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Chapter 8 Direct Marketing and Sales Support

Larry Chase and Eileen Shulock

Whether you know it or not, you're a direct marketer. Every time you ask for a sale, a job, a signed contract, or to start a new relationship, you are seeking a response. Direct marketing (DM) always includes a call to action. Since the Internet is interactive, that call to action can be answered in seconds or minutes, rather than in weeks or months, as is the case in traditional DM. Understanding and adopting classic DM practices is critical to mounting a successful marketing campaign on the Net. Knowing where traditional DM stops - and where the new practices begin - will be your edge.

In this chapter, you'll learn how traditional DM disciplines are similar to those of the Net, as well as how they are different. Case histories will show you online DM practices that aren't even possible in traditional direct marketing. You'll receive valuable insight into the following areas:

How Net Marketing Is Like Traditional DM
Some of the best Internet marketing books aren't Internet marketing books at all, but rather classic direct marketing books. Understanding and applying some of the key principles of traditional direct marketing to your online efforts will save you time and money, will help you better assess your results, and will steer you in the right direction as you work to constantly improve your call to action. These principles are not necessarily practiced by all Internet marketers, since many of them do not come from traditional marketing backgrounds. Memorize the following principles and use them to your advantage:
  • Direct marketing is a business of numbers. It is measurable - and numbers do not lie.

  • Translating your numbers into standard DM measurements makes it very easy to analyze the success (or lack thereof) of your online marketing efforts.

  • Direct marketing includes a call to action, or an offer, in order to encourage a response.

  • Your numbers will be very reliable. You send out x offers, and you get y responses. Your success is-at the most basic level - measured by the number of responses generated by your offer.

  • Direct marketing allows you to target your offer to a very specific audience, and to personalize your message down to the individual level.

  • The more targeted, or prequalified, the audience, the more you can afford to spend to reach them, because your chances of soliciting a response are better. If you are marketing to a less than ideally targeted audience, you will get a lower response rate. Therefore, spend less to reach them.

  • You will also get a better response rate from customers; that is, those who know you and have already done business with you. It makes sense to spend more to retain their loyalty as well.

  • Direct marketing is easy and inexpensive to test, in a continual effort to refine your offer for the best response.
According to eMarketer, "Current consensus among marketing and advertising professionals is that effective online advertising is migrating away from branding and toward targeted direct response messages. According to DoubleClick, 90 percent of the billions of ads served through its banner ad network are response driven, and only 10 percent are pure branding in nature."
Because return on investment (ROI) can be so effectively measured online, direct marketers are perfectly suited for the interactive medium. Employment opportunities in the direct marketing field are increasing at almost four times the growth of the overall U.S. job market, according to the Direct Marketing Association. Of all media, the Internet is expected to see the greatest growth in direct marketing-related jobs, with an estimated 36.3 percent annual growth rate from 2000 to 2006. DMA president H. Robert Wientzen says the evolution in technology is helping to drive growth of the direct marketing industry: "Direct marketing is no longer unseen in the U.S. economy. Its ability to deliver accountability and build relationships with customers has made it a winner as we move from the Information Age to the Digital Age."

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DM Metrics
The classic rule of direct marketing is the 40-40-20 rule, which says that the success of your direct marketing effort depends upon:

40 percent: Reaching the right audience.

40 percent: Creating the right offer.

20 percent: Making it attractive with the right creative graphics, formatting, and so on.

Direct marketing, as stated earlier, is a business of numbers. These numbers are very easy to calculate and analyze. You will be concerned with:

Number of potential customers contacted. This may be measured in impressions, unique visitors, or other ways, which we will explore further in this chapter.

Number of responses returned. Depending upon your call to action, this can represent the number of sales made, email sign-ups to your newsletter, or other desired responses.

Cost of the campaign or effort. How much it costs, including the cost of renting an email list, the cost for the time spent writing the copy, or your management time, for example.

Cost per response. This is how much it cost you to gain a new customer, subscriber, or lead.

Direct marketers also use a technique known as RFM analysis to establish metrics at the customer level. R equals Recency, or how recently the customer has purchased from you. F equals Frequency, or how often the customer purchases from you. M equals Monetary, which means how much money the customer spends with you. RFM analysis can help you identify your most valuable customers, pinpoint areas where you can encourage customers to purchase more frequently and to spend more, and help you establish what is known as the "lifetime value of the customer," or how much that customer will spend with your business over the length of his or her relationship with you. Multiply lifetime values times the number of customers you have, and you have determined the approximate total revenues for your business. How can you improve those numbers? Savvy direct marketing will help.
Let's compare two possible scenarios, and you will quickly see the value of online marketing utilizing direct marketing principles.

Scenario #1:

Snail mail offer for personal Larry Chase website review priced at $500 to 30,000 WDFM subscribers.

# Contacted = 30,000

# Responses = 300 (a modest 1 percent response rate)

Cost of Campaign = $15,500 (assuming $.50 per letter, including postage, plus a modest $500 to create and manage the campaign)

Cost per response = $51.66 per customer, thereby realizing a return of $448.34 per customer on each $500 review.

Not too shabby, right? That's why direct marketing has thrived for so many years. Now let's put those numbers to the Internet test.

Scenario #2:

Email offer for personal Larry Chase website review priced at $500 to 30,000 WDFM subscribers.

# Contacted = 30,000

# Responses = 300 (a modest 1 percent response rate)

Cost of Campaign = $200 (one hour of management time to write and send the offer)

Cost per response = $.66 (66 cents) per customer, thereby realizing a return of $499.34 per customer on each $500 review.

Wow! Quite a difference.

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DM Internet Style
Clearly, email marketing - and most forms of Internet direct marketing - offer enormous advantages to the business owner. Of course, not everyone has a database of 30,000 plus to email. You may incur costs to rent an email list of potential customers. That expenditure will obviously cause your cost per response figure to rise.

Throughout this book we have encouraged you to develop your own email newsletter so that customers and potential customers can sign up and receive information of value from you. This is where the time and effort spent developing and nurturing an email list really pays off. As long as you continue to provide value to your mailing list, you also have your own test market, or petri dish, to contact with special offers, incentives, and other enticements. Not only can this list turn into a profit center for you, but it will also serve as practice for any other online marketing efforts you pursue where you do spend money to reach a targeted audience. You will have perfected your offer to such a degree that your response rates are bound to be much better, and therefore your efforts more profitable, than that of others who have not invested the time and effort into refining their direct marketing approach.

To gain that expertise, it's also very important to understand how online marketing is different from traditional direct marketing.

Lower Cost per Acquisition
As we have demonstrated above, it can be far less expensive to acquire a customer on the Internet than it is to do so by traditional methods. Online, you can bring down the cost to convert a prospect into a customer because you don't have the costs of producing a DM mail package, postage, handling, and backend fulfillment for the initial promotion. In DM speak, this is known as the cost of acquisition.

As our previous example illustrates, if I want to sell $500 website reviews via direct mail, my cost per acquisition would be $51.66. In contrast, the same offer sent by email had a cost per acquisition of 66 cents. That $50 difference could go directly to my bottom line, or I might choose to leverage that savings by spending a little to create an even more attractive offer, such as offering a free copy of this book with each review.

