What To Do When Budgets Get Tight

It’s hard to turn on the TV without hearing the dreaded “R” word. You guessed it: Recession. Some economists would argue it’s just a blip on the overall economic radar while others are preaching impending doom. I tend to agree with the former outlook. In fact, it seems that America has talked itself into a recession.

The first step to dealing with a possible recession is: Don’t panic. This is not a time for radical changes in your marketing plans. We have found that the best approach is to continue doing what you’re doing.

A dangerous response to a slowing economy is to wait it out for a few months and see what happens. At Allegro, we have been talking with several companies who are putting their marketing plans on hold for a quarter or two to see how things will pan out. By delaying, these companies will end up playing a game of catch-up later on.

We recommend making minor tweaks to your current programs to take into account the changing economy. This is not a time for conducting extensive tests. If the economic downturn is temporary, which most believe it is, then by the time you have your test results and are ready to act on them, they won’t be relevant any more. That’s not to say you shouldn’t test. Once again, we would say to continue doing what you’re doing. Test as you were, but be sure factor in the slow economy as you analyze the results.

Here is a list of some things to keep in mind as you review your company’s direct marketing programs:

Look at your target audience.
You may want to really think about who you are targeting. Are you reaching the best customers or prospects for a particular product or service? Is it the right audience? You may find that your product or service is better suited for a different target market during harder times. For instance, it might be worth investigating a higher income bracket than you typically target.

Review your offer.
Does your offer still make sense? You may need to offer a different price incentive or offer a group of products or services. Many financial companies are offering customers free services if they have multiple accounts with the institution.

Think about the tone and message.
What motivates a prospect when times are good may be different than what hits home when money is tighter. Or, you may feel that your message is still right on. Unlike consumers of the
past, we are used to a certain lifestyle, and it takes a drastic shake-up for us to change our spending habits. For instance, Wal-Mart's “Save money. Live better.” theme works even better in a slow economy.

Check out the competition.
If your competition has cut back on its mailing schedule or print advertising, that’s all the more reason you should be mailing or advertising. Your customers and prospects will still be buying, and if you’re the name they see, it’s more likely that they’ll buy from you.

Look for cost-efficiencies.
While we don’t advise you to scrimp or stop your marketing efforts, we would encourage you to take a look at areas in which you can gain cost-efficiencies. For instance, it may be time to look for ways to cut production costs. Or, you may consider using direct marketing agencies that are results-oriented and can efficiently manage programs for you.

The main benefits of direct marketing are its highly targeted nature and ability to get proven results. When budgets are tight, direct marketing is often the discipline that comes through in slow times. With direct marketing, you can target those customers and prospects who are most likely to respond. In addition, you can immediately see the results of your marketing dollars and can make adjustments accordingly.

What Should You Test?

Should you test a live stamp versus an indicia? When do you test entirely new creative? Can the copy on your order form dramatically affect results?

As with many questions in direct marketing, the answer is, “It depends.” You may have heard someone say, “Direct marketing testing is a science.” And while testing requires a scientific approach, it is also an art. It takes experience, some finesse, and common sense.

If you find yourself thinking, “There’s no need to test that because it ALWAYS…” then you may be proven wrong. In direct marketing, things are constantly changing. What worked last year, last month, or even last week, may not work now. That’s why testing is so important.

Whether you’re marketing to individual consumers, businesses, or donors, you are still dealing with people. And people are fickle. Attitudes, motivations, wishes, dreams, and goals can change overnight.

Many direct marketers have found that the direct mail packages that performed well a few years ago are not working as well today. That’s why it’s important to continually test your package elements to make sure they are in tune with the needs of customers and prospects.

However, you can get “test happy.” You should be careful to test only those things that have a reasonable chance at beating your control.

Here are two key factors to consider when thinking about a test:

1) How much money will the test result save you?
2) What can you do with the results?

For example, if you are sending out a package and want to test mailing it first class versus standard mail, you need to determine if the anticipated lift in response will be enough to overcome the additional postage costs.

The point of testing is to improve your return on investment. The ROI equation can be satisfied in three ways:

1) increasing response while keeping costs steady,
2) keeping response steady while lowering costs, or
3) spending more to improve response significantly.

Big tests have the biggest opportunity. If you can work on the strategy, message, creative, and offer, test those first. In acquisition, always test multiple lists and list segments. Formats can also have a big impact on results. A 9 x 12 package versus a 6 x 9 may make a dramatic difference in response.

Sometimes less can be more. Through aggressive list testing and segmenting, you may be able to mail less with greater response. You may be able to eliminate a package insert while maintaining the same response rate. At Allegro, we once tested eliminating a premium from a package and actually increased response from certain list segments. The only way to know if you can get by with less is to test it.

