SMA March 2006 Newsletter

Does Your Marketing Database Need a "Tune-Up"?
    1. Can your marketing database identify your most profitable customers by name?
    2. Does EVERY employee with any type of customer contact know when they are dealing with one of your best customers?
    3. Do you know which marketing vehicles, campaigns, and offers attracted your best customers?
    4. Do you know how your best customers are different from the rest of your customers?
    5. Do you know how many different customer segments you have?
    6. Do you know what products are purchased by which segments?

You want your database to help you identify that 10% - 30% of your customer base that accounts for about 80% of your profit - to ensure that you're doing everything you can to grow and maintain that profit. Although we all have heard the "80/20" rule, do you really focus on those customers that generate the bulk of your profits?

If you're using your "marketing database" more like a customer mailing list - where every customer looks like every other customer, and you treat every customer the same -why not start testing some segmentation strategies?

Segmenting Your Copy in Direct Mail and Email: The Key to Rising Response

MarketingSherpa reports that segmenting your list and versioning your email messages for each segment can boost email open rates as much as 9 times! (We found that versioning email messages based on past purchases boosted one client's email response by 130%.)

Use your prospect and customer databases to talk differently to:

Prospects just added within the last 30 days -- versus older prospects
Customers originally brought in through a special price offer -- versus customers who made their first purchase at regular price
Prospects and customers in different geographic areas, if geography tends to segment your audience
Prospects and customers with different titles or positions within a company
Customer segments, based on the product(s) purchased
Best customers versus less-than-best customers

If you're mailing a laser-personalized letter, you might do the following (as we did for Glendale Federal Bank's maturing account notices):

Assign a letter (A,B, etc.) to each paragraph, phrase, or area of the letter that needs to version
For the first area that will version (e.g., "Section A"), give your mailing house the "version 1" copy, "version 2" copy, etc. - along with the field to read in your mailing file, and which version to use with each code in that field.

Using this process, you can create highly relevant direct mail letters and email messages that should get higher response.

Can a #10 Envelope and Letter Sell Porsches?

    Car manufacturers and their dealers produce lots of big, expensive, glossy, full-color brochures showing their latest models. But are the brochures a necessary part of their direct mail package? One Porsche dealer recently sold 6 new Porsches as a result of a simple #10 envelope and letter package!

    The dealer bought an outside compiled list of 1300 high-income families within his geographic area who owned high-value homes. He had the envelopes hand-addressed, and used first-class postage stamps, to portray a highly personalized and luxury image.

    The letter invited recipients into the dealership for refreshments and a test drive.

    His SALES response rate: 0.5%. (What you might expect from an untested list, offer, and creative package -- but likely, at a much lower cost than the dealer usually spends by mailing out those big brochures.)

    Never underestimate the power of a well-written, personalized letter.

Can Purchased Email Lists Still Work for Prospecting?

A recent article in Direct magazine detailed a B-to-B email prospecting effort that got 13% lead response.

    The campaign to 20,000 CIOs at big companies was designed to generate leads for a software product. Some key components of the campaign:

    1. The email "message" was designed like a print ad - with a big headline at the top (pitching the 2 key elements of the offer), followed by a big arresting photo.
    2. The campaign drove CIOs to a web site to register to download a free white paper.

    But perhaps the interesting movie tie-in was the secret to the campaign's success: the email offered the first 100 respondents free tickets to "King Kong".

    (The "something extra" for fast response is a very smart technique. It gives the recipient a real reason to take action NOW.)

    Both the free white paper and the movie tickets were emphasized graphically in the left column of the email message. When generating leads, be sure to focus on the OFFER.

Online Offers: The Power of Free Shipping - It Can Cost You Less While Boosting Order Size

Test after test continues to prove the response-driving power of a free shipping offer. But here's the really fascinating thing: a free shipping offer tends to work better than percent-off sales or other types of discounts - even when it offers a lower dollar savings than a percent-off discount!

    Why is that?

    - Percent-off discounts typically don't work as well as a specific dollars-off discount. That's because most consumers can't immediately compute what their actual dollar savings on a $59 item at 15% off will be. But if you tell them, "save $10", they understand the true value of the offer.
    - Consumers know that many items they locate online are also available at their local store. Shopping online saves time - but if I have to pay a hefty shipping charge, maybe that time-savings isn't worth it. So a free shipping offer can motivate the online purchase.

    Consider offering free shipping for orders over a certain dollar amount. You'll likely find your average order size will jump up - as well as your response.

"Read What Customers Say": The Power of Customer Comments On Your Site

A study by McKinsey & Co and Jupiter Media Metrix found that users who contribute reviews to a site visit that site 9 times more often than average users, and they stay twice as loyal and BUY TWICE AS OFTEN.

Regular users of feedback areas generate two-thirds of sales, but account for just one-third of visitors.

CompUSA found that visitors finding a customer review on its site had a 50% higher conversion to customers and spent an average of 20% more per order than the typical CompUSA site visitor. Customer reviews can also boost your organic position on search engines.