Direct-to-Customer Commerce


Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Survey Says …

Customer service is tops at retaining customers …

Here’s a headline in Internet Retailer, I love to see, because I’ve been “preaching” this forever.  Most of the people who buy via direct commerce channels (web, phone, mail) are more concerned about convenience and customer service than about price.

Price and breadth of merchandise selection are now table stacks or irrelevant.

After all, it’s so easy to find a specific product at a price I’m willing to pay, that breadth of selection is not inherently a strategic advantage — especially when attracting new customers.

And as far as price goes — follow me on this:

Have you ever used one of the comparison price engines?  You can find 20 web sites, all selling the exact product you want to buy.  And you can site at your computer and see all their prices simultaneously.  Do you always pick the lowest price?

I know I don’t.  I first look for a familiar name.  And if I don’t see one, I look for customer ratings (not completely reliable, but at least a good indicator).

I steadfast avoid companies who don’t accept returns (unless I know it’s something I’ll keep).

You see, my concern is about my convenience.  I don’t want to get stuck with something that disappoints.  I want a company I can trust to treat me reasonably, if not unreasonably well.

Even in good times, Customer Service is the best way to keep the best and the most customers.


Filed under: Direct Commerce, Opinion, , , ,

The last step in direct marketing channel integration

I had lunch earlier this week with a old and tenured friend, who runs a personalized mail business.  As with many, if not most or all, direct mail production companies, his business is suffering some.

He asked me to peer into the future and tell me what I thought was going to happen to the industry.  I won’t claim that my insights are better or more predictably accurate than anyone elses, but here they are:

First, I think the efficacy of direct marketing is being publicly proven — again.  For example, as I posted earlier.  The DRTV business is growing in this economic downturn, because of the reduced price of network TV advertising.  General advertising agencies don’t have budgets from their clients to “over pay” for television time, so DRTV is proving how much stuff you can really sell over TV, rather than just advertise it.

Second, while retail sales are flat or down, ecommerce and mail-order sales are flat or increasing (this according to US Dept of Labor statistics).  Retailers continue to commit increasing resources to their ecommerce initiatives.  Chicos FAS even “replaced” their CEO because he had not devoted sufficient resources to their “direct” business, which was growing faster than any other segment.

Third, internet based retail stores are great “buying” channels, but poor “shopping” channels.  Even with ubiquitous broadband access, you cannot flip thru a web site the way you can flip thru a catalog.  Interestingly, the big catalog companies, such as LLBean and Lands End and others, continue to drive business to their web site by mailing catalogs.  And their web sites are continuing to grow as the point of origin for more and more of their total order volume.

Fourth, electronic-mail does not replace paper-mail (at least, not yet).  By all reports I’ve heard, response to email marketing is 10-20% of response to paper-mail marketing.  That means if you get 2% response to a catalog, you’ll get 0.2% response to an email effort — at best.

And even if the email marketing effort is statistically more profitable, the gross sales and net income remains dramatically lower than traditional direct marketing efforts.  So, all of these merchants who are trying to save money by shifting declining resources to electronic marketing will likely find they will have to return to a more balanced budgetary strategy.

The more difficult question is when will this rebalancing occur — almost impossible to predict.

So, here’s the question I think we need to be contemplating more:

How can we integrate the web as a response channel to paper-based direct marketing efforts, in order to document their efficacy?

And in my opinion, this integration should be more than back-matching orders to mailing files, or forcing customers to enter “source codes” from their catalog.

Let’s have a little creativity in response tracking

Filed under: Direct Commerce, Opinion, , , , , , ,


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