Immediate Response and Flexibility
When creating a traditional direct marketing campaign, be it an advertisement in a magazine with a toll-free call-to-action number, or a snail-mailed solicitation, the time from implementation to actual results can be weeks or even months. The Internet erases that wait. Results can literally be delivered overnight.

What if you don't get results? Well, you will know that fact immediately as well, which means that you can immediately apply your learnings to your next campaign. You can, as direct marketers do, test and test again to find the best results - and implement your new strategies in record time. Traditional DM'ers call this split copy testing, a traditional practice in which you send out three or more test packages and see which copy draws best. This copy can be in the form of an offer, a sales letter, or any other direct marketing copy. Here's one way to take the traditional practice and apply it online.

First, come up with two or three offers for your product or service. Then make some banner ads that tout this offer and set up advertising to place them on other sites that draw the types of people you're looking for. Need a free banner in a hurry? Head to The Banner Generator, where you can create banners online in minute. Simply type in your copy, select a font, select the finished banner size and color schemes, then submit. Voila, you have a banner ad to place on the website of your choice. Experiment, as graphics typically attract more attention than text-only banners. Put call-to-action words in your banners. Words like Click Here, Enter..., or Click Now usually increase clickthroughs.

Okay, now you've got three offers running to see which pulls best. There are three ways to know which offer is doing what:

1. Set up a unique web address on your site to which each banner will point (in other words, a separate web page within your site). Then, you simply compare which address has the most traffic.

2. Use your site traffic logs, which detail where the visitors to your site are coming from, to see if your banner ad placements are sending traffic your way.

3. The simplest way to track which offer pulled in a prospect is to simply ask the prospects themselves, if you're planning on having them fill out a form at your site.

The Internet also gives you the opportunity to adjust your offer or creative during the course of a campaign. If, for example, you are running a banner ad with a sales offer across a number of sites, and that banner ad is not performing well, you can change the ad to try to improve your response rates. This type of flexibility is unknown in the real world - imagine calling back a million issues of Forbes because the printed advertisement that you ran was not delivering the desired results! I don't think so.

Tangible Brand Loyalty
According to Digital Idea, which surveyed 16,000 online consumers in August 2000, companies versed in direct marketing in the offline world are outperforming retail giants such as Sears, Target, and Kmart in terms of online loyalty. Loyalty is a subset of retention - a basic DM metric. How loyal your customers are translates directly into your retention rate, and the lifetime value of each customer. According to Digital Idea, the companies leading in online consumer loyalty were those with real world expertise in aggressively reaching out to the customer, such as QVC, Victoria's Secret, Chadwick's, Lands' End, and L.L. Bean.

The Web offers many ways to tangibly measure the loyalty of your customers, and to encourage them to spend more time with your brand. This concept is called stickiness, or how much time your customer spends at your site and how often they come back. Many sites encourage stickiness by creating retention programs, membership programs, aggressive outbound email marketing campaigns, customer profiles, and more. These tactics will increasingly serve as a way to measure and quantify brand loyalty, as the more a customer has invested with you in terms of personal information, membership points or other special treatment, the less likely that customer is to go elsewhere to do business. It's also much more cost-effective to reach that customer with reminders and special offers so as to increasingly encourage the customer to spend more and shop more frequently. Bottom line: more profits for you

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The Art of the Invitation
A print brochure is pushed out to the recipient through the mail, but you must pull or lure people into your site. In other words, you're asking them to make the effort to visit you. Simply putting your web address on all your collateral pieces, sales materials, and advertising will help those who want more information about you when they see the web address. But, perhaps they're not quite yet in the buying cycle for what you have to sell. You must entice them in by offering them something of value. The first call to action is to ask them to visit the site. There are three basic lures that will pull people to your site:

  • Financial incentive
  • Valuable information
  • Utility
Thousands of sites point to Web Digest For Marketers, while only a few hundred point to its parent, Why? Because WDFM offers more information through its reviews of marketing sites. It offers financial incentive with specials posted for Net marketers, and it offers utility with the CPM calculators or other handy products. So even if people aren't looking for my seminars, training, or consulting at that moment, they come to the site, sign up for the weekly newsletter, and thereby enter into my sphere of influence.

When they do need the services I vend, they naturally think of me and then get in touch because I am not at all bashful about reminding them of the other services I offer in each and every issue of WDFM. I firmly believe my readers find the sales copy useful not only to inform them of other things I do, but to tell them where I'm coming from. It tells them why I'm doing this newsletter in the first place. Too many times, I will go to a site, find useful information provided, and not know why that provider is doing it - which immediately makes me suspicious. Don't let this happen to you.

You should give thought to what your constituency will find useful. Very often, it's something you already have in-house. In fact, WDFM originally was made for internal purposes, so we could stay on top of what was going on out there. When I realized we needed valuable, updated information to draw people to my site, I posted the newsletter on the Web. Thereafter, I made it available for free via email. The list grows by hundreds of subscribers per week. Last year, 60 percent of my income came from readers of WDFM who requested professional services.

When you figure out what your loss leader is, promote it in all online and offline materials. This is a come-on to get you into the store or website. Bloomingdale's may sell you a canvas bag at below cost to get you in the store, where you then buy a sweater for $185. This is where the store will make back the loss and then some.
Prospecting and Acquisition
Fishing for new potential business is extremely cost-effective on the Net if you do it right. I regularly run acquisition programs for my WDFM online newsletter. For about $245, I garnered 1,200 new subscribers. Here's how I did it.

Many people who read WDFM buy and sell advertising. The unit of measure they use to compare one ad buy over another is cost per thousand, or CPM. I decided to feature and promote CPM calculators (as a computer program) that the surfer could use on the WDFM site. A programmer friend of mine wrote the scripts in a half-hour and didn't charge me for them. In fact, Matt Lederman didn't even want his name associated with it because it was such a simple program! Therefore, there were no costs involved to create the initial attraction. I then put out a press release announcing the calculators available at the WDFM site. It was picked up by Reuters and a host of other wire services, which brought people to my site by the tens of thousands. They used the calculators, and many signed up for WDFM thereafter. I have since received a great deal of business from those people who joined the list back then and have later called on me to consult, speak, or provide content for them. How do I know that? Because I asked them where they heard of WDFM in the subscription registration form. The point is, you don't have to spend a fortune to acquire prospects that can later be converted to profits.

The lessons here were twofold: Keep it simple and focused. The CPM calculators were nothing more than simple multiplication and division functions. A $1.00 handheld calculator can do these functions and much more. However, people like single-function tools. People have toasters despite the fact they can toast their bread in the oven.

The CPM calculators had an affinity with the core product of WDFM, which in turn has an affinity with my customer base. I call this hypothesis marketing. If you like the CPM calculator, then you'll like WDFM. If you like WDFM, then I want to know you.

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Copy for the Net
The best traditional DM copy has every sentence supporting or leading to a sale. It's similar on the Net, but I believe that the attention span of the average Net surfer is actually getting shorter, as we become more and more inundated with email and offers and banners and bells and whistles. Therefore, I recommend that you get to the point fast.

Ad banners are nothing more than outer envelopes with a teaser piece of copy. In the same way I want you to click on my banner and come to my site, I want you to read my outer envelope and see what's inside. There are people who look at banner ads as a vehicle for brand advertising. I disagree with this. A banner with your logo on it is useless, the same way an envelope with nothing inside is useless. Your banner ads should have a call to action, a tease, or an out-and-out offer. I see banners as a component to a DM campaign, just like an outer envelope.

