The current shakeout in the Internet industry has investors running scared and pundits shaking their heads. But it also offers a great opportunity for direct marketers who understand the key elements of doing business on the Web.

Knowing what your customers want, in terms of both merchandise and services, is obviously one of those elements. Promotion is the other.

Potential customers must know about a product or a service before they buy. More important, they need to know the benefit of buying that product or service from you.

In the offline world, multiple methods help to drive traffic to retail locations, persuade prospects to request a catalog, or prompt customers to make a phone order: direct mail, space advertising, and alternate media programs, to name a few. With the Internet as an additional channel for consumers, the strategic use of multiple channels can greatly increase traffic to your site.

Offline options

Direct mail and alternate media such as card decks have a very targeted reach, making them a more conservative option than, say, advertising on the Super Bowl.

Many catalogers effectively promote their sites by displaying their URL on the cover as well as on every page of the book adjacent to the 800-number. Some even offer promotions — 10% off Web orders, for instance — on the cover to drive business to the Internet. This type of promotion has been shown to drive up to 15% of a cataloger’s orders to the Web.

If you don’t offer a print catalog, or if you mail your catalog infrequently, you could execute a postcard mailing to entice customers and prospects to your site. The postcard can offer a modest premium to those who order on your site. You can use it with a detachable business reply card (BRC) to capture e-mail addresses from your offline customers, or it can simply announce some specially priced products found only on the Web.

Then there are alternate media:

  • Package insert programs. An offer or a message that fits your customer profile can be distributed in packages delivered to both mail order and Internet buyers. (By the way, be sure to promote your Website in every one of your own outgoing packages.) Costs for printing and inserting the piece run roughly $50/M-$60/M.
  • Sample packs. Product samples, coupons, and special offers can be included within a co-op package distributed to targeted, high-traffic environments such as college dormitories and doctors’ offices. Costs are generally $25/M-$50/M.
  • Card decks. Include your existing postcard designs in a package of BRCs. A typical deck offers at least 20 such postcards stacked, poly-bagged, and mailed to targeted prospects. Typical costs are $20/M-$30/M.
  • Statement programs. Inexpensively produced inserts are distributed to consumers via bank, retail, or other monthly statements. These programs generally cost $20/M-$65/M, with only the cost of the creative and printing additional.

Online opportunities

You most likely also want to use the Web to market your Website. Let’s turn to some of the opportunities there:

  • E-mail campaigns. E-mail addresses can come from any number of channels: print mailings, the registration page or checkout page on your site, your call center, retail sign-ups. Every one of these collection points gives you an opportunity to ask permission to communicate via e-mail.

    You could go one step further and ask if customers would like to receive e-mails from your marketing partners as well. This additional opt-in feature allows you to rent or exchange e-mails with other firms. By renting or exchanging these third-party opt-in e-mail addresses from specific sites, you can target your audience with your message.

    Because far fewer of these targeted e-mail lists are available than are offline merchandise-buyer lists, you should also consider endorsed e-mails. With an endorsed e-mail, a list owner delivers your message in an e-mail that it sends to their customers. The addresses and the approved message are sent to a third party for delivery to ensure the integrity of the process. By centralizing the delivery process with a third-party service, you can dedupe the e-mail addresses — a crucial element in the prevention of sending multiple identical messages to the same person.

    E-mail addresses generated from sweepstakes, savings coupons, and product-registration sites (where the registrant opts in to receive additional offers of his preference) are available for rental right now. Because the majority of these addresses are not generated from purchases, the profitability of these lists will mirror the results of compiled lists in the offline world. Their response could be as little as 40% of the response from a good buyer file.

  • E-mail newsletters (e-zines). A good return on investment comes from sponsorship advertising in e-mail newsletters. Find the newsletters that align with the demographics and psychographics of your customers. There are several reasons newsletters work: The recipients have signed on to receive the newsletter; they usually read it because they are interested in the topic; and you have preselected the audience. Include an offer and a handy link for the reader to go right to your Website. The fact that the newsletter has allowed you to advertise acts as an implied recommendation to the reader.
  • Search engine optimization. Statistics show that more than 70% of consumers use keyword searches to find products and information. Every Webmaster should know to register a URL with the 15 or so major search engines and some of the 500-plus other engines. Each search engine has specific criteria for pushing certain sites to the top-ranking positions, and those criteria change regularly. You can usually buy your way to the top, but here are some free strategies for improving your ranking:
    1. Make good use of your domain name document title. Include a short description of key words using up to 63 characters before the dot and extension.
    2. Be sure to use metatags that contain information about each Web page to help search engines index your site. Be cautious, though; the major search engines have refined their search capabilities and can ignore excessively long tags. For search engines that ignore metatags, relevant text will return results based on word frequency within a document.
    3. Regularly check on search engines to verify that you are still in their databases. If you see traffic dropping, you may want to resubmit your page. Registration is an ongoing process. To keep their search engines running efficiently, providers periodically clean their databases.
    4. Remember that each search engine has its own algorithms to score your page for relevancy, and these scores change frequently. Spiders, which are software programs, crawl throughout the Internet looking to match the keyword request with the number of times a search term appears on the indexed Websites. Some engines recognize sites with the most text matches and rank them highest. Others evaluate the popularity of a Website based on the number of other Web pages that link to it, the rationale being that “link popularity” indicates that the site is more likely to be relevant to the average user. Still other engines have human editors who scan sites, throwing out useless ones and categorizing the others by subject.
    5. Consider outsourcing search-engine optimization to free up your IT staff. A number of firms will provide this service on a pay-for-performance or monthly fee basis.
  • Affiliate programs. Very simply stated, affiliate programs are online partnerships that enable companies to drive traffic, increase registrations, or sell products. By placing links on or accepting links from other Websites you can generate sales or generate income from sales driven to partnered sites. Before you enter into such a partnership, you need to clearly understand the management, tracking, and payment processes involved. And of course, working with reliable partners is crucial. You might want to consider outsourcing the management of your affiliate programs to an affiliate network.
  • Banner ads. Even though response rates have declined dramatically, banner ads can still be viable. If you have unique product to offer and remember the old saying “location, location, location,” you can probably do very well on targeted sites. You may also want to take advantage of the relatively low, highly negotiable rates available today.

Even though the Internet is still considered to be in its infancy, competition is fierce. The companies that succeed will be the ones that have taken the time to know their customers, provide them with a well-merchandised site, and promote their sites creatively, aggressively, but prudently.

Sandra Matika is a senior vice president at Mokrynski & Associates, a Hackensack, NJ-based list and marketing services firm.

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