Increasing Return on Marketing Dollars

A Newsletter Published by
Lee Marc Stein, Ltd.
Issue #57

CONTENTS

• Contrary to Popular Belief
• Are Vouchers Killing the Circulation Business?
• How to Keep a Small Business Small

Contrary to Popular Belief

In his heyday at Time Inc., Sandy Clark was a genuine circulation innovator.  These days, Sandy’s name isn’t bandied about much. That’s exactly why I’m mentioning it: to emulate his position as one of direct marketing’s great contrarians.

I met Sandy when The Fidler Group was my agency at Business Week in the early ‘80s.  He was all contrarian, even coming into big meetings wearing overalls to contrast with our pin-striped suits.  The point here – and it becomes more true as markets change with increasing rapidity and become more splintered – is that a diametrically-opposed approach to controls and marketplace trends may have a chance to break through and win among all the sameness.  This applies to creative strategies, formats, offers and even lists.

Here are some contrarian strategies to consider:

1. Become the Prophet of Doom

There are almost as many direct response marketers against using negative appeals and copy as there are against using humor. It wasn't always that way. In the ‘70s and ‘80s, you'd see a pretty fair number of headlines/envelope teasers/Johnson boxes with lines like:

• "Don't be a victim of…"
• "Stop paying through the nose for…"
• "Is your career over at age 45?"
• “What you don’t know could kill you” (actually from a 2006 mailer sent by Sanofi Aventis)

The best-selling book in those days had a negative title – "How to Avoid Probate."  There was a theory that it sold millions of copies because people thought that “probate” meant conception.

Essentially, a negative approach involves posing a problem for the prospect and then solving it via the product/service. A positive approach suppresses the problem and starts with the solution.

A software marketer’s upgrade series was experiencing severely declining results.  Although the marketer used a number of different packages in its lengthy series of attempts, they all tended to look the same.  They used “official” envelopes with a high degree of branding.  We suggested –

What should you do? It's my theory that MOST people who respond to direct response marketing efforts are optimists – they truly believe that whatever they inquire about or buy holds the potential of making their personal or business lives better. Advertising to them must be upbeat, without negatives. 

However, you may be missing part of your market. First, many optimists are not going to understand viscerally that they need your product/service until they feel the pain. A negative approach can do that.  Second, pessimists may respond to direct response marketing efforts as well. To get them to respond, you have to show them that you buy into their gloom and doom scenarios. They may respond just to validate that nothing can solve their problems.

In print, on TV or online, you have no way of knowing whether your effort is being read or viewed by an optimist or pessimist, so you should alternate and monitor results. In direct mail, with attitudinal segmentation available, you can mail the positive approach to optimists; the doom-and-gloom approach to pessimists.

2. Upsize your package.

Rich Shipley, Director of Marketing at Entertainment® Publications, is one of the smartest clients I’ve worked with.  He builds tests into every program, and sometimes they’re contrarian in nature. 

One of his most successful involved selling the Entertainment® Book in quantity to Real Estate Brokers as holiday and closing gifts.  His re-sell package to previous buyers was a sample book, letter and other materials shipped in a generic white carton. 

Instead of taking the re-sell for granted and down-sizing, he put the sample book in a custom-made die-cut box.  The box itself had an arresting photo and clear statement of benefits.  He increased what was already a double-digit response by 48%, and more importantly, increased revenue per name of his list by over 89%.

3. Go retro.

Often it pays to know the ancient history of direct mail.  In another test, this one to recover older accounts in a different market segment, Rich Shipley took the control letter and highlighted key phrases with yellow shading.  The highlighted letter increased results of the control by 50%.

4. Use humor.

I know I’ve said “Don’t” on many occasions.  But if you need a breakthrough, you may just have to resort to humor.  Humor can work well with magazine subscriptions, for example, and even with serious publications.  Here is the beginning of the letter in the final effort in the renewal series recently created for New Scientist:

5. Sweep them off their feet.

Sandy Clark has said that the best time to use sweepstakes is when they’re out of favor.  Direct mail responders miss them, and you can get away with more modest prize structures.  Consider sweeps in non-traditional markets: B2B, educators, fundraising groups, etc. 

6. Stay away from hammered lists. 

Contrarian thinking can be applied to list selection.  Take the sub-prime mortgage-lending area (please!).  When The Money Store was around and we launched them into direct mail, our first tests included industry-standard homeowner with equity lists.  We wanted to try something different.  At that time, the client was sending $35 million annually putting Jim Palmer’s face on the tube.  How could we leverage that?  We tested TV Guide subscribers (selecting homeowners, of course).  Out of 10 lists, this worked best.  After the initial test, the client asked what other mortgage marketers were using the TV Guide list.  “None,” I said proudly.

