Friday, June 06, 2008

Deconstructing Your Direct Marketing- Pragmatism, Planning, Execution

Direct mail campaigning is the crux of business-to-business marketing. Success should be measured in figures above 4.5% response with a sales conversion on numbers of around 1% original mailing ( >20% of respondents actually buy).

Personally I have achieved this and much better in both a professional capacity and actually job seeking activity with my own custom e-mail! An e-mail with over 80% response and about 10% fruitful interviews is pretty much amazing but was based on the fundamentals of marketing as were my successful mail campaigns.

First let’s forget the word “strategy”. Much loved of all academic MBA types, the key to successful direct marketing has little to do with strategic planning unless a business will wholeheartedly focus on this as the largest route to market. That which matters is getting down to basics and delving into data in detail.

The Key Factors for Success

1. Data That Works for You and Not You Working for the Data
a. A Target oriented /segmentable Mail List (CRM)
b. Clean Data
c. New Data or at least ageable data
d. Well Organised, well populated Record Fields
e. Quality controlled buy-in lists
f. Good Data Tracking from the Campaign
g. Known numbers of quality leads out and hits back in.

2. An Eye Catching Creative with A Sharp Value Proposition

3. A Snappy response mechanism – reply paid, SMS, web

4. A pragmatic and researched delivery schedule

5. Following Up systems for people and IT

6. Tracking of Success and input to Continuous improvement

Direct mail often goes very wrong in B2B contexts because of a lack of seriousness, professionalism and common sense. “Do unto others as you have done unto yourself” is one starting point- would you respond to your own DM material? Take it one step further, if it is warehouse managers would your own warehouse read it and respond?

The fundamentals are to target market- have a key message, related to benefit or demand, which reaches the right people, and an appropriate response mechanism. Easier said than done. Especially when this is coordinated with a follow up telesales round.

Marketing suffer from both having their heads in the sand of data mass, and wearing the emperors new clothes. At one well known Californian company, about 2 million dollars was spent on a SIEBEL database which was installed then promptly furnished with unreliable, incomplete and largely out of date contact data. Marketing had minimal budget to clean the database and did not want to admit to their earlier lack of data quality control. Using the system for sales reps and product managers became an administrative task in addition to their work rather than a tool to facilitate sales and the interaction between direct marketing, web and the front line of customer visits.

These failures in quality management and attention to detail are unfortunately value chain deep with DM suppliers- at the end of the day someone, somewhere has paid for phone calls and a resulting data list to be generated and after it’s first sale it is becoming not only obsolescent but also potentially fatigued ie over utilised. Lists are sliced and diced, sold on, sold out and even sold illegally. The key thing is of course that marketers hate detailed, repetitive work and that is right down the feeding chain to your basic little list broker.

Managing Internal Expectations

As a marketer it is most important politically to understand expectations and manage them! This is mainly in dealing with sales management, but also with IT, senior management, customer teleservices and even technical services.

Expectations can be obvious yet overlooked or devious and unconsidered !


• Sales expect to save the quarter on your leads and want 2000 good ones
• Management gods expect higher growth and mean 2% points
• Accounts expect to save money diverting away from advertising
• Customer services don’t want to have any extra work / hassle
• Your own “marketing excellence” programme dictates an improvement from 2% to 5% response
• IT expect to get to install a new CRM system and win more power over what marketing authority has had previously
• The previous ‘free stress ball when you call’ campaign by Bert Numfunk and Doreen ‘The ass” Glamerpuss had a huge response ( people like the balls, but didn’t buy anymore product )
• The sales management don’t want to double discount- ie. existing customers getting a discounter mail which is an offer they may need to honour!
• Sales personnel expect to do no cleaning of the database or feeding you with ‘pre-leads’ for your own successful marketing.
• Your own staff expect “some intern/student/outside company” to actually clean the database.
• No one anywhere in the company expects or desires to change working practices without a damn good explanation and crucially a steer from senior management.

So expectations are diverse and some are not obvious or actually predictable. This is why women do so well in marketing because their softer, persuasive and listening abilities ie “people skills” are frankly better. If you came into marketing and didn’t want to stoop to working in sales first, then sorry- you have an even bigger, multi level sales job to do in order to get your ideas accepted and not be rolled-over by the likes of sales, IT or worse visiting management consultants on departmental raiding license.

You have to understand perceptions, change them or at least move them a little, and otherwise manage expectations around this proactively. That means selling- confronting people,getting their attention, explaining the relevance, listening to their viewpoint, charming them (yeuuch!) and persuading them to cooperate or at least take a non partisan view on a DM activity.

In this respect your biggest job will probably be to wrestle the CRM and prospects database out of the control of IT and make them your bitch, not you theirs. Sales management swing into this equation but usually don’t have the time or if appointed don’t stay long in the position once they get bored with the be-pluked IT guys body odour.

