Increasing Return on Marketing Dollars

A Newsletter Published by
Lee Marc Stein, Ltd.
August 2006 Issue

Contents

• Customer Focus
• Direct Mail to Put "Feet on the Street"
• Net Promoter vs. Net Response
  

Customer Focus

The other day, I was at an offsite meeting with a client. At breakfast, there were three of us from the "agency team." The team leader was going through printouts of the PowerPoint for the morning. He said to the team's Creative Director (not me) "tell them you were up at 4:00 am this morning to do this." "No," explained the Creative Director, "that would tell them we came unprepared."

I think "Not only that, but that says in essence 'Look how hard we work for you.' And that's not a customer-focused statement." Why would the client care? What's important is how the presentation helps their business, and the client team has to come to its own conclusion about what the agency is doing from the quality of the presentation.

Look at the copy coming out of your company. How much is brag? How much is "we" copy vs. "you" copy? Perhaps you understand your objectives for the mailing, but do you understand your customer's or prospect's expectations?

"Feet on the Street" Direct Mail

Last year, I wrote a book on business-to-business direct marketing, comprised of an analysis of 11 control packages, for the American Writers & Artists Institute. The analysis of this package from Xerox was one of the chapters in that book. For information on the AWAI Course "Secrets of Writing for the Business to Business Market, call Barb or Scott at 866-879-2924. The PDFs shown were purchased from the Direct Mail Archive.

To view this package as you read the analysis, click here for the PDFs

In virtually any business, if you can get "feet on the street" — other people peddling your wares — you can grow your business. The beauty of this is that you pay only when sales are booked. In the business forms business, instead of sending out millions of catalogs like NEBS does, you recruit others to do your selling. Online that is, of course, an Affiliate Program. Is DFS Business Forms the Amazon of its niche? Let's see.

Outer Envelope
The mailer opted to use simply his logo and address on a #10 window envelope. It obviously worked, as the Direct Mail Archive recorded a minimum of 5 repeats of the mailing. Questions arise, however. Would recipients — small business owners — feel that someone was trying to sell them business forms and therefore throw it away? What about teaser copy focusing on revenue potential?

Letter
More plain vanilla — no Johnson box, no headline. But the letter copy itself is a model of strong sales copy and specifics.

The first line is the promise — an upside with no downside: "...earn an average of $360 more from each one of your current customers — risk free." The number is totally believable, and, for a small business owner, enticing. Then we learn how this can be done - by becoming a DFS dealer.

What the entire first page of the letter does is elaborate on the promise. You learn specifically what "no cost to you" means — you don't even pay for the Dealer Kit. Carrying inventory is a major concern for small business owners, so the copy attacks this cause of anxiety deftly. The paragraph about profits takes us easily through the math.

The guarantee copy is equally well written. It's called a "Dealer Protection Guarantee" and it's trademarked. What could be more powerful and more clear than "If you or your customer are not completely satisfied with your order, we will refund your money or reprint your order free — regardless of fault!

On the back, the longest paragraph in the letter (still only six lines) talks about DFS' credentials and its ability to support customers. This (overlong) sentence tells potential dealers they can expect extraordinary service:

"With services that include a composition department that supports custom Printing, more sales tools than any other vendor, rapid order turnaround (3 days on standard products) and a staff that ensures our computer checks and forms are compatible with over 1,800 of today's most popular software packages, DFS provides you with a program that works for your business!"

This long sentence is an anomaly is an otherwise well written letter. But there are two more glitches.

The first is the signature. We have a "nobody" title signing the letter and that tells the prospect that he/she is not all the important. Marketing or Sales titles should not be used in most cases. Something like "Vice President — Dealer Relations" would be more appropriate.

The second glitch is the weak P.S. This is one of the power positions in a letter. Instead of saying "See the enclosed brochure for details regarding out special "New Dealer Introductory Offer" play up that offer if it is strong. We'd suggest something like:

"P.S. To welcome you as a new DFS dealer, we're offering a 50% discount on your first standard order!"

