Alan Rosenspan

Direct Marketing
and Mail Order
Association
www.nmoa.org

"Next Step" Marketing
By Alan Rosenspan

A few years ago, I was visiting a small software company, and I made a fatal mistake.

The marketing director had called me in to create a direct marketing program for them. I met with her and the product people and we had what I thought was a very productive meeting.

We discussed their target market, their objectives, possible offers and I came up with a number of ideas that they were extremely excited about. It was a wonderful meeting.

After about an hour, I had to leave -- and that's where I made the mistake.

Just as I was getting up from the table, one of the product people said, "Do you have time to go through a demo?" I glanced at my watch, shook my head, and promised that I'd be happy to view it at our next meeting.

But there was no next meeting.

In order for them to feel comfortable working with me, they needed me to express enough interest in their product and company to eagerly sit through a demonstration.

In fact, the marketing director later shared with me that there was no way they would hire anyone at any level in the company who didn't go through the demo.

It was a critical next step -- and I missed it.

And that led me to think about direct marketing in a new and different way.

What's the Goal of Direct Marketing?

I've asked this question in dozens of different seminars, and it is always amazing to me how many different answers I get back.

They include:

To make a sale? No, what about lead generation? What about loyalty programs? What about seminar invitations?

To create a relationship? Well, maybe, but that's an awfully hard thing to measure. Plus it canët be the end goal, can it?

To generate awareness? Not even close. Imagine walking in to your boss and saying, "We didn't get any responses to our last mailing, but I think it really got our name out there."

To get the prospect to do something? That's better, but what do you want them to do? And how likely are they to do it?

My answer is very simple. In my opinion, the goal of direct marketing is this:

To get the person to take the next step.

For prospects, the next step could be to request more information, or an evaluation, or even a demo.

For customers, the next step could be to buy from you again. Or recommend a friend. Or attend a seminar.

Now while this may seem overly simple, I think the reason that many direct marketing packages fail is that they forget this objective.

Let me explain by describing a program I just completed for PictureTel.

As you may know, PictureTel is the world leader in videoconferencing solutions, with 70% of the Fortune 500 companies as their customers.

And if you've ever experienced video conferencing in the past -- you would be amazed at how far the technology has come.

PictureTel wanted to use direct mail to identify new prospects. So one of the ideas that came up for consideration was to invite them to a free demonstration.

I recommended against it.

Thinking through the buying process, I reasoned that before important executives would be willing to invest two hours of their valuable time, they would need more information.

They would want to know: which other companies use PictureTel; what are the specific applications they can use it for; and most importantly, what are the benefits for their organization.

After reviewing this material -- and perhaps sharing it with colleagues and key decision-makers -- only then would they be interested in viewing a demonstration.

So after receiving our direct marketing, the next step had to be sending away for additional information.

In this case, we created a "Best Practices" kit which included case-histories, a CD-ROM, and more information about PictureTel products, applications and benefits.

And included with the fulfillment materials, we invited them to take the next next step and schedule a demonstration.

The campaign was extremely successful.

The One Step You Can't Ignore

If you think of your own business, you will quickly identify the three or four steps prospects have to take before making their decision to buy.

And if you gear each direct marketing program to getting prospects to take the next step, it forces you to be very single-minded and ultimately more focused.

The steps may include: information-gathering, comparison-shopping, evaluation of needs, demonstrations, cost-benefit analysis, even a personal sales call or presentation.

What you may also discover is that there is one step that is absolutely crucial for your success.

For example, no one ever invested in a PictureTel videoconferencing solution without viewing a demonstration. Seeing is believing -- which is one of the theme lines we considered.

Therefore, it wasn't enough to do effective lead generation for them. The direct marketing campaign had to keep prospects moving along, step-by-step, to get them to the demonstration.

The sales people were focused on the same goal -- because we knew that if a prospect didnët attend a demonstration, the chances of them ever becoming a customer were practically nil.

So here's a question for you to consider:

What do your prospects have to do before they can become your customers?

If you can help them do it, you will dramatically increase your chances of success.

The Commitment Ladder

Here's a useful analogy to think about when you're doing "Next Step" marketing. Imagine that you're climbing a ladder, rung by rung. It's fairly easy because the rungs are pretty close together.

However, if one rung was missing -- it would be a lot harder. And if more than one was missing, it might even be impossible.

Now imagine your prospects starting out on that ladder. If they keep climbing, eventually they'll reach the top and become your customer. If you remove a rung or two -- and ask them to skip a step -- it makes it that much harder for them. In a recent article, I discussed a software company that specialized in document management. They came up with what they considered to be a very valuable offer -- two free days of consulting to any potential company.

I warned them against it. "You're asking the prospect for too much of a commitment from them too early in the process. The two days of consulting you're offering is also going to cost them two days of their time."

Fortunately, they changed their mind.

Step-by-Step Success

"Next Step" Marketing also provides another valuable benefit for you and your company.

It allows you to estimate the success of your direct marketing, and plan more effectively.

Let's look at the PictureTel example again.

Suppose PictureTel wanted to sell 200 units. (I'm making up these numbers for the purposes of illustration)

They know from past experience that approximately 8 out of every 10 people who view their demo decide to buy the product.

They also know that 1 out of every 5 people who request more information agree to a demonstration. And they know that their response rates are usually 2%.

Let's do the math. In order to generate 200 sales, they need to schedule 160 demos.

In order to schedule 160 demos, they need to have 800 people request more information. And in order to get 800 responses, at a 2% response rate, they need to mail to 40,000 prospects.

So by working back each step, they can understand the quantities they need to accomplish their goals, and also whether or not their goals are realistic.

But they can also do something even more important.

They can determine which step needs to be strengthened.

For example, mailing to 40,000 prospects may be too expensive. So if they can increase the value of the offer -- or use a more targeted list -- or do anything else to improve response, they can mail fewer pieces and still generate 800 leads.

If they can improve their response rate from 2% to 3%, they only need to mail 27,000 pieces.

Or if they can improve another step -- and convert 2 out of 5 people instead of 1, they can cut mailing quantities to 20,000.

So "Next Step" Marketing also allows you to evaluate the success of each step, and determine which areas need improvement. And measure the impact of that improvement.

What's the next step for you?

Talk to your sales people and telemarketers to determine how people buy your product, and what are the critical steps in the process. Then look over your current direct marketing programs, and see how they match up.

And remember -- if you're pitching a high technology company -- always ask to see the demo.

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