Marketing Tips and Techniques

Astute marketers allocate portions of their advertising budget for both new customer acquisition and customer development. Then they rigorously track and analyze the results.

Setting new customer acquisition ad goals is admittedly difficult for multi-step marketers that employ a sales force. Here the conflict between inquiry quantity and sales lead quality must be addressed and a balance struck between the two. New customer advertising objectives for the multi-step marketer should at a minimum encompass the # of qualified leads, a qualified lead/sales ratio and cost measures.

Don't Neglect Your Customers: Everyone knows it’s easier to get an order from an existing customer than acquire a new customer. How much easier? The difference might surprise you. Companies that carefully track and measure program results often find that customers are over 5 times more likely than prospects to place an order. Not surprisingly, these companies target the greatest portion of their marketing communications budget at customers.

It’s a lot more common, however, to find companies so focused on new customer acquisition that few resources are available for customer retention and enhancement programs. Try analyzing your customer vs. prospect marketing communications expenditures. If you’re spending a lot more time and money on prospects than customers, there’s a good chance you’ll improve bottom-line performance by devoting more resources toward building customer order size and purchase frequency.

Understand and use LTV: If you don’t know customer lifetime value (LTV), it’s almost impossible to design an optimal customer acquisition program. LTV is the net present value of the gross profit generated per customer over time less the direct costs of servicing and communicating with the customer. LTV can vary within a firm’s entire customer base (e.g., In B2B, it often differs by industry, size of company, etc.) and in most instances segmentation is necessary to identify levels of LTV.

Knowing LTV allows you to determine the acceptable cost and methods you can employ to acquire a new customer. This includes how much you can afford to spend to generate an inquiry, produce fulfillment materials, qualify sales leads and close prospects.

First time vs. repeat buyers: Many inexperienced marketers think the battle is won when they receive a prospect’s first order. Veterans know otherwise -- the single most critical point in a customer’s life cycle is inducing a second purchase. Two-time buyers can actually be over 200% more likely than first-time buyers to place a subsequent order.

Too many companies fail to devote adequate resources to turn the casual one-time buyers into a long-term customer. You should develop a careful and consistently implemented program to convert new customers to solid, repeat buyers. Employ thank-you calls, develop a "welcome to xyx company" package that includes an incentive to make a second purchase, etc.

Learn from your competitors and others: New ground is being broken daily in advertising and marketing. No matter how talented we are as individuals, it’s vital to recognize that others may be pioneering new approaches. Try building and maintaining a "clip file" of what other companies are doing to aid in keeping your own efforts on the cutting edge. And don’t limit this research to your own industry. Routinely study work that’s used in other markets for fresh ideas you can incorporate into your own marketing communications program.

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Integrated marketing is a valid concept. When the internet, print, mail, web, telephone and PR work in harmony the results are often synergistic. Take this fact into account when you design your web site, ads, mail pieces, qualifying scripts and fulfillment/sales support materials.

Promote that web site: Don't be lulled into thinking a web site can totally replace other media. Your web site is a needle hiding in the world's biggest haystack. If you don't advertise it via other media channels, relatively few prospects will find it. Internet marketing offers a variety of benefits that no other medium can match (especially for customer marketing), but it lacks the targeting capability provided by other channels like direct mail. Make sure to feature your URL in all your marketing communications vehicles.

Low vs. high cost per contact media: In general, a multi-step marketer's prospecting efforts should employ low cost per M circulation media to generate inquiries, medium cost media to qualify leads and higher cost media to close the sale. A typical application is to use card packs or trade journals to generate inquiries, direct mail or telemarketing to qualify and field sales to close.

Similarly, a customer database should be segmented based on historical and potential purchase volume. Relatively low cost direct mail, catalogs or e-commerce web sites might be all that’s needed to serve marginal customers or market low-ticket supply items. Moderately expensive telemarketing or telesales efforts can be directed at mid-level customers. Expensive field sales efforts are then reserved for top customers or to sell high-ticket items.

Try shutting your door to close out daily events for an hour, sketch out the media you use for different stages in the customer acquisition and development process. Then ask yourself why do we use this? Is there a cheaper alternative medium that will do the same job? You might be surprised at the answers.

