The other day I saw an ad one of my clients had posted on the Internet.
The copy was weak. It lacked an “Aha!” idea. It was balanced on two rather than four legs. Its lead was wrongheaded, it had insufficient substantiation, and no social proof.
I mentioned this to my client’s marketing exec.
“I agree. It’s not very strong,” she said. “But it has been doing very well.”
“That’s interesting,” I replied. “Can I see the test results?”
“We didn’t test it,” she said. “But the numbers are better than those we usually get for this advertising slot.”
Coming to the conclusion that copy was “working” without having tested it indicates a complete lack of understanding of the basics of our business. Unless you have completed a valid split test and received statistically reliable results, you don’t have any idea whether the copy worked or didn’t work. All you know is that the offer did better than other offers in the same spot.
If this were the only time I’d encountered this error I wouldn’t be writing about it today. But I have seen it a hundred times.
A Little Knowledge Is a Very Dangerous Thing
This kind of mistake is amazingly common, because nine out of 10 Internet marketers don’t know the first thing about the science of direct marketing.
The wonderful thing about direct marketing is that you can precisely measure response and predict — with statistical certainty — the outcome of your future efforts.
The Internet has made testing much easier and quicker. And that is one reason why Internet marketing is perfect for direct-response marketers.
But the Internet is also the reason why there is so much ignorance out there about how our business really works.
And that is why, if you don’t truly know the game, your business is in jeopardy.
Let me explain.
The Illusion of Temporary Success
The Internet was such a hot medium for nearly a decade that almost anybody who stuck their hand into the World Wide Web bowl came out with a golden apple.
Some of us who were already direct-mail pros when the boom began in 1999 saw the remarkable results and jumped in. Others hesitated. Perhaps it was because the numbers looked “too good to be true.”
Those of us who went forward didn’t yet understand much about the technical aspects of marketing on the Net. We left that to young people who were already modestly Internet savvy. They knew how to “surf the Web.” They were smart. So we hired them.
We created the products and wrote the promotional copy. And they posted our copy on websites and created lists of e-mail addresses to send it to. Everything worked. We were happy.
Many of those youngsters eventually went out on their own. They went out into the virtual world and sold themselves as marketing experts. That seemed odd to us, because they didn’t seem to know anything about direct-response marketing.
But their lack of understanding didn’t matter for them or their clients. Everything that was done turned out either good or great.
Over the past two years, though, that has changed. If you’ve been marketing your products via the Internet, you know exactly what I mean.
A Challenging New World
Gone are the days of easy pickings.
The bubble was huge. And now it is rapidly deflating.
Response rates are crashing Refunds are rising. Bad debt is soaring. Sell-through values are plummeting.
Problem is, everybody and his mother-in-law have gotten into Internet marketing. They learned how to knock off successful Internet businesses by taking courses proffered by those young “experts.” And Google (and a thousand companies that service Google) made the process easier by providing them with hundreds of tools for monitoring their competitors.
But what they learned were “outside” tricks and techniques that have nothing to do with the valuable “inside” knowledge necessary for long-term success — knowledge that can’t be gained by using the plethora of Google tools out there and the latest gimmicks touted by upstarts who never bothered to learn the fundamentals of direct marketing.
Those young whippersnappers don’t know the fundamentals. And what they don’t know, they can’t teach. As a result, their “students” have no idea of what really matters: how to build a strong relationship with your customers so they come back to buy from you again and again.
A Thousand Vanishing Experts
Bill Bonner recently remarked, “Ten years ago, we had a dozen viable competitors. Today, we have a thousand.” He is right.
But 990 of those thousand don’t understand the “inside” stuff. And that is why now — with all this competition and an increasingly jaded marketplace — results are crashing and hardly anybody knows what to do about it.
Well, I know what to do about it: Get back to the basics.
If you don’t know how to test scientifically — or if you do know but you think it’s not necessary — your business doesn’t have a chance.
What You Need to Know Now!
To be successful from now on, you will have to develop expertise in direct marketing. And that means mastering the following skills:
- Statistically valid testing
- Creating “irresistible” offers
- Structuring price, term, refund, and premium tests
- Determining the true lifetime value of every new customer
- Calculating “allowable acquisition costs”
- Measuring responsiveness by media source
- Figuring the “doubling date” or “half-life” of new offers
- Creating “gauntlet” and “pummel” programs for new customers
- Purging unproductive prospects
- Discovering your “optimal selling strategy”
- Brainstorming for the “Aha!” idea
- Understanding the “architecture of persuasion”
- Using the “four-legged stool”
- Implementing the Rule of One
- Using archetypal leads
- Designing effective “peer reviews”
- Efficiently managing the “CUB” procedure
If you don’t have these skills — or if your key people don’t have them — consider your business to be in trouble. The market is tough now, and it will be much tougher as every month passes.
What You Can Do — but You Have to Act Quickly!
I know half a dozen world-class copywriters who have great programs that teach half of this stuff — the creative half. But there is only one program I know of that teaches the science of direct marketing. I’m talking about the program published by Early to Rise (which is owned by the most successful direct-marketing information publisher in the world).
If you are serious about staying in the game and are not totally confident that you have mastered the science of direct marketing, go here.
By the way, in case you are wondering what happened to that marketing executive who didn’t understand scientific testing…
Ten years ago, I would have told my client to fire her. Instead, I suggested that he put her and the rest of his marketing team through an intensive direct-marketing program — the one I just recommended to you. Find out more at the link above.
“The biggest and most reliable returns in the market come from the safest and most mature companies,” Investor’s Daily Edge Investment Director Bob Irish reminds us. These high-quality companies pay dividends. And they raise those dividends year after year.
Buy their shares when they are cheap. Then reinvest the dividends. That’s it, says Bob.
Andrew Gordon, Editor of Investor Daily Edge’s INCOME newsletter, points to Coca-Cola as the perfect example of how this strategy pays off:
“Did you know that Coca-Cola has raised its dividend every quarter for the last 25 years?
Had you bought just $5,000 worth of Coca-Cola stock in 1985 (about 80 shares) and re-invested the dividends, you would have over 3,100 shares today. They would be worth more than $159,000.
“And those 3,100 shares would provide you with nearly $5,000 in annual dividends. That’s a 100 percent yield on your original investment.”
Andy is building a portfolio of solid companies like Coca-Cola right now – companies that can weather the economic storm and come out stronger on the other side. These companies can compound your wealth faster than any others, because they should continue to raise their dividends for many years to come. He calls them the “Group of 88.” And he’ll release them only to his INCOME subscribers in October. Go here to learn more about INCOME and to be the first to know which companies made the cut.
ETR’s Associate Publisher Charlie Byrne just sent me an article from a restaurant trade journal. The advice in the article was for restaurants trying to ride out tough times. It struck me how it can be applied to any business:
- Cut non-essential staff.
- Cross-train/motivate existing staff.
- Examine/renegotiate all deals/contracts.
- Cut poor products/services.
- Keep bird’s eye on all numbers and check them frequently.
- Reduce inventory to best and bestselling products.
- Cut non-trackable marketing expenses.
But like we’ve always said at Early to Rise, you can’t make “cuts” and changes in a vacuum. You have to consider how each one will affect your customers. The writer of the article put it this way:
“Any change that could diminish your customers’ dining experience or their perception of your restaurant is probably NOT worth the potential savings.”
I couldn’t agree more. What do you think? Let me know at AskMichael@ETRFeedback.com.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]