Let's say you've got a 12-panel brochure. It's not safe to say that every recipient of your brochure is going to start with the first panel. It may fall out of the envelope and reveal the back panel first. The brochure could unfold, or the reader could open it up and start in the middle. Because it's uncertain where the reader will start reading, copy points are often repeated in a brochure.

The very same is true for a website. Don't assume that everyone who visits your site begins with your home page. Search engines are very apt to show your sub pages before your home page. Why? Your secondary layers usually have more words on them. The search engine figures those pages with more words on them are more important and rates them higher. Therefore, surfers are coming in from your side doors, which can be confirmed in your log files. This means that there should be key pieces of information about you and your product on every single web page on your site, since probably only your competitor or your best friend looks at every single page.

Dr. Ralph Wilson, publisher of Web Marketing Today, pointed out that I should offer my free subscription to Web Digest For Marketers on every single page of the WDFM site, as well as the parent company, Chase Online Marketing Strategies. This is what he does for his Web Marketing Today newsletter. He was absolutely right. My subscription rate increased 15 percent after doing so. Additionally, my contact and call-to-action information is automatically added in whenever we create a new page for the site.

Your copy style should be succinct, like your brochure copy. It should inevitably lead to a point. If it doesn't, you will confuse and bore the visitor and ultimately lose him or her. Your copy should ask for the sale or some call to action, which is something I notice many websites aren't good at. If your product or service is a considered purchase, then the copy should resemble that of a sales letter, which educates and informs as it sells. Keep in mind that the longer the copy is, the more apt someone is to print it out. In this case, you've just switched your medium from online to offline, which is not necessarily a bad thing, since the customer has made the switch himself without any added cost to you up front. Having said all this, I will now say there are distinct ways in which your online copy should differ from traditional DM copy.

Online versus Offline Tone
Advertisers call it tonality. Publishers call it the voice, while software designers call it look and feel. Whatever you call it, there are differences in the ways you present your wares online versus offline. Generally, people online like:

  • Quick bursts of information, rather than a sea of text.

  • Quick-loading information, rather than large, time-consuming graphics.

  • The ability to choose to seek more information, if desired, through clearly identified links or resources. (There are products that need extensive explanation, such as cars, insurance, and travel, which are considered purchase items that require deep information - research, comparisons - to aid in making an educated decision. In these cases, you want to be sure to give the prospect everything he or she wants to assist in the purchase decision.)
In deep information copy, use a David Ogilvy practice of planting an offer far into the text. If the reader responds to the buried offer, you probably have a well-qualified lead on your hands, since he or she got that far into your copy. In addition, by planting the larger pages further in, you will save surfing customers much time if they don't want to look at such detailed pages until later in their buying cycle.
While cyberspace is endless and it costs relatively little to put up more copy, that doesn't always mean you should. People like you when you respect their time. We all receive too much email, and according to Jupiter Communications, we're going to be receiving about 40 times more of it in the coming years. So email (and web) copy, with or without the fancy schmancy graphics, has a lot of competition. This is one reason it has to be short, yet engaging enough to convey true value, if you seek to sell something right from the email in box.

Too many people think of the Net as only being the Web, or that online DM is only done through email. The truth is, the best campaigns are circulatory systems that encompass many online and offline media. My favorite current example is JR Tobacco. I first came across their charming store on Wall Street Court in New York City. It's an oval building from the mid to late 1800s. It was originally the Cocoa Exchange. I bought some cigars there at a very decent price. Later, I got their content-rich print catalog. I bought more cigars then from their 800 number, where they asked me for my email address. I gave it to them. They send me weekly offers. I actually responded to one, causing me to purchase more products on their site. That was the first email that actually caused me to buy something!

You seldom see well-written DM copy online, or offline for that matter. What follows is an example of engaging, frank, and to-the-point copy for a cigar's introduction. Notice how it brings you right into the pricing process and gives you an insider perspective, while simultaneously setting up permission to discount the cigar without diminishing the product itself, and if anything, building up its image. The writer of this copy is quite a character by the name of Lew Rothman. He's the CEO of JR Cigar, and he is interviewed in Chapter 6, "Retail: Setting Up Shop on the Net." His copy reads as follows:

One of the World's largest manufacturers will be coming out with the Mantequilla (pronounced Monta-key-uh) brand at this summer's Retail Tobacco Distributors Convention in San Antonio. Mantequilla is Spanish for Butter. This is a quality handmade Nicaraguan cigar that will retail for 3 dollars or so (depending on size) at tobacconists everywhere. The Mantequilla cigars feature a double fermented Ecuador Sumatra wrapper and a blend of Nicaraguan, Dominican, and Honduran long filler tobaccos.

Objectively, the manufacturer would love to get everyone in "cigarland" talking about their new cigar BEFORE this convention which is actually the premier event at which to introduce a new product to the industry. So we came up with a great idea:

We needed a "box office smash" to really popularize our weekly E-Mail Special, and they needed a way to get 5 or 10,000 people to try their new cigar. The incentive for both of us is really advertising, not profit... and... anytime you can put together a deal where the manufacturer and the retailer are both happy selling something for nothing, it follows that the consumer is gonna get the deal of a lifetime.

The following offer will be valid until the close of business Thursday, May 4th.

Thereafter, the Mantequilla brand will not be available until sometime this summer. For THIS WEEK ONLY: any size box of 20 MANTEQUILLA CIGARS*: $19.95
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Permission Marketing
The practice of contacting potential customers who have either explicitly or implicitly indicated an interest in receiving information from you is known as permission marketing. These customers may have given their explicit permission for you to contact them by signing up for your email newsletter, for example. Or they may have implicitly given permission for companies such as yours to contact them by signing to receive information on sailing, for example, at a sports e-commerce site. That sports e-commerce site may rent the names of its customers with an interest in sailing to you, the sailboat manufacturer. Those customers have implicitly given their permission to hear from you, as your product or service is likely to be of interest.

In a report by the Direct Marketing Association, entitled "State of the Interactive eCommerce Marketing Industry," 86 percent of the respondents expect that interactive media will increase their revenues over the next three years. Frequently used consumer email, or a permission marketing program, was seen as their "most effective" promotional tool.
Email is called the killer app of Internet marketing. Why? Consider the following facts gleaned from eMarketer's October 2000 Email Marketing Report:

Email is already used much more frequently than traditional mail. Over 394 billion email messages were delivered in the U.S. in 1999. This compares to 202 billion pieces of mail delivered by the U.S. Postal Service. Email volume in the U.S. grew to 563 billion in 2000, an increase of over 66 percent.

Permission email volume in 2000 accounted for 12 percent of total email volume, an increase of 60 percent over 1999. By 2003, permission email will account for 226.7 billion email messages, or 21.9 percent of total emails sent.

By 2003, Americans will receive an average of 31 permission emails per week, including those from companies/websites with whom they have relationships, opt-in lists, sponsored newsletters, and discussion groups.

A full 83.5 percent (33.6 billion) of the 40.2 billion permission emails received in 1999 were from, or generated by, sponsored newsletters and discussion lists. Another 15 percent (6 billion) were promotional and CRM messages sent by companies to their in-house lists. The remaining 1.5 percent (603 million) were generated from third party opt-in lists. The share of permission email volume will shift considerably; by 2003, in-house lists will account for 45 percent of all permission emails sent.

