CHAPTER THREE
DIRECT-RESPONSE ONLINE MARKETING
Squeezing the Juice Out of the Low-Hanging Fruit
Whether you have a plumbing business, a gardening business, or are a restaurateur, e-mail marketing is a necessity, not an option.
That is exactly what one former family-practice physician, David Keller, learned in 2005. He had spent years consulting for a health publisher that used snail mail to send out all of their products and marketing efforts. But Dr. Keller believed that to truly help the buyers of their health products, they needed to be able to communicate with them more often, answer their questions more quickly, and do so in a manner that would not bankrupt the company. In other words, they needed a way to contact their customers and prospective customers better, faster, and cheaper.
E-mail seemed like the logical solution to Keller, so he began with the names of the company’s existing customers and gradually built an e-mail list through joint ventures and pay-per-click (PPC) advertising.
He soon found that by communicating with people directly, the company was gathering information about the things customers were interested in that they would never have learned otherwise. And as the list grew, so did the company’s revenues.
Because of the negligible cost of e-mail, the company was able to send sales letters not every quarter or every month, but every week or even every day. And instead of receiving complaints, as Keller initially feared, he found that people enjoyed hearing from them much more frequently!
Eventually, Keller left the health publisher and went out on his own, putting his online marketing efforts to work for himself. Today, he has a multimillion-dollar business that grows larger and larger each year . . . as a result of e-mail marketing.
More multimillion-dollar businesses have sprung up in the past 10 years than in the past 50 years because of e-mail marketing. It is the single most powerful marketing channel today.
Doing business faster, cheaper, and better than your competitors is a fundamental business strategy—and the Internet multiplies its relevance. In this chapter, you will see just how relevant this strategy is.
THE INTERNET MYTH
Before we explain how to optimize e-mail marketing in your advertising mix, we need to clear up a common misperception.
Most people associate direct e-mail (endorsed or dedicated) marketing with direct-mail marketing (mailing advertising promotions to customers that elicit a direct response). But they are very different.
For one thing, direct e-mail is much cheaper than direct-mail marketing. The cost of sending an e-mail is virtually nothing. Compare that to the cost of a first-class stamp, especially when you’re mailing thousands of pieces at a time.
This low cost of delivery means that you can communicate with your customers almost as much as you want to through e-mail. At Early to Rise, we “talk” to our customers this way hundreds of times a year. With traditional direct mail, we would be limited to sending them perhaps two dozen sales letters annually. The return on investment (ROI) simply wouldn’t justify sending more.
Another difference is that with an e-mail campaign you can often monitor, in detail, customer reaction to your ad. You can, for example, find out if they clicked on a link in the e-mail to read the full promotion. You can also see the results (sales) immediately.
This brings us to another difference: Speed.
E-mail gives you the ability to test your offers, see what’s working, and quickly make changes to generate more sales. (We’ll talk more about testing later in the book.) And if a major news event takes place, you can incorporate it into your sales message that same day.
Direct e-mail is different from direct mail in another important respect. Because of anti-spamming laws, it is illegal to send e-mail promotions to people who have not “opted in” to receive them. In the direct-mail world, businesses routinely send solicitations to people without first getting their permission. Mailing lists—both compiled from public sources and rented from third-party businesses—are the primary source of customer acquisition.
THE CAN-SPAM ACT
In 2003, the United States enacted the first law regulating unsolicited commercial e-mail. The Controlling the Assault of Non-Solicited Pornography and Marketing Act, better known by the clever acronym CAN-SPAM, also lays down several rules for sending marketing e-mails. Some of the basics:
• All e-mails should have an unsubscribe option, and recipients who opt out should be taken off the list within 10 days.
• You must include a full postal address at the foot of your e-mail, and any removal request sent by postal mail to that address must be honored.
• The addresses of people who opted out of your list shouldn’t be sold to other marketers.
• “Subject” and “From” lines should accurately describe the message content and the sender and not be deceptive in any way.
Within five years after the act came into effect, hundreds of violators were charged and convicted of spamming, with sentences ranging from fines to jail sentences. However, Internet experts disagree as to whether the law has had any real impact on the amount of spam in e-mail inboxes. As a legitimate e-mail marketer, it is nevertheless very important that you follow the rules of the CAN-SPAM Act.
