Data matters

With an up-to-date database and a robust CRM platform, you can personalize mass emails quickly and efficiently, and affordably test different combinations of messages and graphics, emotional appeals, and offers to find the perfect mix for building engagement and revenue.

Your customer database will also help you identify high-quality prospects and enable you to build look-alike lists for prospecting that pays off. An effective database for successful direct marketing consists of much more than name, title, company, email address, and so on. It includes key information that allows you to segment your customers into like groups so you can send mass emails with personalized appeal, and monitor response and engagement for the various messages, offers, and content you send in general and to select segments. It also helps you identify the most profitable marketing channels, your best customers and leads, and those that aren’t worthy of your time and resources.

In addition to data that shares details about customers and contacts, you need information that helps you find qualified leads, engage with timely offers and relevance, and communicate in ways that build connections between your brand and your prospects and customers. This information can be used to generate customer profiles that guide your messaging, creative (the words and images in your ad campaigns), offers, and channel selection.

Customer profiles can include information such as:

• Who your customers are: demographic, generation, ethnic and social groups, and so on
• Where your customers shop: online, in-store, direct brand sites, or reseller sites
• How they shop for your category: the recency and frequency of their purchases, and what offers they respond to most, such as discounts, reward points, or free gifts
• What they have purchased from you in the past: products, services, packages
• What relationship they have with your brand: prospect, lead, customer, repeat customers, evangelist
• Which channels they engage with and respond to the most: social media, email, or text, and open rates for each segment

Your database will not start out with all these data points, but you can build the fields that are most relevant to your business over time.

A direct marketing campaign is only as good as the list you use. The quality of your list impacts your sender score, which reflects the number of bounces, unsubscribes, and spam reports you receive from email recipients. If you continue to have high percentages of those types of rejections, your score will be lower and you can get blocked by your email or CRM service and be unable to send messages for a specified length of time. A good way to avoid this is to weed out contacts that haven’t engaged with your campaigns for a year or more, and remove any email address you know is no longer associated with the contact you have on record.

Ask your email service about sender scores so you can be sure to maintain a healthy brand reputation and sustain your email frequency.

You can improve and grow your lists in many ways, including the following:

• Include in product shipments a warranty registration card that requires an email address.
• Offer a discount on an order in process, or a future one, in exchange for providing an email address and permission to be put on a marketing list.
• Add a registration option for accessing and downloading content on your website or a newsletter.
• Reach out to your LinkedIn connections and ask permission to send them information or surveys, or just exchange email addresses.
• Offer incentives for your Facebook, Pinterest, and Twitter followers to send you their email addresses and give you permission to contact them directly.
• If you’re in the business-to- business (B2B) sector, consider purchasing a service like RocketReach or Seamless.AI that enables you to search contacts by title, industry, seniority, company, and location, and get email addresses and phone numbers in order to connect and spark conversations.
• If you choose to purchase lists, be sure to do so from a qualified data provider that builds lists around permissions and consumer profiles.

Data cooperatives tend to have well-vetted lists for business-to-business (B2C) companies and retailers. Before choosing a list and data provider, be sure to talk to some of their clients to see how the provider’s lists performed for them in terms of generating new customers and contacts, and overall return.

Your customer data falls into the following categories.

• First Party Data: This is the data you collect with consent directly from your customers and includes email address, phone number, history, loyalty program information and so on. Other elements of first party data include preferences for communications, shopping channels, products, and/or specific account information.
• Second Party Data: This is data that comes from a trusted partner and covers information such as social media profile, and responses to customer surveys.
• Third Party Data: This is information about contacts in your database that you get from data providers such as income, age, education.

Your data strategy should include collecting and organizing the data you need from customers directly, and third-party providers that can help you expand your database in order to reach customer acquisition goals. As necessary, find a reputable third-party data provider that can help you scale your marketing efforts with quality data and applications. You want a data provider that can build a model that reflects the analytics of your in-house data lists (for example, similar attributes, characteristics, and purchasing propensities). Data cooperatives typically have good data and lists that perform without spurring unsubscribes or spam reports.

Assemble, organize, and understand your own first-party data, that you collect directly from your own customers instead of partners or purchases lists. Ensure that the right tools are in place to utilize it effectively.

Managing your in-house data effectively with a CRM system can save you a great deal of money in the long run. Your cost per acquisition, or CPA (which measures the total marketing cost to get a new customer or individual order), is substantially lower with a house list versus a purchased prospect list. Reports from marketing associations over the years have showed that these differences can range as much as 40 to 64 percent or even higher.

