Five major direct marketing misconceptions:

 1-      Given today’s technologies, direct marketing is the only way to go and it is the least costly. Well, technology is changing the way we do things, but technology alone is not always the key driver for change. Remember that your potential customers are humans and thus they vary on how they “gather” information and interact with technology. Secondly, some products and services are not very well oriented towards today’s technology. As for cost,  the “web 2.0” process is far from free; take a complete look at the cost to do direct marketing. In some cases you may have to add resources to manage the multiple divergent activities.

 2-      Everyone has email, so I can send our emails and the orders will start coming in.  This plan of action may be in violation of the CANSPAM act, and may alienate potential customers.  Just like traditional telemarketing, one needs a compelling offer, an approved targeted list, a call to action, and supporting activities such as case studies, blogging for creditability, and must importantly a well thought out email program, because one mailing alone will not cause potential customers to react.

 3-      Social marketing has no proven results, so I do not need too use any of these new tools! Understand that the vendor to consumer model has changed. The consumer is in the driver seat and consumers can and are talking about enterprises and about enterprises’ products and services. So as a minimum, one should at a minimum, monitor what is being said so you can react. Secondly, many end users are using media tools like blogs, twitter postings and Facebook to become informed before they make a decision, so it stands to reason that if they don’t see anything about your services or products, you will not be considered.

 4-      Hard copy (print) mailings are no longer used because they are not effective. Again, it is not a question of what to use, but your mix.  Hard mailings are and can be very effective.  A good example is a mailing to “new” customers, those who may not know about you. Hard mailings add personalization and get around potential filtering by the corporate IT email structure.  Hard mailings can also precede or follow up as part of planned social media programs.

 5-      The web site is nice to have but once I get it launched I can focus on other marketing programs. As I noted in item number three, the consumer is in control. Their major source of information is the internet, starting with your web site. If your web site is not user friendly, up to-date, contains real information and provides “give a ways” such as papers, case studies, white papers; and then you have just lost another potential customer.

 In summary, as I have always stated, look at your strategy and goals and see how direct marketing as a sales channel will support them.  In reality, your sales model will probably be a mix.  So the real question is how much direct marketing and what percentages of its components will be used. Also like other marketing programs, know your audience and know what they are thinking and saying about you.

 Do you know how your web site compares to your competition?

 RHL 01/19/10

It is simple, they want a favorable experience; let me explain.

But first a little bit of business history. According the experts, our economy was first based on farming and farming produced community type products. The choices were relative few, prices were reasonable and during normal times, available to many. Then the industrial revolution brought about manufactured goods (or products) and along with this some value adds and therefore a premium on price (over commodity). Moving ahead we entered into the service era where instead of products the differentiator became value added services or hundred percent services (no products per say, although I consider service a product). Today we are now in what is called, the customer experience era (meaning the customer has a memorable or good feeling related to the purchase/use of a product or service).

Let me illustrate with some personal examples of good and bad customer experience. First, my local auto mechanic: while he is probably not the least expensive (note I am fairly knowledgeable and experienced regarding auto repairs), I have been going to him for years; he gives me a ride home and picks me up at home, during the rides he tells me about any car issues and which one should be addressed soon and which ones very minor, we also talk business in general, about our families and Boston sports. He calls me before any actual work is done and always gives me options on how to fix it; he shops around for the best prices and has great coffee. The biggest things are, one he does go that extra mile( he knows what it is like to get value) and I trust him and that in my opinion is what he really offers and thus regardless of the financial costs, I always have a good experience and thus one less thing in my life to be stressed about.

Another good example is one of my credit cards, they notify me about potential savings, give me preferred rates, I have grace periods regarding late payments because of my time with them, but again the experience, when I call customer service, they “know” me and it is not a hassle and they close by thanking me for my business.
On the flip side, another credit card company ( has the word America in it), charges me late fees not because of me but their process procedures, changes interest rate and credit limits without any notice, has very rigid customer service ( Sir , there is nothing I can do, that is the policy). Need I say more, who do I stay with?
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So what should corporations do to keep and get new customers? Will it is very simple, put yourself in the customer’s shoes. Given you about to purchase a product or service, what would make you feel great about the decision.