But in the Internet world, you cannot do that without getting into trouble. This means, for one thing, that although traditional direct-mail promotions are routinely sent to prospects through the mail, e-mail promotions can be sent only to existing customers.
Let’s take a look at how that difference plays out in advertising. If you are in the plumbing supply business and you want to become the world’s biggest seller of left-handed monkey wrenches, you cannot simply e-mail your best monkey-wrench advertising piece to people who have bought other plumbing supplies before. Instead, you would have to develop a two- or three-step program that avoids the spamming process.
You might, for example, buy an insert ad (also known as an “e-newsletter ad” or “e-news sponsorship”) in an Internet newsletter on plumbing. You might buy a banner ad on some sort of plumbing web site or on a banner ad network that has a home improvement channel. Or you might make an affiliate deal with another plumbing supply business in which they would send an endorsed or dedicated promotion about your product to their list of buyers. Or you might pay Google or some other search engine or display ad network to list an ad for you based on “keywords” that relate to plumbing.
The purpose of such efforts might be to direct responders to a landing page in which the monkey wrench was directly sold (a sales effort). Or it could be to direct them to a site where they could sign up for a free gift—some sort of plumbing information package or home repair publication that they would receive in return for their permission to let you send them advertising promotions in the future (a name collection effort).
Only after you have created a list of thousands or tens of thousands of willing prospects would you be able to send out an e-mail sales letter that would elicit the kind of response that you could get with a one-step sales letter in the mail.
Welcome to the world of direct e-mail advertising—a more complicated version of direct-mail marketing that relies on the same basic principles but can deliver much greater selling power.
In this chapter, we will examine all of the major aspects of direct online marketing and advertising, including text ads, sponsorships, insert ads, banner ads, endorsed (or dedicated) promotions, co-registration, and polls.
But before we discuss these techniques individually, let’s point out some of the major characteristics of the Internet as a direct-response advertising medium.
• There are two ways you can contact prospective customers. You can post an ad on a web site, e-newsletter, blog, or portal page and wait for the prospect to come to you. Or you can send a promotion directly to your prospect’s e-mail address. The first way is sometimes called pull marketing; the latter, push marketing.
• Because, as we have said, you can’t send advertising via e-mail to people who have not agreed to let you do so, Internet marketers often give away free products or information in exchange for that permission. This is called permission marketing.
• Because of the requirement to get permission before you send advertising to people via e-mail (which doesn’t exist with postal mail), direct e-mail marketing has become a two-step process. The first step is to develop a list of people who will accept your advertising. This list is built through the use of banner ads, insert ads, and so on. The second step is to send them your direct-response promotions. These are usually longer pieces, similar to direct-mail sales letters. It is useful to think of these two functions separately, and even to designate them as separate marketing processes within your company.
• Because of the two-step aspect of direct online marketing, short-form advertising copy is now just as important as long-form copy, which has traditionally dominated direct-mail marketing.
• To be successful at direct online marketing, a company must be skillful with both push and pull advertising, as well as long- and short-form copy.
Yes, there are several basic differences between direct-mail and online marketing. But the similarities are much greater. Direct-mail advertising is based on psychological principles that have not changed with the rise of the Internet. To be effective, direct e-mail advertising must follow these same principles.
SIMILARITIES BETWEEN DIRECT E-MAIL AND DIRECT-MAIL ADVERTISING
To get a ready handle on e-mail advertising forms, it helps to compare them with older, more traditional ones. Let’s take a quick look:
Banner and Pay-per-Click Ads: These are like roadside billboards or small newspaper display ads. You don’t have much time to catch the prospect’s attention. The advertisement is competing against all sorts of distractions. The trick to making banner and pay-per-click ads work is similar to what is needed for billboards or small display ads. You need a strong hook, something that is almost impossible to overlook. It sometimes helps if it is indirect, surprising, or odd in some way. Remember, you have only seconds to get someone’s attention and have them take action (click), so a powerful or controversial headline, leading question, or strong visual image usually works.
Insert Ads or E-News Sponsorships: Insert ads are little ads placed in e-newsletters. They are like small display ads in the editorial pages of magazines. Insert ads are longer than banner ads but still relatively short—usually 20 to 50 words in length. The secret to writing effective insert ads is to craft provocative, emotionally stimulating propositions.
