Jay Abraham claims that almost every ad he sees is an institutional type advertisement. He considers these ads a mistake because they don't direct the reader, viewer or listener to any intelligent action or buying decision. He advocates direct response advertising only.
In later chapters we will deal at greater length with specific types of direct marketing. Later on you will get a more thorough treatment that builds on this chapter's foundation and reinforces what you learn here.
Salesmanship In Print And/Or Over The Air
Direct-response advertising's name is self-explanatory. It is designed to evoke an immediate response or action — a visit, a call or a purchase from the viewer or reader. Direct-response advertising tells a complete story. It presents factual, specific reasons why your company, prod- uct or service is superior to others. It differs from the conjecture of institutional advertising.
Direct-response advertising is salesmanship in print or over the air. As salesmanship, it makes a complete case for the company, product or service. It overcomes sales objections. It answers all major questions and it promises performance or results. It backs the promise with a risk-free warranty or money-back guarantee.
Direct-response advertising compels readers, viewers or listeners to take action, to visit your establishment, call you or send in money. Used effectively, direct-response advertising compels tons of super-qualified, prospects to call, write in or buy.
You can analyze the profitability and performance of direct-response advertising because it produces returns you can track and compute.
Institutional advertising produces no such results. If you are running institutional ads, change them to direct-response ads. Give your prospects information that's important to them, not to you. Give them facts and performance capabilities of your product or service. Tell them about your guarantee. Give the prospect reasons why your product is superior.
Direct-response advertising is more effective than institutional advertising because the pros- pect doesn't care one iota about your business or your motivations. The prospect only cares about what benefit your product or service renders. How will your product save effort, time and money? How will your product improve the prospect's life?
Tell the reader, viewer or listener precisely what action to take. Tell them how to get to your business, what to look for and who to ask for. Tell them who to call. Tell them what to do when your salesperson calls. Remind them of your risk-free purchasing deal. Most importantly tell them what results they can expect from owning your product. Give your prospects the answers to these kinds of questions and you'll own your market. By switching from institutional to direct- response advertising, you should improve your effectiveness many times over.
Most people think of "mail order" or "direct mail" when they hear the term "direct response' or "direct marketing.' Direct-response marketing or simply "direct response,' includes but is not limited to direct mail or mail order. As a matter of fact, it encompasses everything from direct mail to newspapers and magazines to telemarketing to radio and TV advertising.
Direct response is used by all types of businesses and professions. It's used to sell everything from birth announcements to burial insurance — and everything in between... ball point pens...
$5,000 computers... $50,000 cars... gold and silver... real estate... magazines — you name it.
You can use it to prospect or make sales. It can be used to get customers to come to your business, seminar, luncheon or any place you direct them.
84______________________________________________________________________DIRECT RESPONSE Direct Response Brings Measurable Results
Direct response brings measurable results. And all at a fraction of the cost of "traditional"
marketing methods. If I had to give you a good working definition of direct-response marketing, I'd say it directs your efforts to a qualified audience, using one or more media for the express purpose of soliciting a response by mail, telephone or a personal visit from your customers.
It's your total marketing effort — each part orchestrated in harmony with the whole. I honestly don't believe you'll ever find a safer, lower-risk, higher-profit method of increasing your busi- ness or profession than direct-response marketing. What's more, any business or profession can add at least one facet of direct-response marketing to its present operation. And it's worthwhile for many reasons:
1. It augments whatever you're already doing in your operation.
2. It's an affordable way to target specific segments of your customer base.
3. It's an indispensable tool for reaching people or businesses outside your general market area you wouldn't normally be able to access.
4. It's an alluring way to "upsell' your products or services.
5. It's a low-cost way to obtain new business that might otherwise be exor- bitantly expensive.
6. It's a powerful way to leverage modest amounts of increased sales into large profits, because the cost to obtain sales is so low.
7. It's a productive way to constantly communicate with your audience, enabling you to cement professional relationships while making a profit in the process.
It's also a great inventory and payroll balancing vehicle. Whenever your employees have time on their hands or you have too much product in inventory, you can use direct response — targeted at your active customers and prospects to keep the dynamics of products and personnel in balance.
My wife sends out a postcard every month to her customers offering a slightly reduced price on salon services on the three slowest days of the week. Consequently she is booked up on Tues- day, Wednesday and Thursday, and her employees (who would be there anyway) are kept busy.
Let's say you're stuck with too much inventory. Make a special, discreet private offer to old customers and prospects. You're going to lose money anyway, so why not use it as a loss leader to get people to buy from you.
If your business enters a slack period, you still have payroll running and your employees may not have much work. Direct response allows you to launch an immediate campaign to stimu- late business activity. You can announce a sale or make a special offer. You can usually get something going fast and thereby keep your staff busy. The unprofitable lulls in business activity can be nullified by an active, direct response program. Every business needs to employ these tactics aggressively to keep sales up.