Total email marketing spending in the U.S. exceeded $1 billion in 2000. By year-end 2003, U.S. businesses will spend $4.6 billion, including $2.2 billion in email advertising expenditures.

Email advertising will grow from 5 percent of web advertising dollars in 1999 to 13 percent in 2003. Email advertising revenue includes dollars spent to sponsor or buy advertising space in an independently-published email newsletter or discussion list; to rent lists from an opt-in marketing network or email list aggregator; to send marketing messages to third-party customer/in-house email lists by renting the list or co-marketing with the list owner; and for the delivery of unsolicited commercial bulk email, a.k.a. spam.

Nearly two-thirds of dollars spent on email in 1999 was for retention. Focus on email marketing has shifted from customer acquisition to customer retention, because, given high acquisition costs, etailers are closely scrutinizing how to retain customers through relationship management once they have roped them in as buyers. Not only do in-house lists generate better response than lists purchased from third parties; but they are less expensive, are more cost-effective, and offer significantly higher ROI.

Personalized email will be commonplace by 2001. The shift from traditional demographic segmentation to more sophisticated personalization will make email marketing increasingly powerful. With retention email, a company can use the information it has collected about its customers and prospects to reduce the costs of customer support, create follow-on sales, and build lifetime relationships with customers. Marketers hope that highly personalized email content and product offerings will counter the email response erosion most expect due to the overwhelming popularity of email marketing. In 1998, just over 7 percent of email marketers used some form of limited personalization. By the year 2003, nearly 90 percent of all email marketers will be employing personalization to some degree or another.

Mailing List Rental
Renting or leasing lists offline is a time-honored practice and industry in DM. You lease a list from a list broker or publisher, get the names printed on labels, and send out your mailing. An implicit permission email marketing approach is the rental of opt-in email lists. According to eMarketer's October 2000 Email Marketing Report, opt-in email list provider YesMail's Top 10 email list categories were:

  1. Music
  2. Entertainment
  3. Internet
  4. Computer Software
  5. Computer Hardware
  6. Sports and Recreation
  7. Travel and Leisure
  8. Shopping
  9. Electronics
  10. Games
Because of their highly targeted nature, opt-in consumer email list prices typically range from $150 CPM (cost per thousand) to $300 CPM. Opt-in services usually send the message on behalf of the marketer, without providing them with the customer email addresses. Response rates to opt-in list can go as high as 15 percent, depending upon the offer, although it is prudent to plan for a traditional DM response rate of approximately 2 percent.

With access to over 25 million opt-in names, 24/7 Mail is one of the leading permission-based email list providers. Marketers can choose from 260 categories to target their marketing messages. Using 24/7 Mail, a typical opt-in email program can be executed within 48 hours, at an average cost of $14,500. The same program using direct mail, in comparison, would typically cost $27,500 and would take six to ten weeks to execute.

Mailing List Costs
If you do decide to rent an email list to promote an offer or drive traffic to your site, be prepared to take advantage of that expenditure and that traffic by having your own email mailing list ready and waiting for interested subscribers to sign on up.

If your list is just beginning, you can run a one-way mailing list right out of your mail program, bringing the cost of distribution down to nearly zero. Making a mailing list that goes out to dozens or hundreds of people isn't hard at all and varies from one email program to the next.

Here's how it works for basic email programs:

Have a file that holds all the email addresses of the people who have requested to receive your mailings. Put a comma and a space after each address. When you are ready to send your mail out, simply copy all of the email addresses from the document where you keep them and paste them into the "Bcc:" field and then send.

Most basic email programs will even allow you to keep all of those email addresses parked in a special place within the program itself. You give that list a name, such as "MailList," and when you're ready to send your newsletter, just put "maillist" in the "Bcc:" field and the program will know to grab all the addresses you've previously set up and send your newsletter to each and every one of them.

I suggest buying an email program that does this, such as Eudora from Qualcomm. This feature alone is a time-saver for you.

Short of running the list from your email program, the least expensive way to go is to use a free mailing list server such as Majordomo or LISTSERV. You can either have a techie install it and maintain it on your server (usually it is now included as part of your web server software), or simply pay a local provider that already has it installed. At the time of writing, you can run alist of 1,000 people for around $20. You can also run email lists from sites such as eGroups for free - if you are willing to carry one of their advertisements on each email message. I urge you to set up an email list using a professional technical email provider rather than a web-based community service, although many do opt to pay eGroups $4.95 a month for the ad-free version of their list-host service and run their professional communications from there. It's simple and easy, but so are the listserv-provided services, which can be completely branded under your name and sent from your domain. For a complete reference of other majordomo lists, you can check out's list of list-hosting services. By the way, it isn't necessary to use a local provider.

Larger lists require more sophisticated listserv technology. I currently use SparkLIST, which provides great value quite inexpensively.

As a means of comparison, it costs me around $85 a month to send WDFM to 30,000+ subscribers once a week. The WDFM Managing Editor accesses the list management tools at the SparkLIST website. Amenities include the ability to schedule mailings in advance and a complete audit trail for every mail transaction. I have found SparkLIST's automatic filtering feature, which weeds out dead email addresses, to be particularly useful.

In addition to great service, SparkLIST also offers a daily email newsletter called List-Tips Daily filled with email newsletter tips and techniques. Subscription instructions can be found at the site.

Mailing List Management
Clean your lists! People's email addresses tend to be much more transient than physical addresses. It is easier to move from one provider to another than from one home to another. Also, people's email addresses change when their jobs change. Cleaning your list will help you in three ways:

  • You'll receive far fewer bounce-backs from email addresses that no longer exist.

  • If you are selling ad space on an email list that boasts 10,000 people, but in reality only has 6,500 active addresses, it will negatively skew the ad response results that your advertiser is looking for. Traditional direct marketers look for a 2 percent response (plus or minus, based on the list and the product category). Online responses often tend to be lower, but there is no cost of production or distribution, which more than compensates for lower response rates on online mailing lists. If you quote your audience at 10,000, when actually it is 6,500, it will further depress the response rate. You want to be sure you're selling a quality product that delivers exactly what you are promising. Both you and the advertiser will come out stronger in the long run. The cleanliness of your list is also a good selling point.

  • You will be seen as being a good Netizen for not taking up bandwidth by sending email to nonexistent addresses, which will only bounce back from their old accounts to your mailbox'more clutter.
You can attempt to revive your dead email addresses with an email management service. Try ActiveNames, the "Internet's email change of address" service. Similar to the USPS national change-of-address (NCOA), this nifty service enables businesses to turn "undeliverable email" into customers again. Users register with ActiveNames in order to have change of address notifications sent to anyone who emails to an old address. Users gain an easy way to manage multiple email communications, while businesses have an opportunity to find lost customers or prospects.

Mailing List Advertising
One of the least expensive ways to reach a highly segmented audience is to simply sponsor a mailing or discussion list that's already out there. There are two basic kinds of lists: One-way lists just go in one direction; for example, WDFM goes from me to 30,000+ people. Therefore, each subscriber can only receive from me and can't add comments to my newsletter.

