Grand opening of new Linkedin Group – Direct Marketing Questions & Answers


Linkedin members can join by clicking here: http://www.linkedin.com/e/vgh/2080726/.

This is the place to get all of your direct marketing questions answered.

And if you are a direct marketing expert, this is the place to help gain notoriety by helping direct marketers succeed.

Check it out and join!  And Happy July 4th weekend from Jim.

Update 7/7/09, since Friday including the holiday weekend, we have gotten 123 members, both experts and in various stages of their careers.

You lost me there (part one, website issues that lose you business)


Last week, I gave a presentation to the Florida Direct Marketing Association titled “50 direct marketing tips, tricks and tactics to make you a superstar.” I’m going to share those tips with you over the course of the next few weeks.

Part of that presentation dealt with improving Web marketing. Right up front, I’m asking you to contribute to this article by posting your comments below. If I miss something, please add it, OK, lets make this a collaborative effort.

As a side note, I’ve spent a lot of time lately looking at multichannel and other marketers’ Web sites, and have seen tremendous opportunities for companies to capture not just orders, but prospects as well.

Many e-commerce Web sites are good at taking orders, but not so good at capturing prospects.

Thus the goal of this series, which I’m calling “You Lost Me There,” is to help you get more of the people who visit your Web site to raise their hands and request to continue the dialogue with you. You want these people in your database, as they’ve expressed some level of interest in your products.

That said, here are three tips to optimize online sales:

  1. Why is your phone number not prominently displayed on your homepage and ALL pages of your site? Make it big. Make it stand out. And put it on pages in multiple places! Your prospects and customers don’t want to have to WORK to find you.
  2. If you say you don’t want the phone number to be easy to find because you don’t have the phone staff to handle the calls, think again. Even pure-play Internet companies need to coddle their prospects and customers in this day and age; otherwise they’ll shop elsewhere. Contract with a call center, even if it’s just to take messages and pass them on. There are call centers that even allow you to pay as you go by buying blocks of time. Essentially, adding a call center doesn’t have to be as costly as you think.
  3. For crying out loud, respond to customer e-mails. Same customer service issue, different methodology. If you want to drive people to interact with you via e-mail, make your e-mail contact info stand out. And respond in a reasonable amount of time. In the second week of my direct marketing class at Miami International University, I have my students conduct an experiment: Send an e-mail to a company and see how long it takes for it to respond. Guess what — fully one quarter of the e-mails don’t get responded to. Here’s a rule of thumb for you: Return every e-mail in less than four hours. Not only the same day — four hours.

Every call and e-mail is an opportunity. Start a dialogue, and get customers ordering.

Bottom line: Consumers don’t have the time to spend on your site figuring out how to contact you with their simple questions. They don’t want to search your FAQs or dig around for contact info. They want answers immediately; otherwise, they don’t care how good your products are, because they won’t order. Don’t lose business over this.

Check back next week for part two of this series, when I’ll give you some more tips on how to increase ROI with your Web site. In the meantime, post your comments below.

FDMA Catalog Marketing Summit From The Basics to Beyond Thurs 4/16


FDMA Catalog Marketing Summit From The Basics to Beyond!

Host: Florida Direct Marketing Association

Date: Thursday, April 16, 2009
Time: 11:30am – 2:30pm
Location: Westin, Fort Lauderdale
Street: 400 Corporate Drive (I-95 and Cypress Creek Road
City/Town: Fort Lauderdale, FL
Phone: 786-357-3275
Email: info@fdma.org

REGISTER: http://guest.cvent.com/EVENTS/Info/Invitation.aspx?e=c746e12a-6705-48c5-85ff-943edd040881

Description: Catalog Marketing: From the Basics and Beyond.

What does it take to manage a multi-channel catalog and thrive in this economy? Come join us on April 16 as our frank 5 person panel of experts teaches you from the inside out. Each expert has been hand chosen due to their expertise in specific area’s of catalog management. After each panelist makes their presentation, you will be able to get hands on and ask questions. Topics include: 

• Knowing your customers! – Metrics, business intelligence, LTV, and repeat behavior.
• Printing – Optimizing size, page configuration, postal discounts, co-mailing.
• Creative- designing catalogs to sell. A case study in redesign.
• Operations – Insource, outsource, case studies call call center and fulfillment.
• Lists – a broker’s inside info that will help you challenge and get more from your broker.

