Chapter 11
IN THIS CHAPTER
Getting the gist of direct marketing
Understanding what makes direct marketing campaigns work
Creating direct marketing campaigns for direct results
Building successful email campaigns
Making direct mail work for engagement and sales
Testing your direct marketing
Considerations for telemarketing
In a world where brands and consumers can communicate with chatbots, text messages, and email, pretty much all marketing is direct marketing. The term direct marketing encompasses much more than the “junk” mail in your postal box. It is the process and methodology of marketing to your customers on an individual basis with personalized information instead of through mass advertising campaigns that reach large audiences with general messages on TV and radio or in print publications. More than ever, consumers demand personalized communication from the brands they choose. Direct marketing technology today provides many effective and affordable methods for meeting this growing expectation.
This chapter discusses the tactics and technology behind successful direct marketing programs. It takes you through the steps necessary to execute campaigns that build meaningful relationships with customers by communicating with high levels of personalization. You’ll also learn the basics of customer segmentation and how to build campaigns around the important elements of recency, frequency, monetary value, and so much more. Additionally, this chapter provides insight on developing copy, graphics, calls to action, and other elements that drive engagement and conversion. You will also gain an understanding of how to use customer relationship management systems to send highly personal messages to thousands of customers in one mass email, creating individual value with the click of one button!
The key to successful direct marketing is to send the right messaging to the right audience at the right time through the right channel, as trite as that may sound.
Email and mobile/SMS texts are the primary channels most businesses use to reach large groups of customers individually. Yet printed direct mail delivered to residences and P.O. boxes performs much better than many people think.
Following are some 2021 statistics on the most common direct marketing channels:
51 percent of shoppers have completed an online purchase via their smartphone. (Pew Research)
60 percent of customers read texts within 1 to 5 minutes of reading them. (SimpleTexting)
The statistics are impressive, but none of them will apply to your direct marketing programs if you don’t have a solid plan, execute it with accuracy and frequency, and deliver compelling messages that address the psyche and personas of your customers and corresponding segments. With all the clutter and competition among channels, you can’t cut corners on messaging, relevancy, and emotional appeal if you want to achieve a strong marketing return on investment (ROI) and drive both short-term and long-term sales.
The essence of direct marketing is gathering and managing customer data centered on individual needs, life cycle, values, transaction history, and more, and then using that data to craft and send highly personal communications that contain a clear call-to-action or offer. The foundation of direct marketing is to organize customers according to the data you gather, build campaigns that appeal to segments of like customers, and then use a solid customer relationship management (CRM) system to fuel “personalized” campaigns sent to many customers at once. Your CRM system will help you document customer transaction volume and value, recency of purchases, tasks for follow-up, and monitor sales among segments, and more, allowing you to identify the customers and groups that represent the most revenue and warrant more of your resources and time.
Components of a successful direct marketing campaign include:
Data really is “king” when it comes to direct marketing. Collecting and organizing customer and prospect data should be an ongoing priority no matter what space you operate in, or the size of your business.
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:
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.
You can improve and grow your lists in many ways, including the following:
Your customer data falls into the following categories.
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.
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.
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.
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
CRM systems also provide critical insights through analytical functions so you can work smarter and more efficiently than ever. These may include
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:
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.
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.
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 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.
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.
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.
The concept and practice of direct marketing has been around for years and has always been a core component for any business’s success. No matter your industry or customer segment, successful direct marketing campaigns have the following common elements:
Your success lies in how you present each of these elements, and recipients’ readiness to act on your message and offer.
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:
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.
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:
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.”
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
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.
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.
Email is one of the most cost-efficient and highest-producing methods of direct marketing, especially among existing customers and warm leads. You’ll be hard-pressed to find a better return on any other advertising or communications channel.
In addition to being fast, easy, and inexpensive, a core advantage of email is that you can measure it in ways you can’t measure anything else. With printed direct mail, you never really know how many recipients opened your letter and saw your offer before choosing not to respond. With email, you can know how many actually
You can also discover with precision which message, offer, subject line, day of send, time of send, frequency of send, list, and so much more drove sales, down to the individual level.