Don’t limit direct mail to customers: A frequent weakness we find in companies that market to other businesses is a tendency to limit direct mail or catalog circulation to their own account list. Prospect lists that could be profitably mailed are often neglected. Successful direct mail prospecting is a demanding science that is considerably more complex than just renting some mailing lists, and we recommend that you engage a competent direct marketing professional to develop and implement a circulation plan.

Card packs let you split test: One of the great advantages that card packs offer is the ability to conduct scientific split-run tests: as many as 5 splits are possible. When timing permits, this capability can be employed to economically test different headlines, offers, products or even price points prior to rolling out more expensive ad campaigns.

Ask your customers for referrals: A frequently overlooked source of new customers is a company’s own customer base. Many companies can improve their new customer acquistion program by asking their existing customers to refer new customers.

This tactic is especially good for B2B marketers. Companies that market to other businesses should ask customers to refer other individuals in their own company as well as in other companies. An adjunct strategy that may be applicable is to ask your firm’s suppliers for referrals.

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Send mail to kevin@knightdirect.com.
Copyright © 2003 KNIGHT DIRECT LTD.
Last modified: October 13, 2003

Make an offer: A prominent direct response axiom is the 40/40/20 Rule which states the success of a program is based 40% on who a mailing or ad reaches, 40% on the product and offer it includes and 20% on creative execution (i.e., copy, graphics, format, etc.). Unfortunately, we've found that significant portion of trade journal, magazine and newspaper ads don't include an offer. In trade journals, the tepid "call for more information" represents the lion’s share of offers.

If you’re advertising to generate sales leads, offers can range from a Free Demonstration Video Tape to Entry In A Sweepstakes. Paper or information offers -- e.g., Free Product Selection Guide, Free Application Guide, Free Test Results, etc. -- are often a good choice due their low cost and proven ability to generate inquiries. Good copy is essential to attractively position the offer; e.g., compare "call for more information" to "call us today for a Free Fact Kit." The latter wording makes the same offer considerably more appealing to prospects. If you have a catalog, a print ad offering a FREE Catalog can be one of the most powerful lead generation weapons in your arsenal. Take care to develop offers that will appeal to you target audience.

The headline’s no place for shortcuts: John Caples who was one of the greatest advertising men of the last century convincingly wrote that 50-75% of an ad’s success resulted from its headline. While print ad visuals have surpassed headlines in importance because of today’s video oriented society, the headline is still vitally important. Once the visual has stopped a reader, the headline either tempts him to read body copy or lets him turn the page. The best crafted body copy in the world will not be read unless the headline does its job by enticing the reader, and you will be well served by spending more time writing headlines than writing body copy.

There are many established techniques for producing good headlines. Incorporating powerful words such as "new," "free," "save," "how," "first" is usually effective. Announcing a benefit to the reader in your headline will almost always outpull vague statements. Cutesy plays on words that some copywriters employ to demonstrate their mastery of the language, but which rocket past the reader as he turns the page, should be avoided. And there’s seldom an excuse for employing your product’s generic, brand or model name as a headline.

Translate features into benefits: Customers buy benefits -- not features -- and all other things being equal, advertising that does the best job of conveying product or service benefits will produce the most responses. When you develop your ads try this three step technique:

1. Circle every product or service feature listed in your copy.
2. If the resulting customer benefit(s) of each feature isn’t already in the copy, write it down.
3. Finally, ask yourself if your target audience has the necessary knowledge or energy to convert all the features into benefits and modify the copy to incorporate benefits where they are needed and eliminate unnecessary features.

The dual value of a toll-free phone number: In our opinion, the value of a toll-free phone number is much more pronounced in business-to-consumer than in most business-to-business marketing programs. The majority of business people don’t see their company’s phone bills, simply don’t hesitate to make a toll phone call. Still, offering an 800 number will tend to boost reader inquiries.

Another value to having a toll-free number is to make it slightly easier for the advertiser to phone qualify in-bound calls. Since you are paying for the call, the prospect will be more likely to feel obligated to give you a few minutes of his time.

Coupons and bind-in cards: Placing a response coupon in your full page print ads or a dashed line border around fractional page ads will usually result in producing more inquiries. This creative technique shouts "response requested" and will also increase both bingo card inquires and telephone inquiries when these other response mechanisms are also placed in the ad.