Objective Setting and Planning Pragmatically all the Way!

Mean while, back at the ranch…You have to understand what is achieveable in DM. A mass market e-mail or mail blast to a new leads list can result in a less than 1% response with only a 10% conversion within that. In other words the marketer would have been better off spending their time on other tasks! What is the expectation? Companies can only grow the top line in a few ways with respect to customers- sell more to existing customers, sell to new customers, sell different products to either or put up prices! The latter is often unpopular with sales of course. Usually they will be interested in leads to new, fat customers who are ‘hot to trot’ i.e. in the market for the company’s offering. Often they are not very keen on mail campaigns that try to sell diverse or larger quantity items to their existing contacts at customers because they like to “own” this area, but in terms of new contacts in their larger existing customers for new products they are only too happy to get the leads.

If senior management really have a serious expectation that marketing will deliver the platform for top line growth then they must put their money where their mouth is. As a marketer you have to realistically get more budget for new resources and channels. One thing to avoid is the IT director taking a big slice, as above zillion dollars, for a system to which marketing play Cinderella. Big data CRMs are often seen as panacea for the faults in data quality and sales management people-systems.

• Get the objective correct- manage the expectations and investment in resources around this:
• who you want to target, why , how many responses, how many from internal data
• Get the data cleaned*. Funnel it. Get down to a target customer and prospect group who are actually worth mailing.
• Calculate budget and have an idea that this is either going to be a really good focused and folloowe dup campaign or a mass market 1% response junket. I.e get a handle on ROI.
• Buy new lists in- quality control these before you do
• Plan the whole timetable out in advance, taking public holidays, busy periods etc into account. Find out if your competitors for example run a Q1 discount in march and run one in February! Stagger the logistics to avoid overloading your mail room or those at multi contact companies.
• Organise that responses are measurable. Make a special post box with the post office even! Set up or reserve a phone line, email address, SMS number or web form
• Organise some degree of follow ups. This can at least nurture out a few more sales meetings early after a mail to abate the sales managers. Hand pick a few good leads at big, new prospects for this treatment. Sales managers will feel good and not get bored by easily forgotten marketing stat’s.

* age the data, organise it into existing customers and non-sale prospects, buy in new prospect lists, use any product sales data, exclude people without job function, exclude syntax fucked up addresses, de-duplicate on individuals and while doing this watch out for take-overs and company name changes, exclude possible data error characters like ‘pipes | ‘ or hidden tabs, merge or demerge data field like title/firstname/initial etc.

In mailing campaigns the usual ‘head in the sand “no problem with our data” prevails in marketing because marketers are lazy and don’t like detail. That’s why they aren’t in accountancy, purchasing or R&D. They’re sales people with college degrees in marketing. So the usual approach is that marketers will either buy in or use internal telesales services to follow up a mailing to elicit more meetings with customer or a Russian doll further targeted marketing. Given the usual low quality data for new prospects this is putting the cart before the horse. If you are not sure about the quality of your list and it’s age is best measured by carbon dating, then use telesales services to clean the leads in the outset. Self cleaning mailings are a “total waste of time”. However new ‘ we listen to our customers’ market research flyers with just a few question can generate a lot of leads as can such on your big point of touch, the web site.

Getting your Hands Dirty

In order to clean your data you have to understand it’s overriding quality. You have to top and tail it so to speak. Get a feel for how hot the listing is.

The best way is to understand the basic fact that all relevant data can be reduced to ASCII and merged into one spreadsheet or table. This can then be examined ‘forensically’ in Excel or Lotus.

Excel allows you to sort data on the various columns and records with empty fields can be excluded or sent for call rounds to establish new leads.

If you are lucky you will have a date field which allows you to age your contacts and if you are even luckier a last ‘point of touch’ date may be available. This means you can at least exclude leads/contacts who are say 18months without touch or 5 years. However you may want to do the exact reverse and actually win back lost customers and reactivate prospects – this depends on knowing your market personality- do people change jobs often and do these types of companies go bust or get bought out frequently?

Other cleaning ways in excel are to exclude those with incomplete names and addresses and send them to the poor fool who has to ring around them.

Working Up Prospects From the Points of Touch

Data capture is a term which kind of defines it’s own weakness. It takes a blinkered fast fix view on placing a customer name and address onto system. IT don’t understand quality of leads, and often don’t really care about quality of data- they are more interested in the installation and running of the system and willing to blame marketing for not cleaning the data instead of fixing the ‘forms’ to exclude bad data entry.

Working up prospects means taking a little information, giving some back, getting a little more information and then getting either a sales call to them or actually just defining a good prospect for mailings. In Web terms it is sometimes called ‘permission marketing’ whereby your ‘data dialogue’with the customer begins very non committal and easy to do at their end- so just an e-post or user name. You then offer something of value back and go onto to capture their details and interest areas before eventually profiling them further.

