Heading Up the DR Fan Club16 Sep, 2010 By: Thomas Haire Response
David Lee has nothing but good things to say about direct response -especially DRTV- which has grown DirectBuy's Business to new heights.
DRTV Leads the Charge
DRTV became the company’s leading weapon because of talented marketers creating great long-form shows that made the benefits of DirectBuy membership — cost savings on products from 700 brand-name manufacturers in the U.S. alone, for one — clear, while offering potential members great reasons to learn more about the company. Driving calls and store visits is the clear name of the game for DirectBuy’s marketing leadership.
“From the inception of the DRTV campaigns, it’s been all about incentives,” Lee says. “We started with the ‘Free Insiders’ Guide and Visitors’ Pass’ campaign, which included an eight-to-12 page booklet outlining DirectBuy and the benefits of buying direct from the manufacturer.”
From there, the company moved its DRTV offer to the 30-day free trial — “Let the consumer experience the benefits,” Lee says — with up to $1,000 of purchasing privileges. This has been the base of DirectBuy’s campaigns in recent years.
However, another idea arose for DRTV through — of all places — an incentivized outbound telemarketing campaign. The concept? Offer a contest to win a $50,000 home makeover to draw consumers to give DirectBuy a look. “It was so successful on the phone that we had to try it in a TV spot,” Lee says.
Since taking the campaign to television, it’s done “amazingly well,” Lee contends. “We measure everything on a cost-per-lead (CPL) basis,” he says, referencing his presentation at Response Expo 2010 in May. “For us, a good benchmark is a $50 CPL. With the makeover campaign, we’ve seen CPLs as low as $12.”
The company also has a number of other measurements it uses. “In addition to pure leads, we measure things like ‘door rate’ — who comes in — and ‘close rate’ — who signs up,” Lee says. “Any 1-percent increase in door rate generally leads to a 10-percent increase in sales. With the makeover campaign, we are up two points in door rate. These measurements are also applied to our print, radio and Internet campaigns, but it’s direct response television that has opened — and continues to open — the doors to lower marketing costs and increased ROI.”
Another thing Lee and his team consistently monitor are aging campaigns — both from a creative and a media-positioning standpoint. “Offers get tired,” he says. “You have to consistently refresh the campaign. Sometimes you even have to re-target your media, which — working with Euro RSCG Edge for all of our U.S. buying needs — is something we’ve done. We’ve gone back to stations that we’d pulled off of. We’re in pretty heavy rotation now on networks like HGTV, CNN, Bravo, TLC — there’s a higher quality viewer on the networks we’re seeking out now.”
Lee’s belief in television continues to shine through when asked which media outlet is most effective for DirectBuy’s marketing efforts. “TV gives us the base to do everything else,” he says. “TV provides so much awareness and lift, that without it, we’d face a lot of challenges in other media.”
But, he also believes that different campaigns offer different levels of conversion, and other media can work well. “Radio converts well,” Lee says, adding that DirectBuy usually makes deals with dedicated hosts for live read ads on their shows.
“We give them the opportunity to experience DirectBuy,” he adds. “We’ve seen good results in conservative talk radio, and we recently teamed with Howard Stern, which has driven good results. The hosts resonate with their listeners, so when those listeners do come in, they tend to join.”
Lee also says print media is a “good converter,” pointing out that DirectBuy looks for quality leads from publications like Martha Stewart Living.
The Internet is the most recent addition to DirectBuy’s DR marketing arsenal. “The Web is like the ‘Wild, Wild West.’ It’s so expansive that it’s taken us a while to figure it out,” Lee contends. “We’ve expanded from generic, organic search to more pay-per-click (PPC) campaigns, E-mail and display advertising. We believe we’re just scratching the surface on the Internet. We’re now testing landing pages that can be localized, bringing consumers to their local brick-and-mortar store.”
Partner Knowledge Drives DirectBuy
DirectBuy’s marketing partners have been crucial to the company’s expanded marketing universe, Lee says. “There are a lot of agencies out there, and we’ve worked with quite a few — it’s how you learn who can offer the best service and knowledge,” he contends. “It makes the most sense to go with the ‘best of breed’ in every category — agencies that drill down and know a particular media.”
In addition to using Euro RSCG Edge for its U.S. DRTV media buying, the company works with Mercury Media for its Canadian TV buying — “the two best DRTV media buying companies,” says Lee.
This best-of-breed plan continues across all media. “We use Robinson Radio for radio buying — they’ve proven they can get results,” Lee says. “We work online with a few agencies, but Undertone Networks and Intermundo Media are, simply, second to none. For print, specifically free-standing inserts (FSI), we’re very happy with Novus.”
Lee contends that the common denominator with all of DirectBuy’s agency partners is market knowledge. “It’s priceless — in house, we can only know so much,” he says. “There are certain questions you can’t answer. To be able to tap into these experts and maximize their services makes our lives easier.”
Looking ahead, Lee expects DirectBuy to continue to lean on DR marketing across all media. He enjoys the breadth of opportunities direct response provides, as well as the constant effort to maximize ROI from each campaign.
“DR always presents a new challenge — every day, there’s always opportunity,” Lee says. “With a branding campaign, it’s simply about recognition. But with DR, there are just so many ways and angles to attack it, to make the phone ring, to bring in customers.”