Adding direct response advertising allows you the flexibility and ability to constantly manage and balance your inventory, personnel and payroll.
Direct Mail
The primary purpose of direct mail is to promote a purchase or an inquiry.
The techniques to evoke a response range from "soft sell,' (write in or call, request informa- tion, visit at a later date) to "hard sell,' (send cash or call with chargecard information).
DIRECT RESPONSE______________________________________________________________________85 You need to use compelling reasons to convince your prospects to buy and you need to add
benefits and guarantees (risk transference) to get them to buy. You've got to make the proposi- tion irresistible. Offer bonuses just for taking you upon your offer. Make it impossible for them to say no.
If you already have client lists, start a direct-mail program with a specific offer and make such offers frequently. They may be once a month, every quarter, every six months, once a year or whatever — depending on the product.
Also depending on the success rate. At times in my company our offers work every two weeks.
We can mail our customers twice a month and get good results. At others times offers may only work once a month or every two months. If you track results closely you can gauge how often you should be in the mail. After all, if it were profitable you could mail every day. It's simply a matter of figuring the time interval necessary before another mailing will work.
In your direct-mail piece, give an inducement — some kind of added value, to get people to favor your firm. Explain why you're making the offer. For example: "Even if I lose money on this offer, I know that if I give you the kind of service or product you expect, I'll have you as a customer for life." Don't ever fail to give reasons. Always spell out your motives: "Here's why I'm making this offer... This is why I'm writing... I'll give you this free gift just for allowing me to talk with you..."
Your customers aren't stupid. (But advertisers are much of the time.) A case in point: Recently, I consulted with a client who had run numerous ads full of broad claims and then didn't explain why he was able to make such offers. His ads failed. People are naturally suspicious of advertis- ing; they tend to take it with a grain of salt. But the better that people understand your motives (if you present them intelligently), the more inclined they'll be to accept your proposition.
As part of every letter you send out to a familiar audience, you should encourage your customers, either in the body copy or postscript to keep patronizing you. It should be something to the effect of:
"And, by the way, whether you respond to this offer or not, please keep us in mind for this or that."
If you have a retail store, encourage customers to keep visiting or if it's a service company, to keep coming in for service and if it's a doctor's office, to keep coming in for checkups.
Case example: Let's say you own a service company. You have a list of people who rely on your outstanding service. Try a mailing offering one of two things:
1. A special on your service.
2. A reminder of the benefits of your service with additional reasons why your clients should keep patronizing your firm.
That letter might read something like this:
Dear Mr. & Mrs. Moe,
If you need cesspool service, here's an irresistible opportunity for you to save a whopping
$70.
Our normal charge is $100. But we'll service your cesspool during the month of May for only
$30... if you'll let us come by without a scheduled appointment.
To tell the truth, I'm offering you this reduced-rate cesspool service for two very good reasons (and I must admit they're a bit selfish).
The First Reason Why I'm Making You This Offer...
Our cesspool servicepeople, you see, are out in the field all day long. So if you allow us to come by at our convenience instead of yours, our cost to service your cesspool is lower. That's
86______________________________________________________________________DIRECT RESPONSE because our servicepeople will already be working in your neighborhood when they come by to
service your cesspool.
We simply pass the savings onto you. And everybody wins.
The Second Reason Why I'm Making You This Offer...
The other reason I'm making you this offer is because it's a very good way for you to sample our cesspool service. And I know once you see our quality service, once you've had a chance to compare it to our competitors — you'll see our service is far superior to anyone else's — at any price. (Even though our prices are already 10% to 15% lower than our nearest competitor.) And once you're convinced of this, I know that I'll have you as a satisfied customer for life.
To take advantage of this special reduced-rate service offer, just give us a call. You'll be sure you get our best quality at the low price of $30 during the month of May.
If you'll call us today, as part of the service we'll also show you what you can do to take care of your cesspool and minimize damage in the future.
Sincerely, Matt Morris
P.S. Even if you don't take advantage of this offer, remember, we're available for emergency service 24 hours a day, seven days a week — including holidays. Our service is complete and provides 100% of the protection you need to keep your cesspool operating trouble-free. Why not give us a call today?
You gave an irresistible inducement to those on your list needing your service ($70 of!). You created "perceived value" comparing your $30 offer to your normal $100 service charge. You even offered to minimize damage if your customer responds today (an added inducement and added value). You gave reasons why you were making the offer (your lower cost to give the service at your convenience and a chance to demonstrate your superior service and win a cus- tomer for life). And you implied value again by mentioning your service cost is lower than the nearest competitor (10%-15% lower).
You used the postscript to embellish your superior service and availability (24 hours, seven days a week... 100% protection for trouble-free operation). So even if the customer doesn't re- spond, you've created a useful tool for communicating. You have nothing to lose!
