Monday, June 30, 2008

You’ve got Mail


When IIPM comes to education, never compromise

The right message and design along wth the right database, can turn a direct mailer into a really lean, mean , marketing machine.

Back in 1886 a young railroad telegrapher in Minnesota acquired a shipment of unclaimed and thus undeliverable gold-filled pocket watches. They were exceptional in quality. He also happened to have a list of 20,000 names and addresses with him of railroad employees just like him. It struck him that they too would need an accurate timepiece. So he mailed each of them a letter which stated that he had just purchased an unclaimed freight of watches, whose quality he personally vouched for. He was selling them at a bargain price. Would they buy one from him?

If legend is to be believed, he sold all his watches in record time. Not just this, some of his new customers were soon ordering additional watches. So he mailed another letter to all his old customers, asking if they wanted more of those watches. Many said “Yes”.

If that was not enough some of his now regular customers, sent some of their watches for repair. So this time round he sent another letter to his customers, that he could also repair their disabled watches. He now expanded, by including repairing of watches as part of his business. Eleven years after his fortunate purchase of that unclaimed freight, his one page mailer had turned into a mail-order catalog of more than 750 pages with 6000 items. By 1902 the sales of his company had exceeded $50 million annually. The man was none other than Richard Sears, who founded the Sears, Roebuck & Company. Today the Sears Roebuck catalogue has become a household name. That’s Direct Marketing. If one has to go by definitions, then the best and the simplest was given by Drayton Bird. He said “any advertising activity which creates and exploits a direct relationship between you and your prospect or customer as an individual is Direct Marketing”.

Customers are getting more and more demanding. They expect greater variety of product and service to match their individual needs. They need to be targeted and marketed to directly, with tailor-made products. So direct marketing is growing in importance day-by-day. Today just about every company engages in direct marketing of one sort or another. In fact there are some businesses that are based on direct marketing – like Reader’s Digest or Time Life Books. Tools and techniques of direct marketing can be used effectively by any enterprise. Warner Brothers used it to promote their World War II movie “Memphis Belle”. They mailed 7,00,000 post cards offering a special $1 discount to each recipient and a guest for evening performances of the new movie. Interestingly these recipients were purchasers of the Time Life books or videos on subjects such as World War II, Nazi, Germany etc – all likely to be interested in the movie. Warner Brothers had formed a new organization Time Warner with the publisher Time Inc. They used this affiliation very intelligently to promote their movie. Direct Marketing did help in increasing ticket sales.

“If you sometimes unbutton your collar at the office we suggest you read on”. This was an advertisement for The Custom Shop Shirtmakers. It explained how only a custom made shirt could provide that extra quarter inch which was not possible in a readymade shirt. The ad. concluded by saying that “once we have your pattern you can reorder by mail or phone – very convenient” Come to think of it now you could actually order a shirt on the phone!
Back in 1952 Soichiro Honda and Mr. Fujisawa knew that one day they would have the best bikes in the world. Honda would make them and Fujisawa would market them. Honda soon made the Cub F-type. It was a small lightweight 50cc 2-stroke engine. It was smart and cute. This was also the time when often they would be asked by car dealers “What does this Honda Company do?” It was really difficult for them to get dealers and convince them to stock their product. That’s when Fujisawa thought of the numerous bicycle shops all over Japan. He decided to contact the country’s 50,000 bicycle shops by using a direct mail brochure. It was a masterpiece. It clearly showed how well he understood his customers. He wrote “After the Russo-Japanese War (1904-05) your ancestors took the courageous decision to launch the imported bicycle in Japan and they are still the basis of your business today. But now customers want bicycles with engines. We at Honda have made such an engine. Please reply if you are interested”. Fifty – four years ago, there were no automated means of sending out 50,000 letters. Every single one had to be written by hand. The work was given to freelance clerks. However time was short so all the staff joined in to help. The response was incredible. They received 30,000 enthusiastic replies.