Endorsed Ads: Endorsed ads are sent as standalone promotions to lists of qualified customers. Because they are sent separately, they are usually long, like direct-mail sales letters. The way to make endorsed ads work for you is to treat them the same way as direct-mail promotions—which means giving them a great deal of your time, attention, and creativity.
PRINCIPLES OF DIRECT E-MAIL ADVERTISING
In no specific order, here are 10 important principles that govern direct-mail marketing.
1. Copy is King. There are three components that govern the success of any promotion: the quality of the list you mail to, the offer you present to the prospect, and the copy you use. Of these three, the list is the most important, the offer is next, and the copy is third. The right offer with great copy mailed to a bad list will produce zero results. Mediocre copy with a mediocre offer mailed to a great list can produce good results. That said, selecting qualified lists and framing attractive offers is less difficult than crafting great copy. That is why in direct e-mail, as in direct mail, copy is king.
2. Long copy out-pulls short copy. This principle is highly controversial. Many Internet copywriters believe that the nature of the Internet—which makes it necessary for prospects to read copy on a screen—favors short copy. Although short copy can sometimes work very well, hundreds of tests that we have seen prove the old direct-mail maxim to be true: Other things being equal, longer copy is usually better.
3. When it comes to long copy, the lead is 80 percent of the game. A typical direct-mail or e-mail promotion has three parts: the lead, the body, and the close. The lead is usually less than 20 percent of the whole, but it carries the responsibility of conveying the “big idea” of the sales message and provoking an appropriate emotion in the reader. If you can do that consistently in your e-mail promotions, you will have a great deal of success.
4. In crafting a lead, stick with the proven six. There are dozens of ways to begin a long-form sales letter, but in the history of direct mail, six have dominated. These are: offer/promise, invitation, problem/solution, secret, story, and prediction. If you can figure out which of these six leads works best for the offer you are making, your chances of success will skyrocket.
5. All leads range from being very direct to very indirect. Direct leads are those that are obviously sales pitches. Indirect leads appear to be doing something else. Each approach has its strengths and weaknesses. Effective e-mail marketers make wise use of both.
6. Given two packages with equally strong leads, the one that is well-balanced will do better. A well-balanced promotion has four aspects: idea, benefit, credibility, and track record. We call this “the secret of the four-legged stool,” because if your promotion has all four of these “legs,” it will be well balanced and it won’t topple over.
7. When composing headlines and bullets, details matter. At Agora, we teach our copywriters to make their headlines and bullets more powerful by focusing on what we call “the four U’s”: uniqueness, usefulness, urgency, and ultra-specificity.
8. Every product needs a unique selling proposition (USP). Essentially, the USP is what makes your product stand out from the competition and gives your prospect a good reason to buy from you. Ignore this principle at your peril.
9. Benefits are better than features—and deeper benefits are better than superficial benefits. For example, don’t tell a prospect that the car you are selling has good tires and suspension. Those are features. Instead, describe how, because of those features, they’ll be able to maneuver easily through rush-hour traffic and avoid accidents with dangerous drivers. If you understand the deeper benefits your product offers, suggest them (indirectly, not directly) in the copy.
10. Write to one person at a time in the language you would use if you were talking to that person face-to-face. That doesn’t always mean informal language. But it does mean conversational language.
Those are not the only principles that govern direct mail and e-mail marketing, but they are 10 of the most important.
NOT ALL LISTS ARE CREATED EQUAL
Perhaps the most important part of any marketing campaign is to target the right audience. In the old direct-mail days, it was called list selection. Today, depending on the specific marketing channel we’re using, we sometimes refer to it as media buying—but it’s the same thing.
There are basically two kinds of lists that you can market to:
1. Your house list
2. Outside lists
House Lists
Your house list in the e-marketing world comprises names you have received permission to market to. They can be divided up as follows:
• Hot Leads—people who have opted in to receive e-mails from you but have not yet made a purchase. They have taken the first step by saying they want information from you. The more valuable the information that you supply them for free, the more they trust you, and the sooner you can turn them into buyers.