Speakers, 

Fatemeh Khatibloo, VP of Strategic Services Binger Catalog Marketing, Inc.
Kathy Duggan-Josephs, VP, Multichannel Marketing, RMI Direct 
Tim Holody, COO, Seta Corporation (Palm Beach Jewelry Catalog) 
Scott M. Kaczmarek, Sales Manager, Quad/Graphics, Inc.
Fred Neil, President, Spectrum Management Associates, Inc.

Moderator: Jim Gilbert, President, Gilbert Direct Marketing, Inc.

11:30 a.m. – 12:00 pm Registration Check-in and Networking
12:00 pm – 1:30 pm Program and Lunch
1:30 pm – 2:15 pm Expanded Bonus Speaker Tracks

Register early to avoid additional $10 walk-up fee. 

Interested in attending our Board meeting at 10:00am and learning more about getting further involved with the FDMA, please let us know at 786-357-3275.

WHEN
Thursday, April 16, 2009 11:30 AM – 2:15 PM

WHERE
Westin Hotel Fort Lauderdale
400 Corporate Drive
(I-95 and Cypress Creek exit)
Fort Lauderdale, FL 33334

REGISTER: http://guest.cvent.com/EVENTS/Info/Invitation.aspx?e=c746e12a-6705-48c5-85ff-943edd040881

Three Ways to Cut Customer Acquisition Costs


A few weeks ago, I discussed some powerful resources for finding obscure mailing lists that may not be on the traditional list rental market. This week, let’s take these resources a step further. 

With response rates down and expenses up, now is a great time for you to look at alternative ways to acquire customers and even lower your customer acquisition costs. Again, the resources are:

* Belcaro Shop at Home (www.shopathome.com)

* Catalogs.com (www.catalogs.com)

* Greyhouse publishing (www.greyhouse.com/marketing.htm)

One other method I didn’t mention last week is through magazines that target your particular niche. You’d be surprised at how many other companies there are out there with products that have an affinity to yours and that would be open to a marketing partnership.

Here are some examples of the types of programs you can set up with other catalogers:

1. List exchanges. The most obvious way is to exchange housefile names (both offline and online). This will eliminate most of the cost of renting those names. To keep things running smoothly, once you work out your arrangement with the other list owner, you can have your list broker work this like a regular list order. Your broker will charge you a nominal fee for this, called an exchange rate.

2. Package inserts. Trading off space in outbound package inserts can be an excellent source of both leads and orders. Just like paid-package insert programs, set up tracking codes and test creative and offers. For offers, try testing a catalog request vs. a direct sale of a hybrid of each. As for finding companies to trade with, use the above-mentioned sources. Or, your list broker can help you make contact with the list owners of some of the lists you rent (ones that don’t already have a package insert program running).

3. Endorsed deals. Endorsements allow you to provide your customers with items that are complimentary to your products, thus creating goodwill. Endorsement programs can be as simple as sending out an e-mail or postcard to your customers with a recommendation, or as complex as elaborate syndication programs with revenue sharing. How you structure your deal is dependent on what you and the other marketing team can dream up.

Some other ideas include a store within a store, trading pages within your respective catalogs, or selling other marketers’ products on your Web site and vice versa. The sky’s the limit here. Other Considerations Do your due diligence on the company you’re considering partnering with. Carefully review its Web site, product offerings, customer service, etc. Make sure your potential partner company’s quality is of the same level as yours.

Also, structure these types of partnerships as any other test. Use the smallest possible circulation/sample to test the waters before rolling out.

I had a client once who thought he had a slam-dunk co-marketing program. The other company offered his company a free test of 50,000 names. After much back and forth, I convinced his company to mail only 5,000 names. Good thing. The test bombed! And by mailing one-tenth as many names in the test, his company lost far less than it could have. Two words: Be careful!

Consultant, Prosultant or Insultant? Part 1


Now more than ever, fear is driving the business process. To break it down, business owners/C-levels/boards of directors, terrified of the current economy, are making decisions based on fear.  

To make matters worse, their employees, both scared of losing their jobs and of looking bad in their superiors’ eyes, are implementing these fear-based decisions.

The truth is, what I just described is pretty much business as usual!

Even before the economy started to tank, most of the people I’d talk with on a daily basis already were floating through their business tasks with elevated levels of terror. Mix in the current economy and the fear rate goes up exponentially.  