From movies to shirts to bikes – everyone has gone the direct way and it works. A good direct mailer is always a very useful marketing tool. A product is just a bundle of benefits; your direct mail copy lets the consumer “sample” the product’s benefits before he buys it. An intelligently written mailer can work wonders for the bottom line of your organization. Bi-Intelligent, Inc. a New York based software company was selling a product called “Easyfire” which could enhance the performance of several software applications. It was priced at $89.50. The company sent out mailers where the headline on the envelope read “For $89.50 you can make your IBM as easy to use as a Macintosh”. Surely a lot of people did open those envelopes.There are numerous factors to keep in mind while working on a direct mail campaign. Remember the simple 3C’s rule.

a. The Customer

The customer is the lifeblood of any organization. Every business is about creation and cultivation of customers. As Peter F. Drucker once observed “Companies are not in business to make things, but to make customers”. So you need to understand your target market well viz a viz – in terms of what are their need and desires, and what is it that will motivate them to buy. Not just this you also need to cultivate your customers. There is no tool stronger than direct marketing which helps in knowing and cultivating customers. Today with the help of technology, you can easily find out who are your repeat purchase customers, who are the one time buyers and who are the most loyal. Accordingly you can customize your mailers and achieve better results.

So, know your customers well, and establish a relationship with them. Sales are simply the results of such successful relationships.

b. The Contents Once you know your market well, you can design a content which appeals to it. Anyone can write a letter, but not everyone can write an effective letter. An effective letter is one which clearly indicates “What’s in it for you”. The reader should know instantly how he or she will benefit from the offering. The reader should feel that he is the special one. If you can give a personal tone to the letter chances of success are higher.

Enthusiasm is contagious. Show it in your letters. Write like a winner. Open your sales argument with your strongest sales points. The reader will definitely respond. Even though there are no rules yet some sentences always work. Like

a) I have something you want….

b) I want you to have this, but If I don’t hear from you I’ll have to offer it to somebody else.

c) You can still get rich…

To these claims, if you can add something which makes those claims sound authentic, you have hit the nail on the head. To the above three claims you could add sentences like


a) Here’s why or This is why I’ve chosen you for this offer.

b) That’s because …

c) This is what will happen…

There are some tricks which somehow always work.

1. Open your letter with a question. It immediately and almost always involves the reader.

2. Use exclamation marks… the reader will exclaim with you!

3. Your contents should compel the reader to open the envelope. If you can do that, you have been successful. Consider this. You received a letter which says “Congratulations! You are our million dollar prize winner…”. Chances are you will open the envelope.

4. Case studies have shown that a reader typically reads the first few lines of the letter and then his eyes go down the page to the P.S. So the postscript is your best buddy. Its always a good idea to incorporate the main points of the letter in the P.S. once again.

5. Always call for action at the end. Either ask them to call a toll-free number, or create a deadline. A deadline usually increases the rate of response. 6. “Brevity is the soul of wit” said William Shakespeare. He could not have been more correct. A short letter with short sentences and very simple eighth grade english always works.

7. The Golden Rule is that there is no rule. Before you launch your direct marketing, blitz test, test and test. If it works it’s a rule! Follow these tips and you would be ready to make a rocking mailer.

b. The Contact The actual people who receive a mail from you are very critical. You must have the right mailing list. A good database is a very powerful tool and companies go to any extent to build it.

Gerber is a company known for baby food. The company entered into life insurance. While the baby food was sold off the shelf the company decided to sell its insurance policy by mail order. The insurance covered the child till he was 27 years old. The slogan they used to market to the parents was “Ask your baby about us.” Initially they had no database. However once the people applied, the company soon started targeting the children, once they became young adults. The mailer said “Your parents bought this life insurance for you when you were born and have been paying the premiums ever since. Isn’t it time you started buying your own life insurance?” The company had developed a relationship and was now leveraging that. Many of the children did stick to Gerber Life Insurance – just like their parents. If this was not enough, when the parents became grandparents, Gerber sent them a letter reminding them, how they had insured the lives of their children. Now wouldn’t they want to do the same for their grandchild? Not many refused!

A mailing list afterall is not just a collection of addresses. It is a list of people who actually need your product or service. Gerber for one sure has developed a very strong and relevant mailing list.

