#116 Blog
Post – Thursday, December 10, 2020
http://dennyhatch.blogspot.com/2020/12/116-freemiums.html
Posted by
Denny Hatch
The
Downside of Digital Marketing:
Exactly Who Are Our Customers?
Who are they? What do they look like? How do they dress. What car do they drive? Do they come off as upbeat or downtrodden?
Operating in the world of the one-line address (e.g. dennyhatch@yahoo.com) I could be anywhere in the country—from a shack in the hills of West Virginia to a mansion in the Hollywood hills to being a scammer in Russia.
Above is a mythical direct mail 6”x9” envelope for a non-existent non-profit organization going out to a fictional couple in Atlanta.
In the oversized left-hand window is the freemium—a free premium gift in a mailing to the Grayson family. It’s a sheet of 84 return self-stick personalized return labels that can be affixed to upper left corner of the mythical Graysons’ outgoing household envelopes—their paid bills, personal letters, business reply mail.
When
recipients see their names and addresses multiple times showing through an
envelope window it’s (1) an instant attention-getter and (2) immediately
obvious as time savers. No more pain-in-the-ass writing their name and address
in the “From” section in the upper left hand corner of these stupid envelopes! (3) The guilt element: if I'm going to use Pine Tree Conservancy stickers on my envelopes, I really should send them a thank-you gift.
Freemiums may not guarantee a sale. But they get folks past the first step—opening the envelope (and hopefully being attracted by the offer).
Back in the 80s, 90s and early 00s, these label freemiums were widely used by direct mailers. Among the marketers who blanketed the country with these free goodies: Mothers Against Drunk Driving, Guideposts magazine and World Wildlife fund with its darling little panda logo.
The Wizard of Time-Life Books and Music, Joan Manley
During its heyday, Time-Life Books sold tens of millions of
copies of books marketed entirely via direct mail in series that ranged from
Gunfighters of the Old West (its bestselling series, selling three million copies
in the U.S. alone) to the Great Ages of Man.
—Jim Milliot, Publisher’s Weekly, Jan 10, 2014
In 1970, Joan Manley became Publisher of Time-Life Books. She
grabbed the reins of this most profitable arm of the Time-Life empire and sent
it into orbit. Under her aegis, for a while it was one of the top five
publishers in the world.
Joan was a creature of direct marketing. She lived, breathed and loved it! Headquartered in Alexandria, Virginia, the T-L warehousing and fulfillment operations were in Chicago—middle of the country, strategically equidistant from both coasts.
Joan told me that periodically she was called to the Chicago operation. Oh sure, she had to oversee things. But also it was an emotional pull; she had to get her hands on raw orders.
"It gave me a big belt at the time," she said to me after she retired, "and it would now. Direct marketing distances you from your customer, so for many reasons it is desirable to read the raw mail, as well as letters—good and bad—from readers."
She also loved the high of going to the direct mail printer and standing under the great presses as they churned out giant bed sheet circulars, the hallmark of the Time-Life mailings.
Happiness Is Bags of Incoming Mail
I fully grasped Manley’s delirium of burrowing through raw orders. As I wrote about the Peter Possum Book Club in Blog Post #43— http://dennyhatch.blogspot.com/2019/02/43-how-successful-direct-marketing.html:
“Test mailings went out and I discovered the orgiastic thrill of direct mail success. Every day giant canvas bags of business reply mail from the Post Office—filled with hundreds of book orders. Mountains of cash—piled into the mailroom.
Many of the orders contained hand-written raves from deliriously happy teachers. Peter Possum was an unequivocal, raging success!
The four partners, my editor Roberta Sewell, designer Gil Evans, the production team—indeed everyone in the company—were positively giddy.”
Fast Forward to Around 2000
At some point in the early 2000s I attended a Direct Marketing
conference in New York City. At a break-out session one of the panelists was the Boy Scouts of America development chief.
For over a year he had urged his team to test a mailing featuring personal return label freemiums. The copywriters turned their noses up at the idea. These things were tacky and not worthy of the elegance and glorious history of scouting.