Another example involved lead generation for The St. George’s Club, a timeshare in Bermuda.  The client insisted we use the list he secured from the Bermuda Tourist Bureau – recent visitors to the island.  That sounds logical enough.  We took the contrary position of wanting to identify direct mail responders who were well off.  We reasoned that most of them would have been to Bermuda anyway.  We tested subscribers to Boston Magazine, House & Garden, Travel & Leisure and all performed better than the client list.

Mary, Mary quite contrary,
How does your business grow?
With sterling cells and higher renewals,
And pretty nets that let you crow. .

Let’s see – ending an article on direct marketing with a nursery rhyme.  Well, I guess that’s contrarian.

Are Vouchers Killing the Circulation Business?
By Peter Stein

As I sat through a recent Circulation Day seminar on “Direct Mail Creative Breakthroughs & Trends” I was astounded to think the voucher was still a creative breakthrough.  The voucher for many years has played a prominent role for many publishers in their direct mail campaigns.  Creative testing has focused on improving the voucher through tweaks to envelopes, forms, adding brochures, and buckslips.  Not what I consider a creative breakthrough, but for many circulators this format has saved their business.

As subscription prices and advertising pages continue to drop, and postage and paper costs continue to rise, the voucher has proven to be an effective, low-cost format resulting in reduced cost-per-acquisition.  Its invoice-like graphics have produced pay up results never seen before.  Great story, right?

Selling magazines recently has become a price discussion with consumers and the voucher package is an easy vehicle to promote discounts and price term through its savings boxes.  Although some publishers have tested successfully adding editorial copy to the voucher, the days of the glossy 6 X 9 package, chock full of involvement devices and full-size brochures selling the editorial content of a magazine, are gone for most marketers.

But here’s the rub. While the voucher has been a tremendously strong and straightforward format, producing excellent results in response to the market conditions of publishing, in my opinion the voucher has also contributed to devaluing the editorial integrity of the magazine by focusing on a price driven offer. 

In addition, I believe publishers need to be concerned with the quality of readership and the lifetime value implications of voucher responders.  Although the short term results are very promising, marketers must continue to aggressively test creative breakthrough ideas and focus on lifetime cost of acquisition and retention, not simply one-time cost per acquisition. The success of the voucher adds to questions about the future of publishing in general.  

Peter Stein is Director of Business Development at Canterbury Graphics Strategic Marketing (www.CGSM.com). CGSM is a privately held direct-marketing agency specializing in the marketing strategy, design and production of direct marketing campaigns.  Contact Peter at 203-529-4840 or peters@cgsm.com.

How to Keep A Small Business Small

It was the first meeting with a new client.  About an hour from the end of the five hour session, he said to me “If you can just tell me what NOT to do, that would be invaluable to me.”

“Well,” I thought to myself, “that’s kind of a negative way to look at it.”  As a consultant, I’m supposed to put a positive spin on things, provide guidance on how to get from A to B, not on what to avoid.

Actually, in many ways the client seemed to be on a path from B to A.  I concluded that he was already doing an excellent job of keeping his small business small, using these principles -- 

1. Hire a really bright direct marketing manager, and then don’t listen to a word he says.
   
   
2. Fall in love with a particular direct response advertising medium and refuse to test others. 
   
   
3. Continue to believe that valid creative testing is a waste of time, that “either the phone rings or it doesn’t.”  With this belief, you don’t clutter your head with a factor like seasonality (if you run your very best ad at the end of June, results are going to look lousy vs. those from your old war horse ad in October or January). You never know about offers because you run Offer A with Creative A and Offer B with Creative B.

It’s kind of the Yogi Berra School of Marketing Management: If you don’t know where you’re going any road will get you there.

Now in other respects, the client is doing a poor job of keeping his small business small.  His product happens to be superb, he backs it up with a phenomenal guarantee, and he provides superior customer service. 

He also knows that you must invest in marketing – not only in the media end of it, but in strategy and creative.  Unfortunately, there are millions of small businesses out there who don’t believe in this.

Recently, MarketingProfs.com launched a spinoff business called 911MarketingHelp.com.  Based on the success of its free forum, it targets small businesses and offers help in the form of expert answers to a specific marketing question.  Unlike the free forum, experts are vetted and both questions and answers are confidential.  Response to questions is normally within 24 hours.

The spinoff has been promoted extensively on the heavily-trafficked MarketingProfs site.  And what has been the reaction of the sizeable small business audience?  Plenty of clickthroughs and very few takers.  Small (minded) business owners balk at the $250 fee.

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