Guest Opinion: Does the Mecca of Direct Response Lie in the Art of Fulfillment?1 Jul, 2011 By: Nicola de la Salle Response
By Nicola de la Salle
Many veterans of the direct response industry remember the days when most marketers played the role of King Midas — turning every campaign into gold. Flash forward 10 years and now only an elite group of products enjoy this success.
What are the critical factors to the success of your campaign? Is it access to the best media, creating the most dynamic offer, maximizing the Web and call center conversion, or the fulfillment center’s ability to pick, pack and ship? All of the above are essential to the success of a campaign. However, with so many vendor partners and variables, how do you ascertain if your campaign has legs?
Intelligence plays a large role — and I’m not talking about human intelligence. I mean access to intelligent data.
How many times have we heard of a seemingly successful campaign monopolizing media and occupying premium retail shelf space only to discover that a year down the line they are closing up shop? They believed they were achieving the MER (media efficiency ratio) needed to pay their media bills only to find out that they hadn’t taken into account any of the backend costs. In effect, they were shipping a dollar to the consumer with every sale.
It is more than just being able to access information on daily shipments. Accessing analytics on an entire campaign is a fundamental requirement and tying all information together from all vendors is critical. There is no doubt that the MER provides a good indication of a campaign’s potential and potential of the marketplace. But in order to build a sustainable campaign, other campaign costs need to be taken into account — including cancellations, returns and declines by source.
As Sir Arthur Conan Doyle, author of the famous Sherlock Holmes novels, aptly stated, “It is a capital mistake to theorize before one has data. Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts.”
In other words, the data in a fulfillment house’s order management tool highlights the most important opportunities, as well as any areas requiring improvement. There are many intelligent conclusions to be drawn. For example, a high return rate, along with analysis of the return reason codes, could indicate an issue with the offer or telemarketing scripting. It could also highlight the need for additional instructions to be included with the product. Both examples offer cheap and effective solutions to re-engage the customer.
By assimilating the data that drives the consumer to purchase along with the data that causes them to cancel and return products, marketers will be better able to monitor and manage a campaign as well as make fast adjustments. Real-time visibility reduces unnecessary expenditures, promotes more revenue per customer and assists in improving the lifetime value of the customer. Armed with this intelligence, you can grow your business rapidly.
However, you must be ready for some surprises. You may think you know your consumer base, but the data often unveils unexpected information. Looking at an attrition report, for instance, you may find that a small media buy provides you with the highest lifetime consumer value or that the average sale was significantly higher in an unlikely ZIP code.
Once you’ve analyzed, optimized and celebrated your success, what’s next? Your consumer base is your most vital asset, and there is untapped potential in turning these consumers into repeat purchasers. Not only does this offset some of your customer acquisition costs, but it allows you to enhance your brand and receive additional revenue streams through the sale of upsells and relevant cross-sells. As your business continues to grow, you can use this data to influence your next move, whether you need to forecast inventory, manage inventory turns, improve your merchandizing mix or evaluate vendor performance.
The art of fulfillment services lies in the data allowing you to save time, think fast and focus on what matters to your business.
Nicola de la Salle is executive vice president for international and vice president of strategic sales and marketing for Thill Logistics. She can be reached via E-mail at firstname.lastname@example.org.