The Latest in Direct mail and Response Advertising

By: JUSTINE P. CASTELLON /Consumer Strategist

There was a time when direct mail was considered the poor stepchild of more sophisticated forms of advertising, and upscale businesses did not regard it as a viable, elegant solution to their marketing problems. Direct mail ranges from the catalog that arrives along with your letters and the advertisement inside your billing statement to the flyer slipped under your windshield and even to the salesman knocking at your door.

Savvy marketers soon realized, however, that mass direct mail could provide immediate sales results, create a personal connection with customers, is more cost effective than billboard or display advertising when the object is to get immediate results, not just to create awareness. Perhaps most importantly, direct mail lends itself to greater measurability and to testing variations in form and content to determine the best approach. Today it is universally regarded as one of the most effective forms of advertising especially with its latest approach in the new economy . . .

THE FIRST LEAD GENERATION MEDIA
Catalogue Marketing Catalogue marketing is the most common and the first in-line for direct mail. Catalogue marketing occurs when companies mail one or more product catalogues to selected addresses. They may send full-line merchandise catalogues, specialty catalogues or business catalogues, usually in print form. Catalogue marketing is the popular medium because it permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement. In most cases, this means moving that customer from the education and consideration stage to the purchase stage. The distinguishing characteristic, of course, is the call to action. Usually this call takes the form of a telephone number, Web site address or mailing address – often a combination of the three.

The most common catalogue marketers are Avon, who regularly mails consumers the latest in its product line including the best-value offers. Gerber, on the other hand educates its target audience by way of sending “The How to Feed Me Handbook”. And of course, Del Monte Kitchenomics’ best recipes. Some companies distinguish their catalogs by adding literary or information features, sending swatches of materials, operating and special hot line, and answer questions, ending gifts to their best customers and donating a percentage of profits to good causes. The editorial contents surely set apart your catalog from your competitor. Catalogue marketing aim to receive an order from the prospects.

VIRTUAL CALL CENTER TECHNOLOGY
Telemarketing
Telemarketing describes the use of telephone operators to attract new customers, to contact existing customers to ascertain satisfaction levels , or take orders. In the case of routinely taking orders, it is called telesales. Most telemarketing systems are fully automated. Automatic –dialing and recorded-message player (ADRMPs) can dial numbers, place a voice activated advertising message, and take orders from interested customers on an answering machine device or by forwarding the call on the operator. Telemarketing is increasingly used in business as well as consumer marketing. Companies like Globe, Smart, PLDT and Bayantel use telemarketing to reduce the amount of personal selling needed for contacting its dealers. Telemarketing, as it improves with the use of videophones (in some more advanced countries) will increasingly replace, though never eliminate, more expensive field sales calls. Today, a remote agent and telecommuting workforce is made possible and more reliable because of the growth contact centers as well as for call centers of the future (virtual call centers).

FLEXIBLE, INNOVATIVE OPTIONS
Kiosk Marketing
Some companies have designed “customer-order-placing machines” called kiosks (in contrast to vending machines, which dispense actual products) and placed them in stores, airports, and other locations. Although it is not yet fully implemented in the Philippines but some are already enjoying the real time transactions to their customers . Globe Autoload Advantage is an exciting member-get-member program for both Globe Handyphone Prepaid and Touch Mobile subscribers. It is a convenient over-the-air reloading of subscriber through authorized retail outlets or kiosk. Autoloading works just like it sounds: no dialing, no scratching of call cards, no keying in of PINS. It’s hassle-free reloading for your prepaid account anytime, anywhere.

VIRTUAL TV
At-Home Shopping Channels
Some television channels are dedicated to selling goods and services. Mostly, these home-shopping channels, which broadcasts 24-hours a day, consists of program hosts offering bargain prices on such products as, collectible dolls, jewelry, cosmetics, and power tools. Viewers call in their orders on a toll-free number and receive delivery within 48-hours.

