Like most in our industry, our company, ALM, spends the majority of its marketing dollars on direct mail and telemarketing. My guess is that we'll continue to do so for a long time to come. Lately, however, I've been walking the halls of our offices muttering "99.5%" to all who will listen. That's because when we mail out 1,000 pieces of direct mail, we jump for joy if five of them come back as new subscriptions or product sales. That's a return of 0.5%-which means that 99.5% of our mail is wasted, thrown out and quite possibly never even seen by our targets.
Perhaps some of you do better and generate returns that are a few tenths of a percentage point higher. But no matter how good your direct mail results may be, the lion's share of what you are sending out yields no result other than increasing the amount of paper hauled away by the office cleaning staff at the end of the day.
Now, I know how our direct mail experts will respond. They'll say, "But Bill, given the prices we charge and our extremely favorable renewal rates, we still make money on that direct mail ... so stop complaining." But complain I do, since the idea of wasting all that budget on efforts that yield no return strikes me as wasteful at the very least and, ultimately, harmful to our brands. We need to do better.
We need a better way to sell our products to those who really want them, and who don't view our messages as a further contribution to their recycling bins or junk mail folders.
In his book, Permission Marketing, Seth Godin contrasts "interruption marketing" with "permission marketing." Interruption marketing is what happens when marketing interrupts whatever we're doing in order to deliver a message and entice us to take an action. Godin argues that the number of interruptions is climbing dramatically every day. That is, the number of marketing messages being thrown at us in traditional and nontraditional ways keeps increasing. All these interruptions place a growing demand on an increasingly scarce resource, our time.
Permission marketing, on the other hand, is all about giving customers what Godin describes as ``an opportunity to volunteer to be marketed to ... to participate in a long-term, interactive marketing campaign in which they [customers] are rewarded in some way for paying attention to increasingly relevant messages.''
At ALM, we've just launched the first phase of our centralized marketing database, putting all the customers for our numerous newspapers, magazines, books, conferences, Web sites, etc., into one place. Our plan, over time, is to cut back on the number of cold calls and undifferentiated direct mail or e-mail messages we put out, in favor of a permission marketing approach. By recognizing and valuing the relationships we have with our core customers, we hope to enhance our cross-marketing capabilities and build deeper relationships with them.
But that's only part of it. The other half of the equation is to find more effective ways to add to our customer base. Search engines offer two mechanisms to do that: organic search and pay-per-click. I would argue that every direct marketer needs to explore how to add search to their portfolio of order sources.
Succeeding at search marketing takes some particular expertise, such as understanding search engine optimization (SEO). Success also requires the skills of a day trader, since knowing how and when to bid on keywords is critical to the pay-per-click game.
But not understanding how the search engines work is not a good reason to stay away. There are plenty of consultants and agencies out there that can get you started.
As marketers, we need to stop throwing so much of our money away chasing noncustomers with wasteful interruption marketing programs. With existing database technology, we can identify our core customers and use permission marketing techniques to cross-sell our products and build loyalty to our brands. And we can use search marketing capabilities to help those who are looking for our products and services to find them more easily.
William L. Pollak is president-CEO of ALM Media. He can be reached at firstname.lastname@example.org.