Bad decisions executed by terrified employees. Sounds like a disaster in the making, which many could argue is exactly how we wound up in the situation we’re in: watching our economy unravel while our politicians fiddle away (that’s a conversation for another day).

At the risk of sounding self-serving, the need for a good consultant, an objective third party, is needed now more than ever.  

OK, let me say something here that many of you already know. In my four-plus years of writing for Catalog Success, in print and on the Web, as well as eMarketing & Commerce Magazine, not once have I ever written an article even slightly or indirectly pitching my services (or consulting services in general).

That doesn’t mean I’m going to start now. Rather, I’d like to remind you of the benefits of working with one. And mind you, I’m not pitching you for my services. I’m dedicating this week’s column to reminding you of the merits of working with a good consultant in these tough times. That could be any other good consultant, not just me.

That said, here are eight things a consultant can do for you right now with a set of fresh eyes to balance out the fear-based decision making:

  1. Review all of your numbers, from response data to budgets to lifetime value analysis and more.
  2. Review all of your vendor pricing in search of efficiencies.
  3. Look for opportunities in your circulation plan, targeting dead weight.
  4. Review your merchandising plans and prepare square-inch analysis, among other tactics.
  5. Seek out other marketing opportunities you may not be taking advantage of (e.g., social media/Web 2.0, community, on-site reviews).
  6. Find advertising media you’re not using and recommend structure testing, such as package inserts, print ads, supermarket take-ones, billing statements and so forth.
  7. Provide ongoing support to keep you focused and on track.
  8. Review your creative efforts and make recommendations for improvement.

And Now a Word From Our Sponsor
The IT director of a former client used to tell me there’s no such thing as a consultant and all of us are actually insultants. Next week, in part two of this series, I’ll discuss some insider tips on the three types of consultants and how to choose the best for your organization.

How To Create Catalog Split Test Scenarios That Matter (part 2)


This week in the final installment of this two-part series on the value of creating mail tests that produce measurable, and telling, results for your catalog, I provide takeaway lessons from last week’s example of how one catalog company tested the profitability of using an upgraded paper stock in its catalog. I’ll also list some tips to help ensure your company is conducting productive mail tests. 

The Moral of the Story
Even scientific tests often succumb to the subjective. Once all of your scientific testing is done, the art of interpreting the data takes over. Returning to last week’s example, as a direct marketer I never would’ve rolled out the higher-grade paper without additional testing. I would’ve wanted to confirm my results by running the same test over again. Even if the test were a runaway success, I would’ve proceeded cautiously. 

In the catalog/multichannel industry, there are infinite varieties of tests that can be configured, measured and, ultimately, interpreted. 

So how do you become successful and improve your company via testing? I believe the following seven principles, that if adhered to, will allow you to hedge your bets.

1. Always test against something. Your current catalog, e-mail, Web site, merchandise, among other things, can be used as your control. 

2. Always create a testing hypothesis. Use this example: If we do X, we expect Y to occur. 

3. Always set up logical tests based on scientific principles.

4. Test only one variable at a time. If you test more than one, you’ll never know which variable made the difference. See below for a list of variables you can test.

5. Always do your math up front. Calculate all expenses in advance of the test and set up a pro forma profit and loss and break-even analysis. 

6. Always do the math on the back end. Before the creative side of testing begins, have the math in front of you. Many times the numbers will drive decisions. 

7. Always test until you’re satisfied. Don’t roll out any changes to your catalog unless you’re certain of the outcome through testing, retesting and further testing. 

Variables You Can Test Today (a checklist to get you started)

List Variables:

* Recency — the most recent names from a new list; if your list is “working”; older segments of the list; average order sizes.

* New lists in your product category.

Creative and Printing Variables:

* Paper, trim size, pages, formats, photography, copy, ink-jet messages, cover versions, dot whacks, inserts.

Offer Variables:

* Gift with purchase, dollar or percentage off, free shipping.

Merchandising Variables:

* New or different products; repositioning older or non best-sellers via creative execution.

How to create catalog split test scenarios that matter


In part one of a two-part series on the value of creating mail tests that produce measurable, and telling, results for your catalog, this week I tell the story of one cataloger and how its testing proved to have inexact results.