Two-way lists are discussion lists. Discussion lists themselves come in two varieties: moderated and unmoderated. On a moderated list, the postings are moderated by a list manager (for content), and the group is often limited by voting in new members, rather than an open subscription (where anybody could join). An unmoderated list is an anything-goes proposition. I think of mailing list discussion groups as extremely segmented talk radio, where many only listen (online, it's called lurking) while a smaller percentage of people speak. Since you want the environment to be somewhat controlled, you'll more than likely want to run your discussion group as a moderated list. If you're interested in seeing a moderated discussion list specifically for the marketing niche, I recommend the Online Advertising Discussion List.

Advertising on one-way or two-way lists is what I often recommend to clients because it's one of the most cost-effective uses of an ad budget. You reach a no-waste audience with practically no production costs since the message is usually in ASCII text. Since this medium is such a bargain, you can afford to make a really enticing offer to this crowd. Try it, you'll like it. For very little money, you can win the hearts and minds of these list devotees for what must seem like nickels compared to what brand budgets normally run.

ASCII stands for American Standard Code for Information Interchange. ASCII is simple, unformatted text (nothing but hard returns show up) that can be read on any computer platform. These days, much email is still in ASCII text. It's ugly, but ubiquitous.

Use someone else's list to run promotions (assuming that list accepts advertising). Set up one of the pages on your site to receive visitors who see your offer in one of these mailing or discussion lists. By lurking in the list, you'll gain a pretty good idea of what will make this group move to action. Then, buy some ad space and make the offer that is available on your site. When they come in, make sure you attempt to convert them to an ongoing relationship somehow. Offer to update them on points of interest you can provide them via email. You won't get nearly all of them, but that's okay.
The following thought may occur to you: Hey, why should I pay for an advertisement, when I can simply post to the list for free, with my ad copy or offer being the focus of the message? Do not do this! This will be seen by the other members of the discussion list as being entirely self-serving and an abuse of the forum. What you can do is have a signature file that gives your URL and other information, as a sort of an addendum to your message (see Chapter 4, "http://007 Spying on Your Competitors and Yourself," for more on sig files). This is another good reason to use a sophisticated email package, as it allows you to automatically append your signature information, without having to key it in each and every time. My sig file always includes the free offer to WDFM and points to a site featuring a free chapter of Essential Business Tactics for the Net.

The message you post should provide information, observation, a response to someone else's posting, or an honest question. Having said that, it is not entirely inappropriate to inform that discussion list about a timely posting of something truly valuable to that list that is found on your site. This is especially true when someone else on your list asks where he or she might find such information. I know what you're thinking: "Hey, I'll get a friend to ask, 'Where can I find this information?' Then I'll be the hero by saying, 'Lo and behold, it's on my site!!'" Yes, people do this from time to time, but you'll find that discussion list members will pick up on this pattern if you repeat it and they will not think too highly of you. Don't risk your long-term reputation for such fleeting games.

If an existing newsletter or discussion list matches your topic or audience, join it. See how much, or if any, advertising is on it. See who's advertising and what they're saying. Note how many ads there are in an issue and observe whether that number remains constant over a few issues. Just like any other medium, this will give you an idea as to the strength of the advertising rate card, or the price list a media outlet uses to charge for advertising exposure. If there aren't many ads, you might be able to strike a better deal. You might also see if the list owner is amenable to barter. If he or she is loaded with paying advertisers, the answer will probably be no.

Add Some Ads to Your Mailing List
If you start or have a mailing list with unsold ad spaces on it, check out List Exchange. There you can swap ad avails with other lists of similar ilk. In this way, you can help each other build your respective audiences. This bootstrapping method simultaneously builds audience and gives the appearance of having a larger advertising base. That's important when the next advertiser comes around with money. Make sure your sponsor's ad gets results so she or he returns to advertise in your online newsletter or mailing list again. Give the ad away at first, if you have to, until it works, and be sure to agree that your sponsor will write a testimonial about how effective the ad was on your list. This and other testimonials will help convince future prospective advertisers that your newsletter or mailing list is worthy of their budgets.

What if the offers within these ads don't get a satisfying response? Like any good direct marketer, you must test, test, test, and never stop testing. You may find that certain types of products or services pull better on your list than others. This will help you direct your sales focus when attempting to sell advertising space. There's no reason to go after advertisers who will only wind up frustrated and not advertise with you again.

Be creative as you consider how to develop your own permission marketing program. Improved technology has made it increasingly easy and inexpensive to incorporate innovative marketing strategies into your site, your email, and your business. Some to consider are:

Topical Email Newsletter. A valuable one-way newsletter (such as WDFM) reinforces the brand, serves as a sales platform for related projects and products, and serves as a revenue center by selling ads of interest to subscribers to advertisers.

Discussion List. A discussion list is a two-way forum for you to communicate with your vendors, your colleagues, or other types of community who would enjoy discussing topics of shared interest. One example is I-Sales, an online discussion list for professionals in the Internet sales arena. Hosted by AudetteMedia, the list brands the company as an industry player and also generates ad revenues.

Corporate Email Newsletter. A corporate email newsletter is designed to keep your clients, vendors, or customers aware of what your company is doing, products or services that you have added to your assortment, industry mentions, and news about special events.

Educational Email Newsletter. Educational email newsletters are written to provide tips and techniques for using your products, to suggest complementary products, or to provide advice on how to use your company's products or services can help your customers improve their businesses.

Reminder Service/Scheduled Alerts. Alerts can be replenishment programs, gift reminders tied into a simple online calendar interface, or notices of sales or new product arrivals at your site.

The more personal and valuable the service or information you provide, the more successful you will be.

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How Personalization Will Revolutionize DM
It is less expensive to retain a customer than to acquire a new customer. Customers who have ordered from you or in some way transacted with you are familiar with your company and your products or services. They have visited your site and it's possible to know where they went and what they looked at. They are likely to open an email from you, especially if they have requested it. They are also likely to participate in programs that you create for them to encourage their loyalty. If employed correctly, the Net can be very good at keeping existing customers satisfied. has done a phenomenal job of creating customer loyalty. A key component of their marketing strategy has been the development of one-to-one relationships with each and every one of their customers. Interested in the latest Internet marketing books? Sign up at the site and you will be informed by email whenever a new Internet marketingbook is available. Now, we all know that Jeff Bezos himself is not sitting down and writing this personalized email to you. But do you really care that it was a mailbot that performed this service? No, because it is the value that this service brings to you that counts, and that keeps you coming back to

Mailbot comes from two words, mail and bot, where bot is short for robot. A mailbot is a piece of mail automatically sent out upon request. It may be sent right away, or scheduled to go out days, weeks, or months later, as a reminder message. Mailbots are also used as confirmation notices. Sometimes called replybots, these messages can tell you that your order or email has been received and will be acted upon on a certain date.
What you may not know is that, by identifying yourself both explicitly as a customer who is interested in Internet marketing books, and implicitly as an surfer who also takes a peek at the latest in serial killer thrillers, your site experience is being personalized for you. NetPerceptions and other online personalization companies are dedicated to creating and maintaining personal information tracking, which enables companies like to show you the promotions, advertisements, products, and even entire layouts of their sites that are likely to be of most interest to you. Personalization technologies can do everything from recommend to a customer what he or she would like to buy next, based on past behavior or information stored on personal preferences, to reminding a customer when a spouse's birthday is coming up and offering web links or other information concerning gifts or cards for the day. Personalization technology is discussed in more detail in Chapter 6, "Retail: Setting Up Shop on the Net."

