Interactive Marketing: An Integrated Channel Approach

There are several techniques that come into consideration during the list selection process for high-tech catalogers. Techniques that build awareness and uncover working list universes, leading to ongoing and profitable direct mail campaigns.

Two approaches that can be implemented at the list-selection level: an impression program and a hotline program. Both work in the microcomputer/software catalog environment.

Gaining market share and orders through impressions...

Impressions, a term borrowed from advertising, relates to the number of times a potential buyer sees your offer. Whether it is a catalog, direct mail piece, or even a banner placed on the Internet's World Wide Web, controlling, delivering, and measuring multiple impressions builds buyer confidence in your product and organization, which is the path to the placement of orders.

Think of a 'one-shot' space advertisement for a unique, high-tech widget. The ad might elicit a response from the small percentage of early adopters, however, there are those who will order after they see continuity in the ad, since the high impression rate makes them feel more comfortable.

By identifying and renting working lists and then reusing specific segments of those lists (with list owner approval), you can secure a strong impression rate with potential buyers via direct mail.

Look at the average range of response rates -- from fractions of a percent to the single digits. Let's hypothetically say that a 50,000 name segment of LIST A yields a 1.5% response -- generating a profitable ROI based on your break even point.. That leaves 98.5% of the list universe still available to purchase your product -- and they've already been 'primed' by seeing your offer.

How many times should you mail to the same individuals? The answer is quite simple: until they are no longer profitable. You can compare it to a magazine renewal effort. Secondly, with technical products, parts break, computers change and people need confidence in their suppliers -- therefore the re-mail.

By implementing the impression program and incorporating the classic 80-20 rule (80% working lists, 20% tests), you will constantly refresh the program while building a strong base of lists.

For example, if a mail plan calls for a 500,000 name catalog mailing, 400,000 names should be allocated for working lists with the remaining 100,000 for new tests.

The 400,000 names should be distributed over your portfolio of proven working lists, executing reuses on profitable list segments. Close tracking and response analysis is critical to monitoring when a reuse segment starts to drop in profitability so that it can be refreshed with a new segment of names from the list's 12 month universe.

The remaining 100,000 names should be allocated for new list tests. Though 5,000 names is a popular test quantity, this scenario would call for a 10,000 test quantity, factoring in the presence of duplicate names due to the merge-purge.

The remaining 100,000 names should be allocated for new list tests. Though 5,000 names is a popular test quantity, this scenario would call for a 10,000 test quantity, factoring in the presence of duplicate names due to the merge-purge.

The tests lists should be ranked least important in the merge, attributing the duplicates in the test lists to your house file and working lists. Using this methodology, what you are left with, after the duplicates are removed, is a 'pure' test based on absolute unique names to that particular list universe. Don't be alarmed if a particular list test is showing a very high duplication rate with your house file. This is actually desirable since it shows a high affinity of those buyers with your current customers.

In some instances, list tests which show little to zero duplication are sometimes dropped from the overall mailing because of the lack of affinity. Even though you are still responsible for paying a per-thousand running charge for the generation of the names, it is a small in comparison to the 'in the mail' cost for mailing a list that will be, most likely, a poor performer.

Hotlines... individuals in a buying mode.

A hotline program consists of lists that are rented on a regular basis, selecting the most recent monthly or quarterly names. In this scenario, instead of going deep into a file's universe, we are leveraging the recency of the names to generate profitable results. Assuming that the source and offer which generates those names does not go through any dramatic changes, the hotline names maintain a fairly consistent level of response.

Some of the good sources for hotline names come from the magazine lists. New magazine subscribers are, in many instances, new computer owners who are prime for software and peripheral purchases. Other excellent sources are the on-line service memberships, and hotline buyers offered in direct-response generated databases.

Why can't your direct mail program live on hotlines alone? Because hotlines won't deliver the tonnage you may need for a large campaign. A balance of the impression program and the hotline program will give you the best of both worlds.

Overall, knowing and implementing these strategies and tactics at the list level will help you build and maintain direct mail programs that have longevity and build market share. Just remember to build in the key coding and tracking mechanisms that will allow you to closely monitor the performance of your campaign so you can make smart and accurate decisions for the refinement of your future activities.