Should I add direct mail and telemarketing to my digital product business?

9 replies
Hi,

Right now I sell small ticket Digital Products but I'm thinking of going a step further. I've heard you can offer to send something for free, not even asking for a shipping fee, in order to capture a mailing address and maybe a phone number. And then from there you can sell through direct mail and telemarketing.

This is all beyond my expertise but it sounds interesting as these channels are not quite as saturated as the email inbox. More expensive and technical to operate though.

I'm interested in seeing if anyone else has done this, and what the good and the bad of direct mail and telemarketing was to their business. Thanks!
#add #business #digital #direct #mail #product #telemarketing
  • Profile picture of the author gjabiz
    Originally Posted by Delta223 View Post

    Hi,

    Right now I sell small ticket Digital Products but I'm thinking of going a step further. I've heard you can offer to send something for free, not even asking for a shipping fee, in order to capture a mailing address and maybe a phone number. And then from there you can sell through direct mail and telemarketing.

    This is all beyond my expertise but it sounds interesting as these channels are not quite as saturated as the email inbox. More expensive and technical to operate though.

    I'm interested in seeing if anyone else has done this, and what the good and the bad of direct mail and telemarketing was to their business. Thanks!

    And then from there you can sell through direct mail and telemarketing.

    When you start from a premise a phone number and/or a mailing address will lead to sales, you put the cart before the horse.

    In other words, you simply are thinking about YOU, and what to sell to someone.

    A better start on this would be, What might you have which could help or improve someone's life or situation.

    What can you offer them to HELP them through whatever, or to complement or enrich in some way, THEIR lives.

    Remote Direct Marketing is not for amateurs, you need to get seasoned first before you go in this direction.

    gjabiz
    {{ DiscussionBoard.errors[10660268].message }}
  • Profile picture of the author Delta223
    I disagree with your post. Of course we have to keep our customer in mind and provide them value. I do just that with my current products :-)

    We can still have a separate conversation about marketing channels and the challenges/opportunities inherent to them. Branching into direct mail and telemarketing in a business that started online only, is a worthy topic IMO.
    Signature

    .

    {{ DiscussionBoard.errors[10660281].message }}
    • Profile picture of the author Steve B
      Originally Posted by Delta223 View Post

      I disagree with your post . . . Branching into direct mail and telemarketing in a business that started online only, is a worthy topic IMO.

      I can't speak for Gordon (gjabiz) but from my own experience, there is a huge difference between Internet marketing and direct mail/telemarketing.

      One difference that jumps out to me is the cost of product buying, storage, shipping, etc (the entire "delivery" chain). If your business has heretofore only delivered small digital goods, you will be surprised and probably "gag" at the added costs to run your business.

      There are other costs involved as well. Think about the outsourcing costs to do telemarketing. Think about the advertising, printing and postage costs to do direct mail marketing. If you decide to use list brokers, there will be additional costs.

      I don't think anyone is trying to discourage you from looking into these additional channels for your business. But if you decide to go that route, it seems to me that you should begin with a product and market in mind as the optimum strategy will be different for various markets depending upon what you're going to sell and how you're going to advertise it and deliver it.

      "Losing your shirt" in direct mail and telemarketing is a heck of a lot easier (and more likely) than with simple Internet marketing of digital products. Maybe that (or a portion of it) is what others are trying to tell you.

      The best to you,

      Steve
      Signature

      Steve Browne, online business strategies, tips, guidance, and resources
      SteveBrowneDirect

      {{ DiscussionBoard.errors[10660469].message }}
  • Profile picture of the author myob
    Using these additional communication channels can increase conversion rates by several magnitudes. What I do after every transaction is incentivize customers to tell me escalating contact information and personal details.

    In my experience, giving away Amazon gift cards with every order is particularly effective as a reciprocity tool. There is an initial promotional expense, but the payoff can be huge as people often spend far more on Amazon than a gift card value.
    {{ DiscussionBoard.errors[10660293].message }}
    • Profile picture of the author Delta223
      Originally Posted by myob View Post

      Using these additional communication channels can increase conversion rates by several magnitudes. What I do after every transaction is incentivize customers to tell me escalating contact information and personal details.