There are also times that call for significant package changes. Even highly successful controls will eventually wear out. The marketplace or attitudes can change and response rates may begin to lag. Also, when testing acquisition mailings, it can be highly profitable to try an entirely new creative approach or package format. In some instances, a new package can become an instant breakthrough success.

Here are some of the significant areas to test:

• product or service features
• mailing lists
• envelope appearance
• number/type of enclosures
• strategic approach/appeal
• price or donation amount
• offer statement
• copy tone and message
• premiums
• overall package format
• timing of mailing

Always test any changes against what is currently working. If you’re going to test entirely new creative, put it head-to-head against what has been working for you. If you’re testing lists, always test one or more proven lists at the same time so you can have comparative results. If you’re testing copy, price, or offer, it’s also better to test more than one option over several lists rather than to test one package on one list. The more you are able to compare results among different approaches and lists, the more confident you can be that your test results are reliable.

Testing is part art and part science. It takes creativity, discipline, and the willingness to take some risk. And, you may just be rewarded with a higher return on your investment.

Tips to a Good Dimensional Mailing

I believe in the value of dimensional mailings. There are programs and situations in which a dimensional format can increase response and return on investment.

As with any mailing, it’s list, offer, and creative that will make the program successful. However, with a dimensional mailing, it's important to keep in mind that you will have much more invested in the mailings on a per piece basis. Here are some tips to make sure your dimensional mailing gets the response you need to make it a highly successful mailing.

Relevance is key.
A dimensional mailing needs to be relevant to the audience. The creative for the mailing should fit the audience and the message. If you include a premium, it should be tailored to fit your message. If you talk about helping a prospect “juggle” many responsibilities, then the premium might be a set of juggling balls. Send a beach towel if you’re offering ocean-front timeshares. Perhaps send half the premium or a hint of the premium in the initial mailing with the promise of fulfillment when the prospect meets with your salesperson.

Check your list – twice.
As with any mailing, the list is critical to the success of your dimensional mailing. If you’re sending a postcard, you may be okay with sending it to the wrong contact in the hopes that will be passed on to the appropriate person. With the high cost of a dimensional mailing, you want to be sure you have the right contact. It’s worth an upfront phone call to clean and update your list before mailing. An added touch is to let the person know that you will soon be sending them an oversized package.

Write a great letter.
Your unique packaging will get you in the door, but your letter must still make the sell. You can incorporate clever puns or play with words to tie the letter to the theme of the package. Just be sure that you also clearly get your primary messages and offer across to readers. Make your letters so persuasive that your prospect picks up the phone and calls you.

Make a good offer.
Remember that the goal of the mailing is to get a foot in the door. You want to create interest and make a strong case for you company so that the prospect will take your call and agree to meet with you. Offer the prospect something for meeting with you. It could be a special rate, discount, or additional premium that relates to the upfront premium included in your dimensional package.

Maintain your company or brand image.
While a dimensional mailing is an opportunity to be more creative and stretch the branding guidelines, you still want customers and prospects to recognize that it came from your company. Use your company logos, colors, and overall design elements to tie the dimensional package in with your other direct marketing materials.

Consider a mailing series.
Sending a series of two or three dimensional mailings can be even more successful than a single dimensional. You can send items in each mailing or promise to deliver a premium at an in-person meeting. Keep the message and design similar throughout the mailings to create a consistent theme.

Call to follow-up!
Another way to increase the response rate of a dimensional mailing is to call recipients and follow-up. It is a great conversation starter. You open the call with, “Did you get the blue tube…?” or “Have you received the bright yellow box I sent you…?”

Dimensionals offer a fantastic opportunity for fun, adventurous creative, as long as it makes sense for your product or service and your audience. Make sure it’s something the audience will value. If the dimensional mailing is a let-down, the disappointment will overshadow the benefit of your offer.

When Should You Go Dimensional?

A direct mail package can come in all different shapes — from a tube or a box to a thick envelope or custom carrier. You can even mail a lunch pail or a tackle box.

What can a dimensional mailing do that a flat mailing cannot? It takes up space. It has depth. It stands out. It gets noticed. And it sticks around.

What is a dimensional mailing?

When you think of direct mail formats, typically what comes to mind are #10 envelopes and postcards. Maybe an oversized 9x12 envelope or a small invitation-style envelope. The common denominator is that they are all flat.

With a dimensional format, there is height, depth, and thickness. It has an unusual shape or lumpiness. It can be a round tube or a triangular tube. It can be a box. It can be a bubble-pack envelope. And it most likely makes noise or sounds clunky when you shake it.

I usually call these types of mailings “dimensionals,” but there are many names for them. Some people call them 3-D mailings, lumpy packages, or high impact mail. It all refers to mail with an added dimension — both physically and creatively.

The added benefits of added dimension.