The falling birth rate in Britain was a cause for concern for C&J Clarks Ltd., Britain’s largest shoe manufacturer. The retailers started stocking less and less of baby shoes. Magazine advertising was not helping much either. So the company decided to go direct. They contacted 2,80,000 new mothers while they were still in the hospital and presented them with a “Bounty Box”. It contained a letter offering a poster which could be hung in the infant’s room and had a copy describing the various milestones the infant would pass through – like when would he start crawling then sitting then speaking then walking. When he would start walking he would need shoes. So the letter also described the benefits of buying the right “First Shoes” for the child. About 15% mothers wanted the poster. So Clarks soon had a database of 42,000 customers. When the children of these mothers were about to start walking, the mothers once again received a letter from Clarks with a leaflet describing how to choose the right shoes and the hazards of choosing ill-fitting shoes. Of course as the baby grew he would require another pair and there always was a letter from Clarks to remind the family where to go to. These letters always resulted in increase in sales because they were targeting the right customers.

The success of any direct mail programme depends of the Contact list. Make sure its relevant. Otherwise it doesn’t take long for “Bulk-mail” to become “Junk-mail”. That’s the razor’s edge you walk on. So you need to select your prospect with care.

Finally, remember studies have shown that it takes eight to ten contacts before people remember your message. No wonder you see the same ads being repeated again and again on T.V. So don’t stop mailing. Keep in touch with your customers constantly. Keep knocking on their mail boxes and keep reminding them about you and your product – they will take notice. If your mailer is well written and relevant they will respond. So go ahead reach out directly to them and say – you’ve got mail! It will work.

Copyright © : Rajita Chaudhuri and Planman Media.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM, GURGAON
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!



Saturday, June 28, 2008

Accor lets go off Red Roof top!

TheAccor lets go off Red Roof top! French hotel group Accor has finally completed the sale of Red Roof Inn - its US based hotel chain comprising of 341 hotels. Accor, which has a long list of successful hotels like Sofitel, Pullman, Novotel, Mercure, Suitehotel, Ibis, All Seasons, Etap Hotel, Formule 1 and Motel 6, sealed off the deal for a whopping $1.3 billion to a consortium comprising of Citi’s Global Special Situations Group and Westbridge Hospitality Fund. The strategic move by the group is expected to reduce its adjusted net debt by about $1.14 billion. Accor with its ambition to be the world leader in budget and economy hotels, after shedding weight, now plans to focus heavily on its Motel 6 group - a low budget motel chain in the US with 928 establishments at the moment. And the brave plans are all there too! The group plans to open 200 more units in the United States and Canada by 2010. A good deal indeed!

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Source :
IIPM Editorial, 2008

An
IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!


Phon(e)y? Not really!


IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES

WonderingPhon(e)y? Not really! what to give your jet-setting top boss this festival season? Giftworks, the new brand from Archies, has the solution with their striking range of Swedish royal antique desk phones. Coupled with a vintage hue, these phones have an air of exclusivity and will sit perfectly in theplush cribs of the society’s upper crust. Costing just Rs. 4,999 each, they’re also among the few affordable luxuries...

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Source :
IIPM Editorial, 2008

An
IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM, GURGAON
ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
IIPM Economy Review




Friday, June 27, 2008

sensational eye opener

So if you have not been the first mover or have nor been able to invent something new, don’t worry. Gillette didn’t invent the safety razer, it was a company called Star! Gillette marketed it brilliantly. In fact iPhone is not as good as the original called IBM Simon which was priced at $900 back in 1994 and had most of the features found in today’s smart phones. In fact its buttonless touch screen interface was better than iPhones. Yet, the IBM Simon flopped. History is proof that it’s not the largest, strongest or fastest that survive, but the ones who are ready to adapt. And sometimes it’s actually good to be the second best. As Avis once stated in its ads “We are No. 2, that’s why we try harder.” Spot a winning product, a winning trend, keep an eye on customers needs, be flexible and don’t sit on your initial successes, for competitors are always keeping an eagle eye on you. Keep moving, try a lot of things, but keep only those that work and quickly discard those that don’t. Henry Ford once said “I believe, the best strategy is to be the first person to be second.” After all, first ain’t always good enough!