Brochure
This is fairly well done. It leverages the strong guarantee. The overall head on the front picks up the theme from the first line of the letter: "Boost your sales — risk free! We guarantee it."

The first sub-head is first rate: "Increase your income - not your anxieties." The first paragraph covers how easy it is to be a dealer. Then bullet points explain all the products the new dealer can sell.

A second sub-head promises "Easy ordering — fast turnaround." Here, 9 bullet points go into how easy it is to take orders, how fast they're processed, and tools available for marketing.

The back of the brochure spells out the "Special New Dealer Introductory Offer." It repeats that the Dealer Sales Kit is free. Beneath this are two testimonials. They are good ones, both relating to the unconditional guarantee. The brochure would have been better served by including a third testimonial.

Buck slip
This was an opportunistic piece, geared especially for the possible Y2K computer crisis. The head, in fact, is "Y2K Guarantee. Are your vendors Y2K ready?" Copy raises the question about other vendors, then assures that DFS is indeed ready. Buck slips are an excellent way to take advantage of breaking situations without messing with the rest of a winning package.

Response Form
This is a Business Reply Card with a perforated "keeper" stub. On the return portion, the head simply states "Yes, send me my FREE DFS Dealer Sales Kit!" Prospects gets a rundown of all ways they can respond. Then they're asked to check off their business type and also provide a business phone and fax number, the name of the contact person, and an authorized signature. These qualifiers actually add stature to the mailing (e.g., "we're serious about dealing with serious business people").

On the keeper portion, the front is entitled "What You'll Receive" and goes into the Free Dealer Kit and Discounts. There's another free offer introduced at the bottom. While there's nothing wrong with this, it's a strong enough offer to have been played up in the letter. The back of the keeper repeats the strong guarantee and the ways in which the prospect can respond.

Net Promoter vs. Net Response

Many corporations have adapted the concept invented by Fredrick Reichheld, the loyalty guru. It judges a company's health and its future by asking what Reichheld terms "the ultimate question" of customers: "Would you recommend this company (or product) to others?"

Those who would definitely recommend the company are Evangelists; those who say "Definitely Not!" are Detractors. The NetPromoter score is derived by the different between the two. A high score - many more Evangelists than Detractors — indicates a high loyalty factor and a very positive outlook. Southwest Airlines is a great example.

Obviously, having a strong product or service is an important factor in a high NetPromoter score. But that's not nearly enough. If you cannot answer questions on the phone or via email about your product pleasantly, promptly, and completely your score will drop.

Pretty obvious so far — and marketing can do relatively little to affect any of this.

Now let's say you're in the Professional Continuing Education business. Among other audiences, you do mailings to get psychiatrists to purchase home study programs. Once psychiatrists enroll for their first program, mailings get them to take the next set of volumes or buy into another program.

Through testing, you know that your best mailing package uses an "Official" envelope. There is plainly deception in using an envelope that fools you into opening it because you think it's something else. How long before customers say "Their program is good, but I don't want to subject colleagues to their promotional hocus-pocus."

So the debate is "Do I go to a more straightforward envelope and get higher marks (or at least no demerits) from customers and fewer sales, or do I carry on as I've been doing and acquire more new customers and chalk up more "renewals"?

Suppose you were fortunate enough to make a straightforward envelope work. Inside, you've been able to make your initial sale with just a black and white leaflet. You now test a larger 2-color brochure on better stock. It increases response, but cost per response also increases slightly. The brochure reflects extremely well on the program. Do you suffer the higher cost per order?

The company has been mailing four times a year. A consultant comes in and suggests much more frequent mailings to existing customers to sell the next volume or different programs. Sure enough, the increased mailings dramatically lift the program's ROI. But, for the first time, psychiatrists are beginning to complain that their mailboxes are stuffed. The company is afraid of increasing its number of Detractors and wants to cut back on its frequency. What do you do?
Who said direct marketing is easy?

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