Transcript DM for Ad Urev040606..

Direct Marketing Overview
Advertising University
April 6, 2006
Agenda
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Introductions
Definition of direct marketing
Customer lifecycle stages
What makes a successful direct mail effort?
– The mailing list (or database)
– The offer
– The creative
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How it comes together
When should you use direct?
Review samples brought in by class
The direct marketing mantra: test-measure-refine
Key metrics
How to tell if you will love direct marketing like I do
Suggested reading, etc.
Introductions
• Me:
– 15 years in direct marketing
• Specialize in direct marketing strategy
• Currently Direct Mail General Manager at Lexicon
Marketing
• Former VP/Direct Marketing here at TPG!
• You?
– Anyone on a direct marketing driven account?
– Do share!
Definition of direct marketing
• Targeted
• Response vehicle: BRE, BRC, 800#, fax, web form
Customer lifecycle stages
We market to people differently
based on where they are in
their lifecycle:
Lifecycle Stage
Terminology in
“the biz”
Prospect
Acquisition
Lead
•Conversion
•Responder nonconverter
Customer
Retention
Lapsed
•Recapture
•WinBack
Q: What makes a successful direct mail effort?
• The mailing list (or database)?
• The offer?
• The creative?
• Note to self: Stop here so you don’t give away the answer
• A: All three, to various degrees.
– Conventional wisdom says:
• The mailing list (or database) – 40%
• The offer? – 40%
• The creative? – 20%
The List
• Srds.com
The Offer
• An offer is a promotion
– It is not the product itself
– It is what you do to get the prospect to want to
buy the product
• What are some examples from your sample
mailings?
• Always use a “Call to Action” (CTA)
• Expiration dates work!
The Creative
• Why is the creative a relatively small factor in direct
marketing performance? (Discuss)
– Opportunity to really tell a story – you have more real estate
– Test results have told us this time and time again
– The “What’s in it for me?” factor
• Visual look and feel depends on the target
– Doesn’t have to be “ugly”
– 2 color can be as good as 4 color
• Copy
– Don’t spill your guts on the outer envelope
– Don’t be afraid to tell the prospect what to do
– Be clear about what the prospect gets when they respond
• Mailing Format
– Letter/Envelope vs. Self-mailer
– Additional components: BRE, buckslip (lift note), brochures
– USPS adding a surcharge for certain formats
How it Comes Together
Acquisition
(Lowest response)
Conversion
Retention
(Highest
response)
List
Source
Usually rented
(or acquired via space ads,
web forms, promotions…)
Database
Database
Offer
Often gives prospects a
better deal than customers.
Why?
“Second best”
offers
Send out as
soon as possible
Vary offers to
keep customers
enticed
Loyalty programs
Creative
Economical format
Limited personalization
opportunities
Exception: B2B
Can thank for
previous
response
Can often spend
a bit more on
interesting
formats
Greatest
personalization
opportunities
Q: When should you use Direct?
A: When the Goal = Increased Sales
• Are there specific sales opportunities in a particular lifecycle
stage…
• ACQUISITION?
– Generate leads
• CONVERSION?
– Convert leads
• RETENTION?
– (Key question: How big is your customer database? The
bigger it is the more opportunity)
– Increase sales from current customers
• RECAPTURE
– Reactivate lapsed customers
Target must be specific
Behavior/Trigger Event?
Demographic?
(example: Newborn baby, new mover)
(example: Age 65+, in certain zip codes)
Currently use direct
successfully?
If yes
•Other types of direct media
may work too, particularly in
B2B
If no
•Would tweaks make it work?
•Look for “nuggets”
•Try a whole new approach
What are the other
delivery systems?
Electronic
•Internet (Email)
•Radio
•Phone
•DRTV
Print
•Magazine
•Newspaper
Product needs
explanation?
Brochures
•Can be detailed
DRTV
•May be a candidate
B2B
•Products/services often
need explanation.
•Multiple direct media
often used: phone, email,
intrusive direct mail
Mailing Sample Review
The DM Mantra
Test-Measure-Refine
• Test
• Measure
• Refine
Key Metrics
• Every company tweaks the definitions, so
it is important to ask how a metric is
calculated – don’t assume
– Response Rate
– Conversion Rate
– Cost per Acquisition
– Lifetime Value (ROI)
How to tell if you will love Direct
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Blend of creative/analytical skills (but more analytical)
No burning desire to raise creative to the “next level”
Don’t mind learning a lot of rules (before breaking them)
Detail oriented
Can communicate with with both nerds & creative types,
bring them into a room, and actually make something
productive happen!
• Thick skin (especially if you work at a general agency)
• Desire to prove your theories with numbers, yet
understand that not everyone believes statistics
(hopefully not your client!)
Suggested Reading, etc.
• “The New Direct Marketing”
– by David Shepard Associates
• the-dma.org
– The Direct Marketing Association’s website
• Srds.com
– Datacards for thousands of lists and databases
– List brokers, managers, compiler
• “On the Art of Writing Copy”
– by Herschell Gordon Lewis
• Inside Direct Mail
– Sometimes they even give results