Old Media vs. New Media
Finding the best way to generate leads is probably the biggest marketing challenge for businesses of all sizes.
I had a small business owner client that for years relied on direct mail letters to generate leads and prospects. Direct mail to a select list of prospects worked well for him for years. I will admit, as direct mail letters go, his were pretty good. No outlandish promises or claims or must-buy-now-offers.
Then suddenly, direct mail ceased to be effective for generating leads for him. Almost overnight. The “tried and true” marketing method of reaching prospective buyers and customers became “old and useless”.
I got him started (kicking and screaming) on blogging. He connected with others in his industry and with prospects. He kicked the snail mail/direct mail habit. And cut his marketing budget significantly, by the way.
A small business marketing vice president recently told me about the print advertisements they were running in trade magazines. I asked her about the results. She said “…the print ads are good; we’re definitely covering the costs to run the ad.” Hum…
Merely covering the costs of a traditional print ad does not equal marketing success. I define marketing success as generating enough quality leads and prospects that evolve into long-term customer relationships to grow your business and meet your revenue goals.
How happy are you with traditional direct (postal) mail programs, email newsletters and traditional web site lead generation results?
A COO of a fast-growing tech company put it very well at a recent marketing & sales panel discussion here in sunny San Diego-land, “…there are lots of conversations going on all over–in person and online. You need to participate in as many of these as you can.”
Maybe it’s time to dip your toe into the blogs, Wikis, social networks for business that make up new media and join in the online conversation going on in your market…
Changing a client from one media to another can help, but in a sense it is only a temporary diversion. The problem that most firms had with falling response rates is that whereas for years and years people just wrote stuff that experience had shown worked. Then, about 4 years ago, the first serious work was done on creating a theory of direct mail. A theoretical base which showed not just that x worked and y did not, but also why x worked.
Once you have the theory you can generalise outwards, and create mailing pieces with terrific response rates.
So what happened is that a lot of companies climbed aboard the new theoretical approach, which is based around the psychology of perception. There’s even a web-site which has loads of the academic research on it which proves why approach x is better than y – it is http://www.theory.bz
But most firms and almost all the gurus stayed with the old approach – and so found their advice didn’t work any more.
Firms with falling response rates can be rescued and given higher response rates again, when the new approaches are used. They can also be helped by changing media – but that is certain to be a short term fix, because the team that devised the theory of direct mail are currently working on a theory of blogging, again using academic research – and when they publish all the blog results will fall, because a handful will be writing blogs that really work.
Of course, all just my opinion, but I must say when I started reading the academic papers that are summarised in places on the Theory site, I suddenly thought, “Oh my – I have really been getting this wrong.”
Some interesting case studies here Cynthia. The move from direct mail to web 2.0 ought to be a no-brainer for many businesses. But like any marketing decision there are some important strategic issues which need to be faced too. Like, perhaps:
– Time. Businesses should be under no illusions that effective blogging, networking and participation online is very time consuming. Who is the right person to be doing the job? Sometimes it might be the CEO, like Jonathan Schwarz at Sun, but that’s not always the case.
– Look before you leap. Make sure you pay attention to exactly what is being said and being done online in your sector, by your customers or by your competitors.
– How do you reach a mass audience online (in the same way as you might with direct mail). There is an assumption that because Facebook has millions of users, that’s a massive opportunity. Of course, it is, but how do you actually reach a large constituency online. Do you want to reach mass audiences any more? Does your business model depend upon it? Should it?
Anyway, you get my drift. Don’t get me wrong, I’m a huge advocate of the internet and the new social web for small businesses in particular.
I think for many though a toe in the water can result in a lot of questions and a feeling of being overwhelmed.
Thanks, Tony, for your thoughtful comments. I do believe that academic research opens other options and provides explanations. However for smaller companies with limited time and budget I worry that reliance on direct mail–at a time when consumers and buyers are so inundated–can be a mistake.
My sense is that a few years ago as email filters improved and more email promotions were stopped cold as spam, direct mail popularity peaked again. (Or maybe this DM peak was the result of the research you mention…) I’d also bet that a rise in the sales of home shredders took place at the same time.
In my unscientific polling, my friends really dread going through their postal mail everyday; there is just so much ‘junk mail’ to shred now that identity theft is so rampant. Given the tons of credit card offers, home refinance options and free seminars on investing–I would be surprised if very much direct mail makes it through the consumers’ human filters. Maybe that’s just me. I actually am the (proud) owner of two shredders in my home.