I would suggest making a great customer experience “checklist”

1- Know your customer and their attributes (profile, buying characteristics)
2- What does your customer have to go through(processes) to acquire your offering
3- What activities or other products (services also) may be related to your product
4- What are your true differentiators of your product
5- What can you do to make the experience more one on one and memorable

Once you have done the checklist, take actions on them to make the situation “enjoyable” for the customer.

Here is an example of how to take a run of the mill experience and turn it into a great experience and thus a loyal customer.

Recreational boat service:
Typical service has the following scenario: vendor provides a price list of the services available for your boat (examples, oil changes, winterizing, and cleaning for various types of boats) , hours the dealer is open, you drop off and pick up the boat, and you have to call to see if the boat is ready. Any questions are usually deferred to the original manufacturer. You never really know who worked on your boat.

So let’s look at the checklist
1- Customer attributes: use is for recreation, mostly families, water skiing, seasonal, 100 mile radius, getting boat back and forth usually an issue, not sure what really has to be done to a boat, fairly decent investment in their boat/like to protect their investment.
2- Process: find a reliable boat dealer, determine what needs to be done, get the boat there, determine when and how to pick up the boat, validate that you got your monies worth
3- Related products or services: storage of boat, related repairs to boat, places for recreational boating, related recreational activities to boating, other water activities, attractions/ dinning on local bodies of water, and boating/water activity information
Given these findings, here are some ways to make this boat service a positive experience.

A- Provide a complete listing of boat services offered ( even those that may not be from your company) and why one should do them and its’ frequency
B- Provide pickup and drop off service
C- If you use our service, offer discounts on lake activities such as dining, water parks, miniature golf, lake cruises
D- Throw in some auxiliary equipment (anchor, PFDs, horn, etc.) on the first purchase
E- Personalize letters that address the following:
• Holiday greetings
• Reminders about potential next service
• Monthly activities within their area
• Boating articles
• Names of key individuals and how to contact them

In summary, if you want your customers to have a good experience: know your customer (always a requirement), model your process for the customer, not for you, and the old adage, “treat them the way you wanted to be treated”. Personalize the experience. Now some might say, isn’t there additional costs to make this a true positive customer experience. My response is probably there is, but your choices are the following: maintaining costs with the potential of losing some of your customer (given the current economic environment and customer era) OR potentially some additional costs that will result in loyal and repeat customers along with free advertising! It is your call.
One last note, make sure you link your customer experience process to your customer satisfaction program (if anything, it can provide feedback or measurements).

RHL 10/27/09

But first, a definition for clarity reasons and some overall strategy considerations.

I define channel sales by meaning all forms of distribution (direct (your sales force), indirect (via distributor/resellers) or direct marketing (email campaign, promotional offers, etc.)) by an enterprise to promote and sell their product and or service into a market(s).

Regarding your strategy, there are many factors to be considered. The following are some of the major items that should be thought about in selecting your channel.

First, what type of product or service do you offer?  Is it a very straight forward and relative simplistic to explain or is it a very complex solution (complex solution are those that consists of multiple products, some applications and professional services). I would suggest that complex solutions are very difficult to sell via direct marketing let alone by a direct sales force. Related to the type of product or service, what is the cost structure?  Is there margin for “sharing” with other partners, or can related services help provide margins to maintain profitability.

Second, what type of accounts/customers is your primary target? If they are the Fortune 500, then it is highly unlikely that a direct marketing campaign will get you any kind of response from your customer.

Third, do you need a full scale service organization to support your products, both in the pre and post sales environment?  Here you might consider a distributor or reseller who is noted for their service value proposition.

Fourth, is your marketing organization structured to support different channels, do they have various programs (an example would be, if direct marketing is your approach; you will need expertise in email campaigns, telemarketing and web support) and personnel for each channel (example, competitive analysis experts versus email operations), incentives (commissions versus spiffs), promotional programs and channel oriented collateral for the various channels? Is there enough money (margin) to support these different activities?

Fifth, a very often overlooked consideration is your systems or infrastructure. Can they support various channels?  Simple things like product codes and tracking end users can be nightmares for all organizations internally if they are not structured appropriately.

Sixth, a very critical factor in deciding which channels to utilize is what values you bring to that channel.  If the selected channel does not see a benefit to them (financially, value proposition or a fit within their strategy) everything else will be a major waste of time and money let alone major missed opportunities.

Seventh, equally critical to channel utilization is the issue of channel “conflict”. If you have an existing sales force, how will they be goaled and commissioned versus the potential reseller/distributors? Who owns which accounts, who sell what to which accounts? What is the organizational structure and how are they motivated?

