Contributions to Profit: Plan for 2007, Part II
Last month in this column, I defined the basic psychological and behavioral groupings of prospects and customers as suspects, prospects, triers, buyers and advocates. Developing marketing plans with these groups in mind can increase your results and profitability.
This month, in the second of a three-installment series that concludes in the December issue, I’ll explore some strategies and tactics you can implement to accomplish this. For the purpose of this discussion, let’s assume that you’ve done a proper circulation plan and already know who you suspect will become your customers. Your suspects have become prospects by way of list research, and you’re ready to develop powerful promotions to move them up the food chain.
1. Convert prospects to triers using promotions. Promotions are a powerful way to acquire customers and offer something beyond merchandise to stimulate the first sale — and beyond.
Before you mail any new promotion or offer to acquire customers, always do your math up front. Ask, “What are the potential profit and loss ramifications of my offer?” Then calculate best- and worst-case scenarios in a spreadsheet. Look carefully at your offer’s initial return on investment. Just as important, project out these scenarios to the downstream lifetime value of your initial promotions.
Also, consider your brand and its image in your promotion and offer development. Ask yourself, “Do I want to be a promotionally driven company? How will my prospects interpret that?”
In the catalog business, merchandise often is the offer, especially in higher-end catalogs. The more promotionally driven you are on the front end, the more you’ll need to be on the back end. Customers who initially look for a promotion to try your products, could be looking for additional stimulation in the future. So your single to multibuyer conversion ratios need to be monitored carefully.
Jim Gilbert has had a storied career in direct and digital marketing resulting in a burning desire to tell stories that educate, inform, and inspire marketers to new heights of success.
After years of marketing consulting, Jim decided it was time to “put his money where his mouth was" and build his own e-commerce company, Premo Natural Products, with its flagship product, Premo Guard Bed Bug & Mite Sprays. Premo in its second year is poised to eclipse 100 percent growth.
Jim has been writing for Target Marketing Group since 2006, first on the pages of Catalog Success Magazine, then as the first blogger for its online division. Jim continues to write for Total Retail.
Along the way, Jim has led the Florida Direct Marketing Association as their Marketing Chair and then three-term President, been an Adjunct Professor of Direct and Digital marketing for Miami International University, and created a lecture series, “The 9 Immutable Laws of Social Media Marketing,” which he has presented across the country at conferences and universities.