Creep Out Your “Mailing”

The mailing in itself may be a reasonably well focused list, but this may actually reduce your actual mailing numbers. A well targeted list of say 100 is better than even 10,000 mailings to a badly screened list. However the cost of doing 100 proffessionally designed and printed items will be pretty much the same as for 5000. Excluding mail which is the one fully scaling factor.

So here comes the rub- what other points of touch do you have? The very best of all is the pack insertion of mailers. This is because they uncover a lot of actual end users who are key in the decision to buy more of that product, swap it to a newer product or buy a related product or service. Often these are ‘off sales’ that means to say no rep as ever identified them or visited them in the last couple of years so orders are either well established or just out of the blue. Most warehouses have pack insert procedures and will do it willingly. Failing that you could invest in self sticking plastic envelopes and stick these on stock items ready to go out from shelf ( frequently purchased items) . This will be a very good use of those 5000 mailers you got printed.

Also you can use mailers at exhibitions and rep stands on sites, and they find good use at distributors. Finally as a left behind calling card from reps to new potential customers or those they have just missed or “forgotten” to put on CRM.

You may need to get your hands into those catalogue requests. Customer services may have a cosey arrangement in taking the glory for these bookings or just not care to log them to CRM. An hour stuffing your latest flyer into the catalogues likely to go out in the next six weeks is good.

Also a pdf version these days seems de-rigeur and could be sent on a snow-balling or chain mail way, but this is probably just a few sprinkles on the cake.

The one last suggestion is better for the SME market is to send the mailer out with bills

Quality of Message and Creative '

This is usually top of the agenda for any marketing activity but all the time and money in agency land is wasted without being secure that at least you have tried to get the very best out your mail lists in terms of quality leads.

DM has to offer some value to the customer. Many marketers interpret this as either being headline grabbing discounts or some nice freebie either included or to be redeemed by calling in/e-mail/web etc. This is a fundamental presumption of ‘doing some marketing’ that marketing is all trinkets and no content. If the product is relevant and the creative is attention catching then the information and even entertainment value in itself is of enough value to the customer for them to atleast remember it and have more propensity to react.

• Something to avoid it going unopened.
• A creative which gets attention / interest to read the headline
• A headline or strap line which leads to curiosity for more information
• Further information in brief
• Call to Action with Response mechanism

Often the head line (and strap line) these days is based on either a benefit, a key discount or SPIN risk based approach. Often a combination of ‘don’t miss this opportunity’ ‘for a limited time only’ etc on discounts runs the spin way. A spin head line should be balanced with the solution to that ill in the strap line otherwise known as the sign off line. A double negative is probably too vague and just unappealing. It overemphasises the risk without offering cure.

You have about 8 seconds from time of opening to get to the strap line and then maybe ten to 20 more for reading any body text.

When I say earlier some reason for them NOT to just throw it in the bin this means either neutralising the envelope- a clean, quality envelope with the address in a window or making it a little personal. Any printing on the external envelop shouts spam. An alternatively shaped envelope or actually just a card which is fully visually evident is a good compromise for creativity but can end up in spam land regardless.

One campaign I sent out in brown envelopes seemed to keep up to my usual standards, people presuming they were bills and giving them some attention.

In terms of combining content and response to actually getting new data, one little campaign I did with about 10000 from our list was to go after “look warm” leads with a nicely designed “ we listen to you” mailer. This did 6% whilst normal marketing was struggling at 0.5%-2%. So sidling on up to your customer in the guise of market research can be an approach which leads me to :

Russian Doll Marketing and Mail-ReMail

Faced with a poorly segmentable yet quite ‘young and fresh’ database of prospects you may want to screen the field first. This can be done as above with a “tell us what you think of us/ tell us what is important to you in this area’ or a further questionnaire on line.

The concepts are- Russian doll- you start big and respondents get re-mailed and screened at this point before they get the gift or discount or brochure. Often the inner most doll, or layer of the onion is redeemed by a sales person actually calling to deliver the highest value item. Russian doll works very well now with the web as a second tier- capture e-post and reply opt in at least for this campaign, get them to do some more data entry on the web and then move forward by post once again.

Mail re-mail means either two general approaches- you do one cheap mass mail aimed at the *Sharon* market- who ever the hell responds to all the freebies and win a holiday shit. Then you do a second to the same list, deducted those who answered round one.- which offers something else, like a proiduct specific discount, or just with a good creative. Finally you deduct again the responses and send for instance a personally addressed letter reminding of the earlier mail and maybe including another copy. In this way you somewhat reduce production costs, but moreover find out which customers respond to which type of marketing. Products, creative or gifts. Thereafter you can segment the market a bit more for future campaigns. In many markets there are freebies and loyalty campaigns which make the difference to securing business with some customers who feel they like this and have the latitude to get away with basing their ordering around the best freebie!

