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Use E-Bills to Augment Direct Mail

As consumers adopt electronic bill presentment and payment methods in increasing numbers, marketers are hungrily eyeing e-bills as a new medium.

Are marketing messages placed on e-bills effective? Absolutely. Should messages placed on e-bills replace bills sent via traditional direct mail? Absolutely not.

Direct marketers know that their first challenge is getting an envelope opened. This is one hurdle they don’t need to jump with e-bills. Consumers open and read their bills and statements, regardless of whether they are the old-fashioned paper kind or e-bills. Compare that with direct mail readership, in which more than 70 percent of all direct mail hits the trash unopened. Since consumers read their bills, marketers are obviously excited about harnessing the potential of electronic billing.

Does it work? To the delight of some and the embarrassment of others, direct marketing is measurable. “Test, measure, refine, test, measure …” is the mantra of direct marketing veterans – always testing one new approach against the control piece. The same principles apply to e-marketing. Unique offer codes and passwords help marketers track responses to offers placed on e-bills and statements. Just as in printed direct mail, marketers should test only one component of the creative mix at a time. In other words, don’t change the offer at the same time as you change the message’s appearance.

Also, don’t forget a strong call-to-action in the e-bill. Let’s take a consumer’s electric bill, for instance. Instead of saying, “Click here for more information on energy-saving appliances,” try, “Click here to calculate how you can cut your energy bill 30 percent.” This leads to the next point – make it easy for the customer to respond to the offer. A good response mechanism for an electronic bill or statement is to include links to Web pages that capture customer information and deliver something in return.

Do consumers respond to e-bill offers? How do response rates to e-offers compare with traditional direct mail? The e-billers I spoke with tended to think that e-bills provide added operational value, although most were uncomfortable quoting exact response rates.

Should I stop using paper-based direct mail? It’s tempting, isn’t it? Using e-bills for direct marketing eliminates printing and postage costs. It also doesn’t cost anything extra to put your messages in color. You can also include eye-catching animated graphics and active links to other Web pages and online order forms.

So, given the advantages provided by e-bills, the role of traditional direct mail is to strengthen a company’s brand and reinforce the offer. We’re constantly bombarded with marketing messages. Researchers have found that a consumer must see a message seven times in an 18-month period to recall it. E-bills can be a strong component of any business-to-consumer marketing plan, but they should not be the only component. A combination of traditional and new media can be used to sell goods and services to consumers. Businesses can send a consumer a colorful direct mail piece that fully describes a new product or service; advertise it via traditional broadcast media; and solicit an order via an e-bill.

Sending each customer the same message goes against common sense. Since it is easier, this practice has become the industry standard. It is important that companies send offers only to individuals who don’t own the particular product or service being offered. Sometimes a company doesn’t do its homework and includes a marketing message on a bill for a product or service that’s not offered in a particular city or ZIP code. Imagine my dismay after responding to an offer for cable-based Internet access, only to find it won’t be offered in my city until next January!

Data-driven message content is another important functionality for an e-bill system to possess. This enables you to tailor messages to match a customer’s propensity to purchase, thereby increasing your return on investment by marketing products only to those who are likely to buy. If your system doesn’t offer this functionality, find one that does.

Good marketing gone bad; that’s what happens when marketers squeeze too much into too little space. One or two message areas are best for e-bills and printed bills. Consumer focus groups have spoken – marketing messages shouldn’t compete with the information the customer is looking for, such as how much he owes. Perhaps more importantly, the e-bill loses its effectiveness as a marketing channel when it starts to resemble a weekly grocery store circular.

For direct marketers, many of the guiding principles are the same for e-bills and e-statements as for traditional direct mail. However, at least for the foreseeable future, e-bills will not supplant traditional direct mail as the industry norm for selling new products and services to existing customers.

Despite substantial investments and high industry expectations, consumers have yet to embrace online bill payment. According to Avivah Litan, an analyst at Gartner Group, Stamford, CT, a mere 3 million U.S. households paid bills online at the end of 1999. The bottom line is that marketers will be best served by augmenting, not replacing, traditional direct mail with e-bill-based marketing.

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