Now here’s a brief direct marketing history lesson. I think you will see the relevance. Direct marketing actually started in the late 1800s in the
United States. This is when marketers began to create and place direct response advertising in some of the country’s leading national maga-zines. These magazines were the only medium available to reach large portions of the population with advertising messages. Many of those early ads used direct marketing techniques, such as cutout coupons and money-back guarantees, that you would recognize today. Even more remarkable, numerous ads promoted products for direct sale to the American consumer.
I collect these old ads. (In fact, I have collected many of them via purchases on eBay, an online auction site—more about auction sites later!) One ad I have is a great example of early America’s invincible spirit. The ad promotes an Underwood typewriter. The advertiser offers to ship it to the reader on approval—without obligation! Imagine what it took to send a heavy typewriter across the United States in the early 1900s. Imagine the faith the manufacturer must have had in the con-sumer to offer it without cost. This was the crude forerunner of the credit card, because the manufacturer was extending credit to an un-known prospective buyer.
That was just the beginning of direct marketing’s rising popularity.
With the advent of direct mail, the direct marketing business went through its own paradigm shift. Cut-out coupons that appeared in early magazine advertising did not go away—they still exist in newspaper circulars and in some print advertising—but a new format for the cou-pon was introduced: the business reply card and order form in direct mail. Generating leads and orders via direct mail and, later, by phone, quickly became the staple of consumer and b-to-b direct marketers alike.
Database marketing was another direct marketing breakthrough of historic proportions. Yet it was a small, far simpler technological inno-vation that truly changed the direct marketing business forever. It was this innovation that opened the door for personal direct marketing interactivity: the toll-free 800 telephone number.
The 800 number has been in existence since 1967, yet it has been so thoroughly embraced by the world in recent years that the supply of 800 numbers has already been exhausted. In 1996, 888 numbers were introduced, and in 1998, 877 numbers had to be added to supplement 800 numbers.
The impact of the 800 number on direct marketing cannot be un-derestimated. It was Joe Sugarman, a marketer who pioneered selling electronic gadgets via mail order, who first used the toll-free number as a direct marketing order vehicle in ads that appeared in The Wall Street
Journal. He created a whole new form of “we pay for the call” market-ing and changed the dynamics of the inquiry and order process forever.
The toll-free number functionally reverses telephone charges so that the caller does not pay, but it does something more important than that: the toll-free number extends a marketer’s reach. It removes a physical, costly barrier to eliciting a response from a prospect or customer. Now, the individual can make a quick, easy call to any location without paying for it, and if the telemarketer is so staffed, that person can call 24/7.
Think about what the 800 number really does. It means that a mar-keter can effectively open up the entire North American market and serve customers from anywhere, still maintaining the brand and prod-uct awareness so important to the marketer. In many cases, a marketer can even select a toll-free number that supports and enhances the brand (some examples: 1-800-CALL-ATT, 1-800-THE-CARD [American Ex-press], 1-800-MATTRES [Dial-a-Mattress]).
The 800 number is now universally recognized and accepted by all marketers, but it revolutionized mail order marketing. Mail order mar-keters learned that by offering an 800 number, two things happened:
1. Their number of orders via the 800 number outpulled other re-sponse paths.
2. In addition, the total number of orders from all sources generally increased as well. In other words, adding the 800 number had a residual effect: It increased the overall volume of orders coming in from all response paths.
This is a principle that applies well to b-to-b direct marketing. By offering multiple response paths, you tend to increase overall response.
That is because individuals tend to respond, well, individually, and by offering them many response options, you respect each individual’s de-sired way of responding. Some people are comfortable picking up the phone; others prefer responding via mail or fax. Still others would much rather respond over the Internet.
You would be hard pressed to find any serious mail order marketer who does not offer an 800 number. Of course, you still may chuckle when you see and hear them over and over again on those silly televi-sion commercials, but they work—or you would not see them
repeat-edly used. Mail order success with the 800 number led to general busi-ness success. Now the 800 number has reached mass acceptance.
With mass acceptance comes the “put it everywhere” syndrome. It was not long before you began to see 800 numbers appearing frequently in print ads and television commercials. You even began to see them as customer service enhancements on consumer goods products—cereal boxes, potato chips, detergents, and the like.
In effect, the 800 number has now become not only an accepted part of marketing, but an accepted part of life, part of the fabric of America, a commodity that is no longer just a marketing gimmick, but rather a necessary business tool.
The Internet Address Is the New 800 Number
Have you noticed that there is something different appearing at the bot-tom of magazine ads and at the end of television commercials? It is not an 800 number anymore, it is the URL (Uniform Resource Locator) of a Web site. Look for the “www” on ads and on TV. It is everywhere, the way the 800 number used to be. The Web address is becoming the new 800 number—at least in the minds of advertisers and their advertising agencies, and that is just one basic reason why the Internet is transform-ing direct markettransform-ing. It is a transformation that is destined to reach far beyond what the 800 number had to offer.
Suppose Internet usage continues to grow at its current rate. That means the Internet will be the medium with the most extensive reach—
perhaps even topping television. As indicated earlier, widespread accep-tance and dropping access prices will dramatically accelerate this growth.
What will this growth mean to b-to-b direct marketers? The use of direct marketing itself continues to grow in its own right. A Direct Marketing Association study says that direct marketing is expected to outpace total U.S. growth through 2002, growing at a rate of almost 7% annually.
This same report projects that interactive marketing will grow by 54% annually through 2002, and that electronic commerce will grow by nearly 61% annually. This and other forecasts cited in this book point to the same conclusion: It will not be long before the Internet will be the undisputed king of the media world.