The other approach to mail-remail, is simpler- just mail them periodically including a personal letter at the end of the rounds of mailing- this is better suited to pestering a well targeted list who are maybe being a little slow to respond. You will actually find that response rate goes up after the second and even subsequent mailings - if the list is ‘fresh’ i.e. not mailed too often already and quite young or at least filled with current sitting names in their positions. Only polite of course to deduct out respondees. If you deduct out those who respond within 2 weeks then you save on mailing and you save on production by just using the same item each time, with maybe a run of letters at some point. Like TV advertising, the run of how often you spike the audience is disputable but a first mailing followed by a second two weeks after is fresh enough in the mind. The majority of respondents probably do so within a couple of working days of getting the post. So if you know of strikes, holidays, geographical delays etc then stagger accordingly based around a two week minimum separation and then possibly a monthly mailing for the rest of the quarter or offer period. Pester power works because they either do get pestered into it or finally even reading it but also because sometimes secretaries and mail offices open mail and chuck out items like this. This is where the personal letter comes in infact! You get through some of the gate keepers and also you appeal to the more personal, traditional side of some people.

The first mailing can be a little cheaper in production than usual items, and offer something general to the market- like a big discount, a nice freebie. Holiday competitions outside office supplies are a waste of time unless you have like 100 to give away when people feel they have a chance. Free gifts with purchase can be good, but watch those warehouse workers sticky fingers!

The Aftermath

I use this title jokingly because armed with a new attitude to be detail oriented and hands on, charging in with heavy quality control and a healthy scepticism bears fruits of being able to objectively analyse what has worked and what has not.

If you have been so bold as to actually qualify your data and quantify how potentially good your lists are then you can at least get a metric on the top line mailing figure. Just like top line on the accounts sheet, you need to get more prospects in there and be realistic on just how many you can get. You may for example find that a particular target campaign reaches 99% of companies yet has a poor response. It’s time to find more users at those companies, new internal locations and departments and more people in the DMU chain. The top line figures for different market segments and the mass market as a whole become useful in terms of budgeting for future mailings and for aquistion of more share of “vision” on the market- ie. how many customers you hear out there! This then leads to an established share of voice in terms of DM. In a very large busy marketing department you can actually over dominate an entire market with flyers and offers and end up with the worst case- management want you to consolidate offers and promos and NPIs into a montly, worse quarterly special news letter. Hence you dilute targeting, dilute message and make measuring worse. If you like desk top publishing this may be for you though.

So now you can exclude hopefully your top line figure of propects you want to have an idea of actually how many are ‘targeted’ and how many are pretty much blind. This depends on your segmentation of the market and which data you used. But given for example job title and industry sector you should be going down one funnel which leads to more touches than using either in isolation – for example. There comes a point when the SQL build just gets too granular and you are down to handfuls of customers to mail for a three branced criteria. If so it can be tempting to work quality back up over, by reverse-profiling other candidates but at the end of the day.

Having a good idea that the lists were clean, targeted and quantifiable you can now start to consider other factors which made the campaign response either very fruitful or below average. This is creative content, message take-out, response mechanism, postal addressing, going in the waste paper basket etc.

To grab a handle on how good it is all going you need to have snappy response mechanisms which are trackable. You need to be able to tally up how many hits you are getting back to customer services, sales etc. Unfortunetly the human element creeps in and I firmly advocate removing any motivations not to note an enquiry came from a mailer by eliminating human elements outside marketing. Hence post , e-post, telephone or perhaps best for the moment SMS should be fullyu monmitored by marketing. For a really big campaign expected to run to many orders it will be hard to do this, so planning a special product number code to quote for ordering the actual item or better still a package deal ( where the new product number does not replace any of it’s components, just flings them together in a kit or bundle!) This is completely unoavoidable for the whole company and moreover the customer if they want that deal. It is also a big hit with sales because it gives them true revenue recognition when they co promote it with marketing. They get half the job done for them and just need to ice the cake, and it really works for everyone. Worth the effort and also worth the effort of putting agreed systems, awareness and training in place with the other departments.

Finally you should have historic data on mail campaigns to compare yours too, and these can be very much in the way of being % and relative until you start to run regular product # promos when it is top line which talks and not a 10% response rate.
I hope you get an understanding, as an academically educated marketer, that you must give a shit about the small detail. You can’t want to build a gleaming machine like a new sports car when you don’t give a damn about the engine components and just hope someone else takes care of the details. Good creativity and marketing ideas are easily forgotten by endless return, addressee unknown and otherwise low response rates. It takes a great deal of planning, evaluating, going square eyed, coercing, charming, bullying and outright attention to detail to move up from being a so-so 2% marketer to being a success in this area.

Live Long and Prosper in Your Marketing Career.