ADVENT OF E- MARKETING SERVICES
Email and Internet Advertising
The rise of the Internet produced a gold rush not only in commerce, but in new expectations for online marketing. Many of those expectations were inflated: not all Internet marketing has proven to be created equal. Although successful while still a novelty, Internet marketing response rates are quickly eroding. Users are inundated with banner ads everywhere they go on the Internet.
While it is true that advertising on vertically targeted portals can produce better than average click-through rates, banner ads can be a difficult medium to achieve marketing goals. Marketers looking for an effective way to reach customers online are turning to e-mail. E-mail has quickly become a communication standard and the Internet’s most popular application. Both the number of e-mail users and the usage rates are continuing to grow exponentially.

FAST TIMES ON THE MINUTE EXCHANGE
SMS Advertising in Mobile Marketing
Recently, the focus seems to be on mobile marketing services in the Philippine marketplace. Realizing the significance of this mode of marketing, marketers are increasingly opting for mobile marketing techniques to connect with their target audience—directly. And with around more than 20 million subscribers in the country, the concept of mobile marketing services is rapidly gaining momentum,
The rise of the text messaging in the Philippines produced a gold rush not only in commerce, but in new expectations for mobile marketing. The Philippines could be the world’s text messaging capital, with reportedly 50 million text messages sent out every day. Even the crippled economy got a boost from text messaging.

When you hear your mobile phone beep these days, it’s more likely to be a mobile marketing service. It could be new movies, concerts, freebies, you name it! The phenomenon of mobile marketing is, of course, the age-old practice of direct mail remade in modern dress. Mobile Marketing is one of those things that’s easy to do in response advertising— but hard to do well. When it is done right, though, mobile marketing is one of the most effective marketing tools available to businesses, regardless of the industry.

RESPONSE OBJECTIVES
Digital delivery might be rewriting business rules and redefining direct marketing. And the advent of electronic forms of communication such as e-mail, the Internet, and the SMS (short message service) have given marketers new and even more cost effective ways to become more focused and granular in their marketing efforts. But still, creating and managing a direct response advertising campaign whether it is from the traditional direct mail or the technologically-driven mobile marketing services, is about three quarters science and one quarter art. That’s what makes it so much fun.
The key measure of any direct response campaign is the term “effective”. To be effective, a direct response campaign must have a clearly defined core objective – and that objective must be set before doing any creative or media planning work. Direct mail campaigns have four possible objectives:

• Generating Qualified Responses Potential customers either call into a toll-free number or register at a Web site. When people call in, operators can collect contact information and get more data about that person’s particular needs. This information can either be used to mail an information packet, or salespeople can follow-up directly.
• Converting Prospects Through this objective, companies can convert prospects into customers directly. Rather than just collecting data for follow-up, operators can take orders. Generally, this objective works better for more intuitive products and services. Anything requiring extensive customization, such as the installation of a complex piece of software, would probably be better handled through a follow-up call by a salesperson.
• Building Customer Relationships Direct response campaigns can be used for existing customers as well. For example, if a company were was set to launch an upgraded version of its software package, a direct response mailing to current customers would help generate upgrade sales. Or, the customers could call in to learn how to use a new feature in the existing software.
• Developing a Customer Database This is closely related to the first objective, but focused on current customers rather than prospects. Often, as companies grow they start using more sophisticated database software to manage customer accounts. When transferring data from an old system to the new one, there may be gaps in the data about certain customers such as a lack of e-mail addresses. The direct response campaign would encourage those customers to call in and update their account information, perhaps in exchange for a premium.

Direct Mail offers several advantages over a more traditional advertising strategy. The most obvious, of course, is that it encourages customers and potential customers to pick up the phone and call. As a result, the return on investment is more tangible, and more immediate. When managed properly, a direct response campaign can effectively generate leads and sales while at the same time enabling marketers to get the most from their marketing spending.