      In my experience, giving away Amazon gift cards with every order is particularly effective as a reciprocity tool. There is an initial promotional expense, but the payoff can be huge as people often spend far more on Amazon than a gift card value.
      Excellent insights, thanks for sharing!

      Are they buying more of your product on Amazon with the gift cards? I think that's what your post is implying
      Signature

      .

      {{ DiscussionBoard.errors[10660382].message }}
      • Profile picture of the author myob
        Originally Posted by Delta223 View Post

        Are they buying more of your product on Amazon with the gift cards? I think that's what your post is implying
        Giving away these gift cards is a conditional offer in exchange for personal and demographic information. Amazon's ingenious conversion algorithm and product suggestion system often produces orders with margins significantly above the gift card cost.

        I have found that direct sales (mailing, telemarketing, personal sales, etc) can be far more profitable due to higher conversion rates as your customers see you as a "real" person. I have never known anyone who has been consistently successful with conversion rates or selling high-end products through email alone.

        [Note: Never incentivize sales of Amazon products; it is against their TOS and could get your account closed with no recourse.]
        {{ DiscussionBoard.errors[10660716].message }}
  • Profile picture of the author limitbreaker
    Interesting. Its your opinion though.
    Signature
    USE INBOX DIRECTOR AUTORESPONDER SYSTEM PAY JUST $1 PER 10,000 EMAILS
    Click Here for Details About this 100% Inbox Delivery System
    {{ DiscussionBoard.errors[10660429].message }}
  • Profile picture of the author Wile E Coyote
    Originally Posted by Delta223 View Post

    I'm interested in seeing if anyone else has done this, and what the good and the bad of direct mail and telemarketing was to their business. Thanks!
    I've done this before, and continue to do it every quarter.

    It all boils down to data really.

    How much is your initial customer worth - in the first 7 days?

    How many leads does it take to convert a customer?

    How many more times will they buy from you in the following 90 days?

    What is their worth at the 90 day mark?

    These metrics drive all advertising when you start to ramp up your business. You know your current conversion rates, so it can be assumed (only initially) to be similar on different channels. If you find they aren't worth enough to justify commissions and hourly rates for telemarketing, then don't do it.

    Same with direct mail. What is the maximum you can afford to pay to acquire a customer to break even? Take those numbers and then put them in the formula.

    Example (numbers tweaked for EZ-Math):

    7 Day Customer Value (initial transaction): $10

    90 Day Customer Value: $35

    Direct Mail Cost to Mail Large Postcards (to 1,000 people): $600
    Cost of Direct Mail List (I think you said you're going to build it on your own): $0

    To 'break-even' on the front it, you'd need 60 sales from the 1,000 mailing
    >> Initial Customer Value x Sales >= Advertising Cost

    So you need to get a 6% Response rate to break even.
    >> Sales/Leads = Conversion Rate

    If your data suggests you can do this, then you are looking at a low-risk advertising investment.

    Keep in mind that you don't want to base advertising costs on 90-Day or Lifetime Customer Value, because if you do, you're eating all of your profits initially, which causes financial issues down the road.

    However, it is reasonable to go a bit negative on the front end to get them in the door, if your backend can churn people better.

    Hopefully that made sense. When you know your numbers, you don't have to ask questions like this, and you can reduce your advertising risk substantially, and even get into zero-risk advertising.
    {{ DiscussionBoard.errors[10660459].message }}
  • Profile picture of the author graceallen
    Direct mail marketing involves sending a promotional message in the form of mail. The promotion can be any special-offer announcement or anything that markets to the targeted audience. It is more aimed at potential consumers who can be converted for leads.

    While applying both marketing tactics, you should consider the pros, cons, and other important elements so as to implement the right strategies for your business.
    {{ DiscussionBoard.errors[10745186].message }}

Trending Topics