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All too often people look at marketing ROI in terms of response rate: in other words, “I sent out 10,000 pieces of direct mail and only got 39 responses which is terrible.” This is wrong think.

When it comes to marketing ROI, you have to realize that the term means Return On Investment and the return is measured in dollars (or your local currency). Let’s say you spend $2,000 to get out a bulk mailing of 5,000 pieces and you get 10 calls as a result. Doesn’t look like much. But of these 10 calls you close 6 and get immediate sales of $12,000. That’s marketing ROI! And that’s not even taking into account the future sales to those 6 new customers. It could add up to hundreds of thousands of dollars.

The same simple mathematics apply to any other marketing efforts: radio ads, press releases or articles in magazines, print ads, yellow pages, web site, etc.

Obviously you need to keep track of response from each marketing campaign you do so that you can weed out unsuccessful campaigns and strengthen successful ones.

Case in point:

Jeff Lee, CFO of a very successful consulting company, Measurable Solutions, has adopted a successful small business marketing strategy based on direct mail marketing. Key elements are mailing out a newspaper and full color postcards. The design is done in house and the printing and mailing is done by a specialized postcard printing company. In his own words…

“We get our best response from mailing out a newspaper and back it up with postcards. Depends on the postcards. Some postcards have pulled better than others.

“The professionalism of the postcards is something that is effective: it gets attention, it keeps the image that we want to keep, it creates the reach, it creates the response and keeps our leads in a very high range.

“We probably average around 7,500 post cards per week. Out of 7,500 post cards we’ll get in an average of 15-20 leads. Of the 15-20 leads at least a third of them come to our introductory seminar. So say 5 or 7 people show up and they pay $1,700 a piece. Off of that we close a further $30-40,000 for services.

“The money we have put into the postcards is like a drop in a bucket compared to what we get back. We know that the more promotion we send out, the more return we’re going to get. It always works.”

That is excellent marketing ROI. Measurable Solutions spend about $2,275 for 7,500 full color post cards. That includes printing, postage, mailing (including the mailing list). From that they get between $8,500 and $11,900 in immediate response for an introductory seminar and an additional $30-40,000 follow-up sales. Spend $2,275, earn $40-50,000. You don’t need to have majored in advanced math and rocket science to work that one out: that is what is meant by marketing ROI!

Results of direct mail marketing vary from business to business but the principle holds and always works: if you send out enough promotion, you will make sales and maximize your marketing ROI. Don’t worry about response rate if your marketing ROI is high.

How Do I Generate More Online Leads For My Direct Sales Business?

Here’s a question I recently received from a subscriber who was looking for more leads for his direct sales business. He wrote:

*Question*: My wife and I have been an associate for a particular company for several months now and we are indeed very happy with the products and support training.

Our problem is getting other people to view our link or getting them to open it at all, I suppose. We need to expand our effort to new associate recruiting and would like your input as to how we might do this. Thank you for reply to this letter.

*Answer*: Thanks for the question. I know that the problem you face is what many direct sales reps face as well. Right now, you are using the website that the company provided to you. It’s the same site that the other reps are using and it really doesn’t say much about the two of you as unique people.

Your site also makes people enter a code before even viewing it. I understand that this is so you can get credit for any referrals, but you’re creating an extra step for your users. People have to remember the code, type it in or even copy and paste it, which unfortunately, is something a lot of people won’t bother to do. People use the Internet because it’s easy and they want to surf around quickly, without having to jump through hoops. You want your information right in front of your prospect when they get to the site.

Obviously, this is the way the company has set up the website and they probably aren’t going to change that…but honestly…I don’t think that matters. The two of you need your own unique online presence and need to generate your own leads.

Here’s why:

Who knows what will happen with your relationship with your company. They are a highly reputable company that’s been around for well over 100 years, but you have no idea what the future holds. If the company decided to no longer offer the direct sales opportunity or one day, the two of you decide you just don’t want to work with the company…what happens? Your business is gone! That’s no good.

I recommend that you keep your online presence separate from the company you are working with, so it really is your OWN business and you can maximize your income. You can generate leads that might be interested in your opportunity and you can make them other offers through affiliate programs or you might even want to create your own information products down the line.

Think of what unique perspective you give to your business. Are you great cooks who can show people how to make delicious meals with those products? From the recruiting side, you can also figure out a unique perspective, but make it a product focused one. Your best recruits will be people who have the same interests as you…not just people who want to make money online.

You can start by creating a list to promote your products and another to find recruits. I’d create two separate websites for this because some of your best customers will never be interested in the opportunity, so don’t confuse your visitors. For the product list, you can share recipes, information about using the right herbs and spices, etc. For the recruiting one, you can give information about starting a home business, show how fun it is to sell these types of products, etc….all from your own perspective.