If you’re in retail, you can amass valuable data about customers every day through transaction records, loyalty programs, social media interactions, and credit card applications if you offer your own private label cards. This first-party data is yours to use freely — and hopefully successfully — as you work toward securing lifetime value from your core customers.

Keep in mind, the goal of all marketing is to achieve lifetime value — the revenue and referral value a single customer represents over the years that they purchase within your category. If you can secure lifetime value for even a few of your customers, you will save exponentially on customer acquisition, and maintain a steady revenue over time, both of which are critical to the success of any business.

No matter what business you’re in, your first step is to look at your in-house database and find ways to effectively organize it so you can deploy direct marketing campaigns in real shopping time. Knowing what you have will also help you know what type of CRM system to invest in. Having your data in one location will enable you to see what is useful and what you need to improve your insights and personalized communications.

As you build your lists and execute campaigns, you need to factor in multiple touchpoints to get customers to yes. To close a customer, you may need to email, call, send a letter, and call again to get the sale or meeting you seek. Research from various sources shows it takes upwards of seven touchpoints to actually engage a prospect in conversation or get them to purchase from you.

CRM matters

Setting up a robust CRM platform is an important step for organizing, categorizing, prioritizing, and managing customer data and documenting conversations and engagement. Most systems store key data about customers and monitor their transactions, frequency of purchase, rate of engagement, and overall relationship with your brand, allowing you to communicate with high levels of personalization.

Nearly all CRM systems enable you to customize the properties, or data fields, you want to record and manage for your customers. For B2B businesses, these data fields might include

• Date of the lead acquisition, or when your company was first introduced to the contact
• Lead source, or whether you met the contact at a trade show or online webinar, or through social media, a referral, sponsored content placement, a media feature, a digital banner ad, and so on
• Information from a Contact Us form on your website
• Emails received, emails opened, click-throughs, and responses
• Size of the potential business opportunity
• Specific needs and product interests
• Opportunities identified in initial conversations
• Demo completion and date
• Proposal date and details
• Targeted close time
• Probability of closing, and so on

CRM systems also provide critical insights through analytical functions so you can work smarter and more efficiently than ever. These may include

• A comprehensive view of the customer across channels, campaigns, and online communities; behavior such as store visits, online/off-line purchases, blog comments, partner site visits, emotional triggers, and purchasing trends so you can sort customers by behavior, price sensitivity, campaign response, and more.
• Engagement levels that tell you which campaigns, blogs, social media posts, offers, and campaigns were of the most interest to which individuals and customer groups.
• Lifetime value, which is critical to sustainable growth. Many CRM systems let you analyze the overall value of each customer so you can identify the customers who cost you a lot to serve and result in lower profit margins, and those who are lower-maintenance and generate higher returns per transaction.
• A/B testing of emails (see “Testing Your Direct Marketing” later in this chapter), which enables to verifiably determine which messages, offers, calls to action, copy, subject lines, and even graphics drive the greatest response among customer segments, is an important feature to have in your CRM platform. With testing capabilities, you can also test variables like day of the week sent and time of day sent, which can impact open and click rates.

CRM systems

Choosing a CRM system doesn’t have to be a complicated or stressful process. The key is to find one that will grow as your database, communications, and sales management needs grow. Once you upload your customer data, leads, and create a sales pipeline, and so on, it can be expensive and time-consuming to switch, so do your homework up front to find something that meets your current and anticipated needs as you build your marketing program and database.

Things to look for in a CRM system:

• Ease of use: Inputting, editing, managing, and analyzing your customer profile, campaign, and sales data needs to be simple and fast. If it’s hard to use the platform and find the data you’re looking for, it will be hard to get your team members to use it. Often, the most challenging aspect of a CRM system is to get team members to upload data frequently. You can overcome this challenge if you ensure that using your system is simple and fast.
• Features and functions: Some of the basic features to look for in a CRM system include how it stores and manages contact and lead information and data, deploys and tracks emails, and organizes and reports on your sales pipeline activity and progress.
• Integration: It’s essential that your CRM platform integrate seamlessly with other platforms you use. Your marketing stack, or all the marketing technology you use, must be able to communicate and share data automatically. When reviewing CRM options, check to see which ones will easily integrate with your accounting, product management, contact database service, and other platforms.
• Customer service: No matter how many tutorials you complete or how long you use a system, you’ll need ongoing support to help you manage your lists, filter data to exclude segments or contacts for specific campaigns, automate changes to data fields, pull contacts into segments, lists, or pipelines, and so on. Check to see how quickly customer service responds to chat requests and phone calls, and if they charge extra for help. Also find out when they work. Is live chat or phone support available 24/7 or only a few hours a day? Do you get to chat with live people or just bots?
• Automation: How robust are the automation features? You’ll want to review automation for triggered marketing sequences, sales reminders, and updates to key data fields per new transactions or account details. How easy is it to prepare and send personalized automation sequences from various owners among your team?

