Keeping the 'direct' in direct marketing: shunning the idea of direct marketing as "too commercial"? You're ignoring a powerful tool.

For a number of years, we have dabbled around the edges of direct marketing (DM) as part of our pursuit of a larger discussion of integrated marketing. Now, as colleges and universities seek to develop the notion of integration even further, it is time to focus more completely on direct marketing.

According to DM guru Bob Stone, direct marketing is the inter active use of media to stimulate an immediate behavior in such a way that this behavior can be tracked, recorded, analyzed, and stored on a database for future retrieval and use. Let's take a took at some of the key elements that comprise Stone's definition.

1--We need to understand the notion of "interactive use of media." Direct marketing is not promotion, Rather, it seeks to engage in and develop a relationship.

2--Direct marketing uses many different media--traditional advertising, postal and e-mail, telemarketing, special events, even the Web--to create and enhance that relationship.

3--Direct marketing is designed to stimulate an immediate behavior. In other words, it seeks a response. In our context, it is designed to get students to send in BRCs (business reply cards), visit, and enroll. It wants donors to attend, give, and bequeath.

4--Direct marketing involves tracking and analyzing response data for future use. White this occurs for a number of important reasons, two are paramount: First, DM is interested in improving the efficiencies of future messages to other audiences. And second, because DM understands the value of lifelong relationships (what DMer's call "lifetime value," or LTV), it seeks to capture data that will arrow that relationship to grow and mature. It is this last element of direct marketing that has spawned two parallel definitions of direct marketing: Database marketing and relationship marketing. Database marketing is a systematic approach to the gathering, consolidating, and processing of consumer data that is maintained in databases. Relationship marketing implies a deeper knowledge of the customer and using that knowledge to treat the customer differently. Therefore, the exchange between customer and company becomes mutually beneficial.

One final comment: Direct marketing is not the same thing as direct mail. Direct mail is an advertising medium; a tool of direct marketing. Direct marketing, on the other hand, is a marketing discipline that includes a variety of media, including direct mail.

DIRECT MARKETING AND BRAND MARKETING

As you know, both brand marketing and direct marketing are subsets of integrated marketing. The third component, as noted in other columns, is customer relationship management (CRM). The model works like this:

* Brand marketing is responsible for creating awareness

* Direct marketing is responsible for generating response

* Customer relationship management is responsible for client retention

It is important to remember that in almost all cases, your direct marketing strategy--generating response--will be more effective if it is preceded by a robust and carefully crafted brand marketing strategy. In other words, if the right people are aware of you a priori, they are more likely to respond to your direct marketing overtures.

COMPONENTS OF A DIRECT MARKETING PLAN

Recognizing that good tactics rest on solid strategy, all direct marketing efforts benefit from a target integrated marketing plan. A typical DM plan (modified from Bob Stone and adapted for colleges and universities) closely follows the components of an integrated marketing communications plan:

* The situational analysis examines:

a. The marketplace macro-environment

b. The competitive situation

c. Target audience analysis including its precise definition, needs, expectations, and present understanding and perception of you

d. Research summary of all relevant data and insights

e. Technology and resources

* Direct marketing goals and objectives. What you want your direct marketing initiative to accomplish

* Target audience. A dear, precise definition of the groups and individuals from whom you want to generate a response

* The offer. Sometimes called the reward for desired behavior

* Creative strategy. (More on this in "Six Steps ...," below right)

* Tactics. The activities you will undertake to generate a response

* Budgets and calendars

THE OFFER

If the goal of direct marketing is to generate a response, there must be something for people to respond to. In direct marketing Lingo, it's called "the offer." There is almost no way to overestimate the power of a great offer that utilizes one or more of the following variables:

* Price

* Optional features

* Credit options

* Incentives

* Time limits

* Quantity limits

At first glance, you might think that these variables are too commercial and have no impact in higher education. But look again. When you offer scholarships or the opportunity to make a deferred gift, you are directly addressing price. The chance to live in an honors dorm is an optional feature. Spreading tuition payments or your annual fund contribution over a year is a credit option. When you agree to waive the application fee if a student applies before December 1, you are offering an incentive.

Depending on whether your goal is to get a student to attend an open house or apply, or whether the goat is to get an alum to attend homecoming or increase his annual fund contribution, the range of offers can be quite dramatic.

DETERMINING BEST OFFER

The best way to determine the offer that will work best for your audience--or a smaller segment of a larger audience--is to ask your audience. Quite Literally, ask prospective students, alumni, or parents, "What would it take for you to respond, or even respond favorably?" For example, you might have a poll on your Web site where prospective students or their parents could vote on what they want to receive from your institution, to help them make a decision.

YES, NO, MAYBE

Historically, when an offer has been extended, there have been two responses: "Yes, I am interested" and "No, I am not." However, integrated marketing pro Dick Damrow, a Stamats colleague, makes the case that we should entertain a third response: "Maybe." Ultimately, there are two kinds of "maybe": First, "Maybe, I am interested, but not yet," and second, "Maybe, but probably not."

