Many of the most successful digital marketers have a background in direct marketing. I think this is because they're very comfortable with using a structured approach of Test, Learn, Refine to get the most from their campaigns. They're also good at modelling campaign performance from customer demand to response rates and campaign costs to make sure they get positive ROI (See my Emarketing Planning Spreadsheets on my old site for free tools to help here).
Of course, many marketers looking to use the Internet don't have this background, so appreciating the principles direct marketing is useful to prompt different thinking about digital marketing.
I was chatting with Dan Croxen-John, the CEO of Applied Web Analytics and we thought it would be useful to talk through what online marketers can learn from traditional DM approaches. Watch out for Dan's Top #3 mistakes to avoid.
Dan is the CEO of Applied Web Analytics, a consultancy that specialises in helping multi-channel retailers and mail order companies measure and optimise their websites. Before this Dan's DM experience was in directing DM campaigns within several mail order companies.
Direct marketing fundamentals
Q1. Why are the fundamentals of direct marketing still important?
The fundamentals of Attention, Interest, Desire and Action are as relevant now as they were in 1898 when the term was first used by Elias St Elmo Lewis, an advertising executive who was passionate about applying science and efficiency to sales and management..
AIDA retains its relevancy because it is so accurately captures the stages of the purchasing process whatever the channel and however the long the sales cycle is.
Whether you"€™re a time-share salesman typified by the film, Glengarry Glen Ross or selling an engagement ring to a nervous bridegroom-to be, the sequential approach to building momentum and conviction toward a purchase should focus the efforts of the marketing team.
Other direct marketing fundamentals remain solidly in place including the financial assessment of customer acquisition and retention costs versus results. Since the Internet has allowed us to better track the relationship between expenditure and outcome, measurability has advanced both the cause of direct marketing in general, and online in particular.
Whilst measurability has captured many of the hearts and minds of direct and online marketers, AIDA has, for some online businesses, taken a back seat.
Where do digital marketers go wrong?
Q2. What have digital marketers forgotten in the race to embrace new forms of marketing?
One of first mistakes marketers have made when considering whether to increase investment in digital is whether there are other avenues that offer a better return on investment. The smart money takes the blinkers off and looks at wider opportunities. For example, I know of at least one multi-channel retailer that is investing in new shop openings, given plummeting commercial rents, rather than invest in online acquisition. For others, off-the-page one-stage ads in national press have done spectacularly well "€“ far outstripping ROI from paid and SEO investments.
So Mistake, number one is to assume that digital will always offer superior ROI.
Mistake number two, is the problem of over-branding of e-commerce stores. Without wishing to name names, there are several well-known high street apparel retailers who are unable to divorce the need to "€˜dress"€™ their stores and then applying same veneer to their online shop "€“ only to the detriment of their visitors"€™ online shopping experience, and unfortunately the conversion rate. Boden"€™s new website, in my opinion, gets the balance between brand personality and a compelling shopping experience just about right.
In their defence, many of these apparel retailers"€™ websites are designed by brand people situated at HQ. But digital marketers have often failed to show them the error of their ways. Those e-commerce managers that have been brave enough to take their websites into usability sessions have been embarrassed to find how difficult to use these "€˜overbranded"€™ sites actually are.
Mistake number three has been lack of investment in compelling copy and building "€œdesire"€ into category and product descriptions. In a media where space is not at a premium (unlike catalogues and offline media), few online retailers have made sufficient investment in copy that does what copy should do "€“ the transfer of passion from the vendor to the purchaser. Remember this acronym - WIIFM "€“ What"€™s In It For Me, Phrased like this copy will inevitably focus on the benefits to the reader rather than the features. The customer is only ever interested in what the product will do for him or her.
To help retailers identify which product pages they need to optimize we use Look-to-Book analysis. This means identifying those product pages that receive higher-than-average number of page views but have a lower-than-average add-to-basket ratio. These are the products that are getting eyeballs but for some reason are not making it into the visitor"€™s basket. Improving copy can be a quick and effective way to increase add-to-basket ratios.
So, digital marketers in some cases have queered the pitch for the "€œAttention"€ part of AIDA by "€˜overbranding"€™ or, not translating the brand into the online space appropriately. A more heinous crime and mistake number four, is that some UK online retailers have been rather timid, and dare I say it, British, about asking for the order. Call to actions have been positively weak.
