • Developing a marketing plan • Finding time & resources for marketing • Increasing repeat business • Getting consistent referrals • Increasing sales conversions All can be addressed using Direct Marketing Source: Patrick Zuluaga

4. Total annual marketing spending by small businesses Source: Hurwitz & Associates Small Business Survey. June, 2009

5. Why is Direct Marketing Appealing to Small Business? • Can target recipients precisely • Reach those likely to be interested in your products or services. • Not a “spray and pray” approach • Can measure the success of campaigns accurately by analyzing responses • Can create a campaign to fit large or small budgets. • Can launch a campaign relatively quickly. • Can test messages in small groups before going to entire list. • Use direct marketing to test an idea, a pitch, a message, before you spend the big bucks on advertising. • Allows you to see what works and what doesn’t Source: Entrepreneur, Jack Ferrari

6. Why is Direct Marketing Appealing to Small Business? • Direct Marketing = Direct Response • Focus limited resources on activities most likely to produce results • Can protect against overwhelming response • With advertising, you don’t know what kind of response you’re going to get. You need to be able to manage the response. • Can start with a modest-size mailing to study the response and make sure the business can handle the volume. Source: Business Link

7. A direct marketing campaign can help you to achieve the following key objectives: • Increase sales to existing customers • Build customer loyalty • Re-establish lapsed customer relationships • Generate new business Source: Business Link

8. Agenda Overview – Small businesses marketing challenges • Creating an integrated multi-channel direct marketing program Tips and Tricks: How email marketing can complement your direct marketing plan • What is Direct Marketing?

9. What is Direct Marketing (DM)? • Delivering promotional messages directly to customers or prospects on an individual basis as opposed to through a mass medium. • Where deal is done directly between the manufacturer and the customer • No channel intermediaries i.e. distributors, retailers, wholesalers, agents or consultants. • It does not include the use of traditional channels such as TV, newspaper or radio. Source: Marketing Teacher.com, Wikipedia

10. Direct marketing is predominantly used by small to medium-size enterprises with limited advertising budgets that do not have a well-recognized brand message. A well-executed direct marketing campaign can offer a positive return on investment as the message is not hidden with overcomplicated branding. Instead, direct advertising is straight to the point; offers a product, service, or event; and explains how to get the offered product, service, or event. Source: Wikipedia

11. How does Direct Marketing differ from other types of marketing? • Messages are sent direct to the consumer directly • Most often requires a contact list including postal or email address, telephone or cell number • Messages always include a specific “call to action” • Call our toll-free number • Visit the store • Buy online • Responses can be tracked and measured

12. The Internet has turned Direct Marketing into a powerful selling tool • Inexpensive • Campaigns can be launched quickly • Gives consumers another way to interface with the company • In years past, DM follow up was to phone company directly • Now: websites, landing pages: can provide more information • Easier to measure the results of a campaign • Example: email driving people to a landing page • Can track the number of people who open the email, click to the landing page, purchase the product • Can be used effectively to grow customer and prospect lists

13. Quick Fact Each dollar spent on direct marketing yields, on average, a return on investment of $11.73, versus ROI of $5.23 from non-direct marketing expenditures. Direct Marketing Association, 2009

14. Most important component of Direct Marketing • Your list! • Prospects • Current Customers • Former Customers • Members • Success with Direct Marketing is directly related to the quality of the list. • Quality of information – is the address current? Is the email address correct? • Timing of list development – e.g. list of home buyers: are they still on the market to purchase a home? • Do the people on the list represent the business’ target market?

15. Types of Direct Marketing

16. Types of Direct Marketing • Direct Mail • Telemarketing • Mobile Marketing • Door-to-Door flyer marketing • Email Marketing • Others not covered: • Direct Response Television

17. Direct Mail

18. What is Direct Mail? • Advertising material sent directly to home and business addresses • Fliers/Brochures • Catalogue distribution • Promotional letters • Coupons • Typically includes opportunity for ordering online, in-store, or through telephone. • Variable data print: DM pieces are be digitally printed with headlines, messages and images tailored to the individual. • e.g. Dear Wendy

19. Uses of Direct Mail • Sell products or services • Raise awareness of products or services • Drive people to your website • Test new markets • Obtain leads for follow-up • Prepare prospects for a telephone follow-up