All these subscribers you gather now belong to you. If you decide to move in a new direction with your business, you still have these subscribers and you can continue to deliver quality information to them…and earn an income too.

Just remember, this is your business and you want to have complete control AND maximize your income.

Marketing Research: Know Your Customers

Having a competitive advantage over other businesses targeting the same market as yours is a basic, survival must: many choose to develop longterm relationships with their customers, in an attempt to create such competitive advantage. Knowing your customers is crucial, and it is quite a different thing from knowing their buying behavior. It is every marketer’s dream to have real, up-to-date information about consumers: their preferences, opinions, attitudes, beliefs, interests, education level, behavior are the base of understanding their needs.

Businesses often employ Marketing research to determine the consumers’ degree of acceptance of a new product, and the reason behind this is the fact that launching a new product without a real demand would involve much more costs than actual market research. Plus, a failed product launch is not only damaging for a business’ finances but also its image and reputation.

Any marketing research upon consumers’ profile should address at least the following questions:

Who makes the market of a product?

A company active on any given market must ask itself who its customers are. Are they mostly young people, or perhaps elderly? Women or men? What would their income levels be? This is the demographic information that can be a starting point in creating a customer profile.

What do people buy?

Is there a certain product consumers seem to prefer? Can we detect a trend of migrating to a given product? Will the market accept new products or changes in existing ones? These questions could offer a perspective on the mechanisms triggering buying decisions; the answers could indicate just how open to changes customers are.

Why do people buy?

Many businesses ignore the reasons why their customers choose one product or another. While we all know that impulse buying is a reality, most purchases are still made on reasons of benefits, value, satisfaction. Hence, we should ask ourselves “Why certain products are more popular among consumers and are perceived as being superior to others?”

Who takes the buying decision?

It is critical to know who is actively involved in the buying process, as the users of a product are not necessarily the ones to buy it. For example, food items destined to children are normally bought by a parent, which means the advertising messages should be aimed at parents and not at children. Identifying the real decision makers is an important part of any consumers research study.

How is the buying decision taken?

What are the reasons followed by consumers when making a buying decision? A marketer should remember that these reasons are likely to be influenced by a variety of social, cultural, economic factors.

When do people buy?

Some products are requested and are offered only in certain periods of a year, as demand can be driven by social or cultural factors (think of seasonal holidays, for example). Consumers’ lifestyle might also dictate the day or week when shopping is done.

Where do people buy?

Identifying the preferred location for people to buy is yet another important task in researching consumers’ behaviour. Where do they buy from? Supermarkets? The corner shop? New, creative venues can be employed, such as e-commerce web sites.

Marketing research relies on other sciences as well, such as psychology or sociology. Being able to develop the products consumers need, and then market them in accordance to the consumers’ behavior lay the basis for competitive advantages and shape the strategic decisions a business must make.

Guess Who Ford Motor Just Quit Selling To…

One of the very hardest things for a marketer of any kind to accept is that not everyone will buy their product, no matter how great they think it is. And even if someone else believes it’s fabulous too, that doesn’t mean they’ll buy.

I play tennis not golf. So no matter how stunning the new clubs are that Tiger himself uses, I won’t buy. I don’t do golf. So you’re better off to save your energy and find someone who DOES love golf. As obvious as this sounds, it’s almost impossible for marketers to do.

Ford Motor for example, just figured this out a few months ago. I posted on 1.23.06, the day they put out through the Wall Street Journal their five point plan to “restore profitability” to the company, and to “change their mindset.” Here’s #5:

“Quit trying to sell Fords to people who won’t buy them; focus instead on likely prospective customers.”

Think of all the advertising noise this will eliminate. No more screaming at the wrong ones. What if every marketer were to adopt this strategy?

Say you’re selling an insurance type of program. Who is a likely prospective customer? Here’s one group: those who buy extra warranties for things they get, from calculators to computers, to warranty insurance, flood insurance, earthquake insurance. Yes, I am one of those. This group also includes people who plan vacations ahead, have retirement plans in place. The planners. Or the sudden loss set, for example, who want to be ready next time.

Start describing the group by describing yourself. Why do you have the program? Ask your existing customers why they bought. They’re your customers, aren’t they? They comprise a community, if you will, and isn’t that who you want to go after?

Instead of doing therapy?

Say you sell nutritional supplements. Who is a likely customer? How about those who know nutrition matters and who know that they cannot get the nutrients they need from the food they eat, even if it’s all organic? These folks know they need to supplement. Like me. Or those who’ve had a close call or recent diagnosis and are responding to their wake-up call - they’re now ready to eat right and supplement.

Ask yourself why you take your supplements. Ask your steady customers (not just those who are selling). They’ll give you their why’s which will help describe your prospective customers.

It’s a start.