Some of the benefits of dimensional mailings are more obvious. It stands out in the mail among the flat pieces. It is more likely to get noticed and make its way to the top of the mail pile.

Along those lines, dimensional mail also tends to make it through a gatekeeper, such as a mailroom sorter or office assistant. It looks and feels important. Whoever sent it put time and money into it.

Plus, it almost always gets opened. How can you throw out a rattling tube or a lumpy envelope? It’s human nature to want to know what’s inside. Dimensionals usually have an interactive element. Once you open it, there’s some type of premium, display, or materials to interact with. Getting the recipient involved in the mailing helps intrigue them to consider your offer.

Dimensional mail has pass-along or bystander value. The recipient wants to show it to others. If it’s on someone’s desk, people walking by will want to see what is, touch it, play with it, or ask who it came from.

Because it’s interesting or has perceived value, a dimensional mailing tends to stick around. It may contain information that can be referred to in the future, it may have play value, or it may simply be too cool to throw away.

Lastly, but perhaps most importantly, dimensional mail can improve response rates over flat mail. A research study by Baylor University found that response rates for those who received a dimensional package were 75% higher than for those who received only a sales letter in an envelope.

So, we should be sending dimensional mailings all the time, right? Dimensional mail does actually have a time and place when it provides the most benefit.

So, when do you add another dimension?

There must be a reason for a dimensional mailing, otherwise it may very well fall flat, so to speak. Dimensionals are most often used for business-to-business mail. The prospects — busy executives, managers, technical professionals — may be difficult to reach and their attention may be hard to capture. In addition, business-to-business mailings typically involve a higher-end product or service. If you’re selling a $5 widget, a $10 dimensional mailing will most likely be impractical. If you’re selling a $100,000 networking solution, then a mailing program with a $10 per piece cost may pay for itself with one sale.

So, if you have a high-end product or service and need to get the attention of busy professionals, then a dimensional mailing may be able to significantly increase your response rates.

Understanding the Need for Speed

Our everyday lives revolve around the need for speed. We want everything done faster. Photo developing and dry cleaning in an hour. Microwave meals. FedEx®. We even use abbreviated names to save time. We fidget waiting the 10 seconds for our word processing application to open — wishing we had a faster computer.

In the business world, the need for speed also prevails. The concept has been around for decades: getting to market first. Manufacturers rush to develop, create, and distribute products before the competition. However, “speed to market” has taken on a whole new meaning with the rise of the Internet.

There’s no doubt that the Internet has changed the definition of fast. Both traditional brick-and-mortar companies and pure-plays have discovered that the definition of fast is now shaped by the Internet. Companies are created and disbanded in record time on the Internet. In some cases, being first with a great idea has paid off. Ebay’s ability to build a customer base of buyers and sellers has given it a competitive edge that late arriving competitors have not been able to duplicate.

Some Internet pure-plays have even been able to give longstanding companies a run for their money. Amazon.com has held its own and is expanding. America Online has been around since the mid-1980s.

To keep up with today’s need for speed, many companies — and even industries — are changing the way they do business. For instance, the insurance industry is responding to market conditions. To meet consumer demand, state insurance regulators are searching for ways to reduce the time it takes to approve new insurance products. Banks and security firms are making it to market first because of the lengthy approval process currently in place for insurance companies.

So, what are the benefits of being fast? Let’s start with what is to be gained by getting a product to market quickly.

Beat the competition.
When you’re first in the marketplace, you gain a competitive advantage
by building stronger brand recognition. For instance, SwifferTM was the first to introduce dry, disposable cleaning cloths and was able to build its brand before the competition came onto the market.

But, second may be better.
Sometimes you can be a close second and do better than whoever was first. You can learn from the competition — what’s working and what’s not — and make minor modifications that will make your product even better.

Customers are waiting - impatiently.
Another reason for speed is that your customers may be waiting for a product or service. And, you need to get it to them first. Once again, if you don’t put it in customers’ hands, the competition will.

Increase your cash flow.
You may also want to get a product or service to market quickly in order to optimize your capital investment and increase cash flow. You need to see a return on your investment before funds are depleted. Many Internet pure plays are learning this valuable lesson. Many Internet start-ups are closing their virtual doors because they didn’t successfully get their product to market before their cash flow ran out.

One last tip. The key to successfully focusing on speed to market is meeting a new demand. Make sure your product or service is something that people want. It won't really matter who is first to market — if nobody wants the product or service.

Creating an Integrated Marketing Message

Your customers are redefining the way they want to shop for products and services. They may research your company online and then call you to ask questions. They may visit your brick-and-mortar location, or receive a catalog, and then buy from you online.