Some of the most recommended systems for businesses of all sizes include the following which represent the top 3 choices from Top10.com, a review site that researches many products and services and provides in-depth recommendations and reviews.

• HubSpot stands out for integrating marketing and sales functions.
• Pipedrive is known for its artificial intelligence (AI) powered solutions.
• Monday is known for its intuitive interface and flexibility.

CRM systems are designed to help you grow sales and customer communications. As your business grows, your need for data management will too. Purchase a system that will enable you to scale your programs effectively for tracking more transactions, performing more analytics, and adding more names to your lists.

Direct marketing, no matter which channels you use or the depth of your customer data, is only as good as the emotional appeal of your content, message, and offer.

Before you can optimize your ROI, you need to develop your emotional selling proposition (ESP) messaging for each customer segment, so you can build campaigns around triggers that capture attention and inspire engagement. (See Chapter 2 for more on ESP profiles.) Your communications should create a sense of urgency and include a strong call to action (CTA). The longer it takes someone to act on your message, the greater the chances they won’t.

Messaging matters

Messaging is what makes one brand stand out from another, and it’s what makes one direct marketing campaign better than another. Your messaging must be part of an overall strategy reflected in all your communications.

If your brand positioning is that you are the quality leader in your category, your messaging must communicate what that means from a product perspective and what it means for customers. Does your quality advantage result in longer durability or better business returns, greater satisfaction, higher value, or savings for customers?

Your messaging must also appeal to the decision triggers of the customers receiving your campaigns. What most influences your target audiences? Price? Exclusivity? Scarcity? Social proof? Fear of missing out (FOMO)? Keep in mind that each customer segment requires specific messaging. If you have created customer segments around generational segments such as millennials versus baby boomers, your messaging to that group should reflect the usage, desired outcomes, lifestyle implications, and other information specific to that age group.

The quality of the copy you use to convey your message is key. You must be able to communicate with clarity and brevity. No one wants to read a dissertation. They want to find what they were looking for and move on to the next item on their to-do list. Most important, many people don’t read past the first line or even the subject line of an email. Your words need to be meaningful and powerful to engage and put your customers on a journey to yes. This isn’t as easy as you may think and often requires a savvy, experienced copywriter.

Start a paragraph of copy with quantifiable results your customers can potentially gain from doing business with you. This will get you a higher response rate. Copy that starts off with claims about your excellence and other egocentric statements usually just adds to your email unsubscribe rates.

All these strategies may seem overwhelming, but think of it this way: The more campaigns you develop and deploy to communicate your key messaging, the greater your return.

It really is quite simple! The more you send and the more you test, the better your results and the more you’ll understand what works and what doesn’t. If you test and track your campaigns closely, you can tell when a change, even as slight as the envelope teaser or color, or one word in the subject line, improves response rates. Even if you have little or no experience in direct marketing, know that a small effort can generate enough information to help you execute better the next time and on a larger scale.

Don’t overdo your frequency in order to learn more about the effectiveness of your messaging. There’s a fine line of frequency you can’t cross if you don’t want to get unsubscribes and lose potential customers.

Testing messages, offers, copy, subject lines, and even graphics is easy and inexpensive with email and mobile marketing channels, because there are no production costs, just the cost of your email and wireless phone service. Take the time to do A/B testing to understand which channels and messages and emotional appeals drive the best response and conversion rates. CRM systems offer similar functionalities with a few distinctions.

Encouraging customers to take action

Every email or letter you send must have a CTA, or you’re not likely to get much of a response from recipients. Look at your CTA as the climax to your campaign’s story. The action is what leads to the engagement you need to get customers started toward a sales process or transaction and the metric that will help you determine response rates and ROI. Here are some examples:

• Call a toll-free number to process an order/sale.
• Register for your subscription program via an online form.
• Email for more information on a product or to schedule a free consultation.
• Sign up for coupons/discounts.
• Take an online survey (which enables you to get feedback and capture email addresses).
• Return a form in an enclosed postage-paid envelope to process a sale, subscription, or donation (if you’re in fundraising).
• Schedule a demo or free consultation.

You must be able to track the source of responses to your CTA and marketing campaign in general. If you have multiple campaigns in play at the same time, be sure to code each campaign separately, so if you use the same CTA — say, a call to a toll-free number — you can track calls back to each specific campaign, mailing list, or customer segment. A simple method is to use a different phone number for every creative you send, a different landing page for every campaign directing consumers to your web page, and so on. If you’re testing different lists with the same creative, be sure to send each list to a different response mechanism — that is, landing page or phone number — so you can determine which one pulls best.

