69. Where should DM fit into my business strategy?
This is a hierarchy developed by Rod Wright, a former M.D. of O&M Direct in London. It sets out to show where Direct Marketing fits in to your business strategy and marketing activities.
The important thing about it is the way it shows how everything should stem from what kind of firm you want to be. This means that even when looking at a piece of direct mail, you should evaluate it with that in mind.
What are you trying to achieve?
E.g. five year plan
Protect your customer base
Recruit new customers
Maintain high margin with added value, i.e. concentrate on quality not price
Tell your prospects and customers you care about them; add value
Build a database to initiate and develop long term relationship
Show your customers and prospects what kind of firm you are – e.g. you don’t offer bargains; you offer added value
Remind them you care about their needs
TV and public relations to project your chosen image Sales promotion/special offers to add names to your database
Direct mail/telephone to cement relationships with individuals – and make sales
TV – which channels?
PR – which publications?
Where will you make your offers? On pack? In store? Which media?
Tone of voice
When will you communicate?
How often will you communicate?
In which sequences?
70. Which four factors matter most in planning?
1. Product and positioning
You are wise to spend more time thinking about the product and its positioning than anything else.
The positioning is the ‘character’ of the product or firm, as opposed to what it is. Is it efficient? Or friendly? Or cheap? Or deluxe?
A good product, even poorly sold, will do better than a bad product, however well sold.
An idea for a new product – e.g. a new kind of insurance that pays your money back if you don’t claim – will probably make far more difference than anything else you do in marketing.
Good positioning builds great brands. The Mitsubishi Eclipse outsold the Plymouth Laser 5 to 1 in the US – though the cars were identical, made in the same factory.
2. Research and testing
One thing makes the difference between Direct Marketing and other disciplines. You can count your results. You know what works; you don’t have to guess.
Not to take advantage of this is madness.
Testing alone is not enough. It will tell you what happens. Research can indicate what is likely to happen and why it happened.
No product, however brilliant, will sell to the wrong people. And no creative treatment, however stunning will succeed if it isn’t seen by the best prospects.
A poor product or message sent to the right prospect is better than the other way round.
Targeting means when as well as where
In the prospect’s life e.g. marriage, new house, birthday.
Before buying: sending for brochures, looking in stores, working out budget.
After buying: the ‘afterglow’, having a problem, time to buy again.
These are critical to targeting.
Thinking up a good offer can have tremendous impact.
After all, an offer is more than just pretty words and pictures: it is something real which benefits people.
71. Which prospects should I spend most money on?
Spend your money where it does best.
Mass media cover customers, good prospects, bad prospects and many who will never be prospects. There’s high waste.
As Italian economist Pareto pointed out, the 80/20 rule applies in every market. Why waste costly one to one communications on the 80%?
So who are the 20% you want? They will have the most need for the generic product. E.g. if you are selling petrol, they will be people with big cars, more than one car, or who travel a lot.
The most profitable targets will not only have those characteristics, but be customers loyal to your brand.
There are three categories you should be interested in:
- Loyal, high spenders. Your Direct Marketing should concentrate on maintaining these customers.
- Relatively low spenders who are loyal to your product. You should try to upgrade them.
- High spenders who are not loyal to your product. You should try to switch them.
The great mass who do not fit into those categories are largely a waste of time.
If you sell through intermediaries or retailers, launch new products and make offers via mail and phone
Segment prospects by value
– deploy sales people against best, plus phone and occasional mail
– phone, mail plus occasional sales calls against middle group
– phone plus mail against least valuable
72. What are the stages in planning a campaign?
- Establish where it fits into your marketing strategy – what will follow it or precede it and what else is going on in other disciplines. It’s not conducted in isolation.
- Determine your objective. In numbers. In money.
- Establish how long you have to attain it.
- What are the easiest ways to reach it? – and the easiest prospects. Start with them and spend most on them.
- Have you any previous experience to compare with?
- Brief agency and suppliers get their views and adapt if necessary.
- Establish Timings
- See agency’s suggestions.
- Review and only change if you have reasons.
- Run it
- Analyse the results: document your learnings.
73. Is there a simple, quick way to plan?
Clarify your objective. In numbers, time, money.
Who are the easiest, most profitable prospects? Then the next easiest – and so on in descending order.
- How do they decide? Over what period? And what motivates them?
- Which media (including sales people) can you use?
- Against which groups or people within them – i.e. decision makers or influencers?
- When is best?
- How often?
- In what sequences?
- Refer to previous results, available statistics or your judgement.
- What might you achieve against each group, using each medium?
- Again, quantify.
- How can you test?
- And what can you test?
- Estimate the costs and the time needed.
74. What are the most important questions in marketing?
Here are five simple questions you should be able to answer.
1. Who are you talking to?
2. What are you trying to get them to do?
3. Why should they do what you want?
4. Where do you find them?
5. When should you speak to them?
And just a warning: on an alarming number of occasions, marketers fail to do something even more obvious: tell people precisely what they are selling.
75. How can I learn more about my customers?
If you’re starting up on your kitchen table, you will naturally read the mail. Don’t stop doing that as your business prospers. Keep in touch. If you’re not in the mail order business, then make a point of meeting your customers. This is something which in my experience the majority of senior executives don’t do nearly enough.
By reading correspondence, you can learn the most surprising things. I once wrote advertising for a headache relief powder. One letter we got was from a woman who used it to soak her tired feet. Whether this would have led to a whole new advertising approach I don’t know – but that letter told me a lot about my customers.
Here are three other intelligent things to do – particularly if you fear you may be moving in an increasingly rarefied atmosphere:
- Talk to your sales or telephone people; sit in on their sales pitches, listen to their conversations with customers.
- Go shopping in a street market at least once a month. While you are at it go and sit in a crowded pub and listen to ordinary people.
- Invest regularly in group discussions amongst your customers, or street interviews. Get your creative people involved in these. Even if you have no specific objective, I am sure you will be surprised at what you learn.
One of the things you will certainly learn is that people very rarely devote as much time to speculating about the wonders of your advertisements, your website, your e-mails and mailings as you do. Indeed, they are almost entirely indifferent to them.
For this reason, they do not spend much time trying to puzzle out what you’re trying to say. So if you don’t make it extremely clear what it is you’re selling right from the start you are on a hiding to nothing.
76. Do the same things work in different countries?
‘Men’s natures are alike; it is their differences that drive them far apart.’ – Confucius
Different nationalities are far more alike than you might expect.
They may eat differently, have different views on sex, marriage and religion. But they all want to be happy, rich, respected and comfortable.
Don’t be over-impressed by people who tell you “we are different here”.
In finance and business, people often have the same motivation. So never ignore an idea that has worked in another country.
Cultures differ – but if the benefits of the product apply, then the same approach often works.
First try what’s worked elsewhere, with the minimum change to suit the market. Then try something else if that doesn’t succeed.
Cultures affect how decisions are made. In some countries management is dictatorial; in others democratic. The same with families. In some countries husband and wife decide together; in others one is the boss.
77. How can I segment customers – and does it pay?
Almost any way in which you classify customers that enables you to communicate with each group differently will pay because relevance matter more than anything else in talking to people.
There are many ways in which you can do so.
You can segment them by how recently they became customers – the more recent, the more likely they are to buy.
You can segment them on how frequently they have bought in the past – the more frequently – the more likely they are to buy.
You can segment them based upon ethnic origin or by where they live – obviously for many products, the richer the area, the more likely they are to buy.
You can segment them according to how long they have been customers. For instance a regular mailing to people who have been with you a year will pay.
You can segment them by value, by age, by sex, by educational level.