Catalogers these days are racking their brains thinking about ways to decrease costs. Many have turned to changing their books. But as I illustrate below, making universal changes to your catalog can have mixed results. Some of the earliest direct marketers called their work “scientific advertising.”

Catalogers separate themselves from brand marketers by measuring their results and learning from their successes and failures. That’s why catalogers must consistently stay true to the principles of scientific advertising and test everything. I know you’re desperate to reduce costs. But I implore you to test before making any universal changes to your book. To illustrate my point, let me share with you a story — more like a cautionary tale — of a company that shunned the notion of a test before rolling out a major change to its catalog’s paper.

The Backstory

A client of mine decided that upgrading the paper it used in its catalog would result in increased sales — just a gut instinct. I warned them about testing first, as well as running some profit and loss scenarios, to determine how the additional costs would affect their catalog’s break-even point.

They scoffed at the notion of running a pro forma break-even analysis to determine how much revenue they needed to offset the additional paper and postal costs. In fact, it took the convincing of their paper merchant, printer and service bureau reps, along with myself, to convince them to set up a test before changing their paper weight. We set up a straightforward scientific A/B split test. We took half their customers and prospects and sent them a catalog printed on their regular paper. The other half were sent the book with the upgraded, more costly paper.

To keep the test scientific, the service bureau chose every other name from each list segment. In scientific terms, the A portion of names represented the “control” group and were mailed the “before” catalog; the “test” B group was mailed the catalog with the upgraded paper stock. The goal was for the test group to outperform the control group.

The Outcome

When we analyzed the results of the test, the client and I came to two different conclusions. They concluded the test was a success. After all, there was a marginal increase in response rates driving in a few new customers in some, but not all, of the list segments.

On the other hand, I saw something entirely different.

Yes, results were up slightly in some prospecting segments, but response rates were down in the housefile, especially single buyers segments. This meant it was converting fewer new customers (who were just trying the products) to multibuyers — a key metric and clear indicator of future success.

Just as important, the incremental cost of the higher grade of paper was not covered by the slight bump in sales. Prospects were costing more to acquire, and the mailer was losing slightly more money up front — money that would have to be made up in future mailings and orders. Customers were accounting for less profit on a per-order basis.

So who was right?

The client at that point was willing to lose a bit more up front to increase sales and put out a sharper-looking product. Eventually, the increased costs would catch up with it, however. The business suffered and the paper grade had to be scaled back.

Next week in the final part of this two-part series on the value of creating mail tests that produce measurable, and telling, results for your catalog, I continue my story from this week by providing some key pointers you can take away from this example, as well as listing some tips to help your company run successful and subjective tests.

The most basic direct and catalog marketing fundamentals (to learn and re-learn)


I recently had a conversation with another catalog consultant about a client proposal we’re jointly working on. The conversation worked its way to a discussion on the basic fundamentals of direct marketing. In essence, what’s the most basic fundamental of direct marketing that we need to present and our clients need to follow?

It came down to this: the 40/40/20 rule.

This rule states that in order to be successful in direct marketing, you must do the following:

  1. Concentrate 40 percent of your efforts on lists. That means list analysis and planning, selection, RFM, and, most importantly for catalogers, circulation.
  2. Concentrate an additional 40 percent on your offer. For catalogers, that means merchandising. That requires expert attention to detail, including but not limited to product selection, pricing, presentation and analysis. By analysis, I’m referring to square-inch analysis, the most powerful tool you can use to manage your catalog merchandising — aka “squinch.” Understanding the wants and needs of your customers is part of this function, as are the offers you make to them to stimulate response.
  3. Tie it all together by spending 20 percent of your efforts on creative execution. Literally, creative execution is only one thing: the bringing together of your list and offer/merchandising efforts in such a way that it speaks “buy now” to your customers.

As a consultant, I almost always see this in reverse.

If I had to quantify what I see in clients as they apply the above core competencies, it would be these three:

  1. 50 percent merchandising, with less emphasis on analysis and more on product development and presentation;
  2. 30 percent on creative. The creative (i.e., the catalog) is the brand’s calling card;
  3. and 20 percent on lists.

In the catalog business, lists and all that circ stuff are just as important (some would even say more) than offer and creative.

It’s easy to see how that could happen. Most catalogers are merchants first. They had a product idea and brought that to market. How they bring it to market is all about building brand image. It’s as simple as that.

