Speaking Directly: Software industry realizing benefits of DM

The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.Many 'traditional'...

The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.

Many ‘traditional’ businesses now include direct-to-customer communication in their arsenal of marketing weapons, often as a substitute for other less accountable spending.

Considerable enthusiasm

The shrink-wrapped software industry has adopted direct with considerable enthusiasm, and it is easy to understand why: for some vendors, the growth ‘software suites,’ which offer several business application software products in a single package at a discounted price, has put pressure on sales revenue and margins.

This has caused them to rethink their business processes.

Software that sells for $50 (or more) costs $10 to manufacture, all in. More important, since many of these software programs are updated annually, they can represent something of an annuity.

Theoretically sell more

By communicating directly with the 40% or so of all end-users who register their purchases with the vendor, they are, in theory, able to sell more.

I can recite several examples of corporate enthusiasm for direct marketing in the software industry. One particular incident comes to mind.

I telephoned a u.s.-based software firm to request information on the new release of its flagship product. (I use this product, and I am on the company’s customer database.)

I didn’t get much information, but, rather, repeated pitches that I buy the product right now.

Apparently, the company had little interest in providing customer service, just in trying to make a sale, which is a pity since its products are first-rate, and my potential lifetime value as a customer could be significant.

If it is genuinely interested in cultivating relationships with its customers, this company (and others) should work at ‘listening,’ and not just ‘selling.’

It seems obvious the real profit is in the long term, and therefore, a continued dialogue with its customer base translates into profit.

Sale opportunity?

This company seems to view customer inquiries as nothing more than another chance to make an immediate sale. Wrong.

Since there are hundreds of software products that have some relevance for database marketing, I am delighted to introduce you to Rich Bohn.

An electrical engineer, Rich’s extensive corporate career includes several years in Canada.

For the last nine years, Rich has published Sales Automation Success, a newsletter, and countless no-nonsense software reviews. He knows his stuff.

If you’re interested in the concept of using technology – properly – for greater efficiencies in your business, fax Rich at (206) 391-7982, and he will send you a complementary copy of Sales Automation Success.

Free. Free. Direct response consultant Rene Gnam offers this ‘Gnamism’ to budding direct mail writers: ‘If one will do, try two.’

Thus, if you include one order form, test the effect of adding a second one. If your mailing package includes one ‘lift letter,’ test the effect of adding a second one.

Don’t remove order form

Another Gnamism: even if the vast majority of orders come in by phone or fax, never remove the order form from your mailing package.

Gnam says the role of the order form is to remind people they need to act, although it is not necessarily the vehicle by which they will respond, particularly if you have a 1-800 number.

A third Gnamism: the most powerful tool you can use to build your database at exceptionally low cost (in the business-to-business environment) is a checklist.

Gnam cites the example of a company selling to accounting firms that offers ’101 ways to increase profits in your accounting practice.’

Reflects needs

He says the list reflects the clear needs of the target customer, and provides such a large selection of suggestions that is perceived to have substantial value.

The fact that the 101 suggestions are printed on two sides of a legal-size piece of paper does not diminish its value in any way.

If you want to know more about Rene Gnam’s services, get on his database. It’s quite simple: fax him a note on your letterhead to (813) 934-0416.

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (905) 940-8784; fax (905) 940-4785.