It doesn’t take calculus to figure out how to do direct marketing, but when it comes to deciding where to put your emphasis between the 3 levers of direct, knowing how to prioritze your effort can make a big difference in the success of your campaign. Think of it as part of the science in the ‘art and science’ of direct marketing.
The three pillars of successful direct marketing are…
… and they are often presented in this order as a ranking of priority with list being the most important. Here is what I was taught years ago and still use today with clients to explain weighting between pillars:
Campaign Success = List (40%) + Offer (30%) + Creative (30%)
I agree with this weighting for marketing to your customer list. But for prospecting I feel it’s more 60% for list and 20% each for offer and creative. Think about it from this perspective: If you have beautiful creative and a great offer like “Six Months FREE” at a senior’s residence, what good is it if your list is to millennials or to seniors who can’t afford your residence?
Step 1: THE GOLD MEDAL WINNER – LIST
Prospecting – Getting New Customers
When trying to acquire new customers, you will typically be working with a list broker to source an external list. Regardless of how many lists they have, you want a list of records (people) that resemble your existing customers. You want to target people who look like your current customer base in as many ways as possible. If you are a women’s clothing retailer you would be interested in a list of people who have made women’s fashion purchases in the past or who buy women’s fashion magazines or who signed up for an online women’s fashion newsletter, etc. Other information such as demographic attributes like age, income, family status and location are also helpful.
Loyalty – Speaking to Existing Customers
Whether your aim is to activate, cross sell or up sell, retain or recapture customers you have a customer record so you don’t need to go outside to get contact information (you can however use external information to add to and strengthen the quality of your database but let’s save that for another day). You have your a house list from purchase data or from customers who gave you their information directly. But list still matters. For the goal you seek to address (i.e. cross sell), you still need to look at who within your database will give you the best return. If you are trying to sell an existing customer a product upgrade, there are factors that will make some customers more likely to respond. You could analyze customers who have already upgraded and see what item(s) they bought before the upgrade purchase (i.e. if you find that 18% of customers who bought product A later bought product D, reach out to people who have product A and no D). The point is that even within your house file, your ‘list’ does not mean any customer in your database.
Step 2. What Is Your Hook?…The Offer
Does an offer have to be a discount? No, but too often marketers think it must. We’ve trained ourselves (and perhaps too many customers for some businesses) to think that unless you have a sale or a dollar off coupon you won’t get traffic through the door. Not so. An offer is defined in Webster’s this way:
To present for acceptance or rejection
It does not say money anywhere, but you do have to have something of value. And we all know that value includes more than a discount or something for free (although this can be the most powerful offer for your audience). The important note here is to know your audience. The goal of your offer is to find the gem(s) that motivate your target to respond…to act - call you, go online, sign up for your email, enter your contest or go into your store and buy.
Step 3. Make Your Message Stand Out…Creative
Even though creative is behind list that does not mean it’s not important. Creative can be the one element where you can be different from your competitors. They can buy the same prospect list and offer 10% off just like you did. Creative is your chance to stand out in my inbox or mailbox and have me look at your message over your competitors. And certainly on the direct mail side, with marketing budgets being what they are nowadays (spread across more channels), expenditures on creative have declined over the years. Marketers today often invest creative funds in new media over direct. But that’s like running the 100 metre dash and slowing down before the finish line – it puts your effort over the first 90 metres (getting list and offer right) at risk because you didn’t run through the line. So don’t short shift your campaign and go with sub optimal creative.
A final word of caution on creative: Don’t design your creative to win over the hearts and minds of awards judges and not your customer’s wallets. Heed the advice of the master of direct marketing David Ogilvy when he reminds us all that we are paid to ring the cash register, not put trophies up on the wall.
Confessions of an Advertising Man, David Ogilvy, 2011