20. Benefits of Direct Mail • Targeted: you pick the people you want to reach. • Flexible: many different types of mail formats to choose from. • Letter • Postcard • Sample • Catalogue • Gift • Personal: If segmented appropriately, you can address the recipient’s interests, needs, and pain points. Can even address them by first name. • Measurable: can track the success of the campaign. • Tangible: recipient has something in their hands they can refer back to. Source: United States Postal Service

21. Quick Fact 98% of consumers bring in their mail the day it’s delivered, and 77% sort through it immediately. Source: United States Postal Service

22. Objections to Direct Mail • Many people don't like unsolicited offers and are skeptical of their validity • Some people too busy to open what they view as "junk mail." • Requires thorough maintenance of mail lists. • Address must be validated and updated regularly • Concerns about the environmental impact of resources used for direct mailings. • Can be expensive – depends on list size Source: Smallbisinessnotes.com

23. Success is primarily dependent on: • List • Are you going after the right audience? • Offer • Is the offer relevant and attractive to the target audience? • Is it easily fulfilled? • Is the timing right? • Creative • The type of direct mail piece: letter, brochure, catalogue, sample • Size and weight of piece • Branding, images, tone, copy

24. Effectiveness of Direct Mail • Expect between 1% and 3% response rate. • e.g. a 1% sales rate on 1,000 direct mail pieces = 10 sales. • Can be as low as 0.25% for high value items or in a very competitive market. • Consider ROI: • If the cost to prepare and mail 1,000 pieces exceeds the profits you'd realize from 10 sales, go to another plan. • Most expensive portion of a direct mail campaign is postage cost • Consider cost of design and printing • For a direct mail ROI calculator: http://www.bplans.com/business_calculators/directmailroiwindow.cfm Source: Canadian Marketing Association

25. Direct Mail Tip! Follow-up mailings generally increase response, by an additional 25% to 50% over the initial responses from the first mailing. Source: Canadian Marketing Association

26. Telemarketing

27. What is Telemarketing? • Promotion of products or services where consumers are contacted by phone. • Second most common form of direct marketing. • Can be done in-house or outsourced to a telemarketing company • US national Do-Not-Call registry went live on October 1, 2003. • Illegal for telemarketers to call anyone who has registered. • Over 62 million people signed up in first year. • Telemarketers are required to search registry at least once every 31 days and drop from their call lists the phone numbers of consumers who have registered. • https://telemarketing.donotcall.gov/

28. Uses of Telemarketing • Direct sales • Lead generation • Appointment scheduling • Verifying information or cleaning lists • e.g. Populate a database with decision-maker names • Research and surveys • Learn more about your customers • Learn more about your market and what competitors are doing • Event invites • Follow up on responses to direct-mail campaigns

29. Benefits of Telemarketing • Measurable results • Can gauge the customer's interest immediately • Can explain technical or complex messages more effectively • Generate marketplace and customer insights • Can use this information for segmentation purposes later • Build brand awareness • Test your message to be used in other campaigns

30. Quick Fact A telemarketer will reach voicemail on about 70-95% of dials, so always have a “script” ready to leave a professional message.

31. Objections to Telemarketing • In-house telemarketing: • Can be expensive to set up operations • Personnel, training, phone lines, furniture, floor space, computers, and software. • Outsourced telemarketing: • Can be expensive, depending on list size and objectives • Must have well-trained personnel on the phones • Scripts that sound canned don’t work • Don’t have a list with phone numbers. • List management • Lists must be updated regularly. • Must comply with national Do-Not-Call registry regulations • Many people find marketing calls an unwelcome interruption

32. Effectiveness of Telemarketing • ~5% return Source: Magnus Marketing

33. Cost of Outsourced Telemarketing • Costs are based on project type, telemarketer skill level, industry expertise, and when calls are made. • Additional fees: initial setup, script preparation, training, programming, and reporting. • Rates: ~$25 to $60 per hour. • Large telemarketing firms require minimum work order of 1,000 to 10,000 person hours per project. Source: BuyerZone