This use of technology is excellent DM thinking, but also says something about these companies and how they think and do business. These services serve double duty as a DM and branding tool, since they leave customers with a good impression and motivate them to come back and do business in the future.

The Customer Is in Control
The growing use of personalization technology underscores the fundamental shift the Internet has wrought upon business today'the customer is in control. "Years ago I looked at the Internet and saw it as inherently a DM medium. I predicted that DM would own the Net. I was wrong," states Ken Magill, the piquant executive editor of iMarketingNews. "Direct marketers have a chip on their shoulder the size of Montana."

That doesn't mean that DM fundamentals won't apply, but, according to Magill, "The Internet needs a balance between direct marketers and 'creative types.' Direct marketers are used to being the smartest people in the room. The danger in that is that you stop listening." He continues, "As an industry, we need to look, listen, and react to the market. Neither the numbers-focused direct marketers nor the warm and fuzzy relationship-builders are doing it right - they are failing to empathize with the customer and realize that the customer is in control."

Magill observes, "The Internet is not a passive medium. Most people go on the Net with a task in mind. Direct marketers need to understand that you are interrupting this task. What does this mean?"

Magill advises that direct marketers consider a two- or three-step prospecting technique, as follows:

1. Get new email address.

2. Follow up.

3. Close sale.

"That doesn't mean that I'll get your email address and work you for a year to generate a $50 sale," Magill states. "I'm not a big believer in 'relationships' as applied to direct marketing. Marketers need to see numbers associated with their efforts. Spending $250 to acquire a customer who will spend $100 over his or her lifetime with you doesn't make sense. That's where agencies and creative types go wrong. They need direct marketing metrics. It's an arithmetic problem."

On the subject of one-to-one relationships, Magill has the following to say, "A retailer that I buy from online is not my friend. We may interact, because direct marketing is most effective as a dialogue. But I don't want a relationship. If we have a relationship, it's a precarious one based on mutual exploitation."

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Direct Marketing on the Web
The most effective websites are ones that successfully fill a highly defined niche. Sounds just like direct marketing, right? These sites will help you reach a highly defined target audience with your offer online, using a variety of techniques.

Affinity Marketing
Utilizing affinity marketing techniques, you can partner with sites that you, your product, or your service have some affinity with. American Airlines, Avis, and Hilton Hotels are considered affinity sites since they all have something in common; namely, people who travel.

There are three basic ways that these affinity partnerships work:

1. Engage in an equal barter with another site. This is when no money changes hands. You point to each other's sites, delivering about equal value.

2. You pay for links. You need them a lot more than they need you, and you are willing to pay for it. This is paid advertising or sponsorship.

3. They include you in a resource center of links containing sites like yours. No reciprocal link is necessary.

How do you find these sites? For starters, you can do a search to see what turns up. Remember to do this from a few different search engines, as no two cover the exact same territory on the Web.

Ad Networks
You can always run some banner advertising on sites of interest to you to find new customers. You might also want to buy across several different sites in order to capture a particular audience. Ad networks are set up to help you make these buys. The first and best known of these networks is DoubleClick, which will sell you a batch of impressions targeted to meet your specific audience. The more highly targeted the audience, the higher the cost per thousand, just like in any other medium. Individual sites, rich with demographic data gathered with the cooperation of the users, are doing this segmentation as well. For example, The New York Times can specifically deliver your ad to a targeted audience of women aged 18 to 34 who read books and make more than $50,000 annually. Most individual sites don't have this depth of information from their users because they didn't ask for it up front, or didn't feel the user would part with that information in exchange for access to the site. Asking for this sort of marketing information is a barrier for the user and often gives him or her pause to consider if he or she really wants to give that information away. The NYT made good use of this concept from the very beginning'a free subscription to the NYT online was well worth the effort required to answer a few demographic questions.

An impression represents the viewing of an ad by the surfer. Impressions are a much more realistic measurement to use than hits. One person visiting a single web page can account for 10 hits, but only one impression. Beware of any site that attempts to sell you on the inflated number of hits it gets.

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Internet Audience Metrics
We all know that many people are online, and the numbers are growing every day. However, knowing how many people are online or how they are accessing the Web is only the tip of the iceberg in terms of audience analysis. Media Metrix, an Internet audience measurement firm specializing in developing sophisticated measurement analysis, is one example of the kind of firm that helps shape marketing and business decisions. How does it work?

The Media Metrix Meter is installed on the operating systems of home and work computers of more than 100,000 panelists worldwide. Each panelist is characterized as to age, gender, household size and composition, income, education level, geographic location, and so on. The Media Metrix Meter records all of the individual's computer activity, online and offline, and relays it back to Media Metrix servers in real time. This enables Media Metrix to measure audience usage of not only the Web, but also of other online services such as AOL, email usage, and software and hardware ownership and usage - and this allows Media Metrix to then link user behavior with the demographic characteristics of its panelists.

Another division, Media Metrix AdRelevance, specializes in the automated retrireview and delivery of online advertising data. More than 200,000 unique ads are captured monthly and classified into the AdRelevance database, which then informs subscribers as to advertising trends and where, when, how, and how much the competition is advertising on the Internet.

For example, with Media Metrix's Internet audience research, ad buyers and advertising agencies can:

  • Maximize ad buys by targeting unduplicated online audiences
  • Get a complete breakdown of websites' user demographics and track demographic changes over time
  • Make effective ad buys by identifying top performing sites per category
  • Analyze entire industries and trends by tracking audience usage and advertising activity
With AdRelevance's online advertising research, ad buyers and advertising agencies can:
  • Compare their ad buys with competitors' ad buys
  • Leverage media purchasing power with insider knowledge of a site's ad inventory by advertiser
  • Evaluate the competitive landscape with the knowledge of which products are being advertised where, when, and how aggressively, and with what messaging
With Media Metrix's Internet audience research, website owners can:
  • Refine advertising and marketing strategy by pinpointing how well their advertising and promotion drives traffic to their site
  • Effectively target their campaigns by identifying traffic usage patterns across demographic categories
  • Capture audiences from competitors by identifying and targeting the sites their audience visits before visiting the competitor's site
  • Compare growth rate of visitorship/audience (and effectiveness of underlying strategy) relative to that of their competitors' growth rates
With AdRelevance's online advertising research, website owners can:
  • Increase sales opportunities by identifying top and new advertisers every week
  • Get detailed insight into advertisers' strategies before the sales call
  • Benchmark advertising sales against key competitors to make sure they are getting a far share of the ad dollars spent
All of this information is a powerful business tool for all sectors of the market. For example, the financial community uses this information to identify high-growth partners for portfolio companies, complete business plan analyses, and to anticipate quarterly report findings by comparing ad revenue trends with Internet stock performance.

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Search Engines From a DM Perspective
Earlier in this chapter, we mentioned that DM online differs significantly from DM offline because you must draw or lure people into your site, rather than pushing a brochure or catalog to them through the mail. One of the most effective ways to lure people to your site is to intercept them at the point where they are making their surfing decision'on a search engine.