• Buyers—people who have opted in and have purchased one product from you. Even though they have made their first purchase, you should continue to supply them with valuable free information. The next step is to turn them into multibuyers.
• Multibuyers—people who have opted in and have purchased more than one product from you. You should continue to supply these people with valuable free information as well. Your job at this point is to keep these customers and turn them into advocates for you.
• Cancels and Expires—former customers who canceled/ returned/did not renew a service, product, or subscription they had purchased from you. Because they did not opt out of your free information list, you should continue to provide them with valuable free information as well as your promotional information. Your job is to get these former buyers to become current buyers.
Outside Lists
Outside lists are names that you do not yet have permission to market to; however, the people on these lists have agreed to receive third-party advertising. They can be divided up as follows:
• Hot Prospects—people who have purchased a similar product from your competitor. Let’s say you are selling subscriptions to an e-newsletter on the subject of anti-aging. A hot prospect is someone who has purchased one or more anti-aging e-newsletters from other publishers.
• Good Prospects—people who have purchased a related product from your competitor. Again, let’s say you are selling an anti-aging e-newsletter. A good prospect is someone who has purchased a book or DVD about anti-aging.
• Okay Prospects—people on a compiled list of names taken from directories, newspapers, or public records that have something in common or meet a certain criteria. Many people on compiled lists are not buyers. For our example, they could have simply filled out a survey, stating that they are interested in anti-aging. Don’t make the mistake of using compiled lists because they are less expensive to rent.
CIRQUE DU SOLEIL AND ITS E-MAIL MARKETING ACROBATICS
Cirque du Soleil is known for amazing acrobatics and whimsical themes, but did you know that they also have a few tricks up their sleeves when it comes to e-mail marketing?
For more than two decades, this Montreal-based troupe has been touring and setting up shop in permanent performance venues all over the world. With every show, they try to forge a personal connection with every audience member. And they have the same goal for their e-mail marketing campaigns, which started in 2000, according to a case study by Marketing Sherpa.
Cirque doesn’t want its relationships with its customers to end when the curtain falls. They send six to eight messages per week with news, upcoming show announcements, and product offers. But they don’t want to fill their fans’ inboxes with messages they don’t want, so they’ve put together a pretty strong opt-in process. As a result, they know that everybody on their list is truly interested in their e-mails and will respond to offers of tickets and merchandise.
First of all, there is no actual Cirque du Soleil “list” that you can sign up for. There is a fan club, Cirque Club, that sends out the regular updates. The company’s web site heavily promotes this club with a prominently displayed e-mail form and various related links. And they promote the club at shows, giving club members preferred seating and surprise upgrades—in full view of other audience members.
The Cirque e-mail team also heavily segmented the club names so they can send very detailed messages unique to each individual member. They do this by collecting specific information during the opt-in process, including where each person wants to see touring shows, if they want news of permanent shows (and which ones), whether they’re interested in merchandise offers, and (because Cirque’s founders are from Canada) if they prefer their e-mails to be in French or English. They strictly stick to these preferences, and almost never send out mass e-mails to the entire list.
They make sure each new club member “whitelists” the Cirque Club e-mails before they finish signing up. And they require double opt-in, meaning each new member has to reply to an e-mail from Cirque before they start receiving the updates.
As for the e-mails themselves, they are simple and mostly text. Written in the voice of characters from certain shows (depending on the member’s selected preferences), they are conversational and informal. They heat up when a touring show is in town, with a series of updates in the weeks before the show urging members to attend.
The result is a very “clean” list that Cirque says responds at a very high conversion rate to offers, especially when news of an upcoming show hits.
ANATOMY OF AN ENDORSED AD
Endorsed ads are the heart of direct e-mail marketing. They require a great deal of time and creativity for two main reasons:
1. Endorsed ads are sent as standalone promotions. This is a key point. The endorsed ad is the only direct online tactic that does not compete with other ads or editorial copy. A banner ad may have five other ads on the same page, as well as a gripping editorial headline, all fighting for the prospect’s attention. A PPC ad may be competing with 20 other PPC ads on the same page. You are up against the same thing with polls, co-registration, and insert ads.