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Source :
IIPM Editorial, 2008

Royal Crown Cola

You just need to be alert about the best practices and incorporate them. “Shamelessly copy best practices,” says Jack Welch. That’s innovation for you. Throughout its history, Japan excelled at finding the best the world had to offer and then adapted and improved it. It is this that accounted for its stunning economic growth between 1945 and 1985. Just being a pioneer is no big deal. Nearly 47% of all market pioneers fail. Chucks invented the disposable diapers, yet it’s Pampers (of P&G) which is the leader. It was not Coke or Pepsi that invented the diet cola but a company called Royal Crown Cola. Ericsson was the first mover in the mobile market, but Nokia realised that it was design which appealed more to the consumers. Nokia leads the mobile phone market today. Similarly, Matsushita has always got a piggy ride on other firm’s inventions (like Sony), rarely inventing any thing new. It just identifies the winning products, makes them and markets them well.

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Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Gillette didn’t hesitate to develop Mach 3

Gillette didn’t hesitate to develop Mach 3 which would kill off its own product Sensor Excel, which was a highly profitable product. Cannibalising your own product is a tough call to take, but that’s what survivors are made of – they don’t fall in love with their old inventions, they move on. Overnight delivery was not a new concept but FedEx gave a whole new meaning to it. The US Postal Service is still reeling from that one. The automobile industry in the 50’s and 60’s was in an enviable position. However, during the 70’s oil crisis, consumers demanded smaller fuel-efficient vehicles and only those who stood up and took notice reaped rich dividends. No wonder, Japanese auto-makers easily captured the US car market. There is no guarantee of continued market dominance where technological innovation is possible. If you need to survive you need to keep innovating and changing. It’s not necessary to discover something new.

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Source :
IIPM Editorial, 2008

Thursday, June 26, 2008

Mouth watering Indian lands

The company has also tied up with PVR Cinemas and various domestic airport authorities (in Delhi, Mumbai & Kolkata) to open its outlets. And what about a measure of its success? Well, the sheer fact that the company broke even during 2007 proves that it has more than silenced its critics. And there is more good news with the company’s revenues growing at a blinding CAGR of 200%! But here again, a word of caution as many QSRs have lined up to unfurl their colours on the mouth watering Indian lands. Talking about the challenge, Ashish assserted, “Sustainability in restaurant business depends on creating more and more flagship products. We have been doing that on constant basis and we make sure that our flagship products are low priced,” says Ashish. Sure enough, despite many challenges, Yo! China is all set to grow... both in India and globally.... And how sure are we? Well, think about it – didn’t you see the crowd outside a Yo! China outlet the last time you passed by it? Well, thanks... Your answer, answers it all!

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Source :
IIPM Editorial, 2008

Wednesday, June 25, 2008

BRAND : Ansal API

BASELINE : Building Lifestyles since 1967
4Ps TAKE : The real-estate sector is booming and most construction companies are advertising wisely and aggressively – making hay while the sun shines, of course! Then, isn’t it ironic that despite its 40th year in the construction biz, Ansal API’s print ads in red & black still look so bland and uninspiring. No wisecracks, no striking visuals, instead only a body copy full of achievements listed in a boring, monotonous manner. Even the visuals appear to be cut and pasted from some award function’s invitation card. Well, we are only left wondering whether the minds behind this ad, really used their minds in the first place. Bleak words and visuals apart, they clearly forgot to position the product, leaving no reason for the consumer to keep the brand recall intact. Raising skyscrapers is no doubt commendable and bringing smiles to millions, even better. But a humble request to Ansals: If you sincerely wish to promote yourself, make an effort and flip through the 7 commandments of advertising. The rest will follow automatically.

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Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

BRAND : Shark Tooth

BASELINE : Lead the way
4Ps TAKE : For those who don’t know about Shark Tooth, let us give you a background first (because after seeing this horrendously misleading ad, you won’t be able to gather anything, anyway). Almost a year back, Diageo launched Shark Tooth, a Vodka which comes in two variants, Shark Tooth and Shark Tooth Extra. And this surrogate ad of Shark Tooth does literally nothing to add value to the brand. The story board is hardly related to the product in question and the script is as unrealistic as it can get. A couple of businessmen are asking people to vacate a house near a seaside, when hero-Shiny Ahuja enters and asks them to buzz off. The adamant men ask Ahuja to show them the boundary-line of the house, our man whistles and a shark comes racing from the sea and creates a boundaryline on the land. Now how lame is that! Apart from the forced association built between the brand name and the unwanted shark, there is zilch else that makes even a bit of sense in this TVC. Hello! Learn the ABC of advertising before you go all out for the consumers!

