Get Creative As You Prospect

Take the road less traveled.

Cataloging, by its very nature implies acquiring customers via renting lists. For some, that’s prospecting in a nutshell. But most catalogers eventually
go beyond lists as a means to not only grow the business, but also to combat limited list universes,
or as part of an overall expansion into multichannel marketing.

But which directions make sense for your business? There are so many traditional choices, such as co-op databases, inserts, space ads, solo mailings, television or radio advertising. Compound that dilemma with the influx of newer online methods, such as paid search, Amazon.com, eBay and affiliate marketing, and it’s overwhelming. But by focusing on goals before selecting media and tactics, you’ll make better choices and avoid mismatches between your brand and specific options.

Diversification Reduces Risk

A key benefit of multichannel prospecting is reducing risk through diversification. Think about how a financial manager reduces investment risk by diversifying your portfolio with stocks in different sectors, and apply the same concept to customer acquisition. If you only rent lists, you become highly vulnerable to postal increases, deterioration of list-rental universes, etc. When using a variety of prospecting approaches, these things impact you, but your business isn’t decimated.

What’s more, don’t assume that these newer, “alternative” methods won’t perform as well as the more traditional options. Eileen Schlagenhaft, director of marketing at produce cataloger Cushman’s Fruit Co., says these methods have out-performed many more traditional efforts.

For example, the Crutchfield consumer electronics catalog is “always trying to find new customers beyond traditional list prospecting,” says its director of marketing strategy and catalog production, Michele Rick. “Many of these efforts have not only helped us grow our file; they’ve also made us less dependent on any one program.” Crutchfield uses print, radio, paid and organic search, price comparison engines and affiliates, and Amazon. What’s more, the cataloger has tested eBay.

Diversifying prospecting tactics also makes you less vulnerable to competitors, because you have multiple acquisition “tools” in your arsenal. The more places your offer appears, the more likely you’ll be there for potential customers when their need arises. You can capture prospects who are inefficient to reach via mail, with mediums where prospects “raise their hands.” Schlagenhaft points out that the produce cataloger uses print, inserts, paid and organic search. And Cushman’s also is an Amazon.com partner and has tested eBay. Multichannel acquisition “adds a wealth of new names to our list,” she says. “We reach buyers who may not necessarily be catalog buyers.”

When crafting your strategy, in addition to considering which magazines your audience is likely to read, television or radio shows they tune into, or Web sites they frequent, consider internal company issues. Some companies, for instance, want to test quickly, while others take six months to plan a
test. These will impact your media selection. Also consider your resources, such as budget, staff and systems to track everything. Remember to plan for creative and fixed costs of new acquisition media, as well as ongoing production and media expenses.

Tracking Results

While some media are easier to track than others, some have significant customer spillover impact on retail and Web traffic, most notably, DRTV and space advertising. To make tracking easier, use different toll-free numbers by medium (space ads vs. direct mail) and specific toll-free numbers for each effort, if feasible. Naturally, don’t expect prospects to remember where they heard about you. Use embedded links or source codes for every effort.

For online advertising, develop landing pages or mini-Web sites. These will let you close the deal you made for that hero product or catalog request. Cushman’s landing page for space ad offers mirrors the ad. Include a unique URL, but keep it simple — consumers will ignore text after a slash (e.g., www.catalog.com/info).

Planning Considerations

To move money to the most profitable approaches, draft one budget for all customer acquisition efforts broken out into offline and online sources based on profitability projections. If you use a catalog request offer, include the cost of all actions to convert the inquiry to a buyer (e.g., catalogs, mailers, phone calls) in analyzing profitability. The more detailed your tracking data on your offer and promotional efforts, the better decisions you’ll make.

“We try to hold all of the programs to the same metric,” Rick says. “We might spend up to a one-year return on investment on any individual program, but the ROI is different for each. Because of this, we can spend a lot more to acquire a new customer in some programs than others.”

Regardless of your approach, multichannel acquisition marketing delivers benefits. But because of so many options, it can be challenging to pull together. Start the process with a solid strategy and evaluation of your unique brand. This way, you’ll make decisions that are likely to lead to success, and avoid mismatching between specific media and your brand. «

Key Questions

When choosing media, ponder the following:

• Do you have a “hero” product that can stand on its own, or are you going to focus on lead generation? With a hero product, consider options such as a 30-minute infomercial.

• How much selling space and time do you need? Is the offer you plan to make free lead generation, low priced and impulsive, or higher priced? The answer will help you determine such decisions as whether to use a postcard, envelope or a solo mailing.

• Are your prospective customers active or passive responders? Are they heavy TV viewers, or do they actively search online?

Shari Altman is president of Altman Dedicated Direct, a direct marketing consultancy that specializes in acquisition and loyalty marketing support. Contact: (336) 969-9538, saltman@altmandedicateddirect.com or via her Web site, www.altmandedicateddirect.com.