(published January 2005 Ad Edge Magazine)

Best Practices for Direct Marketing and CRM in Relationship Marketing

By: JUSTINE P. CASTELLON /Consumer Strategist

If you are starting a new business or launching a new product line, how do you go about acquiring new customers? Once you have a core base of good customers, how do you go about finding more customers like the good customers you have? How do you strengthen the relationship with your good customers, build their loyalty and make them heavier buyers from you? How do you prevent your good customers from leaving you for your competitors?These are the key questions driving new strategy orientation in many forward-thinking firms today.
There are many terms being used to describe this new strategy orientation, but perhaps the two most common terms are “Customer Relationship Management” (CRM) and “Direct Marketing.” CRM and Direct Marketing are rapidly moving into the core of consumer and business-to-business marketing practices, simply because they represent the single most compelling growth strategy in today’s highly competitive landscape.CUSTOMER PROFILING
Strategies in the New Customer-Centric Economy
As we enter the 21st century, the new economy is becoming increasingly customer-centric. Building long-term, loyal relationships with customers is the key to profitability. Thus, when Averell Gaspar, Operations Manager of Lilly Philippines (makers of the bestselling anti-depressant, Prozac) refers to the new economy as a “relationship revolution,” he is describing the impact of technological and economic change on business relationships.“For me, CRM plays a big role. Any company which can maximize its potential will win in the marketplace.” Gaspar explains that there are three areas where CRM can impact the business: customer service, market research and business processes. CRM can revolutionize sales force effectiveness and processes that can lead to higher productivity.
The concept of CRM is based on the simple activities of (a) figuring out who your best customers are, (b) using transaction data analysis to determine the characteristics of your best customers, (c) getting more customers like your best customers, and (d) understanding the value drivers that make your best customers better. These activities are then put together to implement a strategy where different customers are treated differently depending on their potential value.If there is a way a CRM can consolidate information gathered through various market research activities, sales and even sales representatives’ inputs, and make them accessible to the decision-makers fast, then the organization can react quickly and exploit opportunities as they occur. “A lot of companies are now using PDA-phones mostly for sales-call reporting purposes but I can see that in the future, these gadgets will be equipped with customer-information and even interactive systems that link them directly with customers’ need for info, products and service”, added Gaspar. This new technology tool allows for a more dynamic profiling of opinion leaders (top customers), thus one can address customers’ needs and wants more seamlessly. “Speed and the ability to target specific markets to customize strategy will lead to higher productivity and better ROI.”TAILOR-FIT STRATEGY
The primary CRM focus areas support the requirements of the customer-facing processes of a business: By using CRM, marketers can also access the necessary business intelligence to better understand which campaigns are working and which customers to target with a specific offer. This type of information reduces wasted time and money on sending out the wrong promotion to the wrong customer. With the right profiling of customers, it is to better understand which campaigns are working and which customers to target with a specific offer. One of the best tailor-fit strategies is Avon.

Avon is a global manufacturer and marketer of beauty and related products. Avon’s business is primarily comprised of one industry segment, direct selling, which is conducted worldwide. Sales are made to the ultimate consumer principally by independent Avon Representatives. Avon understands the importance of financial independence and self-fulfillment of women globally. They focus their strategies by dedicating their entire supports to women – not only in beauty – but health, fitness, self-empowerment and financial independence. Avon knows who their primary target audience is, and understand the psyche of this market perfectly. The company capitalized on this segment and built a strong sales and marketing strategy . . . and that’s going direct. Avon Representatives describe as self-empowered women, a group you want to be associated with. They attract, retain and develop loyal customers, heighten marketing, sales and service efficiencies, cut costs and boost profitability.
Today, Avon is in the list of Fortune’s “Most Admired Companies”, featured in Business Week as one of the “100 Most valuable Brands”, with more than 4 million sales representatives in 100 countries. With the success of Avon, many marketers see direct marketing as playing a broader role, that of building a long-term relationship with the customer. Direct marketing can help virtually every type and size of business today. But making it work is becoming more difficult as an increasing number of businesses embrace it. How can you succeed in using direct marketing to help your business?