2. Endorsed ads are the foundation of your entire campaign. If the ad is based on a “big idea” that is expressed clearly and concisely, you can leverage the time and effort you put into it by using pieces of the copy for all of your other tactics and channels. If your headline is a winner, it can be used as your banner ad or PPC ad. If your lead has performed well, you can turn that into your insert ad or a squeeze page.
Now, let’s break down an endorsed ad for The Healing Prescription , a report offered by Total Health Breakthroughs (a division of Early to Rise), and show you how we leveraged the copy to create a squeeze page...a banner ad...a dedicated ad...an e-news sponsorship ad . . . a co-registration ad . . . an online poll . . . and a PPC ad.
The Squeeze Page
The squeeze page is the first page to page and a half of the complete endorsed e-mail ad. The headline and the lead are the most important part of any promotion. You make the beginning so compelling that the prospect is actually willing to give you his e-mail address for the privilege of reading the rest of the promotion.
The end of the promotion will ask for the sale.
• Primary purpose: Name collection
• Secondary purpose: Upsell (conversion to a sale)
In order to illustrate the anatomy of an ad, please take a look at the excerpt from the promotion shown. (Although we have included some of the elements of the ads here, we strongly encourage you to refer to the Appendix, which displays the entire promotion. This ad will serve as a valuable resource for you, as you implement or improve your multi-channel marketing campaign.)
The Banner Ad
Banner ads come in various sizes. Some popular sizes (noted in pixels) include 300 × 250 (medium rectangle), 468 × 60 (full banner), 728 × 90 (leader boards), 120 × 600 (skyscraper), 125 × 125 (square), 120 × 60 (button), and 120 × 240 (vertical). The ads can be flat (no animation), animated, or flash.
• Primary purpose: Upsell (conversion to a sale)—if customer is sent to a landing page, which is done very often. (For the purposes of this exercise, the landing page and dedicated e-mail are the same.)
• Secondary purpose: Name collection—if customer is sent to a special or free report
Note that the placement and audience you’re targeting will determine the primary purpose of the banner ad. If the banner ad is running on your own web site, your primary goal would be sales conversion. If your banner ad is running on a third-party web site, blog, or banner ad network, your prospects may not be familiar with your company, publication, products, or services. In that case, you would want to focus on name collection, and then upsell those prospects later with a series of targeted conversion e-mails.
The Dedicated E-Mail Ad
The dedicated e-mail ad is dedicated to a single sales letter—the full promotion.
• Primary purpose: Selling the product
• Secondary purpose: Generateing leads
(Refer to the Appendix to see the dedicated e-mail ad for The Healing Prescription. The beginning of the ad is similar to the squeeze page, yet its scope extends beyond that.)
The E-News Sponsorship Ad
The e-news sponsorship ad is placed in an e-newsletter or e-zine. The placement is usually in a top, middle, or bottom position, and can be in text or HTML format. You can buy the space or approach others for swaps.
• Primary purpose: Upsell (conversion to a sale)
• Secondary purpose: Building a hot list and generating leads
Below are two examples of what an e-news sponsorship ad looked like for
The Healing Prescription.
Are You Waking Up to Pee at Night?
David, a 56-year-old executive, had an enlarged prostate that was causing him to get up to urinate three or four times a night. He desperately wanted to avoid prostate surgery, which could potentially leave him impotent. The treatment? A bioactive compound that blocks production of DHT, a hormone causing the body to overproduce its normal amount of prostate cells. David avoided surgery, shrank his prostate naturally, and today sleeps through the night without waking to use the bathroom. Now you can learn about the same healthy prostate treatment without leaving your home. Click here for details: [URL to our landing page inserted]
Lower Cholesterol Safely and Naturally
More than 2,600 Americans die from cardiovascular disease daily. The two most common dietary factors putting you at risk? Fat and cholesterol. Our free report is your guide to foods that lower your cholesterol and risk of heart disease as well as foods to avoid. Get the straight talk on olive oil . . . omega-3 . . . salt . . . alcohol . . . folic acid . . . potassium . . . garlic . . . green tea . . .1-Carnitine . . . and more. For more information and to download your free cholesterol-fighting report, click here now: [URL to our landing page inserted]
Note that since the above e-news ads were inserted into our own Early to Rise e-newsletter, the redirect landing page was for a straight sale. The target audience was already familiar with our publication and services. They didn’t necessarily need to “buy into” our philosophy. If this same ad were going into an outside e-newsletter, the landing page would likely be the squeeze page—as the primary goal would be to collect names and add those prospects into our sales cycle, giving them time to bond with us. The secondary goal would have been immediate sales conversion after we collected the names.
