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| Perspective on Your Marketing Investment |
| - Will It Pay for Itself?
- by David Ehrlich, President, Track Marketing Group, Inc. |
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| This is a question that many people ask us before deciding to move forward. Direct marketing is a time tested proven method for building your business and ultimately increasing your customer base and sales figures. Pick any industry, and one of the major players has successfully used direct marketing to grow their market share.
If you had asked one of these current market leaders, "did your early direct marketing efforts break-even financially?" you will often find that there was an initial period of investment where the cost of acquiring new customers exceeded the additional revenue. This assumes that they were even able to accurately track exactly which new business came from what marketing effort. In the real world, it is often a combination of factors that ultimately motivates someone to buy.
So why did these smart growing companies invest in direct marketing? The answer is that with repetition and on-going exposure, they will ultimately convert more and more new customers to buy their product. They know it takes time to grow their brand awareness and motivate their target buyers to take action to acquire the product. The marketing helps educate the prospect to the need and desire for the product.
Think about Geico in the insurance business. They regularly market themselves via direct mail and via the radio to reach new buyers. It is no accident that they are reaching the right target audience consistently, with a repetitive message aimed at breaking through the "clutter" of competitive advertising. They are truly investing in their future and are building their client base consistently.
I remember that when I first started working for AOL, many of my friends didn't even know what AOL was. America Online did not become the #1 online service by accident or simply by having a good user experience. They invested heavily in direct marketing and reached people with their famous AOL disk so many times that prospective members made jokes about using AOL disks as drink coasters. Clearly AOL lost money in the early days of growing their brand, but over time, a critical mass developed which paved the way for even more direct marketing investment to the point where they now "own" the number one position in their market.
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| There are many reasons for the need to reach your target on a repetitive basis. Consider these facts: |
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According to various surveys, including one by Sales & Marketing Management Magazine, it takes an average of 12 contacts to close a sale. Wow! That's a lot more frequency than most marketers are prepared to conduct. |
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The good news is that 90% of your competitors will give up somewhere around the 4 th contact. One of the keys to successful marketing is repeated contact with your prime prospects and customers. |
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At any given time, there is a small percentage of your target that is actively looking to buy your product/service. |
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You never know how "random" chain of events will lead to your prospect. One contact made from one direct mail effort could lead you to your biggest client. Meanwhile, that one lead may never even buy from you! Or perhaps a target prospect will receive a piece from you at one job (and have NO need then), but 3 years later call you when they are in a new job and need your service. It happens to us! This is one reason to create a really attractive piece that people will want to hold onto to. |
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Over time , the percentage motivated to buy increases greatly due to their changing needs & situations, and frustration with their current supplier. Change is the one constant that you can count on and use to your advantage. Therefore, an organized and systematic method of staying in front of your target puts you in the best position to profit from change! Telemarketing and direct mail are the two most obvious methods to stay in front of your target and help move them through the early stages of the sales process. |
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| Direct mail |
| Direct mail is relatively inexpensive, efficient, and it makes it possible for you to give a full and complete sales presentation. As I mentioned, your prospects may save your direct mail for future reference or, to share with other key people involved in the decision-making process. One-shot mailings will likely produce leads and sales. But a carefully planned and regularly scheduled direct mail program aimed at your best prospects can multiply your results considerably. |
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| Telemarketing |
is relatively inexpensive and interactive. When you make contact with your prospect, you're able to quickly assess results.
One of the biggest benefits of an ongoing direct mail program, in addition to positioning you to benefit from change, is its ability to educate, inform and ultimately persuade. Because the steady reinforcement of benefit-rich, prospect-centered marketing communications in the form of letters, postcards and other materials will enable you to gradually warm up your prospects to the idea of doing business with you. Direct mail combined with select telemarketing helps you realize the greatest benefits.
Looking back, if you asked AOL did those early direct marketing expenses pay for themself, I'm sure the answer is now YES. Isn't hindsight 20-20. Keep focused on the business you are growing and you too will arrive where you desire to be! |
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