I can NOT over state that understanding and developing roles and responsibilities among these channels is very complex and potentially expensive.

Lastly, what is your overall strategy for sales at this phase of your company? Are you just getting established and thus awareness is the key, or is it penetrating new markets or is it taken share away from your competitors.  Whatever the case, you need to have an integrated plan that considers the above items.

So before your switch channels or if this is your first time at this; first have a strategy and see how you would answer the seven items above.  After that, look at the overall financials to support the targeted channels and look at the margin differences and the forecasted sales volumes, to see if the overall combined projections are profitable.

Next time, we will look at the direct model in more detail.

RHL 7/22/09

Buyers (or buying committees) respond to the tone or tenor of their company which is often expressed in both direct and indirect incentives.  At the current time, the tone at most companies is conservative, reflecting the management team’s doubts and uncertainty about the balance of 2009 and 2010.  Expenditures are being managed on a quarter-to-quarter basis, with monthly status reviews.  A premium is paid to those functions that exhibit “agility” and managers who commit errors that lock the company into “the wrong decision” are often castigated.

Buyers are not buying because they are incented or forced not to.  This corporate tone takes many forms:

• Management telling each function to “do more with less.”
• The reduction in discretionary buying authority and the establishment of endless review committees.
• The desire of functional mangers to exceed goals/limits for a more positive review…look, instead of saving 10%, I saved 20%…reward me accordingly.

Barbara suggests that compelling ROIs, coupled with knowledge that your competitors are using your product, combined with strong reference accounts will close the sale.  I agree that all are part of any product/service offering.  However, unless the data presented is so compelling (90 days or less ROI!!!) the negative “do not buy” incentives will out-weigh the decision to buy.  Borrowing from football coach Bill Parcells’ famous “you are what you are” phrase, the economy is what it is and buyers are acting according to their self-interest.

Accepting this, Marketers in 2009 should reflect on past, similar conditions (the Great Depression) and implement the successful strategies used then.  Specifically:

• Know, understand and cultivate your customer base. Up-sell when possible, but make sure that your key customers know who you are and what you can do when the economy turns around.
• Build your brand awareness and differentiators within your core target market.  Use the appropriate social networking tools to accomplish this…2009 tools that are the 1930s equivalent of radio and print advertising.
• Hone your value proposition, stressing the benefits that the buyer will receive.  Communicate this through the appropriate product mix.  Dick Lush has provided some thoughts on value propositions here.

When management loosens the reins, success will flow to those firms who have clearly established who they are and why they are better.

RHM 6/3/09

Having taken liberty with a famous document, I contend that not only are vendor’s value propositions not created equally, most miss the mark with their customers.

First let me briefly address the issue of the feature as claims or positioning (often referred to as “speed and feeds”) versus a value propositions.  A features is usually some very tangible characteristic of a product (I consider services a product also- that discussion for another time).  Examples are: 1Mbps, 12 feet tall, four-wheel drive, or wireless access.

Here is where many marketing people get confused.  Taking four- wheel drive as an example, many marketers will say that with four- wheel drive you can drive in the snow, stating this as a value proposition. In fact, this is a benefit of having four-wheel drive, not the value proposition.

Value propositions as the term implies, have some worth or value for the customer.  Major areas of value propositions for an enterprise client include: growing revenues, reducing costs, improving operational efficiencies, increasing share of market or improving customer satisfaction. Thus one must “link” feature to the customer needs or as I like to say, pain points and make them a compelling, focused and specific value proposition.

Back to the four- wheel drive example.  A value proposition for four- wheel drive might be; when driving in the snow, your sales people will always be on time  for their customer calls(improve on time performance by 15 minutes or reduce missed appointments by 1 per day) and thus reduce losing business or impressing the customer that the sales person always makes their appointments on time.

When one considers today’s economic environment, the current customer issues of fear and uncertainty require pointed, accurate value propositions.   Instead of listing the product’s features (speed and feeds), linking the product to pain points is the more effective way to communicate. Along with the linking, know your audience; is it the end user or a partner, because they may have different pain points and thus a different value proposition.

Rather than forcing the customer to pick from list of features to see which applies, communicate how your feature set addresses his/her pain points, accurately and succinctly.  This messaging will lead the customer to say; YES, I want that product or service.

RHL 5/27/09