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Clients frequently ask how many responses they'll get from a marketing
campaign. Without trying to be flippant, our reply usually sounds something
like "how many do you want?"
In traditional direct response marketing, response rates of .5% to 2% are
typically considered good, and usually require budgets of $25K to $250K and
higher for the campaigns to be meaningful.
Lately, pay for performance has gotten attention...why pay for the mailings,
phone calls or banner impressions that don't result in any action?
Many companies are willing to pay $100 to $200 for confirmed appointments,
assuming that the appointments will lead somewhere. After all, what's to
lose?
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Time and Money |
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Traditional direct response has always counted on the percentages for
success. Mail X number of postcards, send Y number of envelopes, and
you'll get Z number of responses. Out of those responses you hope
to get some appointments. Then from those appointments, you hope to find
some opportunity, and finally to close some business.
All this takes time and money. What's more, it's an approach that
focuses on conversion percentages rather than the ultimate end results.
Pay-for- performance is a step in the right direction, but frequently,
we've seen firms receive quantity rather than quality under
pay-for-performance contracts.
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How Many Do You Want? |
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In planning and managing customer acquisition campaigns, our approach is
a bit different. We focus on results, which we typically define as new
relationships with highly qualified prospects. One IT services client,
for instance, wanted to expand their presence with emerging
pharmaceutical firms and to begin discussions that would lead to 5-6 new
consulting engagements. To reach this goal, we designed a 4 part mailing
targeting 350 highly researched and well-qualified contacts at emerging
pharmaceutical firms.
This particular campaign was successful for several reasons. First,
the list was highly qualified. Second, the multi-part message resonated
strongly with the business issues faced by the recipients, and third, we
coordinated a focused follow up. We mailed groups of 50 postcards to the
recipients and then worked with our client to ensure follow up on these
receipients. The small groups of mailings allowed the sales organization
to follow up while the mailing was still fresh.
This campaign achieved success on several fronts. First, it achieved
the primary goal of beginning conversations with a number of
well-qualified prospects that eventually led to substantial consulting
contracts. Second, the multi-part mailing and follow up phone calls
established relationships with a good number of additional prospects not
yet ready to begin the discussions about specific projects. This
substantially bolstered the company's "house list" and undoubtedly will
lead to additional business over the next several years.
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Critical Success Factors |
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Be specific about your desired end results. How many sales or projects
do you want to generate? Second, profile your ideal target customer.
What are the key pain points for these customers?
Then consider the value of these transactions. What would it take to
guarantee that your prospect will talk to you? Is the cost of this
activity worth the return?
With this knowledge, you can begin to plan a customer (or partner)
acquisition campaign that will be highly focused, cost effective and
profitable.
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Resources |
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