Friday Forecast: Six Essential Tips for Direct Marketing Success

by Colleen Ferrier and Rick Petry on May 12, 2017 9:55:00 AM Trends, Direct Response

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Entrepreneurs, inventors, and mainline brands may all consider direct marketing at some point as a means of introducing their product or service to the marketplace. Amid a world of dominant online and offline retailers, it makes perfect sense: why not sell directly to the consumer, enjoy better margins, and keep more profits for yourself? In today’s omni-channel universe, however, one should enter the arena of direct marketing fortified with the knowledge of what it takes to succeed over the long haul. Direct response advertising is no longer a quick fix that generates instant profits. Instead it is a powerful marketing methodology that, when properly executed and funded, can deliver exponential results over what is now a much more multi-faceted and multi-step consumer buying process. Here are six tips to help give you a better understanding of what it takes to succeed:

1. Do Your Homework: As fundamental as it sounds, it is essential that you size the market for your product or service and not rely on “backyard barbeque” research. Asking your neighbors if they would buy your brainchild in the midst of flipping burgers is not a barometer of broader marketplace success. After all, who is going to tell you your baby is ugly? Market size will help quantify your potential audience size and also help guide which marketing tactics are best suited for that audience. If it is of broad appeal, direct response television may be the best way to build awareness. If is more niche, digital marketing can help you advertise to a more targeted group of prospects. There is plenty of research available through the government and other sources to help answer questions like: how many households in America have a dog? How many own a boat? And by the way, the answer to the question: who is the audience for your product? is not “everybody.” Those are your rose-colored glasses whispering in your ear.

2. Be Clear About How You Define Success: What is your ultimate goal? Are you looking to create a robust e-commerce business? Get into retail? Ultimately sell your company? As Paul Rothstein, a respected consultant and direct marketing campaign manager explains it, “There are many ways to define success.” Rothstein spends significant time probing up front to ensure there is clarity about what the goals of campaign are. Naturally, everyone wants to make money, but having a clear understanding of where you're headed can help inform the tactics employed to get there. As Dr. Stephen R. Covey, author of the seminal self-help book, The 7 Habits of Highly Effective People put it, “Begin with the end in mind.”
 
3. Be Certain the Numbers Work: Direct marketing is all about the numbers. It begins with having a product with sufficient margins. As a general rule of thumb, if the product is selling for a dollar, it should cost .20 to .25 cents or less. Why? Because the associated costs of media, telemarketing, fulfillment, etc. require retail prices that reflect four to five times the cost of goods sold (COGS), unless the marketer is relying on a longer play involving continuity and lifetime value. Putting even more pressure on margins is the fact that the public has become accustomed to free shipping. As Rothstein puts it, “You have to be properly funded and know the metrics so that you do not run into cash flow problems. It isn’t just about the media efficiency ratio (MER), but your overall return on sales. That means you need a complete pro forma that takes into account all of the costs including manufacturing, media, shipping and handling, postage, customer service, merchant processing fees, etc.”
 
4. 💩Will Happen: Inevitably, things will go awry at some point. Your media won’t clear, you’ll run into manufacturing or inventory issues, or a credit card processor will become suspicious of your sudden and rampant success. The best defense against such matters is to carefully plan and monitor your results as your campaign rolls out. Are those results matching up to your pro forma? If not, what adjustments must you proactively make? “Direct marketing is incredibly dynamic and requires a kind of hyper-vigilance that traditional marketers may be unaccustomed to,” Rothstein advises. “That’s why it helps enormously to have someone minding the ship who has been there before and knows how to head off the most common problems that can arise.”
 
5. Don’t Overbuild: The shoulder of the direct response highway is riddled with the corpses of companies who, seduced by their own success, overbuilt infrastructure that then forced either massive layoffs or downright bankruptcy. There is a natural life cycle to most direct marketing campaigns that can last from roughly six months to two years. Therefore, it is strongly advised that you outsource as much as possible so that you can maintain variable costs and operate as nimbly as possible. Unless you are among the lucky few who parlay your direct marketing success into a sustainable brand, Rothstein recommends you, “Stay lean. Avoid the temptation to build your own call center or shipping department. There are expert resources for such matters that have a ton of experience and will free you up to do what you do best.”
 
6. Take the Long View: Today’s customer journey from awareness to purchase and post-purchase will often take days, even weeks or months, and require multiple touch points. Gone are the days when a marketer can rely on just one marketing silo such as DRTV or even digital to accomplish their aims. As Rothstein puts it, “You have to take a global view of your direct marketing efforts. There are no longer any quick fixes and it can take one to two years to get into retail.” With online and offline advertising, including broadcast television and radio, print, out-of-home, display advertising, and social media, today’s direct marketer must be committed to building an entire ecosystem that is myriad in its complexity.
 
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Paul Rothstein, President of PCR Marketing, is a consultant and campaign manager who specializes in direct marketing.
 
Rothstein has two final words of caution: “If someone tells you they have all the answers, run. Marketing is changing on a daily basis and the tactics required to succeed are changing with it. Secondly, remember that you will always find someone who will tell you what you want to hear. Be skeptical. Ask questions. Find out if who you are talking to has any relevant parallel experience to what it is you are trying to achieve.” So, there you go: six tips to help accelerate your chances of direct marketing success. Six tips that are, to say the least, merely the tip of the iceberg.

 About the Authors

Colleen & Rick.jpgColleen Ferrier is a seasoned direct marketing expert who specializes in guiding integrated direct-to-consumer campaigns with an acute focus on ROI. Her broad experience has included management oversight of marketing, operations, media, and international distribution. The campaigns she has been instrumental in helping lead to success across her 15+ year career include Pillow Pets, Little Giant Ladder, Dream Lites, and Stompeez. Ferrier has a Bachelor of Arts in Communications from Augusta University, Georgia.

Rick Petry is a direct marketing veteran of over 25 years who has been involved with campaigns that have generated over $1 billion in sales. He provides creative services to both B2C and B2B marketing campaigns and recent projects have included Actegy/Revitive, Education Connection, GOLO, Joybird, and OYO/DoubleFlex. The author of over 200 articles on direct marketing best practices, Petry has a Bachelor of Arts in Cinema/Television from the University of Southern California and an MBA with a Concentration in Marketing and Sales from Marylhurst University.

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