Direct Marketing
How to use direct marketing programs to boost up manufacturing & sales
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Direct Marketing: How to use direct marketing programs to boost up manufacturing & sales
By Andrei Kossyrine
© Xpress Software Inc. - All Rights reserved
http://www.xssoftware.com
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Making manufacturing more profitable is not a "one size fits all" solution. This change in thinking and operations is also not accomplished in a single step or procedure change. The following is one of a series of topics designed to enhance the profitability of manufacturing in general.
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Once seen as the medium of choice of for quickie oil change joints and pizza delivery services, direct marketing is now becoming more and more common way for almost any business to increase profits. Whether its offering parts to business customers through post card alerts, or marketing direct to consumers with catalogs and fliers, most manufacturers are at least exploring direct marketing opportunities available to them.
When the manufacturer of a high-end whitening toothpaste underwent margin erosion, after years of success and sales growth through infomercials, TV home shopping and space ads, executives realized they were facing a crisis. Increasing media rates had pushed profits down from 38 percent to five percent, and the company needed answers.
The toothpaste maker turned to an unlikely source for help: the printer of color advertising postcards. Over the next twelve months, owners of 2,600 day spas received postcards showing "before" and "after" pictures of teeth belonging to people who had used the whitening toothpaste. They also received a special offer to "trade in" their current toothpaste and try the manufacturer's brand.
Over 810 day spa owners participated in the "brand swapping" program. And by year's end, the whitener became the leading toothpaste brand sold in day spas. Within 16 months, distribution in the U.S. and Europe increased from just 32 stores to over 430 stores.
Many manufacturers avoid direct marketing programs and stick to traditional sales routes. After all, manufacturers are in the business of making things - not publishing catalogs and compiling direct mail list.
Fortunately, a simple Web search will reveal hundreds of companies that specialize in developing direct marketing programs. The number one rule of any direct marketing campaign is known as "60-30-10." Translated that means 60% of your mail success depends on the list, 30% on the offer and only 10% on the creativity. It is critical to obtain, or generate, a mail list with the correct target companies or audience for your products, services, and the most important first step. Consider using a list broker to identify the list that meets your needs most concisely.
Direct marketing is like any other form of selling. Your two primary goals are always the same:
1) find out what your customers want and give it to them, and
2) make it easy for them to get in contact with you.
Direct marketing is also about introducing your product to new customer services. By the mid-1990s Sea-Doo had obtained a 50 percent market share of personal watercraft (or "jet ski") sales and was having difficulty increasing sales. To expand sales, Sea-Doo expanded it's "Everyone's Dooin' It" direct marketing campaign, first to broader-based boating publication, and then to general interest publications like USA Today and the Robb Report.
The direct marketing effort not only allowed Sea-Doo to present its products as an alternative to power boats, it allowed the company to maintain its 50 percent market share. The only difference now is that market - and it's market share - is much larger because of Sea-Doo's efforts.
For the small, specialized manufacturer, direct marketing is an antidote to shrinking profit margins and stagnant market share growth. They are relatively easy and inexpensive to implement when weighted against the potential return on your advertising investment.
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Since 1996 Xpress Software Inc. has provided
technical assistance in lean manufacturing methods,
computer systems and business process automation
to maximize manufacturing profits.
Visit its website www.xssoftware.com or contact
Andrei Kossyrine at andrei@xssoftware.com.
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