Monetizing Email in A Direct Response World
Perhaps one of the reasons that we enjoy the Electronic Retailing Association’s (ERA’s) show so much, is that it gave us that kid in a candy store feel. A chief complaint others have about some of our industry trade shows, is that too many of the companies exhibiting sound the same. Offers this, offers that. Payouts this, payouts that. It’s a very different experience when you go to a place where the majority of booths have actual products being displayed. Many have the same pitch, but what they actually offer differs in a way that you can see and feel. And, when you see the same product in a different booth, you start to understand how it works – this guy makes it, this guy buys the media, this guy ships it, etc. Around each corner is a chance to learn and a new ecosystem unfolding.
One of the most interesting parts to the ERA’s Direct to Consumer show are the handful of aisles dedicated to inventors. If ever there was a part that would stop you cold and have you calling up your designer this is it. The inventions range from concept to those just rolling out in stores, and they present a world of opportunity for email marketers. Just go to one of the exhibitor’s sites – www.crunchmat.com – and you’ll see what I’m talking about.
Why email? It’s not a direct parallel to television, but it’s a medium with more inventory than offers, and it’s the medium of choice for direct response products during shopping times. If there is one type where, all of a sudden, for sale offers can do well, it’s email. And, with the holiday season right around the corner, it’s never too early to start looking for the holiday season offer. The margins are another reason why direct response television offers can work so well on email. The products generally cost 1/4 of their purchase price or less, providing enough spread for a drop to occur. If a $49.99 non-continuity product pays out 50%, that stands a chance for someone to run as opposed to it retailing for the same but paying $8 to $10 per action.
The CrunchMat example is one of the later stage companies. They have retail distribution which probably means they have run on television. We haven’t seen them on the networks, but you can assume they’ve probably been approached by now. Others at the show make for a more compelling case. They have an idea and a prototype, but they lack the funds to produce. They are at the show hoping that one of the big guys will pick them up. If they do, that company will cover the cost of development and handle all sales, giving the idea guys a relatively modest piece of revenue. What’s to stop the online space, especially if it’s a company with its own inventory, from playing the role of the “big guys?” If a company would be willing to do that, it could find a product it knows could make enough of a profit and take it to market. Instead of waiting for a direct response company to create the opportunity, the online company could make that commercial buster quiz game the holiday’s next hot offer. Then, if they wanted, they could in turn take it to TV.
Some might say that email is not a commercial medium, and that it works only during very specific times of year, like Christmas. If there is anything that we are learning from the pre-paid local coupon space, it’s that email is very much a transaction catalyst. It just takes a few other psychological tools to make it so, which is what the need to buy for the holidays is. But, the holidays aren’t the only opportunity, and it’s so easy for us to think in terms of the offer instead of how can we create something to leverage what the medium offers. An idea we had while walking the show flow of ERA’s D2C was to strike a deal with many of the product owners for their no longer hot items. Like all campaigns, theirs too have peaks, and rarely do they order just enough. Given the cost structure, they could sell their surplus at cost and see a return. So, why not strike up a deal where a product that has retailed for $49.95, you can do a one-day email sale for $29.95. It operates similar to the current daily deals where the offer is only valid for a short period of time. If people who come late (open the email late) and miss the deal, that’s ok. It makes the next email more valuable. And, that’s what this is about.
The goal is to find ways of making email marketing messages more valuable, to make them almost content. That’s what the local coupon guys have done, and it’s something that the broader performance marketing community can do as well. They can do what is necessary, and go from a disjointed series of offers to a brand that has meaning. If our hypothesis is correct, there are a handful of different ways to approach solving the problem that won’t cost too much more. That initial barrier will keep many from trying, but it isn’t nearly as great as hiring up a sales staff to create your own buyer network. Don’t be the inventor who waits for another to create the offer and take the lion’s share. Be the offer maker.
