Reap the Web's Testing Capabilities

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Conceptually, marketing is a simple discipline. Define user needs on one axis, product attributes on the other and look for boxes of opportunity. The problem is that most of us are not very good at listening to consumers and defining their needs. It's not for a lack of trying. We spend billions of dollars a year on market research. The problem is that we often don't interpret correctly what the consumer really wants.

To add to that complexity, there's a second problem. Most of us cannot articulate the benefits of our products and services.

To solve these problems, you can try to find the magic bullet, or you can follow the proven offline direct marketing drill: Test, test and test!

Direct marketing in the online world is a marketer's dream. Finally, you can stop guessing about your customers needs -- you can actually understand them, react to them and satisfy them, all on an accelerated basis.

So what's so great about marketing online? Technology and cost.

The technology provides marketers with the ability to evaluate consumer data via vastly superior feedback loops, which increase the depth and speed at which learning can take place. With the guessing over, you can let consumers tell you when you've got it right.

To understand a superior feedback loop, compare an offline direct mail campaign and an online e-mail marketing campaign.

In an offline campaign, a fortunate marketer can create and launch a new campaign in eight to 10 weeks. Orders begin to trickle in and maybe 80 percent of orders are in 90 days later. So, five to six months after the idea is crystallized, a baseline is established.

To improve the baseline performance, you can try to improve the quality of the list or determine if the offer was effective. Perhaps you could improve the order process. You can systematically test variables to determine critical paths, but it's hard, costly and time-consuming. You basically drop the mail and hope for the best.

In an e-mail marketing campaign, there's not that much left to chance. Did your message get delivered? How many opened it? Which subject header performed better? How many visited your site? Which version of your e-mail was most effective? Did those graphics in the e-mail help or hurt? Once the prospective customers got to your site, did they go past the home page? Where else did they go? How long were they there?

You receive results immediately, and if the test is not performing up to expectations, you can drop it or do major surgery on it before you do yourself any real economic damage.

What's more, the technology allows you to speak to prospective customers in a highly personalized, relevant manner (e.g., communicate to niche market segments appropriately).

Web-based direct marketing is a needs-based methodology that uses millions of data points and advanced algorithms to help you determine the optimal marketing campaign.

The real-time testing and decision-making capability of Web-based direct marketing allows the marketer to do things that are almost impossible offline. For example, you can test an extremely expensive offer. The Web gives you the ability to test it yet drop it from your test matrix on a moment's notice if the results are not economically viable.

So with all of the benefits that the Web provides to direct marketers, why aren't more companies applying DM techniques? The answer is that they are just beginning to realize the benefits of direct marketing and the connection between traditional direct marketing methodologies and the Web. To this point, Web players have been concerned about the land grab. It's been all about market share, but those days are gone.

Rather than worrying about how to obtain the next customer -- more of a brand-marketing play, companies are realizing that they need to maximize the value of their existing customer base -- direct marketing applied at its best. This is a normal next step in a market's maturation.

Smart Web companies will use direct marketing techniques in a big way over the near-term. To make DM work, you need to develop or buy the infrastructure to support this marketing approach. You also need to hire or buy direct marketing expertise. It's too late to take an existing marketer and train them on DM techniques.

We are living in an environment in which smart marketers can accurately understand our customers' needs and provide products and services that meet their needs. Let's make sure we take advantage of this direct marketer's dream.

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