This guy recounted how one day he wandered into the mail room and grabbed bag of Business Reply Envelopes just to see what was in his raw orders. To his astonishment, a huge percentage of these BREs had little personal return labels in the upper left corners—labels with logos from MADD and WWF and a bunch of other non-profit mailers.
DING! DING! DING! went the bells in his brain. It was suddenly obvious a large percentage of his donors had responded to mailings featuring these label freemiums. He called a marketing meeting and ordered his crew to test this concept. The test blew the prior control out of the water. The confirming retest did better than the test.
The result: BSA had created long term control that brought in tons of money!
Takeaways to Consider
• Joan Manley raised an interesting problem all direct marketers deal with: we seldom if ever meet, greet, talk to or interact with our prospects and customers face-to-face.
• In the good old days of direct mail, you knew your customers by their street address and zip codes. You knew customers who lived on Fisher’s Island, Florida, were among the richest people in the land. North of 96th Street in New York City was another story.
• List rental is a huge profit center for all direct marketers. To get our business they supply detailed data cards loaded with demographics and psychographics.
• We also had raw mail to paw through and open.
• Operating in the world of the one-line address (e.g. dennyhatch@yahoo.com) I could be anywhere in the country—from a shack in the hills of West Virginia to a mansion in the Hollywood hills to being a scammer in Russia.
• How can direct marketers meet their customers face-to-face and learn from them—their ideas, know their wants and fulfill their dreams? It’s a challenge.
• It’s the subject of a future blog post.
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215-644-9526 (rings on my desk).
Always happy to read your enlightening blog posts, Denny. Best holiday wishes to you and Peggy!
ReplyDeleteErnie,
DeleteSeason’s Greetings and thank you for taking the time to comment.
Delighted you find the blogposts “enlightening.” I never know if I’m resonating or off the rails. Am always happy and honored to hear from readers.
With all good wishes.
And do keep in touch!
Cheers.
The last six paragraphs, before the takeaways IS THE REAL TAKEAWAY. Thanks Denny for a wonderful article. Greetings from Chihuahua.
ReplyDeleteHey Armando,
DeleteThanks for your enthusiastic response. I’ve been carrying Boy Scout story around in my head for years.
I remember when Joan told me about her love of pawing through raw orders. I never saw it as much of business benefit… until years later I heard the Boy Scout story.
It’s amazing how all things seem to dovetail if you pay attention to business ideas.
Do keep in touch!
CHANGE THAT "IS" for ARE THE REAL TAKEAWAY.
ReplyDeleteHere's a fascinating response from a long-time reader gave me the okay to share this:
ReplyDeleteTo:dennyhatch@yahoo.com
Thu, Dec 10 at 11:58 AM
Love getting your email pearls of wisdom. If you were doing this 30 years ago it would be a mailed newsletter and if I wanted to respond I would write you a letter. Turnaround time perhaps two weeks. Now it is two minutes. Love those return labels . I have a stack of them that go unused because I hardly use the mail anymore. I am not alone. Social media is made up of many affinity groups. I can identify interests just by reading their correspondence. I can test a product or service by just putting the idea out there and see what kind of response I get. Can you imagine a successful creative piece being replicated by the addressee and mailed to all their friends at no cost to you. That happens every day on the internet ed. For the cost of one product ($60 cost) I can have Ambassadors promoting my product to thousands of their followers. On top of everything else I can see how and what my competitors are doing and plan accordingly. Instant pay into my checking account doesn’t have the thrill of seeing bags of orders with checks but it does save time and is good for cash flow. Then there is the information available at a push of a key. For no cost you can know how many people received and opened your offer, how many responding by taking action, where they came from (using codes) and finally you can have a conversation and get their input about the product . It is a new world and it has changed in the past nine months at a rate that is breathtaking. What has not changed are the motivators that move customers to action.
The last line is an echo of an email from Seattle marketing wizard Bob Hacker: “Focus on the emotional hooks, ignore the techno-babel.”