Keyword Buys
As you can imagine, it's important to know what search terms people are going to use when looking for a company like yours. You can actually buy a word from just about any search engine that will bring up your ad each time the word is searched for in the engine. This is known as a keyword buy. I was one of the first ones to do this a few years ago, so I got terrific deals for my clients until media buyers caught on. Here's how it worked for one of my first clients,

Along with the volume of impressions we bought at InfoSeek (now, I asked to have some keywords thrown in for added value. Back then, they didn't charge because no one understood the value. We got hold of some very valuable category words like 'car,' 'auto,' 'travel,' and 'minivan.' When people searched on those words, they got a banner from at the top, along with their search results. The clickthrough rate for the banner ad campaign went from an average of 2 percent to 15 percent and higher.

Today, - and all search engines - charge a premium for these words. In other words, for every 1,000 times the word 'weather' is used and your ad appears, you pay the negotiated CPM, which depends upon popularity and availability. Some words are less popular than others and you may be able to get a price break. The major words in the major categories are worth more than words in less frequented categories. You'll probably get the word 'lobster' or 'scuba' for less than you'd pay for 'mutual fund.' I suggest you pick a few words you're interested in buying and enter them into a search engine again and again to see how many times your competition's ad comes up and how many times a randomly selected ad comes up.

As an alternative to premium keyword buy sponsorships, Google's innovative AdWords program lets you manage your own account and ad text, with a minimum buy starting at just $50. AdWords is a great program for advertisers with limited budgets, and for those interested in trying out keyword-based ads before making a larger buy. AdWords ads appear on the right side of a search results page. The Jeeves Text Sponsorship Network also offers a creative approach to low-cost, targeted advertising - advertisers select and bid for keywords, indicating the top dollar they are willing to spend. The top bidder wins, and that company's ad is served whenever someone enters that search word or phrase.

In contrast, the randomly selected ad runs in what's called general rotation. This arrangement is similar to what traditional media charge for premium placements. You spend less money on ad space if you allow the newspaper or TV/radio station to stick the ad in where it fits most easily. This is called run of station or run of paper. Online it's called run of network, or general rotation, where someone who is looking up 'pterodactyl' might get the Hotel Discount banner on the search engine. If you find these general rotation ads running more often than not on the words you're interested in, it may mean the search engine has a large inventory of exposures available for this keyword, and not many people have bought it yet. That's important information to have when negotiating the price.

Observing Search Engine Habits
Sit with other people in front of a search engine and ask them individually to look for something in your category. It's a good idea to do this with people both inside and outside your industry. Note which words they use most. This will not only tell you what words you might want to buy from the search engine, it will also tell you how to write the metatag code on your site so your firm comes up higher in the search results (see Chapter 4, "http://007: Spying on Your Competitors and Yourself," for more information on how to do this).

While you're watching people do searches in your category, you may see them tiring after 20, 30, or 40 sites found by that search engine. So what good is it if you're 432 in the listings? Not much. Often the search engine visits your site and dumps a certain percentage of your site into its database. Since it only has so much room, it may take only the first 25 words of your site and actually show those words when showing the surfer the results of what it's found. Make sure those 25 words telegraph a message to the reader of that search showing why they should visit you. Make it compelling from the user's point of view. In other words, make it so compelling that even you would click on it.

One way to find out where you stand with the search engines is by using a tool such as PositionAgent. You give it a search word and it enters it in a few different search engines and comes back and tells you where your ranking is in each. It offers a subscription service for improving your search rankings as well.

Power Tracking
In comparison to such free or low-cost tools, we can also give you an insider's view of the one of the Web's most powerful traffic analysis tools - WebTrends.

WebTrends offers more than half a dozen sophisticated analysis and reporting solutions for all sizes of organizations. "A few years ago when the Internet in general was in its infancy, it was really webmasters who were using our products," says Jeff Seacrist, Product Marketing Manager at WebTrends. "They were seeking insight into how many visitors were coming to their sites, whether or not their links were working, and making sure that bandwidth was being utilized efficiently."

The times have changed. "Over the past few years, more and more people throughout the organization are interested in gaining more information about their visitors and how visitors behave," continues Seacrist. "Based on the behavior of people on your site, you can learn so much about them. It's like a traditional retailer watching how people move throughout a store. Online, any site can understand what visitors are interested in, who those visitors are, and can use that information to help convert them into a customer and make them a happy loyal customer."

WebTrends provides both products and services to help businesses get the information they need to make informed decisions based on what is going on in their sites. WebTrends Live is unique in that it is a web-based service that site owners subscribe to, as opposed to a software product. With WebTrends Live, subscribers are able to analyze web traffic reports in real time. Hundreds of reports are available, including visitors, page views, ad campaign tracking, revenue analysis, top paths, content group reporting, and even wireless access usage patterns. "WebTrends Live is attractive to small businesses because it is an ASP solution," explains Seacrist. "The amount of involvement to get it up and running is minimized, businesses can pay as they go, and they can get a lot of stats without an up-front investment."

The fee-based versions of WebTrends Live (Enterprise and eCommerce) range from under $40 a month (for up to 25,000 page views) to several thousand dollars a month, based on the number of page views per month. The site owner selects the pages to be tracked and places an invisible image tag on those pages, which reports the individual page activity to WebTrends Live. The site owner then accesses all resulting reports on the WebTrends site.

For those of you who want a free version, the scaled-down Personal Edition is a single site solution that requires only that a small (visible) button is placed on the pages to be tracked.

Another WebTrends solution, CommerceTrends, differs from WebTrends Live in that site owners are using the product to build a full transactional database of what visitors are doing on their site. This database can be used to go back and do more in-depth analysis, and to datamine in all sorts of ways. "This is our Visitor Relationship Management solution," explains Seacrist. "The VRM is essentially a platform that can help a company understand its customers. By being able to correlate back to the behavior of visitors at your site, and the behavior of people who purchase at your site, you can understand how to convert more of your visitors to customers." The VRM is based on open architecture, so that users can integrate any personalization or CRM service on top of the VRM platform to create a closed-loop system. Typically, integration costs range from $50,000 to $100,000 for the CommerceTrends product.

For example, site owners can look at where people are coming from to get to their site, how they are moving through the site, and at what point they are leaving the site. "As a marketer, I think reverse path analysis is one of the most interesting things to look at," says Seacrist. "It's one thing to say where people go. It's quite another to be able to identify ending point and then figure out how the customers that purchase got there. Did it take them 15 clicks to get to your order page? To be able to streamline how people get to your desired end result is important."

WebTrends products also offer campaign analysis, which helps increase marketing effectiveness and ROI by determining how many customers came to your site from an ad (whether banner, email, or print, through the use of distinct landing pages), and to what depth they traveled. "You as business manager can define what a qualified visitor would be," states Seacrist. "In our own case, we think people who download trial versions of our software are qualified leads. The number of visitors matters, but we can also assign value to different types of visitors and behaviors, and then to different types of messaging. What message brings more qualified visitors, what message brings more revenues'not just the copy, but the site, the words and the path that visitors use to get to the end point?"

To demonstrate just how much information can be gleaned from the CommerceTrends product, WebTrends ran a text advertisement in WDFM and then tracked performance metrics for our review. In this specific campaign, the offer was to download a free report entitled "10 Reports Every eMarketer Lives For" from the WebTrends site. According to eMarketing Manager John Simpson, "The fully-qualified column (in our report) tells me that 41 percent of the respondents completed the registration form and downloaded the guide, which is a very high conversion rate."