As a direct marketer, you are interested in both groups. The "not yets," will require a different approach, depending on why they are not initially interested. Perhaps your original offer was not clear, perhaps they did not have all the information they needed, or perhaps, as is sometimes the case, the timing was not right. Your goal here is to refine your offer to accommodate their needs and interests. A donor who is asked to make a gift that is immediately beyond his or her reach may respond "maybe" rather than "no." "Maybe" is a powerful signal that someone is still interested in a relationship. A "maybe" allows you to continue the relationship. "No" is equally powerful and can provide you with the option of eliminating the uninterested from your prospect pool, therefore allowing your resources to concentrate on those truly interested. Your goal for the "maybe, but probably nots" is to see if they possess some common demographic and psychographic characteristics that might help you exclude these people from future offers.

SYNERGY MADE IN HEAVEN: DM AND THE WEB

Any column on direct marketing must acknowledge the impact that the Web has had on the direct marketing industry. Especially when coupled with a dynamic database, the Web offers direct marketers unparalleled opportunity. It can be used to disseminate messages (e-mail and pop-ups), gather responses, and customize future offers based on earlier responses. If you think back to Stone's definition, direct marketing involves tracking, recording, analyzing, and storing responses. The Web makes all of this possible in real time.

SIX STEPS TO IMMEDIATELY IMPROVE DM STRATEGY

While there are lots of ways to improve your direct marketing strategy, here are my favorite six:

1--Your offer must be customized, not merely personalized. Using real-time data drawn from multiple sources will dramatically increase response. Last Christmas, for instance, I received a Lands' End catalog featuring only Ohio State University clothing. The catalog arrived the week after OSU beat the University of Michigan. As an Ohio State grad, I was ready to buy.

2--Test. If your target audience comprises 100,000 people, take the time to develop a second offer to test on one-tenth of that larger target audience. Or, you might want to test a hand-addressed postal envelope vs. a label. Or, you might want to send an identical offer on a slightly different date. The only way to improve performance is to test. (Remember: You typically need a minimum of 5,000 people for a reliable test.)

3--Don't overlook the importance of the list. A bad list is usually at the heart of most direct marketing failures. But what constitutes a bad list? One key is to understand the difference between a compiled list (a list you purchase) and a response list (a list made up of people who responded to an offer you made). Compiled lists are often larger, but response lists are often better (and in the electronic world, much safer). When you buy a list from ACT (American College Testing) you are buying a compiled list. When you have a list of students who have visited your campus, you have a response list.

4--Don't forget to use great creative. In an era of predictable messages, creative that is surprising, or even courageous, gets noticed. This is especially true when the creative-based on audience needs--resonates both logically and emotionally. Of course, your creative needs to be consistent with the larger brand image.

5--Segment. A powerful tool in the direct marketer's arsenal is the ability and inclination to segment. We know, for example, that older donors prefer solicitation letters with larger fonts. Younger donors often prefer e-mail over postal mail. Segment on both demographic and psychographic data. And of course, be willing to segment based on previous response.

6--Support your direct marketing initiatives with both brand marketing and multiple media. Direct marketing appeals will be more effective if they are preceded by a brand marketing initiative. In addition, a DM strategy that features advertising coupled with such direct response media as e-mail or telemarketing (or e-mail and telemarketing) will be more effective than one that incorporates just direct response media.

IN THE END ...

The impact of integrated marketing efforts can sometimes be difficult to measure. Fortunately, this is not a problem with direct marketing because DM is all about response. And the only response that matters is the response--yes, no, or maybe--that the target audience makes to your solicitation.

On a personal note, many thanks to Stamats' direct marketing consultant, Sabra Fiala, for helping me communicate clearly and cogently with you about a powerful tool that holds much promise for college and university marketers in the months and years to come: direct marketing.

Some Quick Guidelines on the Offer

* The key for students: Direct marketing sells the offer, the offer sells the school. Many colleges try to sell themselves in DM rather than promote a specific desired action or behavior. If you give all the information away in DM, there is no incentive to respond.

* "More information" is NOT a good offer.

* The offer should be relevant, personalized, and timely.

* Watch the timing. Sophomores may just want the facts or to be romanced. Juniors are ready to narrow their focus, visit the campus, or talk to like-minded prospective students.

* Watch the altruism. An altruistic offer that has mass appeal may produce more responses, but yield less qualified prospects.

* Go for focus. A focused offer may produce less responses, but yield more qualified prospects.

Bob Sevier is a senior VP of Stamats Communications (www.stamats.com), and the author of six books on integrated marketing and strategic planning. His latest, An Integrated Marketing Workbook, is available now from strateqypublishing.com. For more information, e-mail [e-mail].