Update, Upgrade, Convert

Having a hard time finalizing your 2008 contact strategy? You’re not alone. The mission hasn’t changed: You want to develop the most efficient way to convert prospects into first-time buyers and first-time buyers into repeat customers. But piece together the rapid pace of technological change, the volatile economy, the ongoing migration and evolution from phone to Web ordering, then add the likely distraction of the presidential election throughout the year, and it can make any marketer feel like throwing in the towel in bewilderment.

Realistically, there are only three ways to proactively convert known prospects to buyers and one-time buyers to repeat buyers: mail, e-mail or call them. The challenge is to combine these in the right mix at the right time for each segment to achieve maximum benefit. The best approach is CANI (Constant And Never-ending Improvement), where you refine your strategy through an iterative process.

A few years back, the frequency of mailing customers was the most challenging aspect of contact strategy planning. Each housefile segment “supported” some theoretical number of mailings (sometimes zero). You just had to figure out how often to mail each group.

Today that theory remains valid, but online ordering and e-mail marketing complicate integrated strategy planning. B-to-B (and some B-to-C) catalogers incorporate outbound telemarketing. You can add other tactics such as solo mailings and postcards to the mix. Lest that not be challenge enough, we endeavor to maintain consistency of our “brand” throughout all customer communications.

Allocating Marketing Efforts
We sift through more data than ever to figure out the true effect of each marketing effort, determining how many and which contacts to allocate. Percentages of phone orders are decreasing as more customers order via the Web. Using matchbacks and analytics to identify what drives online buyers to purchase continually is obviously becoming more important.

Catalogers like Fred Bell, co-owner of the Touch of Class home furnishings catalog, use both matchbacks and Web analytics to evaluate the effectiveness of contact strategies. But matchbacks have limitations. For instance, if order credit goes to the most recent catalog, results from remailed buyers can be overstated by “stealing credit” from previous drops. Contact interactions have given rise to increasingly complex matchback rules so catalogers can sort them out.

Cannibalization Testing
To really figure out the impact of a mailing, e-mail or outbound call, try cannibalization testing. That’s where you determine whether subsequent marketing efforts can “step on” an existing effort, truncating its natural order-curve tail. Consider the typical example presented in the chart on pg. 30 with 60 percent variable costs assumed.

In the pg. 30 chart, 40 orders from
Contact 2 would’ve come in anyway had Contact 1 not been “stepped on.” (Subtract the results of Contact 1 alone from the combined results of Contacts 1 and 2.)

What if you see results like those in this chart? Is canceling the remail (Contact 2) your only option? No. Mix it up by testing different versions to differentiate the remail from the original. Send a postcard, solo mailing or e-mail instead to benefit from the repeated impression. You have more tools in your arsenal, so think creatively about how to maximize the benefits of repeated contacts.

Advanced E-Mail Contact
No longer an afterthought, e-mail’s a critical element of virtually every multichannel marketer’s integrated contact strategy. A new body of knowledge is developing around the most effective uses of e-mail. We conducted an informal survey among catalogers for this story, however, and found only a small percentage of those companies execute these new tactics:

1. A series of e-mails triggered when someone signs up for your e-list. Many marketers send a simple introductory e-mail. While only one firm (out of 20 in our survey) deploys a preplanned series of e-mails, five plan to do so this year.

2. E-mails triggered by purchases (or otherwise targeted to individual behavior). The majority of companies surveyed don’t yet send EBOPPs (E-mails Based On Previous Purchases). Like the 40 percent of our survey respondents who plan to implement EBOPPs in 2008, Bell says Touch of Class’ second e-mail priority (after general improvement in e-mail merchandising) is to trigger e-mails based on previous purchases. EBOPPs can be automatically generated for effective cross-selling or timed replacement of consumables.

3. E-mails announcing imminent catalog arrival. According to our survey, 40 percent of catalogers are doing this now, with another 20 percent planning to start this year. Some who stretch catalog in-home dates can’t predict the timing well enough to deliver an e-mail within a short time window of the catalog’s arrival. We also came across some who e-mail customers about a catalog that just arrived.

4. E-mails that tie into a company-wide merchandise or seasonal theme. Eighty-five percent of the catalogers we surveyed tie their e-mail, catalog, Web site and store themes together. This generally flows from a quarterly or annual plan in which marketing, creative and merchandising departments plan out events, themes and special offers. Catalogs such as Touch of Class plan to add themed e-mail to their contact strategies this year.

Unique B-to-B Challenges
The inherent complexity of B-to-B purchase processes makes designing a contact strategy challenging. “B-to-B catalogers have to contact end-users, purchasing agents, product specifiers and decision makers,” advises B-to-B consultant Ruth Stevens. “The way to talk to each is often different. You might emphasize productivity to decision makers, price to purchasing agents and ease of use to end-users. The channels may differ based on contact preferences and the value of the account. You might place outbound phone calls to higher-value accounts, but use only catalogs and e-mail for lower-value accounts.”

Stevens recommends that B-to-B catalogers who want to improve the effectiveness of their contact strategies in 2008 should consider the following:

✍ sharpen contact strategies based on buyer preferences and ROI;

✍ pay deep attention to data hygiene, keeping data clean; and

✍ conduct “data discovery” to identify new contacts in each account.

Conclusion
New technologies have made integrated contact strategy planning more challenging, but they also reward smart marketers with more opportunities.

With more tools in your arsenal you have more data to evaluate. Instead of being overwhelmed, rely on CANI to continually tweak and evaluate your integrated contact strategy, taking it to the next level of profitability.

Shari Altman is president of Altman Dedicated Direct, a direct marketing consultancy specializing in acquisition, continuity, DRTV and loyalty marketing. Reach her at (336) 969-9538 or saltman@altmandedicateddirect.com.

Mark Lee is president of The Mark Lee Group, a Charlottesville, Va.-based catalog consultancy. Previously, he was vice president of sales and marketing for International Auto Parts and senior vice president of marketing at Crutchfield. Reach him at (434) 825-9739 or mark@themarkleegroup.com.