Target Marketing featured Hennerberg's client in a cover story and case study titled “Taking Risks, Increasing Response”
Published in Target Marketing
Your product is ready to sell. The offer has been determined. The mailing lists, print ads, or other media chosen. The creative work is written, artwork complete, photography shot, and all of those prospective customers are out there and soon will see and respond to your latest direct marketing campaign.
Ah, you can smell the sweet scent of success and know your hard work is finally over.
Guess again. Your work has only begun.
The seasoned direct marketer knows a business is built on repeat purchases from customers, and acquiring new customers at a reasonable marketing cost. But too often, after all of the front-end work of developing a product mix, determining the media placement, and creating a direct mail package, catalog, print ad, or other media, the mundane, but all important, back-end program is relegated to the end, and dealt with only after the orders come in. By then, many opportunities may be lost, some forever.
A flow chart is one of the most effective tools direct marketers can use to ensure that during the back-end of the selling and relationship building process no stone is left unturned. By using the flow chart as a tool, you can graphically chart the relationship path of every customer as well as a path to eventually convert some of the non-responders into customers.
No step on a flow chart should ever end, because the flow of customer relationships and convincing non-buyers to buy at a later time is continuous.
An effective way to begin a back-end marketing flow chart is to pick up where the front-end work ends: with the marketing effort itself.
Beginning at the far left of the flow chart, for this discussion we assume a direct mail drop to both a house list and rented lists. If your marketing effort includes other media, you may need to modify your flow since buyers from other media, such as print, broadcast, and inserts, tend to behave differently and require different types of follow-up for conversion to sales, cross-selling, or collecting money.
Separate the house list and rented lists on the flow chart because the follow-up to these audiences will be different. With your house list, there is far greater leverage and less cost to go back to your customers again or go back to them with questions about your product offering or creative approach if there appears to be a problem in response.
All direct marketing efforts will result in either an immediate sale or simply no response. Those who respond will do so by either mailing the order form, calling your toll-free number, or if you’ve made it available, faxing the order form to you (or a more updated way to respond: via email).
There is opportunity at every communication with your customer to learn something about them, so a few questions which will help you in future product or marketing programs should be asked on your order form or by your telesales personnel. Those questions can involve customer ideas, or facts about your customer which you can add to your marketing database.
Evaluating Initial Response
You should quickly evaluate response from your marketing campaign. By looking at the response from your house list separate from rental lists, you will discover if there are opportunities for immediate follow-up. For example, a follow-up mailing shortly after the first mailing usually produces from one-third to two-thirds the response received from the first mailing. If a response at one to two-thirds the initial response is profitable, or even acceptable, a follow-up is probably warranted.
Assuming there is merit to a follow-up effort, you’ll follow up with profitable segments of the house list and rental lists which performed acceptably. An acceptable performance from a rental list will depend upon your profit objectives (both short-term and long-term), so while you may not make money on the first sale to the rental name, repeat business may justify a follow-up. If a rental list has pulled its weight and justifies a follow-up or roll-out in a future mailing, it’s better to know that sooner rather than later so arrangements can be made with the list owner to use the list again.
Additionally, at this point in monitoring the back-end progress of your marketing program you can evaluate selling your product by telephone. The advantage to telesales is that if your mail has produced a promising response, your chances of selling by telephone are enhanced. Besides, telephone is easy to test, and can be done so with customers with whom you already have a relationship and have "permission" to call. You’ll know after only a few hundred calls if telephone will work for your offer.
Customers from your house list who still do not respond to this follow-up offer could be candidates for research on why they didn’t buy, which can be especially helpful for modifying the product you’ve just offered them, or to research new, related products. Additionally, these people will be an excellent resource for giving you feedback on your offer and evaluating their level of comprehension of the creative package.
Rented names which did not respond may also provide similar research opportunities. Otherwise, depending on the profitability of your initial efforts, you may decide to test or rollout in the future, or simply drop that list from future consideration.
Fulfillment and Analysis
The next step includes fulfilling product orders. In addition to the product your customers ordered, your fulfillment package should contain other cross-selling materials. A bounce-back flyer offering related merchandise will be an opportunity to make another sale after your customer inspects the product they have just received.
Analysis and indicated actions for future marketing efforts are critical. Your next step, using this example, is to analyze the product(s) purchased, the answers to questions on your order form or prompted by the telesales agent, which you can use for your next marketing effort, or to cross-sell or up-sell additional products.
You should include a special form informing customers how to return merchandise. It will save time and cost for you when processing returns, customers will appreciate your thoughtfulness, and it provides yet another opportunity to collect data. In this case, data on why the customer is returning the product. With this information, you’ll be able to fine tune your product, offer, or other elements with feedback directly from your customers.
Orders generated from bounce backs should be fulfilled immediately, and payment information such as promptness of payment should be logged onto your database. And if you’re using "bill me" as a payment option, there will be bad debt. You might as well prepare your series of collection letters, and note "customers" on your database who don’t pay their bill so you don’t make a mistake by mailing to them again. If you do mail to them again, you may want to require payment with their next order.
A collection series, stated in flow chart form, is imperative to collect money and make sure no opportunity is lost.
As you plan your next direct marketing effort, you’ll now be able to segment based on common demographics or psychographics, know your frequent buyers and payment history, and know if you need to offer something special to customers who returned merchandise to entice them to buy from you again. And, of course, you’ll have response history from both your house list and rental lists to base your next plan.
Lead Generation Flow Charts
Lead generation programs require an entirely different kind of back-end marketing approach because of the multiple steps involved for conversion to sale. These steps can include identifying your audience (especially in business-to-business, and in particular, circumstances where a sales force is involved), qualifying the "suspects" into bona fide prospects, and generating interest, and detailed steps which include a continual "regrading" of leads. These steps become essential to make the sale, especially if a sales force is involved.
A Flow Chart is Continuous
In every marketing program and the flow chart that goes with it, it’s important to remember that all efforts and programs should be continuous, and check points should exist in the flow so your program can be modified when necessary.
Timelines are also a helpful part of a flow chart. Noting the dates particular tasks are to occur with each step will assist in keeping your program on schedule.
Most importantly, a flow chart will ensure you leave no stone unturned or opportunity lost. You’ll ensure success when you follow every lead, every sale, and every non-responder. Just because someone didn’t act today, doesn’t mean they won’t act tomorrow.