Too Few, Too Little, Too Much: Why Direct Marketers Fail . . . And Ten Ways To Make Sure You Don't

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8. Too much money left on the table

Direct marketers too often suffer from "prices and charges paranoia." Without exception, the fear of charging too much or charging for a service results in leaving money on the table.

You can get more money for the product, for the service, for the wisdom, for the information if you ask for it and target the right level and segment of the market. You can get more money for speed, efficiency, innovation, and uniqueness if you will ask for it and deliver what you promise without fail. You can get more money for exquisite service and for anticipating and meeting the expectation of the customer before the fact.

You can charge more for handling, for shipping, for subscriptions, for continuity programs, for unique products, for almost everything. Ever since the first price, someone has asked for a discount and a merchant has given that discount. And, ever since the first price, a merchant somewhere has made enormous amounts of money by asking, instead, "How can I get more?" This is not a sin.

The leaders have met the specter of margin erosion face to face and have decided to pursue high margin business and to add significant value that brings adequate financial reward for the risk. The risk level is increasing in consumer and business to business direct marketing; only the bold will survive.

SOLUTIONS:

1. Abolish all thinking that says, "We can't raise prices." Rather, encourage thinking that says, "How can we charge more and make the customer even happier?"
2. Prove to yourself and your company that price is not necessarily the number one concern of the customer. Isolate and test two segments of your customer base for each of: product prices, price multiples, shipping charges, handling charges, service fees, and all other price variables that you must contend with.
3. Create 4 new marketing, promotion and merchandising approaches that increase the value of what you are offering to your customers. Begin turning the dominant thinking in your company away from price protection and more towards price enhancement.
4. Ask 500 customers this year what they would pay more for. Then listen to what they say and try it!

9. Too much market constriction

Direct marketers are, by and large, not thinking broad enough. The global expansion of the markets has been ignored by too many corporations and opportunities for rational international expansion are not being captured. The expansion out of comfortable, familiar markets has been too restricted. The development of products that expand the market reach and has been too slow and too constrained.

Both consumer and business to business marketers will suffer from a failure to thrive if they continue to employ tunnel vision relative to markets. Just because you have been in the electrical equipment business for the last 75 years is no longer a valid reason why you remain only in that one market; just because you have done business only in the U.K. is not a valid reason why you are not doing business in other parts of the world.

Advancing and growing direct marketers are often doing 50% or more of their business internationally. The home markets are a solid core, but growth is coming from the global marketplace.

SOLUTIONS:

1. Relax at least two market restrictions within the next 6 months. Open your thinking to a new market segment, a new product concentration, a new distribution channel, or an entirely new business expansion and complete the research, the definition and the pro forma financial work. Then do it!
2. Identify, define, and research one foreign market for your products. Find 5 reasons why you should do business there rather than 5 reasons why you shouldn't.
3. Seek alliances, licensing deals, royalty arrangements, partnerships, and other creative ways to expand internationally. Do not concentrate only on start-ups, acquisitions and 50-50 partnerships.
4. Create a "Foreign Market Expert" on your staff -- or do the work yourself - - and begin strategic planning for foreign market and product expansion on a formal and organized basis.

10. Too much fulfillment error

Direct marketers are shipping too many of the wrong or defective products, too slow, too late, too often; out of stock is anathema to survival. Technology and fulfillment is now driving business to business marketing, not the traditional marketing practices of the past.

Product shipping errors are far too prevalent in the sick companies. The wrong size, color, count, specification, or any other element of product satisfaction is unacceptable. The excuses of "the people," "the system," "the computer," or "the manufacturer" simply no longer wash with an experienced, jaded and demanding customer who no longer is reluctant to go elsewhere to get what is desired.

Fulfillment delivery times of one, two, three, even four or more weeks are totally outside the acceptable customer limit today. The revolution created by express delivery is now the norm; if you aren't preparing your company for same-day delivery anywhere, as evidenced by Viking and others, you will ultimately fail in the fulfillment-reliant future of direct marketing.

SOLUTIONS:

1. This week, target one fulfillment problem for total elimination. Begin the battle plan, the logistic planning and launch the assault to prove to yourself and your company that you can win any fulfillment battle you choose to engage in.
2. With one fulfillment error success, target no less than 5 problem areas for absolute solution within the next 12 months. These don't have to be major or earthshaking. As long as you constantly eliminate time and mistakes you are on the right track. Set goals and accomplish them!
3. Become a speed freak and an overnight delivery service partner. Move now to absolute same day shipment and delivery tomorrow. It's the only way that you will be in the vanguard of same-day delivery in the coming years.
4. Rethink your fulfillment process and turn it inside out so that the customer is fulfilled before the needs of the business. "We can't ship products in under 3 days because it takes 3 days to move the order through our system" is a ludicrous concept when you think about it, but it's where most direct marketers are still stuck.

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