So You Think You’re Doing Direct Marketing?

The golden age of direct marketing has arrived. Nearly all advertising and sales are “interactive” and “measurable”. At the same time, attendance and enthusiasm for local and national direct marketing trade shows is almost dead compared to 20 years ago.  (I wrote this article almost 20 years ago, as the Internet gurus claimed everything would change.)

Since 1968 the definition of direct marketing has been examined and refined. Here is a composite definition from 28 text books: “Direct marketing is a database-driven interactive process of directly communicating with targeted customers or prospects using any medium to obtain a measurable response or transaction via one or multiple channels.” (reconciled from 28 published textbook variations, Scovotti & Spiller)

Are These Direct Marketing?

Acme MegaCorp decides to improve its sales. It matches present customers’ addresses to a large database to add demographic variables and build a customer profile. This is sent to its ad agency to shape the design, offer and media positioning. A grand ad campaign drives traffic to its Web site and facebook page. Sales double within two months.

Costo Club Retail takes customer card information to identify trading areas and penetration. It highlights characteristics of neighborhoods with high market share versus low market share. From those factors, it produces newspaper fliers. Its sales associates are trained on customer interaction. Sales increase 30 percent for three weeks following the fliers.

Jane Selazar plans a garage sale. She calls the names in her church directory to pick the best day. On the basis of that feedback, she puts an ad in the bulletin and posts the event on facebook. She greets every person who visits, and she keeps careful track of her $250 in sales.

Each example uses a database, systematically communicates with customers and interacts directly with them at some point. In fact, in each example not only are there “measurable” outcomes, but there actually is measurement (which often is not the case, especially where there are multiple overlapping media). From an inclusive view, our three sellers are all direct marketers.   (Little wonder companies no longer send employees to direct marketing trade shows … they’ve already arrived!)

The Key Element of Direct Marketing

Testing, testing, testing. The pioneers of this industry assumed everyone doing direct marketing would know and practice this.

Obviously it’s possible to mail offers without tracking or even selling anything. It’s also possible to measure results without any comparison. General advertising is always trying to measure, but the ubiquitous nature of mass media tilts its measurement toward focus groups, attitudinal surveys and test markets. None of which precisely isolate causal variables.

In the most basic ‘A/B’ test, we send half our list (offer A) “50% off” and the other half (offer B) “Save $9.95” and see which one not only gets more orders, but after we’ve paid the cost of goods, mailing costs and order processing, which one makes more money. If the total price is the same, I’d bet on the second offer every time (people don’t like figuring out what 50 percent comes to).

Field valid scientific experimentation through isolation of causal variables allows you to actually test and prove the impact of changes in your copy, creative, offer, list, timing, etc. It’s possible to accomplish this through most media; it’s helpful to have a database you measure; but most importantly, you must correctly design the experiment before you launch it. This, and this alone, is what sets apart the practice of direct marketing. You can see whether it’s better to charge $10 or $9.95, take credit cards, allow three easy payments or only c.o.d., market to high income or low, and even see if it’s worth the trouble to put a thank-you note in the box. Yet with every year that goes by, I see fewer and fewer practitioners standing firm on the principle of testing.

Why Aren’t You Testing?

It’s always more expensive to create a campaign with a test than to just create the campaign alone. Even the simplest test requires modification of something, and modification takes thought and planning. Constant vigilance is necessary to ensure you are conducting valid experiments.

There is a price to all our segmentation and variation. Most of my clients struggle to meet all the mini deadlines for each e-mail blast, monthly newsletter and Web update, not to mention deal with the training issues that keep everyone on the same page for each customer inquiry. In this frantic marketing mix, few have the stomach to ask, “Did we remember to test what we’re doing?” Especially if the company is an entity of a division of a mega corporation.

“Try” is so much easier than “test.”

“We do lots of different things and compare the results.”

How can you define direct marketing success without testing? I helped launch an imprinted merchandise catalog. We put our customers like 3M, Caterpillar and Miller Brewing Co. on the cover. After a dozen executives asked me, “Why would I want to buy Miller hats?” we decided to do a cover test. Corporate logos versus “your imprint here” (shown above) with no other change in the catalog, We mailed 600,000, split in half. The “your imprint here” version did more than 40 percent better. Same audience, same time, same look, same pricing; it could only be the little messages on the cover items.

The Big Point

“People who are afraid to lose are afraid to test.”* Great companies always test. The legendary retailer, John Wanamaker, once said, “Half of my advertising is wasted, I just wish I knew which half.” You can know – find an old direct mail marketer and perhaps he will show you how.

*Des Smith, NCAA Men’s Basketball Champion, UW-Madison, 1941

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