Commentary & Analysis
Infiltrate your market to dominate your opponents
By Harvey Hirsch March 8,
By WhatTheyThink Staff
Published: March 8, 2004
By Harvey Hirsch March 8, 2004 -- Over two thousand years ago, a Chinese General named Sun-Tzu outlined his strategies and principles for warfare. If you believe as I do, that all marketing is like warfare, then his theories of war are still valid today, perhaps even more so. 1:1 marketing and variable data digital printing gives you an “uncommon” edge against your competition. In today's highly competitive marketplace it's not good enough to just get a new account, you've got to make sure your competition doesn't! I know, that sounds mean and vicious and goes against the precept of “Live and Let Live,” but in reality, someone has to lose and better your competitors than you. To quote Sun-Tzu, “Generally, in battle, use the common to engage the enemy and the uncommon to gain victory!” Here's where the true power of 1:1 marketing and variable data digital printing gives you a valuable “uncommon” edge against your competition. Today, all businesses are facing the same challenges; 1- acquiring new customers in a cost-effective manner 2-keeping the customers they have 3- increasing the amount of services or products the customer buys, and 4 - making a profit. Let's use as an example two Japanese restaurants in the same marketing area as our armies and their territories as the battlefield. Restaurant A – places an ad in the local newspaper for $300 and generates five customers ($60 per new customer). Same with Restaurant B. Each customer brings 2 people with them to eat and the cost of the meal averages $60 for 3 people, breaking even on the cost of running the black-and-white ad in the paper, but still losing money on the cost of the meal. This becomes a loss leader. Restaurant A thanks the customer and the customer goes their way. Restaurant B asks the customer to fill out a Special Event Club card listing all birthdays and anniversary dates where they will receive a gift in the mail (in this case 15% off the entire bill, in other cases a free special appetizer or dessert). Every month for a year, both restaurants run the same ad and receive the same response, but after the first year, restaurant B has compiled a database of over 4,000 names. In year 2, Restaurant A is still running a newspaper ad every month for $300 and losing money on loss leader meals. Restaurant B however has tapped into its database and sends out about 350 full color personalized post cards a month (printed on a connected digital copier), listing the patron's name, birthday or anniversary with a special 15% discount off the entire bill if used within 5 days of their birthday. Cost of the personalized postcard is only $1.37 each with postage. Response rate is averaging 20% and with the dinner charges pretty much the same, over $4,200 in business is generated from this tactic alone every month. Restaurant B no longer needs to run an ad in the paper and it has increased its overall marketing costs by a mere 17%. It has also generated over 10 times the business, and best of all, the profitability. Imagine each year, they are adding another 4,000 names to the list. Hmmm. Sun-Tzu was right! Every restaurant (and business) in America should be compiling a database of their customers in order to approach them in the most cost effective manner, but do they? Now, here's the real kicker. I receive almost 200 pounds of mail a month. Each piece pretty much has my name either on a sticker or in 10pt black dot matrix ink, telling me right on the front of the piece that this is not a special offer. Most of these get tossed during triage, but occasionally a mailer does come to me that stands out, has my name in a nice font, in color and in some cases, actually contains data which interests me. This means companies are spending millions of dollars every year trying to get my attention (and decision-makers like me) but fail. In fact, the average response rate is just about .005%. If the average cost is around a dollar, the cost of just converting a suspect a prospect can be well over $200 based on a 10k print run. Try sending them a birthday card for $5 followed by a telephone call. I bet they get on the phone with you and with the $195 you saved, you both can enjoy a nice Japanese dinner (at Restaurant B, of course). Want to improve your response rate? Here's what the experts know; The most important part of the mailer is where the name of the receiver is (duh!). It should be attention getting (in color) and it should have something on it that teases the receiver (me) into wanting to open it. It should also be personalized with the prospect's name larger than 14pt. type. Black type on yellow is the most attention getting color combo, but keep testing unusual colors (I have had interesting success with lavender and turquoise when sent to certain market segments). Lumpy mail gets more attention than flat mail (generally), so packaging is very important, if you can send a well decorated box, with a premium or pop-up, do it. If you can personalize the pop-up with the prospect's name on it they will show it around and keep it forever. Pop-ups work by engaging the receiver (like a toy) and if they are done well, they can effect a smile (and even a pass along rate), but most can't be personalized. My favorite is the personalized hand folded origami fish mailers. I use them for very special events and clients who need to get results fast. After all the above, the most important element is the offer! It should be easy to understand, be the best offer (take the worst case scenario --16 of your competitors are mailing to the same person, your offer must be the best), have some sense of urgency (a deadline for the offer) and, a guarantee of satisfaction! Next, it should have an easy-to-find response mechanism; a BRC (postage-paid business reply card) an 800-number (free call), or a website address. Finally, it should incorporate a tracking element so you can determine if this or that database, list or offer is working for you. In creating your pitch, “sell the sizzle, not the steak,” describe the benefits of your product or service, not the service. Most clients have no idea how much it costs them to convert a suspect to a prospect, to an appointment, and then to a sale. The beauty of using variable data, full-color, on-demand digital printing is that you can test offers, price points, just about anything, in lots as small as one. This process helps you develop the most effective “sales cycle starter” quickly, inexpensively and most importantly, profitably. Digital on-demand printing offers you the elegance of change at the touch of a button, making regular offset “one size fits all” offers, virtually obsolete. What I have also discovered in 25 years of direct marketing is this: most clients have no idea how much it costs them to convert a suspect to a prospect, then to an appointment, then to a sale. Most printers have no clue either, because they have, in most cases, commoditized their service. When you put it all together, if you sent a box of fancy pastries with a personal note to a prospect, and had it delivered at 9 AM, odds are by 10 AM they will take your call and thank you. Cost, about $35.00 (with delivery), response…priceless. Now, that you've got your prospect on the phone, the fun really begins. Banzai!