Direct Mail vs Online Marketing

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Direct Mail vs Online Marketing

There is a discussion about Direct Mail vs Online Marketing that occurs pretty regularly.  This week a challenge was brought to the Bourquin Group.  A bank wanted to dominate the keywords in a certain area online and improve their online presence.  Every business should have a solid online presence for their existing customers, and here is something not every online marketing agency will tell you.  We are finding some industries where it doesn’t make financial sense to be a dominating force online.

Simply put, there isn’t enough traffic or interest.

Online Marketing is about being in front of a ready and willing potential new customer when they are looking to buy a product or service.  This is a little like sniping.  You have identified the target and you sit and wait in cyberspace until they appear.

Direct Mail is more like hunting.  Direct Mail goes out into the field for you and flushes out the potential customers.  A good Direct Mail piece will have a call to action that is targeted at bringing the customer to you via telephone or in person.

If you do a great Direct Mail piece which flushes the customers out and sends them to the internet, you open yourself up to a Online Marketing campaign cutting you off and sniping your potential new customer.

Think of it like pheasant hunting and direct mail is your dog.  The dog goes out and flushes the pheasants out of the tall grass.  You and the dog are working away and just as a bird flies out of the grass, BOOM it is shot before you even get a really good look at it.  The sniper sitting in the trees waiting got the bird you and your dog flushed out.

This happens with Direct Mail and sniping  is part of the tactics used by good Online Marketers.  It goes like this.  Bank X sends out 40,000 letters at a cost of .50 each for a total of $20,000 and the break even is 40 new loans.  The Bank X direct mail piece is a great piece that leads the reader online to their website with a rate of 4.00% for a “No Equity Refinance VA Home Loan”.

When Joe Consumer opens the Direct Mail ad, he had no idea that he could get a new loan that will save him money and now he wants it. He has been flushed out of the grass.  Since Bank X had a “quick online” application, Mr. Consumer goes online and does a little search for “No Equity Refinance VA Home Loan”, exactly the title of the Direct Mail ad.

Bank Y’s ad pops up with “3.75% Re-fi Call Now” so right there Mr. Consumer was sniped by Bank Y’s online ad and he calls Bank Y, only to find the rate is now 4.00% but since he is on the phone, he sticks with Bank Y.

When buying online ads to pick off the ready to buy clients, you need to know your competition.  When they spend $20,000 for 40,000 ads, you might spend a ridiculous $50 per ad, get 160 calls to yield the same 40 new loans.  If you are Bank Y, you spent $8,000 when Bank X spent $40,000.

It is possible in some cases that both Direct Mail and Online Marketing provide the best rate of return, and in other cases only one of the two methods works.  This is where knowing your customer is important, and setting your sights accordingly gets the customer.

If you need help building a highly targeted online campaign, call me, I can help.