Direct Response Marketing - The Crucial First Step : Testing

There are more options today to sell your product direct to the consumer public than ever before. So many options that it can be overwhelming. Different approaches … but all focused on the same goals: how to achieve best return on investment ROI, grow your market and expand your business.

Direct response marketing is a highly specialized arena with great rewards for success and great risk of failure. It is:

• Very fast paced
• Needs daily monitoring
• Requires on-going sales analysis
• Calls for quick changes in direction
• And is, in essence, your storefront*

*We'll talk about getting the most from your website in our next article.

After 20 years of strategic marketing in broad client categories and media buying in all formats, we'll share some of our most successful DR techniques. Marketing tips and advice for a business entering the market or a new product launch using direct response. Our best advice:

Test … test … and test some more!

There are many cost elements you must cover: Product cost, production expenses, marketing costs, media vehicles, call center fees, order fulfillment, etc. All factors should be measured and weighed, optimizing your marketing efforts in order to maximize profit.

Test Price Point and Offer: Do you know your market ... really know your market?

• Who is your best prospect? (age, income, gender, geography)
• Who is your competition?
• What is the sales potential?
• What price point needed to reach break-even?
• When do you make a profit?
• What is the sales potential?
• Is your product subject to seasonality?
• What price will the market respond to and call?

These type of questions should be worked out in your Business Plan and Marketing Plan before you begin. Internet research can supply invaluable information to answer many of these issues. Do the research in the early stages or hire a professional consultant in your field to help you navigate through direct selling.

Even with expert guidance, testing is still key. If you talk with a direct marketing consultant and they don't recommend testing .. re-think your choice of marketing professionals. Testing provides a roadmap with many of the variables worked out. Yes, you're eager. You know you have a winning product. Slow down. Testing can save you time, frustration and a lot of money. Serious money.

Testing in a smaller area gives you an opportunity to work out all the bugs while you are risking less money. Test different aspects of the offer to see which produces the greatest results. If sales are good in a small area, they will only be better on a larger scale. If your product isn't selling in the small area at the rate you need to be efficient .. go back and change different elements of the offer until it does pay-out. Then expand into larger areas or add other media vehicles.

Don't let anyone sell you on advice to put a large percentage of your budget into production. Keep production costs down to allow more money for media placement. Yes, you want good quality .. but you can achieve both within a reasonable budget.

In media, determine the direct response vehicles that fit your product, budget and goals best:

• Niche marketing special-interest Magazines
• Targeted Radio Promotions
• Newspaper Couponing
• Direct Mail Offers and Telephone Follow-Up
• Direct Response Television DR TV
• Interactive media and combo-buys

Don't leave out the internet when selling direct:

• Product Websites with Secure Shopping Carts
• Highly visible E-Zines and Newsletters
• On-line stores (selling through E-Bay, Amazon)
• Product auctions, new product showcases
• Opt-in E-Mail campaigns
• Publicity through special interest Forums
• Product-specific Directories
• Pay-Per-Click Advertising campaigns

Choose media vehicles that provide the best combination of Reach (how many people will hear/see your message) and Frequency (how many times they will see/hear it). You need a balance for a successful campaign which often requires a combination of media.

Test Media with smaller audiences:
Test in a controlled test market environment to determine closing ratios and rates of CPL (cost per lead or inquiry) versus CPA (cost per sale). Whether it's print .. radio .. TV (cable, spot, snydication), start small and cost-efficient.

Test the Offer Response
Direct response marketing campaigns always have an immediate "call to action." The offer invites prospects to call to order, visit your website, redeem this coupon, return a postcard for more information … directing you to take some form of action. They offer a convenient way to buy and have a sense of urgency to Act Now!

So, you've got your media selected, but do you have a Website? Do it .. now. Your website needs to be a core part of your direct response marketing campaign. Other forms of media should always cross-promote your website.

A well-thought out and optimized website provides the perfect companion to media testing of your offer. Results to change are so immediate and testing is less expensive. Once you have good traffic flow to your site, you can change your offer in seconds and evaluate the results in days. Tweak different aspects of your product offer until you have the right fit.

Remember that in addition to pricing and shipping offers, web site layout with user friendly navigation, professional-quality graphics and ease of ordering will all affect your on-line closing ratio. Lay the foundation for your new product success. Make sure that all the pieces fit.

Beyond Media … Test Systems:
Before you buy media in larger areas or roll-out to network advertising, make sure all your systems are in place and working properly. Are your fulfillment operations handling progressively increasing order size effectively? Is your Call Center top notch and closing ratios reasonable? They're usually getting paid per call - you're only getting paid per sale.

Beyond testing...
You've done your homework. You've tested. You've worked out the details. You're set. Or are you? If something is not working, fix it now. There are many elements that you can test to fine-tune your marketing efforts. With … a smaller audience … less risk of budget dollars, and …the best chance for success on a larger scale.

There is no question that Direct Marketing can introduce products to the consumer marketplace fast and more efficiently than traditional forms of distribution. With great rewards and many risks, give yourself every competitive advantage for success in Direct Response Marketing.

Have a new product? Learn more about new product launch from a new product introduction specialist.

3/17/05 Written by Linda E. Yarbrough, The Media Mix.