Traditional DM Is a Perfect Fit for E-Tailers

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Over the next few years, we will see the Internet's truly transformational effect on marketing. Because the Internet is a great communications medium and transport mechanism, it serves as an ideal central marketplace. The Internet demands that we deploy new approaches to leverage the most cost-effective marketing and sales medium yet. For those reasons, marketing is taking on greater significance in the sales process and within an organization.


Until the Internet, no traditional marketing activities addressed all four points in the AIDA cycle -- Awareness, Interest, Desire, Action -- often used to describe the marketing process.


For example, broadcast, print advertising and public relations drive awareness and interest, and sometimes even desire, while direct sales, channel marketing, database marketing and telesales typically address the desire and action modes. Moving a target buyer from suspect to prospect to customer to repeat customer is inefficient because it requires handoffs from one marketing medium to another. The disjointed nature of traditional marketing media harms not only marketing practice but also the direct sales force, distribution channel and related areas.


The Internet offers a near-complete superset of the benefits associated with conventional marketing media and delivers those benefits on a platform that spans the entire AIDA spectrum. Because Internet marketing also provides an unprecedented level of end-to-end integration and measurability, the Internet-centric mode creates the possibility of closer relationships among marketing, sales, service and other corporate stakeholders. Internet-based marketing activities become a more critical component of corporate strategy, since these activities require the marketing organization to function as the clearinghouse for the content and data that drive virtually all sales, service and promotional activities.


To differentiate itself in this highly fragmented and competitive e-tail environment, a catalog retailer we'll call XYZ Corp. leveraged the electronic age by embracing marketing as a core component of its corporate strategy. First and foremost, XYZ identified measurable e-marketing goals: increase Web site visits 20 percent, increase sales 12 percent and increase customer spending 10 percent. These measurable goals reflect the company's overall business objectives and offer clear metrics that enable the company to measure the effectiveness of marketing campaigns.


XYZ launched two e-mail campaigns last month to interact with its customer base. The first was designed to cross-sell and upsell products to its current customer base to increase customer spending. The company developed five promotions offered to five categories of Web site visitors based on customer purchase history, registration data and clickstream analysis.


The goal of the second campaign was to encourage new visitors to buy products at the site. To motivate these individuals, XYZ offered a promotional discount of 15 percent off their total purchase and the opportunity to sign up for their loyalty/frequent-purchase program for future discounts.


The two campaigns increased visits to the Web site by 25 percent and 18 percent, respectively; increased sales by 18 percent and 7 percent; and increased customer spending by 11 percent across both campaigns. When these results were measured against the campaign goals, XYZ could see that its marketing efforts regarding site traffic and sales were more successful with existing customers than with new customers, and that dollars spent per customer exceeded the stated goals.


All sales-centric marketing offers the ability to close a sale. Yet none of the existing media -- direct sales, channel sales, telesales or direct marketing -- can integrate all aspects of the close in the same medium used to promote the initial offer. The Web provides exactly this capability.


The goal of any sales cycle is to lead qualified prospects through progressive steps of commitment -- interactivity, permission, relationship formation and close of sale. The Internet, along with e-mail, offers a level of interactivity comparable to direct sales at a fraction of the cost per contact.


The classic direct sales process attempts to engage the prospect in a specific type of interactivity through a series of progressive permissions and commitments. We can no longer market to the customer. Instead, we must market with the customer. Marketers must seek the customer's permission to begin and continue a two-way dialogue that will extend beyond the initial transaction. This process becomes part of the relationship record available for analysis and reuse.


When communicating to individuals via promotions or e-mail, the opt-in process lets the customer actively consent to receive future product services/offerings, newsletters, promotions, etc. This can be achieved easily by providing a button or form that the customer clicks or fills out.


By gaining the customer's active consent, and thereby getting permission to market to him, you avoid the repercussions of spam, which can be detrimental to both business and your future mailing opportunities.


If you are identified as a sender of spam, many servers will block the delivery of your Internet initiatives. But most importantly, by not gaining a customer's permission, you limit your opportunity to gain a valuable, lifetime customer through a relationship built on trust.


Because the Web allows an exchange without the time delays of the physical world, the business can maintain instantly accessible records of customer interactions and therefore can further the relationship with the customer. For example, Amazon offers one-click ordering, "smart cross-selling" and other consolidated sales features that continually engage the customer with personalized offers.


The Web is quickly becoming the central nervous system of commercial relationships. It serves as a platform for sales force support through the provision of account history and as an external platform for unified sales management.


• Paul McNulty is vice president of marketing programs at Wheelhouse Corp., a marketing infrastructure services provider in Burlington, MA. Reach him at paul.mcnulty@wheelhouse.com.
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