34. Cost of Outsourced Telemarketing • Hourly telemarketing costs • "$3,300 for 100 hours of telemarketing – includes script." • [cost-reduction services] – Telecommunications CEO, Lone Tree, Colorado • "$3,525 telemarketing setup, script, and 100 hours of calling." • [401k plans] – Financial Services Owner, Pasadena, California • "$2,500 - update database info and get email addresses for 3,300 people." • [awareness campaign] – Business Service Provider, Houston, Texas • "$1,000 for an outbound telemarketing campaign. This included script editing, daily reports, and an exit database." • [inventory liquidation] – Retail Office Manager, Walnut Creek, California Source: BuyerZone

35. Cost of Outsourced Telemarketing • Per lead telemarketing costs • "$150 for 100 leads to follow up direct mail campaign. Agreed to call each one at least twice to establish contact, and if interested, call until appointment or a no go." • – Financial Services CEO, McKees Rocks, Pennsylvania • "25 leads, with guaranteed 15% close ratio. $800." • [refinancing] – Banking Operations, Grandville, Michigan • "$1,400 for 40 leads." • [mortgage refinancing] – Financial Services CEO, Elizabeth, Colorado Source: BuyerZone

36. Mobile Marketing

37. What is Mobile Marketing? • Involves communicating with the consumer via cellular or mobile device, to: • Send a simple marketing message • Introduce them to a new audience participation-based campaign • Allow them to visit a mobile website • Newest form of direct marketing Source: Quirk eMarketing

38. Quick Fact % of population with mobile cellular subscriptions in US: 83.5% Source: MobileActive.org, 2007

39. Types of mobile marketing • SMS (short message service) • Marketing through text messages • 100 million advertising SMS sent out every month in Europe • MMS (multimedia message service) • Can contain a timed slideshow of images, text, audio and video • Nearly all new phones produced with a color screen are capable of sending and receiving standard MMS message • LBS (location-based services) • Offered by some cell phone networks • Sends custom advertising and other information to cell-phone subscribers based on their current location.

40. Quick Fact Over 130 Billion texts are sent each month, up from practically nothing in 2000 Source: SmallBizTrends

41. Uses of Mobile Marketing • Text Campaigns • Fast-food restaurants: order food for pick-up • Order products • Event invites • Contests • Read reviews • Send gift hints to friends • Text wake-up calls • Bar-coded coupons – scannable bar codes on consumer’s phones • Pay by phone Image Source: KI Mobile

42. Quick Fact In the next two years, three billion mobile coupons will be issued to phones. Source: Juniper Research

43. How interested would you be in receiving the following on your smartphone? Source: Compete’s Smartphone Intelligence, Jan – Feb, 2010

44. Benefits of Mobile Marketing • Messages can be sent to groups of people quickly and cheaply • Users tend to take their phone with them - easy to reach them with time-sensitive messages • People tend to read every message they get - far less likely to be ignored than other types of direct marketing • Attract new customers • Drive traffic to your business during slow periods

45. Objections to Mobile Marketing • Requires list of mobile numbers • Limits to the amount of content you can send given size of display. • Personal nature of mobile phones means that some people may find SMS messages intrusive. • Privacy concerns • Telecom regulations are currently outdated concerning unsolicited commercial communications and SPAM • Mobile Marketing Association has adopted industry standards that dictate opt-in to receive messages.

46. Effectiveness of Mobile Marketing • Starts at $10 - $15 per month • Pricing based on: • Number of messages • Keywords • 7% response rate • Consider: • On average 94% of text messages are read • 80% of consumers keep their mobile with them all day Source: SmallBizTrends

47. Door-to-door Flyer Marketing

48. What is Door-to-Door flyer marketing? • Where flyers are delivered in targeted areas to homes or businesses. • Geographically-focused • Best used to promote products or services with mass appeal • Three methods: • Solo – where flyer is delivered on its own • Shared distribution – flyer is delivered with other flyers • News share – flyer is delivered with a local, normally free, newspaper and also with other flyers. • Can use US Postal service to have flyers delivered • Used extensively by fast-food industries

49. Door-to-doorexamples:

50. Uses of Door-to-Door flyer marketing • Fast-food promotions • Food delivery • Taxi services • Local retail promotions • New restaurant opening • Spa services • Contracting • House cleaning • Home maintenance • Dry-cleaning