The goal is to have all of your marketing efforts supporting each other and working together to promote your company and its products and services. Here are some tips to help you integrate your marketing message across many channels:

Put your Web address on EVERYTHING.
It may seem obvious, but include your Web address on every piece of promotional material that will be seen by your customers and prospects. Make sure its on your letterhead, business cards, direct mail packages, postcards, print ads, collateral brochures, TV spots, flyers, coupons, premium items…everything.

Use a consistent brand image.
Be consistent in your branding and company image, as well as in your branding of a particular product or service. Customers and prospects should be able to look at your Web site, direct mail, print ads, emails, banner ads, and TV spots and know that they all came from your company. This means that in addition to brand standards for offline marketing materials, you need branding guidelines for online materials that make sense for electronic media.

Make a graphic statement.
Along the same lines as brand image, your materials should all follow the same graphic standards. If your company has an approved color palette, follow that color scheme on everything you do. You may use specific fonts and photos or images in a consistent manner. That doesn’t mean everything needs to look exactly alike. For instance, a banner ad should look different than a print ad. It’s a different medium and may call for a different design. However,
viewers should be able to recognize that they are both promoting the same company.

Create a unified tone.
Your company’s business philosophy and mission should be consistently portrayed on all of your materials. Your company’s tone and voice should be the same on everything you do. It should seem like one person wrote all of your marketing materials. Customers will feel like they know you and will put their trust in you if they can hear a consistent, reassuring voice in everything you create.

Integrated marketing campaigns.
It is especially important that customers and prospects feel comfortable crossing over marketing channels within a specific campaign or promotion. If they jump from one medium to another and the message, graphics, and content suddenly change, you will lose them in the transfer. The transition across multiple channels of communication should be seamless for the customer or prospect.

• Send a direct mail package and follow up with an email message. Communicate the same key benefits and offer in the email as in the direct mail package.
• Run TV spots for a product or service sending prospects to your Web site. The landing page they reach needs to look, feel, and sound like the message they heard on TV with more information and a method to respond.
• Email customers and ask them to respond to an offer on your Web site or come into your brick-and-mortar location. The link you provide to a Web address needs to take them to a page that specifically relates to the email content. In addition, the store should contain promotional materials that reinforce the offer and sales staff need to be prepared to honor coupons or take special discounts.
• Offer flyers with coupons or special discounts for in-store customers to make a purchase online. These special offers could take customers to a specific Web page that welcomes them as a customer and encourages their ongoing business.

The importance of landing pages.
As you can tell from the examples above, if you are sending customers or prospects to your Web site, it pays to create a customized landing page or micro-site. If you dump them on your company’s home page, they may lose their momentum and be unsure where to go to find the information they want. It can be relatively quick and inexpensive to develop a unique landing page to capture responses to a promotion.

If you offer more information about a specific product or service, the details should be on that page. If you want respondents to sign up or make a purchase, it should be clear how to do so immediately. In addition, the landing page needs to look and sound like the medium that customers just came from. They need to know they are in the right place.

By integrating your online and offline marketing messages, you can increase the effectiveness of both methods. That means more responses and a greater return on your investment.

The Power of Selling Across Marketing Channels

If you think of your customers as online buyers versus traditional brick-and-mortar shoppers, it’s time to rethink your customer relationships. The distinction between these two groups of customers has become increasingly artificial.

Many of today’s customers research and shop both online and offline. They could be anywhere! Therein lies the power of integrating your offline and online direct marketing efforts to reach customers and prospects where they want to be reached. Crossing over marketing channels allows customers to research and shop on their own terms.

There are two ways to cross over:
1. Reach customers offline and bring them online.
2. Reach customers online and bring them offline.

Examples of going from OFFLINE to ONLINE:
• Direct mail to Web: Send a direct mail package or postcard that gives your audience the opportunity to go to a landing page, then visit your Web site for more information or to respond to your offer.
• Catalog to Web: Send a catalog that prominently displays your Web site. Customers can browse the catalog and then go online to order, using a “quick order” search box to enter item numbers.
• Direct mail followed by email: Send a direct mail package and follow up with an email providing the same offer and linking to a custom landing page.
• Shop traditional store and drive to Web: Send in-store customers online with coupons on their store receipt or flyers that promote special online savings.
• Broadcast to Web: Include a custom URL on TV or radio advertising to encourage viewers to get more relevant information about your product or service online.

How to drive from ONLINE to OFFLINE:
• Email to store or meeting: Send an email with special offers and relevant information to encourage customers to visit your brick-and-mortar location or meet with you to talk further.
• Web site to store or meeting: Make special offers on your Web site or place search advertising that encourages customers to visit your brick-and-mortar location or meet with you.

Consumers cross over many marketing channels to research and make purchases both online and offline. Integrating your online and offline direct marketing programs will help you reach customers and prospects—where and when they want to hear from you—with consistent, relevant marketing messages.