I definitely will study the site you recommended further http://www.theory.bz I’ll also post about my thoughts based on preparing direct mail the right way, “with the customer at the center, not the company or the writer.” as your site suggests.
Best,
Cynthia
Alex,
You hit the nail on the head–it is all about time in a small business. One of my 2008 goals, is to help my clients identify marketing activities they can eliminate, in order to take on new the new functions of joining in the online Web 2.0 conversations.
It will always be a question of time. My sincere hope/belief is that the time will be a positive investment. That social networking research and participation will provide multiple benefits: new sources of prospects, insight into customer needs, early warnings about the direction of the market segment–and more.
And also, it’s so important to select the best person in the company to be the blogger. It might not always be the CEO/owner. There are only so many Johnathan Schwarz’s out there.
Thanks for your comments.
Best,
Cynthia
You are so right!
Direct mail is dead and with web 2.0 I think things are going to become so much easier with advertising. Utilizing the social network is always a great idea.
I was trying to find a place do some advertising for my own business using rich format, sadly it tend to be very expensive, but I did find somewhere thats pretty interesting. They called it a “social shopping network”. Its pretty cool, you can sign up as a user or merchant and I guess on the user side they can get on and rat the promotions, leave comments, create wishlists, etc. I wasnt on there for too long cause I had to run, but looks like its free to advertise with them for a couple months.
Regarding your response to… “Merely covering the costs of a traditional print ad does not equal marketing success”, I would have to – partially – disagree.
If the person means that “the initial purchase in the customer’s lifecycle covered the cost of the print ad” then that could translate to “the effective cost to acquire the first customer balanced out at zero, however once you add the lifetime value of this customer, we are looking at a substantial lifeime ROI”.
If the person means that “the projected lifetime value of this customer covers the cost of the print ad” then I would more than agree with your statement.
I am a strong believer in a blended strategy, but I would certainly not take this comment that traditional media advertising is anywhere close to “dead”.
Thanks for your comment–humm, on traditional print advertising. I find many small businesses don’t have the budget needed to use print ads to meet objectives. The small business, actually startup, that said they ‘covered the cost of the ad’, did not have a services revenue model. Their one-time sales pricing is only income–so that is the lifetime value of customer for them. My view is that a social media, Web 2.0 strategy can benefit a startup more. Print ads are recycled–online social media educational information lives on. I do agree blended strategies can work best–if the small business has the budget.
Cynthia
You may need to match your marketing media to your audience. It could be direct mail, Web 2.0 or both. I have a client whose business comes solely from doctor referrals. How many doctors have time to blog, check blogs or websites, forums, etc.? However a professionally written direct mail letter (NOT a postcard) can indeed target this group effectively. Even if your initial lead comes via the web why not target the most promising of these leads with a follow-up direct mail piece. Or use your direct mail piece to drive traffic to your website, blog, etc. Mix it up and do the unexpected.
Thanks, Brian. I agree about matching media to target market–the optimal marketing approach may be a combo of traditional marketing (direct mail) and social media. But if a small business doesn’t have $$ for direct mail (correctly), social media is an option. Problem is, I’m afraid small businesses just aren’t even trying social media. You’re right, doctors/most other business people do not have time to read blogs–but if a buyer is searching for something, a frequently posted small business blog may come up in the organic results and put the small business in the best possible place–in front of a buyer looking for a solution.
Cynthia
I’m of the opinion that both direct mail and email advertising is now almost completely ignored by the end viewer. In fact if they’re anything like me they probably make a mental note never to by from that compnay again. That said, a really well designed website, coupled with seo and Internet marketing (both direct market & parrallel) with put your products in front of interested people. With the advent of Google Caffeine we are finding that the launching times of new products are now into the listings within 24 hours.
I don’t think it’s as simple as saying direct mail, or even email advertising is dead. It’s not quite that simple.
For example, when I browse through the mail I do ignore all the credit card offers and home mortgage spam. However, if something comes through the mail about a great new web service then it tends to catch my eye. Emails about new web services and webinars on SEO, etc, etc. are all ignored by me.
Sometimes, it’s about getting through to customers in a way that no one else is. Stand out from the crowd.
Thank you for your help! This was what I needed to know.