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How Net Marketing Is Like Traditional DM

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Some of the best Internet marketing books aren’t Internet marketing books at all, but rather classic direct-marketing books. While you dig deeper into how the Net can be used for marketing, look at some of the bibles and key principles of direct marketing and then figure out how you can apply some of these time-honored practices to your situation on the Net.

Loyalty & Retention Programs

These are programs that are meant to keep the existing paying customer happy. If employed correctly, the Net can be very good at keeping existing customers satisfied.
A good example of this is American Airlines (http://www.americanair.com). With your frequent flyer code, you can go into an exclusive area and find out how many frequent flyer miles you have accrued. This actually lets the customer peer into the American Airlines database, which is a complex technological feat that the company should be congratulated for. Similarly, Federal Express lets you track your package pretty much in real time (http://www.fedex.com) and even schedule pickups directly from its Web pages.
You don’t have to be that sophisticated. One of my first clients, 1-800-Flowers, sends, at your request, an e-mail reminder of a future birthday or anniversary, based on your previous buying patterns. Another instance is the Amazon.com bookstore. It offered to inform me, via email, when the discovered Jules Verne manuscript about Paris in the 1960s was translated into English. Amazon did inform me, and I ultimately bought the book. I didn’t care that it was a mailbot that performed this service, rather than someone physically sitting down and writing to me. That’s okay; it was the thought that counted. In this case, the thought was a piece of programming that offered good customer convenience.
Mailbot comes from two words, mail and bot, where bot is short for robot. A mailbot is a piece of mail automatically sent out upon request. It may be sent right away, or scheduled to go out days, weeks, or months later, as a reminder message. Mailbots are also used as confirmation notices. Sometimes called replybots, these messages can tell you that your e-mail order has been received and will be acted upon on a certain date.
FireFly (http://www.firefly.com) and other online personalization programs are dedicated to creating and maintaining customer reminders, personal information tracking, and other technology that allows companies to provide such customer retention programs. These programs can do everything from recommend to a customer what he or she would like to buy next, based on past information stored on personal preferences, to reminding a customer when a spouse’s birthday is coming up and offering Web links or other information concerning gifts or cards for the day.
This use of technology is excellent DM thinking, but also says something about these companies and how they think and do business. Naturally I bought the book from Amazon when I was notified of the English translation. Therefore, these reminder services serve double duty as DM and branding tool, since they leave me with a good impression, as well as motivating me to give them my business in the future.
This practice is also used in the financial services category. Brokerage houses and financial firms are big on loyalty and retention programs via the net. If you have a Smith Barney (http://www.smithbarney.com/) or Merrill Lynch account (http://www.ml.com/), you can get higher grades of information on their sites than is normally available to just anybody.

Acquisiton & Prospecting Programs

Fishing for new potential business is extremely cost effective on the Net if you do it right. Let’s look at two companies that acquire new names for their mailing lists by advertising on my Web Digest for Marketers newsletter. The companies are American Demographics Magazine and an industry newsletter called Web Marketing Strategies.BR>Every WDFM subscriber is a potential lead for the other two publications, in this case. Many of these leads take the trial subscription offer for their print versions and are converted into prospects. When the trial subscription expires, these prospects are asked if they want to convert to a paying subscription. Of course, many don’t, but some do. Those who do are considered “closes,” as in closing on a sale. If a trial offer is placed in a well-targeted environment, more people will opt to pay to continue their subscription.
The publisher who runs the promotion calculates the final costs by taking the amount of money he or she has spent on the program and dividing it by the number of closers, or people who ultimately subscribe for money. The cost of closing each subscriber may be as much as one year’s paid subscription. The publisher figures that’s okay because that subscriber will be around for a few years. Online, you can bring down the cost per conversion because you don’t have the costs of producing a DM mail package, postage, handling, and backend fulfillment for the initial promotion package. In DM speak, this is known as “the cost of acquisition.”
Since the cost of running such a (Web) promotion is so inexpensive, Web Marketing Strategies (which costs $199.95 a year) decided to take the money it saved and plow it into providing an even more attractive offer in Web Digest for Marketers. It extended the free trial period from one month to three, a $50 value. When this ran to a highly targeted audience, the response was phenomenal. That issue of WDFM went out one evening, and within the first hour of the next business day, the publisher had 20 requests. The final figures showed scores of requests that came in over the next few weeks, solely from WDFM‘s online offer.


DM Online Tracking Techniques:

Tracking Results in Minutes, Not Months

Here’s how to take the traditional practice and apply it online.
First, come up with two or three offers for your product or service. Then make some banner ads that tout this offer and set up advertising to place them on other Web sites that draw the types of people you’re looking for. Need a free banner in a hurry? Head off to http://www.coder.com/creations/banner/ where you can create banners online in minutes: Simply type in your copy, select a font, select the finished banner size and color schemes, then submit. Voila, you have a banner ad to place on the Web site of your choice. If you can afford to make a few banners, I urge you to do so, as graphics typically attract more attention than text-only banners. Put call-to-action words in your banners. Phrases like “Click Here,””Enter…,” or “Click Now” usually increase clickthroughs.
Okay, now you’ve got three offers running, in order to see which “pulls” best. Here’s how to know which offer is doing what. Set up a unique Web address on your site to which each banner will point (in other words, separate Web pages within your site). Then you simply compare which address has the most traffic. You can set up a page counter, in fact, to check traffic easily (another simple CGI script available premade on most servers). This doesn’t mean that any offer will result in more conversions, however. It simply indicates which initial offer attracts more prospects. This approach is very inexpensive and easy to implement. It is literally just the cost of another Web page, which is often free once you have set up your Web site.

Online Direct Marketing:

A Threat or an Opportunity?

It’s actually both. Over time, some percentage of the business that’s being handled by traditional DM will migrate to the online world. Historically, new media do partially cannibalize their predecessors. A good example is how computer companies found a new sales outlet by offering to sell the consumer right from the magazine or newspaper page. This ultimately took sales away from computer stores. If you feel threatened by this, I suggest you consider the options you have: You can either cannibalize your own marketshare, or have a competitor do it for you. When this cannibalization will occur depends on the industry you’re in. Computers, business-to-business, travel, telephone, books, and financial services will be affected sooner than soft goods or packaged goods.
In short, if you’re a direct marketer, you’re going to be doing buiness online sooner or later, so it might as well be sooner. Embrace this medium. Marvel at its potential, and know it’s limited only by your keen imagination as a direct marketer.This article courtesy of John Wiley & Sons, publishers of “Internet World: Essential Business Tactics for the Net,” 0-471-257822-2, $29.95, from which this article was extrapolated.




This article is from thePMA Newsletterfor February, 1999, and is reprinted with permission of Publishers Marketing Association.

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