In direct marketing, the offer often refers to the call to action and defines the benefit of acting. For example, the offer might say, “if you call now, or redeem a coupon before a specific date, here is what you will get in return.”

Directing consumers to a Contact Us form on your website will help you capture data and get permission for further communications, so never leave these out of your contact options or sources for more information listed in your print material. A hot link to a Contact Us form should become a standard part of all your email campaigns.

A coupon offer often improves response rates and can help you track sales easily. Give each coupon a unique code so you can track the sale to a specific campaign, mailing, and individual customer.

When it comes to mailing marketing letters, you have options: standard bulk mail, first-class mail, or overnight packages. Traditionally, overnight packages get opened the most, but the open rate may not justify the cost unless each sale is substantial and can easily pay for the cost of the campaign. First-class mail tends to do better, as do personalized envelopes with messages about a direct consumer benefit on the outside.

Following is an example of how a successful direct marketing campaign evolved to increase sales and loyalty. System Pavers (www.systempavers.com), a leading designer and installer of interlocking paving stone outdoor living systems, was using a traditional direct marketing piece that had worked well but was reaching a point of diminishing returns. The company wanted to create a direct marketing campaign around the psychological values discussed in Chapter 2 to test against its control. By using all the principles covered in this book and executing them through a direct marketing channel, we were able to achieve a 3,100 percent ROI and generate at least 200 percent more revenue than the control. Here’s a summary of the processes used to achieve those results:

• Messaging: We needed to find an emotional value that would resonate with potential customers. System Pavers creates beautiful paving stone driveways, walkways, BBQ stations, outdoor kitchens, water features, and so much more. None are necessary for daily functions, and outdoor living upgrades can be expensive, so we had to assign an emotional value to this non-emotional product.
• Survey and research: To find the right emotional value that would spur a high-end home improvement project, we surveyed existing customers to find out how they “felt” about their new outdoor living systems. We then reviewed those results along with testimonials gathered over the years to identify and build ESP. We discovered that many customers felt their home was like part of their family, so we built our ESP messaging around family values and rekindling sparks, like when you first moved into your house or when Mom and Dad first fell in love.
• Format: Because the decision to upgrade and remodel your home’s outdoor living space is a complex decision, we decided we needed more than a self-mailer with product photos and limited-time-offer copy. So we created a newsletter — a four-page large-format mailer that included a lot of content around our ESP and the customer decision process. Our copy centered on the theme “Love Your Home Again,” because, as with relationships or a new home, we see no flaws at the beginning, but over time we notice a lot of little things we want to change. We also included statements about our business owners and customer satisfaction results to build trust and confidence in our brand.

• Testing: We then tested our new “Love Your Home Again” theme and format against the control, another large-format self-mailer, in select markets. We chose test cells in two regions where System Pavers operates and compared like cells in each region against each other to weed out any geographical influences. We assigned the test and control pieces to similar homes in each cell so we could test messaging rather than economic or social variances. We sent three mailings to our test cells to ensure that no anomalies existed in our process.

  We also tested results among past customers or prospects we’d already mailed marketing materials to and cold prospects with no prior contact with our brand. And we tested email against printed direct mail.

  Our results were very telling. Our ESP approach achieved more than 3,000 percent ROI and outperformed the control for revenue generated. Interestingly, the print version outperformed email, reflecting that we still like to hold onto things that are important to us, and when we’re making big changes to an emotional part of our life, tactile marketing material matters.

Figure 11-1 shows a visual of the first edition of “Love Your Home Again.”

Building effective email lists

As evidenced by many studies over time, direct marketing tends to generate higher results from in-house customer and prospect lists. Yet purchasing prospect lists is critical to customer acquisition and to building your own lists of qualified leads.

List purchasing options are many, including

• One-time rental of prospect lists based on attributes you designate: If a consumer replies, you own that name and can add it to your in-house list.
• Census-based lists that provide information about households in demographic areas: These are less expensive than modeled data lists that come from in-depth analytics of customer groups, past transactions and behavior, and other attributes. However, they can also generate higher unsubscribes and spam reports that impact Sender Scores.
• Modeled lists from data companies that create, manage, and sell lists they compile from tens of millions of households: These lists may be built upon household data they compile from various sources or from surveys they conduct to sort consumers in multiple segments according to preferences and needs, life events, and so on.
• Lifestyle change lists: These lists may include names of people moving to new markets (new movers), obtaining recent marriage licenses, and parents associated with new birth certificates, and so on.

