Get More for Your Marketing Dollar

By Ron Rosenberg

FootballWhen most people think about marketing and advertising, they normally think about TV commercials, magazine and newspaper ads, radio spots, and billboards.

Some companies have advertising budgets in the tens of millions, even hundreds of millions, with some even topping half a billion dollars annually. And you would think that people willing to spend millions of dollars on an ad would want to measure their return on investment.

The problem is that many of these ads are what we call “image” ads, which are designed to build awareness, familiarity, and brand identity.  The theory is that if you see enough Pepsi ads on TV, when you’re thirsty you’ll order a Pepsi.  Or buy a Buick.  Or fly on United Airlines.

But unfortunately, most organizations – definitely mine, and almost certainly yours – don’t have multi-million-dollar budgets for marketing and advertising.  We watch our financials closely, we run our operations as efficiently as possible, and we expect a measurable return on any investment we make.

And that’s the fundamental difference between the common “image” advertising most companies use and the “direct” marketing approach.

There are three key advantages to utilizing direct marketing that make it preferable to “image” or “brand” marketing.

1.  Direct Marketing is Targetable

Consider these two alternatives: a billboard on the side of the road that advertises a particular brand of soft drink, and a vendor that shows up on the side of a neighborhood basketball court at the exact moment your game finishes.

Which situation is more likely to get you to buy that drink?

Clearly, someone who shows up on your doorstep with exactly what you’re looking for at the exact time you need it is far more likely to make the sale.

The beauty of direct marketing is that it allows you to select, with almost surgical precision, which prospective customers you want to reach, craft a message that appears to be just for them, and deliver it to them at a time, and in a manner when they are likely to be most receptive.

2.  Direct Marketing is Measurable

Because effective direct-mail campaigns are coded for identification, we know instantly what the response was to each promotion.  We can test, side-by-side, different headlines, different offers, and different price points.

We can make sound business decisions based on facts and data instead of intuition and “gut feel.”

And because we know how many leads and how much new business was generated from a particular campaign or individual marketing piece, we can calculate to the penny the cost-per-lead and cost-per-sale and know exactly what our return on investment is.

3.  Direct Marketing is Repeatable

Direct marketing allows us to develop a campaign, test it on a small group, tweak, adjust and fine tune it to get the maximum response.

But there is one last benefit of this approach that is the most important one of all.  It’s repeatable.  If you get a promotion working that gets a certain set of results one time, similar results the next time, and the same results a third time, then you can reasonably expect the same performance every time you make this offer.

What this means is that if you have a predictably slow period where new business is scarce and revenue is lower than usual, you can count on a proven promotion to generate a known response (and a known amount of revenue) to help smooth out your revenue stream.

Direct Vs. Image Marketing

Many organizations market themselves blindly.  They develop ads and other promotional pieces that don’t provide any tangible results or easy ways to track performance.

By utilizing direct marketing, you know what’s working and what’s not because you can track your response rate. In this way, you can craft an offer targeted directly to your members and customers, and you can deliver it to them at the right time and in a manner when they are likely to be most receptive.