Old-Time DM Works Best Online FORGET THE technology. The most valuable asset for an online venture is old-fashioned direct marketing horse sense.
That was the consensus of the panelists in a Town Hall meeting during MeritDirect’s first Business-to-Business co-op conference in Stamford, CT in July. The session was moderated by Regina Brady, vice president for strategy and partnerships at FloNetwork Inc. in Cos Cob, CT.
The problems start with e-mail. As now used, it has many disadvantages compared with paper direct mail. One is the lack of merge/purge. (That may be changing – see story on page D2, DIRECT.com, this issue.)
“Twelve to 18% of marketing costs are going in the tank,” said Geoff C. Walker, CEO of PetfoodDirect.com in Montgomeryville, PA.
Another disadvantage is the lack of 3602s (postal verification forms). “They’re your audit trail,” Walker said.
One more drawback is the lack of good RFM information on the average e-mail list.
“With the lack of true RFM, mailers will look for high selectivity,” said Rob Sanchez, MeritDirect’s vice president for sales and new business development. “Business-to-business lists do offer some selectivity – for example, company size and industry – but there’s less on the consumer side.”
Doesn’t e-mail have any advantages? Sure. One is that “in three to five minutes, you get 100% delivery,” Walker said. “You can also customize.” And it’s useful for both customer communications and prospecting.
But there are a few things to keep in mind. Walker argued that companies must regulate themselves. PetfoodDirect.com works hard to make sure its customers don’t get “five mailings in 24 hours,” he said.
“Do these people write to their vendor? No, they write to me, or to Mother MAPS,” he added.
Neil Sexton, founder of Sexton Marketing in Trinidad, CO, said that he has tried several times unsuccessfully to get himself off Insight Marketing’s e-mail list.
One thing the panelists seemed to agree on is that online customers buy more frequently. Walker reported that PetfoodDirect’s frequency is 20% higher for his firm’s online customers.
Panelists expressed alarm at the high rate of online shopping-cart abandonment. So what’s the answer?
“I’m a proponent of human beings as a killer app,” said Sexton. Firms should create inside call centers and staff them with people who can convert an online shopper into a buyer. That’s better than “blindly deploying e-mail.”
Banner ads? Moderator Brady said that she saw 25% clickthrough rates when she was at Compuserve, but that now the industry rate seems to be “well under half of 1%.”
The co-op was the first public event hosted by MeritDirect, which was founded barely seven months ago. The conference drew around 130 direct marketers and some 20 other guests.
Founder Ralph Drybrough reported in an interview that he expects MeritDirect to be profitable within a few months. The firm, which now has 50 employees, is projecting net revenue (commissions on list orders) of $6 million for the first nine months.
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