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

e-marketing verses p-marketing?

That’s short for electronic marketing verses paper marketing.

I’m raising the question of what is the balance between electronic marketing (in the form of email, etc) and paper-based marketing (in the form of direct mail or catalogs.

As a rule of thumb, I sense a general agreement that response rates from electronic marketing is about 10 percent of similar paper-based marketing efforts.  Obviously some do better; some worse.  Comparisons are difficult.  Because the market segmentation is less strictly enforced for e-marketing efforts — since cost is so minimal, compared to the cost of p-marketing.  Therein lies one of the more significant issues.

When the focus is on acquisition, any new customer is valuable.  So the low cost and similarly low response rates seem to be a non-issue.  However, when attrition rates are considered, part of your strategy must be to maintain and grow the size of the current customer file.  Can you rely on e-marketing efforts alone to meet your customer acquisition goals?  It’s certainly more difficult.

When the focus is on customer files, finding this balance becomes very important, because customer marketing is generally the source for the most profitable sales revenue.  And if response rates for e-marketing are 10 percent of p-marketing, profitability of e-marketing efforts must be about 10 times higher than p-marketing, to maintain profit goals — as sales revenue declines.

How likely is that?

Certainly possible — but not always a likely outcome.

In my view, this calls for more of a balance between these two marketing strategies that I generally see in the marketplace.

Personal anecdote — when I get a paper catalog, I routinely drop it on the reading table where I watch TV.  Then often, while watching/listening to the news (or some other equally mind-numbing program), I flip thru the catalogs.  I never know when something will catch my eye — something I can no longer live without.

I can’t do the same thing with e-marketing — at least not yet.  Maybe when I get an iPad, that will change.  But Apple has only sold a couple of million iPads, so market penetration of iPads is still small.

Several years ago, we heard catalogers talk about the “shelf life” of their catalogs.  That is, how long did a customer let the catalog sit around before they trashed it.  A few days ago I noticed one blogger write about the “half-life” of a marketing promotion.  Both terms get after the same point.

Back to business:

e-marketing seems to require a bulls-eye shot to produce revenue.  While a paper catalog or other p-marketing efforts have the potential for a much longer shelf-life.

We need more balance.  I think it will produce more loyal customers, more revenue, more profits.

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

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