Early in my career, I learned that there was an enormous gulf between retail marketers and direct marketers.
Direct marketers had the ability to literally control their businesses. If direct marketers wanted to acquire 500,000 new customers, they could acquire 500,000 new customers. If direct marketers wanted to become more profitable immediately, they stopped customer acquisition activities. If they wanted a large, growing business five years from now, direct marketers hit the customer acquisition gas pedal.
Retail marketers have almost no control over new customers. Retail marketers simply don’t control who walks in stores. Retail marketers learn that comparable store sales — to some extent — can be controlled via marketing. But in reality, retail marketers don't control their audiences.
The future of direct marketing is online, of course.
And online marketers don't have control over their audiences. Paid search, for instance, is a wonderful channel, but one that doesn't effectively differentiate between new and existing customers.
This fact fundamentally changes online marketing. In reality, it makes online marketing much more similar to retail marketing than to classic direct marketing.
Classic direct marketing has always been about controlling lists. Direct marketers used to rent lists — lists composed of customers who were directionally similar to the type of customers they wanted to acquire. Then direct marketers executed a “merge/purge,” enabling them to avoid mailing customers who'd already purchased from them.
Co-ops owned customer acquisition during the past decade. Co-ops represented an important step in the evolution of direct marketing because they determined the customer acquisition audience, not direct marketers. Instead of asking for “Crutchfield customers,” direct marketers asked for “prospects who like electronics.”
Paid search is the next step in the evolutionary process. Instead of asking for “prospects who like electronics,” paid search enables marketers to ask for “individuals who want to buy electronics right now.”
- Companies:
- Crutchfield
- People:
- Kevin Hillstrom