You can also participate in a cooperative database, (explained in the earlier section, “Data matters”), which is a compilation of your mailing lists combined with those of other companies targeting the same customers. Each contributor to the database has access to the full database, which is duplicated and often enhanced to make it more valuable. These lists can be highly effective because they consist of customers who have been vetted in a sense by other brands and are interested in products or services represented by cooperating brands that know their purchasing behavior. However, you have to be willing to share your lists to participate.

Create your ESP customer profiles, run analytics to find the common emotional, demographic, and functional trends, and then purchase lists that support those trends.

Take time to browse analytics you receive from your list supplier instead of just reading the report it generates. You may find insights about your prospects that didn’t show up in the summary report.

For example, I was working with a client in the utility space and looking to buy lists to expand our lead generation for an ancillary service. We hired a data firm to run analytics on our households and show us purchasing, lifestyle, demographic, and even political trends. One thing we noticed that didn’t show up on the data firm’s report of strong attributes was that most customers paid off their credit cards regularly and carried little credit card debt. This showed a trend toward responsible spending, which we added to our messaging and our profiling for future data models.

Test various data models against each other as well. As you get results and reports from your data provider, you can even test the top percentile from one segment against the top or middle percentile from another to help you more precisely identify who you need to be targeting for optimum returns.

If you intend to make direct marketing a core component of your marketing plan — and to succeed today, you must — it’s important that you build a clean database of highly targeted contacts.

To supplement your current contacts and those from carefully purchased lists, find a platform like RocketReach or Seamless.AI that allows you to find highly targeted contacts one by one or many at a time. Take time to learn how these contact research platforms gather email addresses and phone numbers to ensure they are sourced ethically and in line with privacy and spam guidelines.

Avoid brokers that use ISP browsing to find email addresses to sell to you because these methods violate consumers’ privacy and are actually illegal in many countries. To be clear, ISP browsing takes place when an internet service provider (ISP) tracks the websites you visit, the duration of your visit, the content you watch or browse, the device you use and your location. Due to a U.S. senate vote in 2017, it is now legal for ISPs to sell this information to list providers in the U.S., although still illegal in many other countries to protect privacy.

Setting up triggered emails

Triggered emails are those that your CRM system sends automatically in direct response to customers’ browsing or shopping behavior, an event, a customer action, a missed opportunity, or a change in customer behavior or status. According to a report by GetResponse in 2021, triggered emails achieved an average open rate of 38 percent. Compare that with the average open rate of 20 percent, and it’s easy to see how important triggered emails are for any business, B2B or B2C.

One of the most effective uses of triggered emails is to get people to go back to abandoned online shopping carts, a critical part of an email (and overall) marketing strategy if you’re in the e-commerce space. Triggering emails to remind shoppers to complete the checkout process can pay big dividends. Various studies show that shopping cart reminder emails have high open rates — 30 to 45 percent higher than other emails in many cases — and that around 50 percent of recipients go back and complete the process. And yet, less than 21 percent of retailers, which likely includes your competitors, are sending reminders (Return Path).

Automated marketing campaigns are an effective tool for keeping messages alive. HubSpot offers automated sequences that allow you to craft emails, schedule them to auto send in intervals you choose, and add phone call reminders to your sales team in between. These sequences work best with contacts that have already had an interaction with you, such as someone you met at a trade show or who responded to an ad or prior email and tend to get higher open and engagement rates than general email campaigns.

A sequence of at least three emails seems to do better than sending just one email reminder. As you experiment with different sequence messaging, schedule intervals, and phone calling, you’ll quickly identify your best message/offer combinations and timing patterns.

Implementing personalized emails

Like printed direct mail, email works best when it’s personalized. HubSpot’s research shows that when the recipient’s first name is in the subject line, the click-through rate goes up. Other research from Statista shows that the open rate for a personalized email is upwards of 17 percent, and closer to 11 percent when it’s not personalized.

Personalization is key to success today, and that isn’t likely to change anytime soon. It’s dependent on having strong CRM and content management systems that enable you to customize your content for various personas, cultures, languages, segments, and even channels (see Chapter 7 for more on content marketing).

Printed direct mail or email needs to be viewed as a series of communications. Although the first piece is designed to get a sale, it typically takes multiple touchpoints to achieve the desired behavior. Creating a series of touchpoints helps you increase your return and conversion rates. You can mix up your channels too. Maybe send a first touchpoint by letter, reinforce it with a corresponding email, and then try to close the deal with another letter that’s highly personalized and follow up with a phone call.