The Co-Registration Ad
With co-registration, your ad goes on someone else’s web site, generally after a transaction on that web site (such as a newsletter signup or an order) has been completed. Your ad is usually limited to about 200 characters. And you typically get to put a small graphic image next to it.
• Primary purpose: Name collection
• Secondary purpose: Upsell (conversion to a sale)
Again, because these leads are coming from a third-party source, your primary goal should be name collection via your squeeze page, and then an upsell via a targeted series of promotions.
Following is a sample of what our co-registration ads looked like for The Healing Prescription.
The Online Poll
The goal of an online poll is to collect names as well as to engage your prospects. The poll can be in the form of a banner ad that redirects to a name collection source (your squeeze page). The answers that prospects give to your poll question also give you a way to qualify them. “Very interested” may be redirected to your landing page for sales, whereas “somewhat interested” may just get a “thank you” page. Both types of prospects, however, should receive a free incentive, such as a report, for their time. It’s also important to mention your privacy policy when you’re doing an online poll. Prospects want to make sure their e-mail address is safe with you.
• Primary purpose: Name collection
• Secondary purpose: Upsell (conversion to a sale)
Here’s an example of an online poll for The Healing Prescription:
Special Report: Alternative Health Guru Spills His Secrets . . . Interested in overcoming chronic conditions and serious illness and dispelling the myths about nutrition that could radically change your health . . . and the rest of your life?
I just met a doctor who can do all that. He’s an expert in alternative health. He isn’t beholden to the drug companies. And his systematic research and years of experience have yielded a proven method for balancing the nutrients and hormones in your body. The result could be the best health you’ve had in years, if not decades.
I’m going to tell you about this system in just a minute in a free report.
Here’s just some of what you’ll learn:
* 5 amazingly effective natural remedies that can clear up your children’s ear infections faster than they can say “Mommy and Daddy, my ear hurts!”
* 12 natural remedies that can relieve tenderness, stiffness, aches, pains, and other symptoms associated with fibromyalgia
* A common vitamin you find in grapefruit that can speed your recovery after injury—and help wounds heal up to 50% faster
* The awful truth about canola oil . . . energy bars . . . farm-raised salmon . . . soy . . . frozen yogurt . . . and other popular “health foods” that are anything but
You’ll also receive a complimentary subscription to the Total Health Breakthroughs e-mail newsletter—the number one source on the Web for natural health and wellness information.
Please answer the following questions and then enter your first name and e-mail below to get your free copy of this special report.
How interested are you in learning natural solutions to your diet and health problems?
[ ] Very Interested
[ ] Somewhat Interested
[ ] Slightly Interested
[ ] Not At All Interested
Your First Name:
Your E-mail:
Take Me to My Free Report!
The Pay-per-Click (PPC) or Display Ad
The pay-per-click or display ad is an online advertising tactic in which payment is based on how often Internet users click on your link.
• Primary purpose: Name collection—with a redirect to your squeeze page
• Secondary purpose: Upsell (conversion to a sale)
Note that the names we collected with our PPC ads for The Healing Prescription were added to the sales cycle, with targeted conversion efforts over a number of months. Typical conversion rates for “cold” prospects can vary from 30 to 90 days.
With PPC ads, you have limited space. The typical ad has about 15 words or 123 characters. So you want to take your strongest headline and call-to-action statement and use that. Your success in this platform will also be based on the keywords and keyword strings you’ve selected.
Look at the four examples below to see how we did it.
Do you see how we took this one endorsed e-mail ad and created an entire campaign using several other tactics? And this was for only one marketing channel.
IT’S TIME TO APPLY
Before we move on, consider your own business. Take your most successful endorsed ad and see if you can create the following from it:
• Two Banner Ads
• Two PPC Ads
• Two Insert Ads
• Two Poll Questions
• Two Insert Ads
Why did we ask you to come up with two of each one? Because that will come in very handy when you find out what we have to say about testing later in this book.
Meanwhile, let’s get to Chapter 4.