DeleteFrom long-time reader David Amkraut who gave me the okay to share this email in the comment sections:
ReplyDeleteTo:dennyhatch@yahoo.com
Thu, Dec 10 at 3:44 PM
Denny,
It’s always a pleasure to see your hand chosen mailings and what they teach us. Among other things, this story reminds us to at least try for your own product what is known to work for others. The attitude of the ignorant also shows up here: it’s tacky, it’ll never work; and so on.
Some of these labels could be better thought out. For example, I get mail address to my law firm and with salutations like “Dear Mr. Offices.”.
You have hit the nail on the head with your comments about actually knowing something about your customers. I always felt every person in my mail order firms should occasionally handle incoming mail, especially feedback, himself. Some copywriters and mail order businesses put in front of their desk a photo or two of their typical customer, or broad sampling of typical ones. I did it and it was very helpful. I could pretend I was chatting with them across their kitchen table. Also, how many businesses take the trouble to call up some customers, including happy and unhappy ones, and ask for a few minutes of their time. What they say can often be a revelation--- I found it so. Ditto chatting with them yourself if you take orders by phone rather than outsourcing that task completely to English challenged customer service in, say, the Philippines and Costa Rica.
Your faithful reader,
D. Amkraut
Happy Hannukah, Merry Christmas and a happy and safe New Year.
Denny,
ReplyDeleteA good reason for the labels is that the BACK of the labels was extremely helpful for allocating costs of the fundraising pieces. If it contains information about the programs the non-profit runs, the costs associated with the labels (the freemium) can be allocated to "program costs" in the P&L as opposed to "fundraising costs."
While that may seem like an insignificant detail, if you'd like to demonstrate that your organization spends less than a certain ratio of funds in fundraising, classifying the components in your direct mail is really important.
And as the label sheet is usually pretty big size-wise, a fair bit of your fundraising can be classified elsewhere in the P&L.
Hence the name of those labels in some organizations: The "FASB piece" referring to the Financial Accounting Standard Board.
As always, thanks Denny. Happy holidays and best for a better 2021!
Cheers,
Mark Pilipczuk
And, by the way, it's the stuff like this that makes proper direct response marketing so darn interesting!
DeleteMark,
DeleteMany thanks for this fascinating insight. I gather you mean there was promotional information printed on the back of the label sheets that could be allocated to printing rather than the high cost of the freemium thus changing the percentages of costs.
I am reminded of the 1980s when murdering/poaching African Elephants for their ivory was rampant. China was a huge market for this ivory. I published a Special Edition of WHO’S MIALING WHAT! pointing out how the animal protection organizations all sent out hysterical mailings to stop the slaughter. At the time only 2 or 3 of these charities actually had programs, workers and armed rangers on the ground shooting poachers and saving elephants—World Wildlife Fund and the Bronx Zoo’s Wildlife Conservation Society and maybe one or two others.
Many of the animal rights groups were jumping into the mail screaming for money to help save elephants when their real programs were was pets—animal cruelty, starving kitty cats and darling doggie-poos. Their rationale: No they were not physically saving elephants, but their mailings were raising consciousness and generating publicity nationwide about the problem. In short, they were claiming the mailings they were sending out were the actual programs. The mailers were making huge amounts of money from the mailings—paper, printing, postage, etc.
All donations were spend on mailings so they could mail more mailings, raise more money to make more mailings ad infinitum. This was bullshit. These mailing actually hurt elephants. People would get a legit mailing from WWF and would say, “Oh, gee, I saved elephants last week. I’ll give to cancer now.”
In fact, the only charity that legitimately claimed their mailing campaign itself was the program that saved lives was Mothers Against Drunk Driving (MADD). They sent out gazillions of freemium personalized labels with the MADD logo on them. These things would go out all over the country on bills, personal letters, payments, UPS and postal shipments. The message: “FOR GOD’S SAKE DON’T DRINK AND DRIVE!!!!!”
Thanks again, Mark.
Do keep in touch!
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ReplyDelete