Part 1: New ways to prospect and Golden Rule #1
By Aaron Hale
According to one Direct Marketing Association (DMA) 2007 white paper the average consumer receives approximately 3,000 advertising and marketing messages per day! Okay, some of these are just the logos on your Starbucks cup or the sign on the sandwich shop where you buy lunch, but it's still clutter and static. So how do you help your clients get their message heard above the noise? You focus on multi-channel marketing (MCM) strategies. To do this, you need to connect the dots. What are those?
- The value proposition
- ROI (Return On Investment)
- The application and power of data
- The cost – pricing strategy
- Commitment to the process
- Measuring Results
Today and tomorrow, we'll take a look at each of these dots and wrap up with conclusions about how these concepts will effect your business.
We'll start with prospecting. In an MCM world prospecting requires a whole new approach.
New Ways to Prospect
From a B2B (Business to Business) perspective the natural inclination would be to reach out to your advertising and marketing agency clients, right? Well, maybe. It is only recently that I‘ve stopped getting the, "deer in the headlights" response from print buyers and the stiff arm from creative directors. Yet in many ways it is not their fault they have been less than receptive; it's human nature to reject what you do not understand.
First, very rarely has anyone has ever properly connected the dots for them, and thus they can't connect them for their clients and justify the cost. Second, the big agencies don't have a compensation model for VDP. It's still a cost-per-piece paradigm despite the current shift to performance-based pricing.
The marketplace's demand for ROI and results measurement is causing this shift and forcing them to break down their silos. In this case, a silo is a media channel within the agency such as TV, radio, newspaper, magazine, web, print, etc. They all function independently, so adopting a multi-channel project is a very complex proposition --and highly competitive as to who gets credit for a successful or unsuccessful campaign.
Says Bruce Biebel, managing director at the Winterberry Group, a NYC strategic consulting firm: "Focus on the agencies that get it. Better still, focus on the smaller ones where de-siloing is easier because the compensation comes from the top down. Whether the agency is large or small you must speak their language --marketing not production. Sell them as a partner helping them execute their strategy in a more efficient and effective manner, while delivering a higher response and lower internal cost."
He calls this strategy being a CEP (Campaign Execution Provider) --a friendlier term for a creative shop to wrap their head around. You help them make their projects work! Saying you're an MSP (Marketing Service Provider) make you sound much more like a competitor --the enemy.
Whether the agency is large or small you must speak their language --marketing not production.
Shifting From the "Cost Per Piece" Mentality
From a B2C (Business to Consumer) perspective, just getting the buyer to shift their "cost per piece" mentality to a "cost per sale" or "cost per customer" paradigm is in itself a formidable task. The most critical aspect of the sales cycle is the educating process. They must understand the process before they will buy it.
One of the best methods of B2C prospecting, whether for your business or your clients', is using PPC (Pay per Click) advertising utilizing keywords. By doing this you are eliminating most of the educational component of the sales cycle because if a prospect is searching with keywords such as VDP, multi-channel marketing, targeted marketing, etc., they (1) have a need, and (2) may know something about the solution.
MindFireInc, a multi-channel marketing application supplier, takes it one step further by including a "ClickCapture" module to their application. You can hedge the qualification process of the keyword search by dropping the searcher on a single landing page that states a promotional incentive for them to retain your services and takes them through a brief questionnaire where their responses are recorded in a database. The result is an auto-generated lead of a thoroughly qualified prospect. Your follow up sales conversation is much more intelligent and positioned for the win.
Live by the "Golden Rule"
No matter how you do it, if you have a prospect that has a need and is ripe for a change in their marketing strategy then there is one golden rule: The client doesn't care about the technology! What matters is the benefit. "What's in it for me?" If you are not selling the benefit the client has no motivation to change. You must articulate and support their need for change, and you must demonstrate how the change will be significant.
There is one golden rule: The client doesn't care about the technology! What matters is the benefit
One of the best ways to do this is using a comprehensive ROI tool. Begin by asking the customer to provide you with previous data of their last campaign (budget, production costs, mailing costs, response rate, conversion rate, value of each sale, etc.). If they balk, stating confidentiality, or did not measure results, then use industry standards for the production costs and metrics for a typical static single-channel direct mail campaign. (e.g., price of static offset print; 0.75% to 1.5% response rate, etc.).
Then calculate the differences and show them the results side-by-side. For example, the charts below helped show a banking prospect who wanted to cross-sell $10K CDs to their current customers. It shows them what their previous static single-channel campaign looked like and what it could look like using VDP and PURL interaction at an 8% response rate with a 15% conversion. The charts show the return on investment and the difference in the cost per deposit.
Remember: Data is King
There is nothing more critical to a successful marketing campaign than good data. Certain verticals, real estate, banking, insurance, and healthcare, for instance, maintain very good data and it should be easy to demonstrate the effectiveness of using their data in segmenting their target audience.
Other organizations either have data but don't know how to employ it, or have not included data mining into their previous marketing strategies. In either case you will have to articulate the benefits of using emotional triggers such as personalized messaging and segment-specific imagery. For those who do not have good data, PURLs are a great way to begin gathering and profiling their intended targets.
Communicate to them that a key benefit of utilizing data driven marketing solutions and getting personal with their customers is retention. As every business owner knows, it costs far less to maintain a customer than it does to acquire a new one. "A 2% rise in customer retention equals a 10% reduction in operating costs," states Rich Reichheld in his book, The Loyalty Effect. Taking that a step further, increasing business with existing customers can have a very positive benefit to your bottom line.
Sell them on the premise that it is not who they know, or what they know, but rather what they know about who they know that gets maximum results.
It is not who they know, or what they know, but rather what they know about who they know that gets maximum results
Tomorrow in Part 2 we'll look at an effective pricing strategy for mutli-channnel marketing services, view a real quote based on "Golden Rule #2" --presenting as a package price-- and finally the follow through: measuring results.