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Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

BRAND : Igo TV

BASELINE : Choo lo aasman
4Ps TAKE : At first, you feel that this is a promotional campaign of Daler Mehndi’s latest track, but hey, as the ad finishes, the logo of Igo TV pops up unexpectedly. Only then do you realise that it’s Igo TV promoting its television sets. The logical question: What is an ad without a ‘decent’ storyboard called? No, let’s re-phrase that. What’s an ad with a ‘stupid’ storyboard called? This one’s as pathetic as they come. Not only a confusing ad, but also one that fails on all counts. If ads were just about roping in a famous face as brand ambassador, guess every brand out there would have acquired a fair chunk of the market by now. Unfortunately it requires more. Mehndi is wasted and even the communication is meaningless with the brand boasting better sound than hearing Mehndi ‘live’ (sound clarity, anyone?). Forget touching the sky (choo lo aasman), this one requires some good positioning and brand strengthening on the ground first...

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Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tuesday, June 24, 2008

A toilet worth $19 million!

Outsourcing in space at its best...
NASA is in the line of fire once again. Having lost the ever-famous video of man’s first step on the moon, causing speculations about the theory of the moon landing hoax last year, guess what they’ve done now! They have purchased a Russian built toilet system for a whopping $19 million for the International Space Station (ISS), claiming that it was cheaper than building their own from scratch. The expensive toilet will be installed on the American side of the ISS in 2008, while the Russian half will have to make-do with the old system only. This is part of a larger $46 million deal that NASA signed with Russia’s RSC Energia. The space station toilet physically resembles those used on Earth, except it has leg restraints and thigh bars to hold astronauts down. A NASA spokeswoman claims, “It’s like a miniature municipal water treatment system.” The system is similar to the one used at the space station currently, except that new one will be able to recycle urine into safe drinking water. Eeks! About $16 billion of the American taxpayers’ money goes to NASA’s funds each year and hey... here’s how NASA has chosen to spend it. And if the Russian built space toilet is similar to the one already in use on the space station, they could just as well have improved upon the design they already had in use, isn’t it? Why buy a whole new system anyway? They surely wouldn’t be designing it from scratch if they already have one in service for sure! Well, the $19 millions are already spent, so no sense in arguing. NASA is NASA and NASA puts its funds in things they want. That much money for a highly engineered toilet, but one that 99.9% of the world population will possibly never ever use! Welcome to planet Earth...

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Source : IIPM Editorial, 2008

Successful in capitalising

Closely tied up to it, have been incessant price cuts, a tactic the Chinese customers have actually fallen for, hook, line & sinker. By reducing average voice revenue per minute by 19.8%, the company was able to increase total minutes of voice usage by a whopping 230%! The company has also been successful in capitalising on the VAS space. Revenues increased by 35.5% to touch RMB 41.91 billion. Colour ringtones & MMS were stellar performers, rising by 90.3% & 76% in revenues respectively. While detractors may condemn its monopoly, the fact remains that China Mobile is proving to be quite adept at innovating business practices to retain leadership & profitability. And with the 2010 Beijing Olympics just around the corner (China Mobile being the official mobile services provider), its dominance over the Chinese consumer mind space would be just about complete.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

The dragon’s breathing fire!

China mobile ‘achieves the unachievable’
Do pyramids have false bottoms? Not really, though one could indeed get that impression if one analyses the rising fortunes of China Mobile Ltd.. The company, is clearly riding the crest of China’s telecom boom, with a virtual monopoly over the sector. Recently, the company announced its results for H1 2007, and posted a fabulous turnover of RMB 166.6 billion (y-o-y rise of 21.6%), and profits attributable to shareholders of RMB 37.9 billion. Moreover, the growth in subscriber base is on a consistent upswing showing 21.4% growth y-o-y to reach 332.38 million, a commanding market share of 68%. Stated a confident Mr. Chairman, Wang Jianzhou, “We are adept at leveraging our innovations to face changes in the business environment.... In the second half of 2007, we will continue to focus on exploring rural markets, expanding VAS & optimising our network....” Rural markets have been at the core of China Mobile’s strategic reorientation, as urban markets of China gradually started approaching saturation. Half of the new subscriber additions in H1 2007 came from the rural markets.

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Source : IIPM Editorial, 2008