MARKETING INTELLIGENCE
An integrated CRM strategy gives the marketer access to intelligent information on customer profiles as well as campaign metrics and analytics. Marketing intelligence on campaign metrics can help the marketer understand which channels are most effective, which campaigns are generating the most leads, and which lists resulted in better response rates. This enables marketers to measure campaign effectiveness and allocate resources to the most successful tactics.
For example, when you decide to go direct to the consumer based on the results on customer profiling, you must implement basics and essentials that are necessary in any direct marketing endeavor.

• GET THE RIGHT PRODUCT OR SERVICE
  A terrific product or service is absolutely essential. Otherwise, people won’t return to buy from you again. An important direct marketing concept: the back end is more important than the front end. In other words, getting your customers to buy from you again is most important and you won’t get them back unless you have a terrific product or service. If your product or service can stand on its own without a lot of hype, you will get repeat customers.
• CREATE A MEDIA CAMPAIGN THAT GETS RESPONSE AND BUILDS A RELATIONSHIP.
  In creative work, copywriting skills are vital. Art attracts but COPY SELLS. You need to break through all the communications clutter in the marketplace. Good design should lead the eye. It should not dominate the display. The design does not sell — even if you’re selling Caribbean vacations. Art attracts, explains and enhances, and good art will let the copy make the sale.
• DEVELOP and LEVERAGE A CUSTOMER DATABASE
  The lists you choose can make or break your mailing. Your most valuable marketing resource is the database containing the names of your current and previous customers who have defined their interests in terms of the products and services they have purchased. These are the people that can be depended upon to make any promotion profitable.
• MAKE THE RIGHT OFFER.
  The right price, terms, guarantees and extras
  An offer simply means what you’re willing to give and what you want in exchange for a particular response from prospects or customers.
  - Proper timing is essential.
  - Segmented marketing can achieve very high responses for you.
  - Tailor your mail to an individual prospect.
  - Options put your prospects in a power position.
  - Urgency lifts your total response.
  - Risk relievers, such as guarantees or warranties, build confidence.
  - Use reinforcers, such as testimonials and case histories, which state your product or service
  is really the best. If someone else says you’re great, that’s better than you saying you’re
  great
• BUILD ADVOCATES The transformation of loyal customer to aggressive sales force Advocates are your very best customers. They not only buy from you very heavily, but sell for you by touting your product or service to business colleagues, friends and neighbors.
  The objective of any direct marketing effort is not just to get a response or make a sale. It is to build customers. Direct marketing can be used at any stage – separating suspects from prospects, moving prospects to trial, converting one time buyers to multiple buyers, and getting multi-buyers to become advocates.
  Not everyone will become an advocate. Direct marketing helps you leverage the 80-20 rule (80% of your business will come from 20% of your customers). It allows you to identify the 20%, reward them to retain them, and then clone them.

MEASURING RESULTS
Being able to measure means being able to improve
This means income generated per money spent on marketing. Do not be fooled by an expensive promotion with a high response rate compared to a less expensive promotion that may have a lower response rate overall but a higher rate of responses per dollar. Also, any evaluation of your marketing effort must include an assessment of the lifetime value of an average customer. This information allows specific promotions to be evaluated both in terms of the cost of acquiring a new customer and in terms of the customer’s contribution to short and long term profits compared to the average. There are a number of ways to improve lifetime value (other than lowering product/service costs): lowering customer acquisition costs, increasing frequency or duration of purchase, and increasing size of purchase.Customer Relationship Management has become the bridge by which vendors get, keep, and grow customers, whether you decided to engage in ethical marketing or direct marketing. It is the means by which companies are meeting the needs of customers who now expect high levels of personalization and care at every touchpoint. While providing superior customer relationship management across your organization may seem overwhelming at times, it is a mandatory competency. “When used strategically, it has potential to improve business profitability. The key is to use it where it brings incremental benefits not because it is “nice to have”. Gaspar ended.

[published January 2005/ Ad Edge Magazine]