What we have, then, is an interesting phenomenon. From a market-ing perspective, use of the Internet is growmarket-ing at such a rate that it could overshadow and surpass traditional media.
This suggests an intriguing scenario on the near horizon that b-to-b marketers must take into consideration:
If the Internet takes over the lead, and other media flatten out, then marketers will become more reliant on the Internet as the driver of marketing programs.
It’s All About Integrated Marketing
I believe that, even now, we have reached a point of intersection be-tween usage of the Internet and usage of traditional direct marketing media (Figure 1.1). At this intersection point, the Internet and other media cross. After the intersection point, the Internet trajectory contin-ues upward and traditional media begin to flatten out. As the next few years progress, usage of the Internet goes up steeply, so the gap widens.
In b-to-b marketing, the Internet incline is likely to be much steeper than in consumer marketing. Earlier adoption of Internet marketing by business marketers is the primary driver of this phenomenon. With the Internet playing such a key role generally in businesses, the use of Internet marketing should accelerate even more rapidly. In the next few years, you will likely see a very different marketing world emerging.
My own “direct” experience has convinced me that the Internet is as much a true direct marketing medium as it is a new, exciting channel that will enhance all forms of marketing communications and facilitate response.
The significance of Internet marketing is even greater with a more clouded economic picture. When you consider the potential to very eco-nomically reach large audiences via e-mail, online advertising, affiliate mar-keting, and your own Web site promotions, Internet marketing can look like a media bargain. Of course, you need to balance that factor against the reality that Internet marketing is still not nearly as targetable as direct mail.
With direct mail lists, you have a much greater ability to segment and tar-get audiences with pinpoint accuracy, but that is changing as Internet mar-keting matures and online targeting opportunities increase.
I think the Internet will surely dominate—but it will not completely replace other media. I cannot see direct mail dying off, any more than other forms of direct marketing and advertising have disappeared. Di-rect mail will continue to have its rightful place, as advertising has had before it, but Internet marketing has already become an accepted and increasingly popular method for successful b-to-b marketers. Now the challenge is how to intelligently integrate Internet marketing with advertising, direct marketing, and other means of promotion so that it becomes part of the mix, not a standalone element. Moreover, mar-keters will need to learn how to ensure that the same measurement criteria can be applied to Internet marketing as to traditional direct marketing.
Figure 1.1. The Internet and traditional direct marketing media are now at an intersection. Over the next few years, the Internet trajectory continues upward, while traditional media begin to flatten out.
Intersection Point
Traditional Media Internet
Usage
Years
Transition to Integrated Marketing Now
As marketing becomes more reliant on the Internet, b-to-b marketers will face a new media world—one that has different kinds of challenges.
With the upward spiral of the Internet trajectory, you will need to ad-just your marketing and media strategies. What this really means is that you will need to redefine your use of direct marketing in the context of the Internet if you have not already done so… and ready yourself for a marketing future that looks very different from the past.
Much of the impact of the Internet in this new future will be based on “one-to-one” e-enabled communications. This is the notion of ad-dressing individual prospect and customer needs via personalized e-mail and Web-based communications. It is already playing a prominent role in b-to-b and b-to-c marketing. We will talk more about this in the Chapter 7, “Building Customer Relationships.”
Are you taking advantage of Internet and traditional media integra-tion? To do so, you should continue to use advertising, mail, phone, and other traditional media, but now is the time to increasingly enhance them by adding Internet response paths, offering Internet fulfillment, using e-mail for follow-ups, driving individuals to your Web site, and inviting prospects and customers to virtual events that occur on the Internet.
Now is the time to build a marketing strategy that will com-bine the best of traditional media with the one-to-one power of Internet media.
At the end of the book, you will find a complete blueprint to help you implement this strategy. For now, here is an overview of the basic steps you will need to take:
1. Assess your Internet marketing readiness. Now is the time to evalu-ate your organization’s Internet marketing capabilities. Are you pursuing Internet marketing now? How far along the media inte-gration curve are you? Evaluate your company’s current use of Internet technology and your current use of Internet marketing.
– Do you already take inquiries over the Web? Are you doing electronic fulfillment? Are these things in your future plans?
– Is your Web site capable of order entry, processing, and track-ing?
– Do you have a marketing database that can be integrated with the Internet? Have you started to use database-driven Internet marketing?
– Is your organization planning investments to make all of this happen?
2. Make the move to Internet direct marketing. Do not let the as-sessment process deter you. Understand your current state of readi-ness and recognize where you are today—and where you will need to be soon. Study what your competitors are doing and make sure you are keeping up or, better yet, at least a step ahead of them. Integrate the Internet with your use of traditional media and conventional direct marketing. This book will help you un-derstand how to do that by showing you successful strategies and tactics used by other b-to-b marketers.
3. Prepare your management for the Internet-dominated future. The Internet has already captured top-of-mind awareness among se-nior management at many companies. Make sure your company is one of them. Help your management prepare for the electronic future by sharing Internet direct marketing information from au-thoritative sources. Don’t let the dot-com disasters color your organization’s long-term strategy. There has certainly been some fallout, but the Internet will continue to have a permanent impact on marketing and business. You can’t afford to be left behind.
4. Develop an Internet marketing action plan. If you are in a posi-tion to do so, participate on or chair a committee in your organi-zation that is charged with developing an implementation plan for using the Internet as a strategic marketing tool. You may find that there is an even larger issue—using the Internet as a strategic business tool, and even becoming an e-business. If management is already on that course, so much the better. Then Internet mar-keting and electronic commerce can be positioned as a logical subset of your organization’s e-business plan.