In addition, Simpson assigned a revenue forecast to the various types of leads generated by this campaign based upon qualification level. By extrapolating potential revenues, the ROI of the advertising campaign can easily be established and compared to other marketing efforts.

Finally, Simpson took a look at the top downloads by the visitors who responded to the campaign. "The value here is that I can see that in addition to visitors downloading the free report I was promoting, they are also sticking around at our site and downloading a product brochure and other whitepapers," Simpson explains. "Both downloads are signs that the potential customer is digesting additional information about the products and services my company offers. That's valuable insight."

By the time you read this, WebTrends will have added an eMarketing Server product to give site owners the ability to send targeted email campaigns to customers based on the behavior they have exhibited on site. "eMarketing Server was designed to help people leverage the benefits of the VRM platform in order to better segment their customers and send targeted campaigns to better meet their needs," explains Colleen Kerry, Director of Product Marketing for WebTrends. "We're merging the what - what they are interested in when they come to your site, your customer's needs, behavior, and preferences - with the who - the standard age and demographic information. Combining the demographic with the needs and preferences allows businesses to create much more effective campaigns. The real power in targeting your customer is not just who they are and where they live, but also identifying their needs and preferences." Kerry concludes, "You cannot have that without the clickstream analysis. Traditional traffic analysis falls short of providing the behavioral data. Now behavioral data can be integrated into your marketing campaigns."

For the small business, Web Trends Log Analyzer, priced at $500, provides a wealth of information to site owners about where customers are coming from and what they are doing on the site. This solution evaluates web server log files from a single server. The resulting information can help site owners optimize how they are spending money to bring customers to their site, and it can help them optimize their site for a more user-friendly experience. The Professional version includes alerting, monitoring of server uptime, and link analysis, so site owners will not just measure traffic, but also manage site uptime and bandwidth utilization.

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Online Marketing Supporting Offline DM Efforts
One of the richest areas for you to explore is how to have one medium, such as the Web, assist other mediums, such as direct mail or print advertising. Because the Net is such a quick and cheap test bed for what pulls and what doesn't, you should consider using it not only for online campaigns, but for offline efforts as well. Testing print offers takes months of preparation and handling, not to mention significant expenses. In certain categories, you can get a quick response on what offers may or may not work for print mail pieces. This will not be as scientific as an offline mailing list you can buy, because you won't be sure of the authenticity of the respondents online, unless you prescreen them via telemarketing or some other channel. But it can give you an indication of which test packages to use and commit to when putting print offers together. The package that tests best will become your control package. I caution you here. Your mileage will vary depending upon your category, audience, and quality of sample on the Net. Proceed with open eyes. Then be sure to write an article about it so you can get additional mileage out of the experience.

Control Packages
A control package is a classic direct-marketing practice. You create multiple offers for the same product. You run them separately and track which offer pulls better. Whichever one wins then becomes the control package. This control package is the one you use in the field and try to beat in the future by creating an even better control package for your next gambit.

As you can imagine, there are a whole range of ways the Net can be used to help traditional direct marketers work smarter, faster, and cheaper. For one, you can get your traditional mailing lists cleaned up online. MAILnet is one such example. MAILnet offers a wide range of list-processing services directly through its site, using an online upload of ASCII-delimited text database files. List owners can merge/purge, update addresses, and have files CASS (Coding Accuracy Support Standard)-certified to take advantage of postal discounts through bar coding. MAILnet will return updated files in as little as three hours.

Even in the age of email, direct mail (or snail mail) remains a viable and necessary marketing tool. On the Web, you can explore examples of vintage campaigns, such as a 1941 mail order journal by Paul Muchnick. Who knows? You might get some good ideas for your offline as well as online direct marketing efforts.

Catalogs and the Net
For presenting a wide array of products, there's nothing quite like the Internet, for better and for worse. You can't put enticing, high-resolution pictures in front of visitors without having them spend at least a little bit of time waiting, but you can do other things that print doesn't do as well, providing yet another way online direct marketing can support offline direct marketing efforts.

You can have a dynamic catalog, which deletes an item when you run out of it. This way, no one calls your 800 number (at your expense), only to be told that the item is out of stock. If you have a product that consists of a number of components or peripherals, you can use what's known as a configurator, which adjusts the price of a configuration based on the different components you assemble. Dell Computer uses this tool on its site. A prospective buyer puts in the monitor size, amount of RAM, speed of the processor, and so forth that he or she wants, and the configurator spits out the price of that configuration. If it's too much money for the user, he or she simply tries a smaller monitor, a slower CPU (central processing unit; that is, the computer's engine), or a less-expensive monitor, and the configurator gives the prospect the slimmed-down price for the slimmed-down computer system. That's much cheaper than having a telephone representative take the time on the 800 number to figure out all of the variables to close the sale.

For an even more complex example of this, take a look at 3Com's Network Designer, where you can design a whole network for your office this way. Even if the user doesn't buy the product online, the cataloger has saved a bundle by not having to send the paper catalog to that person, usually. You may have to ship loads of catalogs to potential customers before they even buy, if they ever do at all! When you stop to calculate the cost of sending multiple catalogs to someone who may or may not buy something, you've got incredible savings. Remember, the person who visits your online catalog is already near or in the buying cycle for your product. Why else would he or she be there?

However, many web companies now see a real need to reach their customers where they live. They're taking what they have learned online and closely integrating it with real world activities to reach customers anytime, anywhere, anyhow. Most etailers with catalogs, such as Bloomingdale's, J. Crew, or Chadwick's, feature easy ordering by catalog stock keeping unit (SKU) right on the home page of their sites. Some etailers are even working backwards, creating mail order catalogs for what were originally pure web-based etailing businesses. One example is Red Envelope, which created a print catalog to expand its market from online to offline.

If you're going to put your catalog online, do your homework first. Go to Buyers Index, where you'll find over 19,000 catalog links, and a search engine to help you locate the ones relevant to you. Learn from those who came before you. What are they doing right? What are they doing wrong? What can you do better? I urge you to also look at a few catalogs that aren't in your category. You can probably learn from them and be the first to migrate some of those practices into your business. This can give you an edge over your competitor, at least for a while.
Online Direct Marketing: A Threat or an Opportunity?
It's both. Over time, some percentage of the business that's being handled by traditional DM will migrate to the online world. Historically, new media do partially cannibalize their predecessors. A good example is how computers found a new sales outlet by offering to sell the consumer right from the magazine or newspaper page. This ultimately took sales away from computer stores. If you feel threatened by this, I suggest you consider the options you have: You can either cannibalize your own market share, or have a competitor do it for you. When this cannibalization will occur depends on the industry you're in, although almost all industries are feeling the impact. Who thought that the Internet would change the automotive industry? Now there are models of cars that are available only over the Web. Consumers can create their custom-built cars online, or they can utilize technology to haggle for the best used car price.

To a direct marketer, in my estimation, the opportunities far outweigh the drawbacks. You can open up new markets, some of which you aren't even aware of yet. You can better serve your existing customer base with loyalty and customer retention programs, including personalization. You can better serve yourself by reducing the costs of DM programs, increasing speed to market of materials and products, and lowering your overhead. In short, if you're a direct marketer, you're going to be doing business online sooner or later, so it might as well be sooner. Embrace this medium. Marvel at its potential, and know it's limited only by your keen imagination as a direct marketer.

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