Commentary & Analysis
Direct Marketing: Sometimes It's the Right Partners
By Barbara Pellow April 12,
By WhatTheyThink Staff
Published: April 12, 2006
By Barbara Pellow April 12, 2006 --If your customers are looking for the best vehicle to reach their target audiences, build a sales funnel, and gather prospect information, direct mail is the answer. Just combine the right data, a solid marketing message, a compelling offer and good creative, and you've got an efficient, self-contained, heat-seeking marketing missile capable of hitting the target and providing a substantial return on investment. But if it's that easy, how do print service providers "get in the game"? Two Key Strategies To participate in the lucrative direct marketing world, Firms like DME in Daytona Beach, Florida; Digital Marketing in Minneapolis; and Salt Lake City based Rastar Digital Marketing have developed the in-house expertise to develop and implement direct marketing campaigns. By sharing with others, you can direct your resources and capabilities to activities where you add the most value. Other print service providers have come to the realization that time to profitability for digital press technology is important and they don't have the internal skills or resources to complete the strategic direct marketing value chain. The approach they have used is to identify direct marketing partners and establish synergistic business relationships where both parties profit. Meaningful partnerships are the foundation for success for firms in a number of different industries. Partnerships are what enable many companies to make continuous improvements. By sharing with others, you can direct your resources and capabilities to activities where you add the most value. For example, Yoffi Digital Printing aligned its business with Trekk Communications to deliver business results for clients. Trekk Technology had been working with variable data printing and Web-to-print technologies for nine years and built expertise in applying technology to solve business problems. The company had the ability to work with designers to merge data-based information with traditionally generated graphics and messaging to build highly personalized and relevant campaigns. Together Yoffi and Trekk offer a unique infrastructure that merges data and design to increase marketing ROI for clients. Each partner does what they do best. There are hundreds of direct marketing agencies. The challenge for the print service provider is identifying the direct marketer, understanding what they do and developing a process to vertically integrate capabilities with the direct marketer. Understanding What the Direct Marketing Agency Does Over the past several years, I have had the opportunity to work with Rochester, New York-based Catalyst Direct and recently interviewed the owners, Jeff Cleary and Mike Osborn. Jeff and Mike opened the doors to Catalyst Direct, Inc., on January 2, 1990. It is a full-service, vertically integrated direct marketing agency working with both B2B and B2C clients. Catalyst has provided services for an array of customers including Bausch and Lomb, Tumi, Bank of America and Kodak NexPress. As an example of how a print service provider and a direct marketer can synergistically leverage their respective resources, Catalyst shared the process used in the evolution of a lead generation campaign for Kodak NexPress. 1. Understanding the client's objectives . The primary objective for the direct marketing campaign for Kodak NexPress was filling the sales funnel. Everyone is looking for leads and Kodak NexPress was no different. Cleary said, "There was also a secondary objective, and that was to learn as much as possible about the targeted companies. While we wanted to identify immediate prospects, we also wanted to identify and profile companies that would be good potential future customers. The program was designed to both generate revenue quickly and build a solid data infrastructure for the client." Zeroing in on the right person at the right time is the single most important factor in direct mail or any direct marketing effort. 2. Then it's the data. No matter how good a mailing program you've put together, it just won't work unless you're talking to someone who actually cares about what you've got to say-and has a need for the offering. A perfectly tailored message won't affect anyone if it isn't delivered to the proper audience. According to Cleary, "Long before you even start thinking about what you're going to say and what your mailing's going to look like, understanding your market and sourcing appropriate data comes first. Zeroing in on the right person at the right time is the single most important factor in direct mail or any direct marketing effort." While the target market for NexPress was commercial and in-plant printers, not all printers are great targets for the NexPress. Catalyst used a series of metrics, including revenue and existing equipment mix, to identify the higher potential direct mail targets for Kodak NexPress. 3. The Creative--The Offer. Cleary indicated, "Given the time of the year and the demographics of the typical commercial and in-plant printer, a golf theme was used. As part of the campaign we wanted to gather data about the prospective purchaser by directing them to a Web site with a series of 15 questions about their business today and the direction they were headed in the future. We knew we needed to create an offer that couldn't be refused. The incentive needed to be sufficiently appealing to inspire immediate action and drive the prospect to provide the information we were looking for." The "offer" was a dozen Titleist ProV1 golf balls.Catalyst designed the direct mail piece so that the offer was clear, easy to understand, easy to respond to, and relevant to the audience. The creative also showcased the capabilities of the NexPress. The text was personalized and each of the direct mail pieces featured a PGA golf course in the geographic location of the recipient. If the prospect was in Atlanta, Augusta was featured, while Pebble Beach was the course in the Bay Area mailer. The probability of double digit response rates improves with telephone follow-up. 4. Follow up by phone -Whenever direct marketers send out a piece, they prefer to follow it up with a telephone call. Direct marketers know that the probability of double digit response rates improves with telephone follow-up. Whoever makes those phone calls must be professional, courteous, and well-informed about the details of the product offering. Catalyst's telemarketing group called those that responded to the offer, asked a few more questions to gather additional information, and told the respondent that the premium (Titleist Pro V1 golf balls) was on its way. 5. Rank the prospects. Based on the qualification information Catalyst gathered, prospects were ranked into A, B, and C categories. The A prospects were the hot leads, the ones that had a legitimate and timely need for digital color. These were fed into Kodak's sales automation database for immediate action. The B prospects typically had a purchase time frame further in the future, but represent potential customers. They would be subject to future campaigns. At some point in time Bs can become As and Kodak NexPress wanted to make sure that they continued to cultivate those top prospects. C prospects were those that appeared to offer no likelihood to purchase. 6. Measure and communicate results to the client. Finally, Catalyst set up a follow-up system so that Kodak NexPress could track the results of these efforts. They used the data to calculate and analyze the return on investment and the effectiveness of the promotional activity on direct sales. 7. The actual results. The program generated more than 1,100 qualified leads for the Kodak NexPress sales force. The response rate exceeded 15 percent and the ROI was 20:1 for equipment sales revenue. The results do not include the follow-up consumable revenue generated by equipment placement. By any set of metrics, this can be deemed a very successful campaign. To "get in the game," print service providers need to look to direct marketers as strategic partners for business growth. Message for the Print Service Provider As evidenced by the Kodak NexPress campaign, comprehensive direct marketing campaigns require unique skills including target market selection, excellent creative execution, database management, telemarketing and results analytics in combination with printing, kitting, mailing and fulfillment. Few print service providers can afford all of the specialized expertise and technology they need to respond to emerging needs regardless of the type of clients they serve. As resources are constrained by increasingly complex market demands, strategic alliances are becoming business as usual. When alliances between print service providers and direct marketing firms succeed, they open up new horizons for the partners: new products and services, new markets, access to new resources, and smarter ways of doing business. To "get in the game," print service providers need to look to direct marketers as strategic partners for business growth.