The New Alternative
“Alternative prospecting strategies” almost seems like an oxymoron. The lines between traditional and alternative prospecting approaches have blurred — today all marketing is driven by multichannel consumers. So let’s define “alternative” as media other than mailing print catalogs to rented lists or paid search. Yes, we need to lump in paid search with traditional print mailings because search has become mainstream and is no longer considered an “alternative.”
But what’s a cataloger to do if, as Marc Coan, owner of Made in New Mexico, points out, you want to come up with another way to prospect? “We have the infrastructure in place,” he notes. “How do you get to the next level?”
Alternative prospecting media includes radio, TV, inserts, space ads, newspaper free-standing inserts (FSIs), affiliate networks, banner ads, public relations and even billboards. Consider such media if the following is taking place:
• Traditional prospecting methods aren’t yielding sufficient new customers;
• tapping new audiences through list rental isn’t feasible; or
• you’re looking to expand your portfolio to gain a competitive edge by developing a range of effective prospecting to protect your brand from negative impacts in any one media.
If one or more of the above resonates for you, the next hurdle to contend with is the planning process. Determine whether to budget a specific amount of money or a percentage of your marketing budget.
Most marketers include media testing as part of their overall testing budgets. A reasonable rule of thumb is to allocate 20 percent of your budget to testing new media, other creative or offers.
Package Inserts Produce
For the brands under 1-800-Flowers.com — including 1-800-Flowers, Plow & Hearth, The Popcorn Factory, Cheryl&Co., Wind & Weather, The Wine Tasting Network, HearthSong and Magic Cabin — the company employs package inserts, FSIs, radio, TV and less mainstream alternative media, such as billboards.
Jill Eastman Vidal, the company’s director of third-party marketing, notes that 1-800-Flowers brands test what’s affordable and low-risk. But the company is open to testing any new idea that has a realistically positive ROI.
Georgina Johnson, marketing director for Joules Ltd., a Leicestershire, England-based apparel cataloger/retailer, says that as a fast-growing entrepreneurial business, Joules seeks out new testing opportunities. Joules uses affiliate programs, PR, newspaper inserts, magazine ads and package inserts. As a small to medium-sized business, Joules remains nimble and flexible, testing new initiatives on short notice as long as the ROI is promising.
Having set your testing budget, determine which media to try. Your overall budget impacts decisions. DRTV can be hugely successful, but it’s the most expensive. Print requires significant investment, as well; radio and inserts less so.
Direct Sales or Lead Generation?
Beyond determining your budget, decide whether you want a direct sales approach or lead generation. Direct sales requires that you have appropriate “hero” products that can stand alone to capture interest and sales. Without a hero product, you’ll need a lead-generation approach.
Radio and print ads can function well as drivers of catalog requests or Web visits. Other mediums, such as newspaper FSIs and affiliate marketing, usually require a hero product to be effective.
Deciding if you’ll have a hero product will help determine your format within that medium. For example, DRTV infomercials demand a hero product to retain interest during a full 30 minutes; however, one- or two-minute DRTV spots can be effective for both direct sales and catalog requests.
Evaluate Acquired Customers
One question on the minds of catalogers is, “How do customers acquired through alternative media compare to those acquired through direct mail?” The answer goes back to lead generation vs. direct sales. For lead generation/catalog request offers, newly acquired customers have similar lifetime values as other two-step buyers. For direct sales, it depends greatly on the specific media. Long-form infomercials and package inserts with the right creative/offer can generate customers as valuable as those acquired via direct mail; other media less so.
The Vermont Teddy Bear Co. — whose brands include PajamaGram, Calyx & Corolla, Gift Bag Boutique, and TastyGram — uses DR radio, DRTV spots, and magazine and online advertising. Sarah Pribram, the company’s director of sales and marketing information, notes that the company spends less to acquire customers via mass media, like TV and radio. But the lifetime value of those customers, in turn, tends not to be as strong as ones acquired via direct catalog mailing.
The value of customers is consistent with the cost to acquire them. Mass media — be it DRTV spots or mass magazines — costs less per customer to acquire but delivers less long-term value. Execute careful goal-setting and analysis of results in alternative media.
Set Goals, Then Test
Given the dynamics of cost and lifetime value, set your goals before you test. Every medium has unique measurement tools, but you can define standard goals to compare customers acquired from one media as opposed to another. Cost per order, average order size, gross sales and percent of promotion spending are good places to start. You can define goals that span all media, allowing you to have an apples-to-apples comparison.
You can succeed with alternative prospecting if you treat each media uniquely. Learn particulars before diving in. This means listening to the experts; a DR radio agency with 20 years of successful experience will offer valuable insights on DR radio. What’s more, a package insert broker should do the same regarding package inserts. Listen to those who have made the mistakes before you.
Know your audience. An ad that works in a men’s magazine is probably different than an ad that’ll work in a women’s magazine. A commercial that works on sports talk radio is probably different than a commercial that works on an easy listening station. Tailor your creative message to the audience to have the greatest response and acquire the largest number of customers.
Recognize the limitations inherent in your brand. Made in New Mexico was unsuccessful at lead generation in a regional lifestyle publication. The number of appropriate prospects as a proportion of the overall magazine circulation just didn’t justify the expense.
Never doubt the need to “test, test and retest,” as Eastman Vidal of 1-800-Flowers.com recommends. Her comment underscores the fact that it can take a bit of trial and error to find the right creative to make a given alternative media work.
Pare Back Variables
On the other hand, don’t test too many variables at once, says Johnson of Joules. “Testing too much too soon is difficult to measure, often not statistically relevant, and it produces a lot of hard work and headache for little reward,” she warns.
“Balance beautiful creative with tried-and-true DM techniques,” Johnson advises. One of the biggest mistakes Joules made initially in alternative media was not providing enough information about what Joules was.
In multichannel marketing, it’s the rare cataloger who won’t want to seek out alternative strategies for prospecting. Being a “one-trick pony” and relying on traditional catalog direct mail is risky in the current economic and competitive environment.
The keys are determining which media make the most sense for your brand, identifying goals, gathering input from knowledgeable experts and testing until you find your path to success.
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 email@example.com.