An expensive print advertising tactic, but one that we often recommend testing due to its effectiveness, is to place a bind-in response card facing your ad. This approach offers the advertiser numerous benefits:

1. It draws more attention to your ad by causing the magazine to "break" at this point.
2. By requesting qualifying information on the card you can pre-qualify prospects.
3. You tend to get better quality inquiries than from the magazine’s own reader response card because the reader has taken the time to complete your separate card.
4. You can easily conduct true scientific split run tests via the card.
5. There’s no middleman between you and the reader except the postal service so you can answer the prospect’s request super fast.

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Forget the long letter advice if you’re attempting to generate inquiries using mail. The purpose of a lead generation mailing is to identify prospects by getting them to request more information. Try to limit your letter to one page and employ easily scanned bullet points and short paragraphs.

Envelope teaser copy: Don’t blindly assume that your mailings should employ teaser copy on the outer envelope to get the recipient inside you package. We have witnessed plain window envelope packages that outperformed the same package with envelope teaser copy. Perhaps the message on the teaser was faulty. Then again, maybe recipients believe a plain window envelope might contain a check. A similar situation for avoiding teaser copy occurs when you go to the expense to make a personal looking closed-face match mailing. Whether to use or not use teaser copy on a new mailing must be considered in light of factors such as the target audience and the perceived value of the offer you would highlight with teaser copy. Fortunately, both options are among the easiest factors to test in a mailing , if you’re in serious doubt, test it.

Self-mailers vs. traditional multi-piece mail packages: Before you go to the expense of designing and producing an traditional mail piece (outer envelope, sales letter, brochure and response device), ask yourself if a less expensive self-mailer would be a more cost-effective device to achieve your marketing objective.

Targeting ... guard against turnover in B2B mailings: Considerable personnel turnover exists in most businesses, individuals either leave companies or change their responsibilities within the company at a rapid rate. The result of this situation is that even the best maintained mailing lists are constantly out of date, and a significant portion of mail directed to any individual name will not be delivered. While we are strong believers in the value of personalization, directing a mail piece to a title (e.g., Plant Manager) in your mass B2B mailings is often a better strategy.

Don't buy pre-packaged lists on disks: Never purchase any list that is pre-packaged for sale on a CD. These lists are terribly out-of-date throughout most of their shelf-life. While they might include good names and addresses when first produced, by the time you purchase the disk it might be 6-months old or even more dated. A good list compiler will be adding, deleting and updating records during those 6-months and can provide fresher names. Always custom order lists from a reputable supplier.

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Regardless of the relatively low cost of news releases, you should still do everything possible to ensure your new releases are published and strike the right note with readers. Here are a few simple, yet effective, tactics to employ:

• Try to include a photo with your product and literature releases. A photo, preferably of the product in use, will attract more reader attention.

• Write a headline that tells the editor and readers what is new, important and different about your product.

• Structure your first paragraph like a newspaper article with answers to "who, what, when, where, why and how." Use subsequent paragraphs to expand these points.

• Don’t concern yourself with length, usually it’s better to give an editor as much information as possible.

• Include a contact name, address, phone/fax numbers and release date.

Do a pre-show traffic builder: Trade shows are very expensive, one study found that the average cost per prospect reached was over $230 in 2001. This high cost doesn’t mean you should give up on shows (A show usually serves a variety of important marketing roles in addition to finding new customers.), but it clearly points to the need to get the most out of your trade show expenditures. A good technique to maximize booth traffic is to do a pre-show mailing to prospects. Ads placed in pre-show issues of trade journals should also include a message that asks readers to stop by your booth. The latter approach is particularly effective since the incremental cost is virtually nothing

Use a qualification form at trade shows: Trade shows are arguably the medium most affected by the balancing act between lead quality and quantity. Gimmicks ranging from using prize giveaways that elicit a fishbowl full of business cards to having a chimpanzee hand out bananas will attract plenty of booth traffic. Unfortunately, many individuals drawn to the booth are more interested in the prize or the chimp than your product. Real trade show success is meeting and identifying qualified prospects.

One solution to "fishbowl prospecting" is to employ a qualification form on the show floor. Print the form on heavy, card stock and in a size that will easily fit in the pockets of your booth personnel for ready retrieval. Use check boxes to aid in quickly filling out the form, but also leave room to write notes.

Remail all show literature: Studies find that up to 75% of the literature collected at trade shows is discarded by prospects before they leave the show. The implications of this are two-fold: 1) try to avoid handing out materials like expensive full-line catalogs; and 2) remail the literature that you distributed at the show to every individual who visited your booth.

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