Direct-to-Customer Commerce

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

The eighth step to multichannel commerce

Step 8 is marketing & promotion.

What a can of worms that is … or at least can be!  And obviously, in a single post, I’m not going to cover this topic.  This is a topic of unending variables.

I really only want to make a few points.  First recognize the difference between the channel or medium and the activity.  You can advertise by mail, market by mail and promote by mail.  Mail is a medium of communications.  Advertising, marketing and promoting are the activities.

Multichannel commerce, it seems clear, by definition refers to conducting commerce (which means generating sales) thru multiple channels.  So, I’m not taking about advertising, which is just sending a message.  I’m thinking about making an offer to a customer or prospective customer to conclude a transaction with me.

We have more channels than ever, for commerce:

  • brick and mortar stores (fact-to-face)
  • paper mail (flyers, postcards, letter packages, catalogs)
  • electronic mail
  • social media
  • web store
  • smart phone app
  • tablet app
  • telephone
  • direct response broadcast (radio, television)

… and I’m probably leaving something out.

So, in the ideal world, your marketing & promotion efforts will generate commerce transactions with your customers.  And it should be your customers choice to use any particular channel.  Your offers, products, promotions should all be visible to your customers across all channels.  And that takes no small effort.

Here’s the next important point:  If you can’t measure it, consider not doing it.  The beauty of direct marketing, direct commerce, whatever you choose to call it, is that it’s measurable.  And with technology you can almost measure everything.  But not everything is worth measuring.  But if you’re not measuring anything, you’re wasting a lot of time and money.  And if you’re measuring so much you can’t comprehend the data or analyze the data, you’re still wasting a lot of time and money.

So, be deliberate about what you measure.  The most basic and most useful things to measure are:

  • customers who got an offer
  • customers who bought
  • how much they bought
  • how many they bought
  • what it cost to make the offer
  • what it cost to fulfill the offer

You’ll know a lot, if you keep these six data points for every channel and every promotion.

Think about this … it’s a lot to think about.

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Filed under: Ideas, multichannel commerce, , , , , , , , , , , , , , ,

Acquisition Spending, Direct Mail on the Rise: Winterberry Report

Acquisition Spending, Direct Mail on the Rise: Winterberry Report.

Interesting market analysis and forecast for 2011 by Bruce Biegel, managing director of Winterberry Group, interviewed in Chief Marketer.

In general, direct and digital marketing are not the dominant advertising channels, as compared to traditional media.  Paper-based direct mail is making a little comeback, expected to rise 5.8% in 2011.

Worth reading the whole piece.

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

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths.

This is a great post, which you should read in detail.  I picked it up from a consultant friend, Ernie Shell, who blogs at Direct Commerce Systems.  Kevin’s post, in effect, reminds me of how much the direct commerce trade press struggles to report real information, rather than the self-interested sales pitches of companies who will benefit from promoting their view of what builds sales via the direct channels.

Read and learn from Kevin’s post.  It’s great stuff.

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, , , , , , ,

Growth in DRTV Advertising

Direct Magazine published an article entitled “Direct Response Rare Bright Spot in Nielsen Report.”

The gist of the report is that DRTV advertising spending has increased recently, while other categories have declined.  That is great news for the industry — and includes many of my friends.

But let’s also keep it in context.  Spending in most advertising media is declining.  Newspapers are thinner.  Magazines are thinner.  Radio is less interrupted.

In this economy, any expense that a business cannot clearly measure it’s ROI is under review, if it hasn’t already been cut.

The reduced demand for most forms of advertising is leading to lower rates.  DRTV companies can buy network spots like never before.  Good for them.

But ultimately, the real test is whether, when the economy comes back, will general advertisers adopt the direct response type model to clarify and perfect the measurability of their TV / Radio / Newspaper / Magazine advertising?

Obviously, it’s too soon to tell.  So, in the mean time, enjoy the ride … all the way to the bank.

Filed under: Direct Commerce, News,

Direct Mail Fades As Mass-Marketing Channel: Winterberry

This is a headline in Direct, here’s a link to the entire article.

I pretty seriously disagree with the implications of the headline.  The jist of the article highlights how the total direct mail volume is declining — which has nothing to do with the headline.  There are fewer advertisers on TV these days — fewer on radio — fewer in newspapers.

The decline in advertising activity relates to the general decline in the economy, and has little to do with the impact of the medium itself.

While general TV advertising is down, direct response television is increasing pretty dramatically.

What is changing is the economics of the marketplace.  Companies who have not been managing themselves well are fading or disappearing.

On top of that, if anyone sees direct mail as a “mass marketing” channel, they probably should not have been using the medium in the first place.  Every competent direct mail person I’ve every known would have loved to eliminate every non-responsive name they could.

Jacking up mail volume, just to get big numbers is always a losing proposition.

Filed under: Direct Commerce, News, , ,

Prime Time Direct Response Ads

Here’s one of the headlines in today’s Washington Post Newspaper:

New Prime-Time Ads Act Now

The article relates the plight of local TV stations where their rates for prime time advertising have dropped, in some cases as much as 75%, and there are still a lot of availability.

As the article points out, this is translating into a dramatic increase in direct response television advertising, because the spots are available and cheap.  So, DRTV merchants can afford the spots and can make money with them.

We need to watch to see if how long this trend lasts.  Certainly, it should last until the economy recovers enough for traditional advertisers to reclaim their budgets.  But it could also have the same type of impact that the internet had on print advertising.

The internet taught mainline advertisers that there was a way to measure their print advertising directly, rather than just thru “gross rating points” or “gross impressions.”  This may do the same for television  advertising — we’ll have to wait and see.

In the meantime, we may see a boom in DRTV advertising while the economy remains in the doldrums.

What fascinating times we live in!!

Filed under: Direct Commerce, News, , , ,

Where will the action be in 2009?

There’s an article in the December issue of Direct provides some of the answer to this question.  It’s based upon data from the DMA .

Here’s a chart of the data, showing Projected Sales by Direct Channel for 2009 (in $ billions).


What surprised me a little, when I first saw this data, was the relationship of Direct mail / catalog to Direct mail / non-catalog.  I was surprised the catalog numbers were so much lower.  But, at the same time, then I noticed the Web marketing / non-email numbers.  You might be tempted to think this web marketing sales number is based upon Search or Advertising, but it is also likely driven a lot by catalogs.

I don’t know about you, but when I order from a catalog, I often place the order on the catalog web site, just to avoid all the up-selling, which to many consumers is annoying.

It also seems likely that the Telemarketing sales number is driven a lot by catalog.  These three channels seem to be closely linked and almost impossible to differentiate.

This is great information for Service Providers who are assessing where to devote their marketing efforts to secure new clients.

Filed under: Direct Commerce, , , , ,

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