THE RKGBLOG

WMQA: Where should I be spending my acquisition marketing dollars?

Dear WMQA –

In a world where customers want to get touched less by catalogs (see catalogchoice.org), where should I be spending my acquisition marketing dollars?

Especially, if I’m extending out my search marketing terms & dollars as far as they can possibly go.

I still see email as a retention vehicle, affiliate marketing is complementary, and ad banners are still a suspect direct response vehicle.

– Hercules

Dear Hercules –

Ouch. WMQA feels your pain. The old world of cataloging is going through a seismic shift. Gone are the days where “housefile” meant “loyal”, and gone are the days when your book might be the only way that a household learned of new products in your category. Google changed all that. CatalogChoice et al. will change it more.

You have some acquisition channels that are working for you. Excellent. Push on those channels hard — but don’t push them beyond the point of diminishing returns. Keep a close eye on lifetime value by acquisition channel, so you don’t overmail the housefile. Kevin Hillstrom would say that, if you circ like most catalogers, you may already be overmailing to both prospects and house names.

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Look carefully into your order allocation logic — don’t fool yourself with self-reinforcing allocation rules like “if the household received a book within in the last 30 days, give the catalog credit for the order, regardless.” Make sure your circ strategy, be it modeling or RFM, includes a variable for “last order channel”. Carve out costs where you can using all the standard tricks — lighter paper, smaller trim size, optimized mailing, the best NCOA you can buy.

Make sure you keep your channels on level footing. Unless you have LTV data to argue otherwise, you should run your acquisition programs so that all of your channels should be equally efficient on the margin — if not, shift the worst cells from one channel to anything better. (Eg, pull any money spent on truly terrible circ segments and put it into only somewhat bad search or email opportunities.)

OK, so search is tapped out. Can you improve your site conversion so, with improved sales-per-click, you can afford higher max CPC bids? This could be usability, testing, or better offer. For example, Zappos offers free shipping both ways, and treats that as a marketing expense, not as an ops expense. Are there ways you can take some of the money going to Google or the post office or the printer and instead give that to customers? The marketing expense might turn out to the be same to you, but the money goes into your customers’ pockets, vs. to the guys in Mountain View, which is probably a good idea.

Haven’t said much new so far, Hercules. Hmmm…

An important tactic is video. Catalogers could never afford TV, but now in the age of YouTube anyone can be a network. How are you using video to showcase your products and your brand? Again, different industry, but check out Gary Vaynerchuk at Wine Library TV. Or the product videos at Vat19. Or Tom Nardone’s intro to ShopInPrivate — whatever you think of Tom’s merchandise, he uses that video well to show who he is and that he cares.

The glimmer of strategic hope we see in the distant darkness for catalogers comes from folks like Seth Godin and Andy Sernovitz — the word-of-mouth stuff. (Hate the label, love the concept.) Their prescription: (1) do something worth talking about, and (2) make it easier for folks to do so. Is your firm participating in the blogosphere, answering every positive comment with a sincere “thanks!” post, and following up every negative comment with a “Sorry, contact me so we can see if we can help”? Is your firm using the new PR to greatest effect? Different industries, but check out Hugh McLeod’s efforts on behalf of Stormhoek and Thomas Mahon.

One last imperative, hattipping to Mike Moran: do it wrong quickly. The web has speeded up the marketplace, and we as marketers need to try much more stuff, more new crazy ideas, more quickly and more nimbly than the old days. Heck, at the extreme, some folks build entire web 2.0 sites in 48 hours. Now, that isn’t feasible for real big stodgy established orgs, but still, it shows how fast a nimble company can get a beta test up and running. Maybe some of the hurdles to the new marketing reach back into softer issues like company culture and org structure and incentives and risk taking…

Old-style cataloging, the dry-RFM-and-squinch-polishing, no longer alone is enough — the web and the postal rates change everything. So direct marketers will need to be more creative, more guerrilla, and better at PR. Again, be noteworthy, and make it easy for folks to talk about you.

Wish there were easy answers, Hercules. Hard stuff, truly. Wishing you the best of luck, we remain

– WMQA

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