Profitable Catalog Marketing on the Internet
February 18, 1999
BY REGINA BRADY
To be a successful catalog marketer on the Internet you must have a taste for adventure. It’s really a combination of 75% traditional direct marketing, 20% experimentation, and 5% serendipity.
We’ve all grown up with the rigors of traditional direct marketing and understand how we must measure and calibrate everything we do. It’s the basis that lets us expand and grow. The experimentation I referred to is different from the testing we have all done in the non-virtual world. Experimentation means the willingness to think outside the box when you market on the Internet. Serendipity affords you that bit of luck that allows you to stumble on the right thing, recognize it is the right thing, and embrace it.
My hero (or heroine) for Internet direct marketing is Omaha Steaks. Every time I hear a new partnership opportunity, a new marketing idea, or a new technology announced I invariably read that Omaha Steaks is one of the first companies to sign on to test. I’m sure that along the way they have learned some painful lessons. That sense of adventure and willingness to experiment has opened e-commerce doors that have been shut for other marketers.
Let’s examine some of the opportunities that are available for your experimentation.
Shopping Portals
There are a host of opportunities for you to explore from the major sites like Yahoo! and Excite to catalog request domains to online shopping malls.
Each of the major search engines has realized that shopping draws customers. You can arrange to be one of their featured suppliers. You can place banner advertising based on the large number of eyeballs attracted. And you can experiment with key word buys. Don’t worry that “every” good word or search term is already taken – test, test, test. This is likely to be one for the most fruitful strategies you can employ. However, when you do this negotiate in advance with the search engine. Tell them how much money you plan to spend and use that as a bargaining chip to arrange for the ability to change the weighting of your marketing dollars depending on which words draw the most qualified traffic.
There are a variety of lead generation sites designed specifically for catalogers such as CatalogLink, CatalogSite, CatalogCity and FreeShop. These companies are in the business of generating traffic from Internet shoppers who are interested in catalog shopping. It generally cost you nothing to participate but you pay for each lead they pass on and you can also arrange to link directly to your site for those individuals who want to shop immediately. Of course, the key to success is to measure your conversion rate. Test offering your catalog for free versus charging a nominal fee. Test the various promotional opportunities available – many are free but you need to invest the time to develop a relationship with the individuals running the site. And, if one site in this category works for you that’s a clear signal that you need to participate in all of them.
There are a variety of shopping malls on the Web. Many of the major online services and Internet Service Providers aggregate shopping sites and offer innovative ways to reach a large number of eyeballs and there are many, many other Web malls. On America Online you can pay an additional fee to participate in one of their pop up screens to drive traffic. Many develop seasonal promotions and since you provide the content to help fill out their offerings you can often participate for free. If you are willing to run a contest or provide prizes they will give you added visibility.
E-Mail Marketing
This is one of the most awesome vehicles you can employ. Most of the marketing opportunities on the Web are based on pull technology where you try to attract people who are online to your site. E-mail operates in a different and very personal space. People don’t surf through their e-mail. They are in a different mindset when they are reading their mail and you can use this to push individuals to your site.
Two thirds of all the marketers using e-mail are using it to get closer to their own customers. The major obstacle encountered is not having e-mail addresses for each and every customer. If you are in this situation make sure you do anything and everything you can to aggressively collect e-mail addresses. Ask for e-mail address on every order form. Train your customer service representatives to ask for e-mail address on each call. Create reasons on your site for individuals to register with you – whether it’s a survey, a promotion or a registration area. Even if you only have a limited number of e-mail addresses begin today to communicate with your customers. You will reap rewards.
There are a finite number of opted-in e-mail lists on the market today and they do not offer the same amount of selections as we are used to in the traditional world - but they are working.
A few tips to consider. - First of all you need to develop a control e-mail letter. Don’t just try one creative effort. Click throughs (licks on links embedded in your letter that transport recipients to specific offerings on your site) begin within minutes of launching a campaign and 80% of responses occur within two days of a mailing. Test multiple offers, creative approaches and personalization techniques. You’ll be able move from test to roll out on the most effective letter within hours or days.
- One catalog marketer we work with learned a very valuable lesson – they included a unique 800 phone number and fax number within their e-mail letter. They found that 20% of all the revenue generated came offline!
- This is a personal medium. Use personalization within your letters wherever and whenever possible. Do everything you can do to make it easier for the customer to order. Some e-mail service bureaus can also help you to pre-populate order forms. If the customer’s name and address is already entered on a form it makes it that much easier for a customer.
- Feature multiple offers within your e-mail and link directly to each of your featured products.
Loyalty programs
There are several major sites that have created loyalty programs in the Internet. They usually develop a profile on each registrant and then provide offers tailored to these interests. BonusMail offers their 1.7 million customers Rew@ards to customers who receive e-mail and click on embedded links to go learn more about specific offerings. Consumers receive ClickRewards from Netcentives and redeem points on frequent flyer, hotel and car discount programs. CyberGold appeals to the basic human instinct of receiving cold, hard cash for members who interact with their offerings.
There are three keys to making these loyalty programs successful for you: a strong offer, good creative and pinpoint targeting. Don’t let some of the large universes tempt you. Select carefully and you can reap rewards.
Affiliate Programs
Amazon.com may have been the first e-commerce site to offer affiliate programs but now many other sites have followed suit. This is a nice way to borrow content from another site to round out your offerings and have the opportunity to generate incremental revenues. Using Amazon.com’s affiliate program as an example, a cigar catalog might feature Amazon books on cigars. The cigar catalog will retain 15% of the revenues from the sale of books. The downside is that if consumers decide to search for books beyond the cigar category Amazon gets all the revenues and the cigar cataloger loses these consumers from his site.
Synergistic Links Look for sites that complement your catalog offerings and develop reciprocal links. The more links there are to your site the more traffic you have the potential to generate. Also check out sites such as LinkExchange and LinkShare.
Technology
A few weeks ago Victoria Secret launched on the Web with a fashion broadcast. They made a splash by using technology. Consider the appropriateness of using cookies to customize and personalize the experience for your customers. Explore the possibilities of Flash, audio, video, multimedia e-mails and more.
Companies have made major investments in building their Web sites but quickly realize that the “Build it and they will come” mentality just won’t work. You have to work hard to build traffic to your site and to stimulate e-commerce. There are many, many vehicles out there that can help make e-commerce success a reality. Not every one will work for your company; but until you test the waters you won’t know how to navigate profitably on the Internet. Direct marketers have built their businesses on the tenet that testing is of vital importance. Test shopping portals, e-mail marketing, loyalty programs, affiliate programs, synergistic links and technology. Find out what will work for you.
Happy testing!
Regina Brady is president of Reggie Brady Marketing Solutions, a consultancy on direct and interactive marketing. She can be reached at 203-838-8138 or reginabrady@att.net.
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