Articles - Written by Arthur Hughes - 2 Comments
Web Response – Modern 1:1 Marketing
How do you get customers to respond to your offer? Customer response is the hardest single task that any marketer faces. Lets explore the implications of web response – a new technique that may eventually eclipse all others.
How Does This Work?
In the ideal web response, you ask people reading your catalog, ad or direct mail piece to respond by entering www.yoursite.com which is a special micro-site that is set up just for this promotion, or just for each customer. Using a system that we have set up for several of our clients recently, we send a mail or email promotion to customers giving each one a personal PIN asking them to log on to a micro-site to update their personal profile. When they do, they find a site specially prepared for them. We have already populated it with their name and address, plus whatever else we know about them. The offer that brought them to the site is featured.
While there, they can correct their name and address, give us their email address, and complete some survey questions which we may need the answer to – in addition to buying the offered product or getting the promised reward for the visit. We get their permission to retain the information that they have provided to us, and with that permission, we save a cookie on their computer so that when they come back again, they don’t need to enter the PIN.
The advantages of web response are many:
- The cost is very low – almost nothing, once the micro-site is set up.
- The data that customers enter goes directly into the customer database which is on the same server as the micro-site. That way there is no need to enter the customer’s data, since the customer is doing it herself. We save the time and expense of data entry, and can process the order immediately.
- We know immediately what has happened. We can keep track of what and who is responding minute by minute. There is no other response method that is so instantaneous. Web response is much better than phone calls in this respect, because if a promotion produces a flood of phone calls, thousands may be put on eternity hold. With the web, if you have a big enough server, everyone can get on right away. They never hear that constant annoying message, “Your telephone call is very important to us, please stay on the line…”.
- Customers like it better. They can respond at any hour of the day or night, 24 hours a day and weekends too.
- You can give them instant feedback. When they respond, you send them an instant email saying, “Thank you for…”
- The instant email costs you nothing. It is built in to the software of the microsite.
Comparison with Other Methods
There are really only eight methods:
Each method has its advantages and its drawbacks. How can we choose among them? There are three main considerations for judging a response method:
- Response rate
- Speed of response
- Cost of response
In direct marketing a 2% response rate from prospects is usually a good rate, depending on the offer. From customers, response rates are often much higher. If the customers are local, nothing beats having them come in to visit your store to buy the products. Where that is not possible, most companies use mail or phone response. Phone is preferred if the offer justifies the cost. In catalog sales, live operators usually boost the average order size over any of the other methods. GUS, the largest cataloger in the UK typically gets a 20% cross sell rate on live operator calls. That means that when a UK consumer calls in a catalog order, one time out of five, the operator can talk the caller into buying an additional item after she takes the original order. Few of the other response methods can boast this rate of cross-sell success.
The offer to pay for the customer’s Fedex and Priority Mail response can be quite impressive. Some marketers, particularly with large donor files, find that they can get double-digit response rates with these two methods. Fax has never been a big method, except in business to business, simply because most consumers don’t have fax machines.
The two least costly and fast response methods are email and web response. These cost the company and the customer almost nothing. Both are lagging in the past couple of years because not enough people are on the web from their homes on a regular basis. That is changing fast as we will see later.
Cost per Response
A phone call to a toll free number can cost you $5 or more, depending on how long your agents have to talk on the phone. Mailed in responses are much cheaper, but they take forever to arrive, get opened, get entered, and get answered. Sometimes more than a month goes by. This is no way to create 1:1 relationships.
From this chart, it is clear that email and web response are the least costly methods of hearing from customers. They have one key drawback at present, however. Not enough people are on the web yet. This is changing fast.
Before you finish reading this article, over 1,480 additional US households will have come on line – a total of about a half million new households per week. These people are going to have to do somethingwith their Internet connection. Some of them will use it to respond to your promotion. When they do, you have to be ready. Web response is probably your best solution.
Arthur Middleton Hughes is Vice President of The Database Marketing Institute that does research and consulting for e-mail and database marketing companies. He would love to hear about your problems. Perhaps he could help. He can be reached at Arthur.firstname.lastname@example.org or 954 767 4558. His new book Strategic Database Marketing 4th Edition is due out from McGraw-Hill in 2011.
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