Identify Your Market
Have someone in your office start collecting and identifying prospect and customer files. Go back to your company archives, warranties, files, sales receipts, invoices, checks and phone messages. Organize a central-house file. Make it a procedural part of the purchasing function to see that the name of every prospective customer or patient is recorded. Train your clerks, recep- tionists, secretaries and salespeople to capture the name, address (complete with city, state and zip code) and phone number of everyone who comes in, calls in or with whom they come in contact. (Ask for children's names and ages too, so you can really personalize your lists.) After you've made this part of your procedural operation and you've started collecting names inside your business, categorize them according to whether they're active, inactive or merely prospective customers. Then cross-file as many different ways as you can think of by frequency and size of purchase. Remember, the more information you can gather on your customers and prospects, the more other products or services you can sell them. And just because they don't buy today doesn't mean they won't buy later.
DIRECT RESPONSE___________________________________________________________________87 Once you've got your "in-house" lists, start working them by direct mail or telemarketing. Then
you can go "outside" your business and buy or rent permanent lists to expand your market. But a few words of caution: Beware of "dump" lists. Look for quality lists that have been recently "cleaned."
Try lists that are more focused. It's better to use a rifle shot than a shotgun blast. For example, if you're in the consumer market, you can get lists of the exact names of heads of households who live on the best streets or who drive the best cars — or however you want to focus your list. If you're in the trade market you can get the names of heads of certain types of businesses.
Here's an example of how to use direct mail to solicit new customers.
Devise a customized computer letter that promotes your company. (You don't want a cheap multi- color, quick-print letter that won't be read.) You want a well-fashioned, personalized letter explaining the reasons you're writing and the benefits the reader will gain by acting promptly on your offer.
Here's how a letter from a carpet store owner might read:
Dear John Doe,
Mr. Doe, my name is Jay Abraham. I have a carpet store four miles from you at such-and-such address.
We sell Du Pont, Monsanto and many other fine carpeting with names that most people recog- nize.
Quite frankly, our store is small. But so is our overhead.
That means we can offer you a very low price on almost any brand of good quality flooring you want.
In fact, if you'll let me come out and show you the values we have compared to (name other carpet stores), I'll give you — absolutely free — $50 worth of any flooring repair you may need in your home or business just for allowing me the privilege of showing you our quality carpeting and comparing our price.
There's absolutely no obligation on your part. No strings attached, either.
Sincerely,
Explanation: You personalized the letter by mentioning the prospect or customer's name. You introduced yourself. You told the truth and stated the obvious (small store) and why it's a benefit doing business with you (low overhead passed on to the customer, quality products). You embel- lished "perceived value." Compared to competition it's a good buy). You made a no-risk bonus offer ($50 flooring repair) and you explained why you were willing to make such a proposition (for the privilege of showing them your carpeting).
The Giant Companies Use Direct Mail
Bell & Howell pioneered the sale of big-ticket products direct to consumers. Mercedes-Benz used an eight-page letter to sell 10,000 diesel cars that weren't moving — and won the coveted
"Golden Mail Box Award" from the Direct Marketing Association. Hewlett-Packard has used direct mail to sell electronic equipment — without their regular sales force. These giant compa- nies know what direct-response marketing can do for a business.
Telemarketing
Telemarketing costs far less than a direct sales force. Some companies use it to "cold canvass"
prospects and set up appointments for outside salespeople. Others solicit business from custom- ers or prospects who have responded to ads. You can use the phone to generate leads or for repeat sales to active customers.
88____________________________________________________________________DIRECT RESPONSE Should You Undertake Telemarketing?
Should your company telemarket and if so, should you handle it or contract someone else to do it? Answer the following questions to answer whether telemarketing is for you:
• What goals have you established in writing for your business?
• Can you blend the telephone into your present operation to reach these goals?
• Do you have phone experience or sales skills that would lend itself to telemarketing?
• Do you have the time or personnel to create and implement a
telemarketing program? Can you recruit, train, motivate and supervise?
• What type of equipment will you use? How many phone lines? What are the costs? Do they make good economic sense?
• Are your prospects or customers available to the phone during work hours? Are they at home or work? Do you have phone lists? Can you get them?
• How long will your telemarketing campaign run? Will it be permanent?
Can you maintain this sales force and enhance your profits?
• Should you have all this done outside your place of business? Should you contract with a telemarketing service?
If so, ask the telemarketing firm the same questions you just asked yourself. Ask about expe- rience, skills, schedule and equipment. Ask who will write the script. Find out if they have knowl- edge about your business, profession or industry.
If you elect to go this route, ask the telemarketing firm for previous and current client compa- nies. Check with them and find out what their results have been. If you decide to do it on your own, here are some pointers:
1. In telephone sales, you don't have the advantage of body language so tone of voice and rate of speech are critical. A good personality, the ability to build confidence, and to be in charge and to work towards a
1. In telephone sales, you don't have the advantage of body language so tone of voice and rate of speech are critical. A good personality, the ability to build confidence, and to be in charge and to work towards a