I usually get called in when there are some business issues that need addressing. Often I’m told that there’s a problem with their catalogs. To this I say, “The catalog (or direct mail piece) isn’t the problem; you’re trying to solve a marketing problem (translation: circ and merchandising analysis) with a creative (design, look, feel, brand) solution.

At that point, I review the client’s version of the 40/40/20 rule and then the “textbook” version. There’s plenty of evidence for the proper application of the rule in the direct marketing textbooks. Absent this principle, I’ve seen some horribly ugly catalogs that are cash cows, while beautiful catalogs sink like stones.

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com. You can also follow Jim on Twitter at www.twitter.com/gilbertdirect. Read Jim’s personal blog at http://gilbertdirectmarketing.wordpress.com/.

Attention Catalogers: 3 surefire ways to add new names to your catalog mailings (and lower your cost per acquire)


I’m currently in the midst of doing some more research on the social medium and its applications in the catalog/multichannel industry. If your company is using social media and wants to be profiled in a future column, e-mail me at jimdirect@aol.com.

In the meantime, if you’re looking to grow your housefile, there are a number of ways to generate new catalog requests and orders beyond the traditional list rental model. I’ve successfully used the following three services many times in the recent past.  

These companies are especially helpful to retailers operating in niche markets where there aren’t enough names to mail from rented lists.  

You can use these sites to research lists not openly available on the rental market, and to get your catalog listed to generate catalog requests and orders.

  1. Catalogs.com (www.catalogs.com) offers in-depth descriptions of the catalogs it promotes, along with links to the catalogers’ Web sites, allowing for further research on a particular product, price, etc. This helps you gauge whether a catalog’s list may be a good fit for your business. Getting your catalog listed on this site will help you add new customers within your allowable cost per acquisition.
  2. ShopAtHome (www.shopathome.com) is a catalog of catalogs that’s been put out for years by the Belcaro Group. It has both prominent and more obscure catalogs listed in its pages. Its Web site serves as a good research tool, too. Getting your company listed is a great way to increase business.
  3. Grey House Publishing (www.greyhouse.com/marketing.htm) offers both online and offline research. Its “Directory of Mail Order Catalogs” is one of the largest catalog resources available.

The direct mail list business – A primer for general management


Since last September, we’ve discussed printing, merchandise and catalog creative execution. Over the next few weeks, I’ll serve up some suggestions and insights regarding the list side of the catalog business.

Always remember, the 40/40/20 rule of direct marketing states that list selection can impact 40 percent of your direct marketing efforts. 

For starters, you’re probably paying WAY too much attention to your merchandise and creative efforts! That’s O.K., it’s only natural. You’re a merchant in a product driven company and you want your products and your brand image to represent the sum of your hard work. Besides, your products and image are the calling card for your business, right? 

But as I’ve said before, don’t yourself as a product-driven company. Start focusing on matching up the right lists to the right offering — not one before the other, but in concert with each other.

Your job as a direct marketer is to put the puzzle pieces in the right place regarding the list choices you make. But it can be much more complicated than that.

Let’s take a look at lists in general for a minute. There are many different lists on the market and many different list brokers you can choose from. 

Simply put, lists are either two things, customers or prospects. They are made up of people with some sort of affinity to each other. Usually the glue that holds the names on a list together represents certain demographic, psychographic, social or behavioral factors.

Three Kinds of Lists

The basic three kinds of lists you can choose for your marketing efforts are the following:

• House lists: your own customers and prospects already in your database

• Response lists: lists of people who’ve responded to a specific offer (eg: catalog buyers)

• Compiled lists: people who came from a source like compiling from a phone book or public records etc.

The closer you stick with product offering’s affinity, the better for your results. For instance, your house list will always yield the best response. If you’re a consumer mail order cataloger, stay away from compiled lists and stick with response lists unless you have such a small list that you’ve exhausted all possible names of mail order buyers. From a product affinity perspective, the response list that most closely resembles your customers will most often return the best response rate. 

If you are a B-to-B marketer, then you may want to delve into the compiled list world.

Why? Stay tuned to my upcoming blogs, and I’ll explain why B-to-B and B-to-C catalog marketing efforts have very different list demands. We’ll also look in to some basics on list brokers and how to choose the right one, as well as other list concepts like circulation planning, RFM analysis, catalog co-op databases and models in the coming weeks.

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