So in summary:
- Look at other high ROI opportunities
- Translate your brand online rather than just apply it
- Invest in compelling copy
- Ask for the order
Where can direct marketers learn from digital marketers?
Q3. Does traditional direct marketing have anything to learn from online?
I come from a catalogue background where the lengthy timescales of catalogue production and the seasonal product cycle can often train the organisation to work at a slower pace than the online environment demands.
Many cataloguers have become far to used to "€˜catalogue-speed"€™ business cycles, and this is one of the many reasons that their businesses are slow to respond to changes in customer demand. .
So the message here to direct marketers is to "€˜speed up"€™. Speed of response to trends in your on-site search terms, sneak previews of new products, "€œIn the warehouse now"€™ campaigns are all key ingredients to moving away from a pedestrian paced sales cycle.
A second set of learnings for direct, is the incorporation of the backchannel or feedback loop into their offering. Some retailers have taken to Feefo (transaction rating service) with some relish, but others have simply not used the tools (free in most cases) to ask for and elicit opinions, thoughts, gripes and plaudits from their customers and prospects. On-site survey tools like Kampyle can now be integrated with Google Analytics, and you can look at where visitors are falling out of the checkout process as well as understand why.
Despite the growing use of social media, many direct marketers have yet to understand the now 11-year old Cluetrain Manifesto that markets are about conversations, rather than transactions. Some companies like ASOS have embraced social media and Twitter in particular to their advantage. Unfortunately, these companies remain in the minority.
Now, conversations won"€™t just take place on Twitter and Facebook, but also the in call centre, in the shop floor, customers"€™ letters, focus groups. But it is true to say that the online space is leading the way with this "€˜conversation-based"€™ approach
The third major area where direct marketers can learn from the digital counterparts is developing a set of engagement KPIs. Many direct businesses have a simple Suspect "€“ Prospect "€“ Customer model of acquisition. Yet online we can measure engagement in a number of interesting and creative ways
- Direct and branded search visits
- Length and depth of visit
- Product views
- Add to Basket ratios
- Email enquiries sent
- Catalogue requested
- Visits to key content areas e.g. Buying Guides
Mail order companies in particular have tended to see an on-off approach to behavioural targeting "€“"€˜they"€™ve now bought and we are going to place them in a RFM segment and let the propensity model take care of business"€™. What is needed is for the catalogue and other offline media to "€˜engage"€™ prospects in a way that can be measured and optimized.
Steve Jackson"€™s Reach "€“ Engage "€“ Activate "€“ Nurture model (REAN) is a valuable way to measure and optimize the customer journey. It is a model that online marketers are more familiar with than direct marketers, and can teach a lot of offline folks about measurement and analysis.
Finally, the web analyst"€™s job is considerably more complex and nuanced than a database analyst. The database analyst has lots to learn from his web counterpart about segmentation, data mining, trend spotting and correlations. Website data is inherently dirtier. It contains all kinds of outliers and aggregates the behaviours of all kinds of visitors "€“ suppliers, job seekers, returning visitors, catalogue requesters, those looking for directions or information on exchanges as well browsers and those ready to buy today.
Integrating direct and digital marketing
Q4. And how can digital and direct marketers work together to better integrate campaigns?
Kevin Hillstrom writes well about the multichannel space and the contribution that each channel makes to the marketing mix. Depending on your business, each of your channels - catalogue, store and web - will be more efficient than others at acquiring and retaining customers.
Practically speaking this also means understanding the unique qualities that each channel has to offer.:-
- If I want to touch the product and ask a few off-beam questions, the store may be a good place to start.
- If I want to read unfiltered product reviews and research detail tech specs , the website often does a great job
- If I want to be inspired, sold entire outfits and a lifestyle, then I may well enjoy relaxing on the sofa with a catalogue
Finally, I think it is about the contribution of skills and experience. I believe that direct marketers still rein supreme is putting together a compelling offer. This skill is borne out of having to get everything just right for a £9000 off-the-page ad running in the Sunday Telegraph "€“ this is the one chance that the marketing team has, and it has to be a superb offer and result in orders.
What I would always favour the digital marketer for is the ability to measure the difficult stuff, and sweat the analysis. I particularly like the efforts of companies like Fresh Egg to tie together separate channels such as online and the telephone. With their technology, you can serve different phone numbers on the website depending on whether the visitor came from an organic or paid search. Tracking phone calls based on your keywords you used to find the website is just the kind of innovation multi-channel marketing requires.