Be sure to drive traffic to your website and not third-party sites. For example, if you are sharing a story about your company on a media website, embed a copy of the story on your News page or blog to keep people engaged with your brand and set them up to see more of your messaging on your website.
Reblasting emails three to five days after the original send helps lift your response and engagement rates; however, it can also add to your list of unsubscribes. Test the impact of reblasting emails to your database before making this a regular practice.
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.
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).
Just like a subject line is critical for email open rates, the envelope teaser (a short slogan or sentence on the outside of an envelope) is essential for getting direct mail opened and read. Following are some techniques to make your envelope enticing enough to open:
In general, a letter combined with an insert, like a one-page flyer or a small brochure, pulls better than a letter alone. This is another element worth testing, because adding inserts increases the cost of production and mailing.
Test various messages and channels to see which work most effectively and efficiently for your industry, your customer database, and your offers. You can test messages and offers with email before utilizing more expensive channels to save money and time. Your tests should cover multiple variables to find the perfect combination of channels, messages, and offers for your brand and customer base.
One of the prime advantages of direct marketing is the ease and affordability it provides for testing. Truthfully, there’s no reason you shouldn’t be testing your campaigns, and if you’re not, you’re likely wasting a lot of money and walking away from huge opportunities to find out what works and what doesn’t, your customers’ preferences, and how to optimize efficiencies.
The list of testing variables is extensive, as shown in Table 11-1. What matters is not just that you test, but how you set up your test so you know precisely what you’re finding out and can glean actual truths rather than assumptions.
TABLE 11-1 Variables to Test in Print and Email
|
|
---|---|
Database lists and segments | Email lists and segments |
Responses based on CTA | Open rates and click-through rates |
Inserts versus no inserts | Google sponsored ads (email ads at top of in-box) |
Offers | Offers |
Reply cards versus phone calls | Landing page views |
Free gift versus no free gift | Free gift versus no free gift |
Coupon for free lunch versus discount | Coupon for free lunch versus discount |
Response mechanism | Response mechanism |
Creative and layout | Creative design or text-only format |
Envelope teaser | Subject line |
CTA | CTA |
Envelope color and return address | From line |
Arrival time to household — time of week | Send time — day of week, time of day |
Following are some guidelines for conducting a test that delivers clean results you can have confidence in:
Metrics: Have in place clear metrics so you can document actual response and sales from each direct campaign you execute. Code your response cards for the offer, incentive, and time of your campaign. For example, if you’re sending a letter package to customers and prospects in May 2022 and offering a 10 percent discount, your code for new customers may look like this:
DM0522NC10 – Direct Mail May 2022 New Customer 10 percent off
Also use different URLs and phone numbers on different print packages you send out to discover what works best for response and conversion.
A/B tests: Straight A/B testing is simple to execute. You send out two versions of the same campaign at the same time to the same test cells and see which one, A or B, pulls the most response. After you identify a winner or a champion, keep testing that piece against new ideas and offers. This is a simple yet powerful way to find out how small elements change results. You learn quickly and thus can adapt quickly.
A/B testing can be as simple as testing the colors you use in your creative, the size and placement of your CTA graphics, the photos you use, and which incentive, headline, or subject line works best.
Direct-response phone efforts worked well in the past and generated a good response because people participating in live calls tend to say yes more than they do with other direct marketing channels. However, with all the regulations, privacy concerns, and Do Not Call lists in play today, this is an increasingly difficult channel to use. Add the popularity of online chat versus customer service calls, and you have even more reasons not to make direct calls.
Here are some tips if you choose to include phone calls in your direct-response mix:
While telemarketing is losing its effectiveness, partially due to the overuse of robocalls and other impersonalized approaches, you may find that it still works for you. Like all aspects of your marketing, document sales generation, revenue generated from each sale and collectively, and the cost for making calls. Calculate your CPL and compare against other forms of marketing to see if it makes sense to include it in your marketing plan.
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