Strategy : The New Marketing

The best of brand + the best of direct + sales, powered by finance = success

The Best of Direct
The second key ingredient in convergence, direct marketing, is the science of moving people forward in the sales process, either to interaction/leads or to sales. Direct marketers know how to measure and project every possibility. They can push the limits of interaction and build brand using every kind of media available, in ways that traditional advertising can barely fathom. … I like to think of it as building communications via any media to provide prospects and customers with “proof of concept points” for their consideration.

The Best of Sales
Combining the best of brand and direct is starting to make sense, as both have proven skill sets that can enhance the objective of the other. But what the heck does sales, our third ingredient, have to do with it? … Salespeople are on the frontline every day—listening, probing, questioning, and then answering the customers’ hard questions. … With ever-increasing competition and complexity in the market, the need to support them with real-time information is more critical today than ever before.

One of the tools we need to learn from sales is called objection selling. Rather than focusing our strategy and creative on features and benefits, we need to know why an individual wouldn’t move forward—the individual’s potential objections. … Objection selling gives everyone in marketing and advertising the right perspective to develop the empathetic dialogue needed at each phase of the sales process.

Not only can we benefit from their frontline knowledge of the customer, but also we can gain some serious traction from their database. Sales organizations use sales support software to isolate and define customers, lovingly referred to as the pipeline. Convergence uses the same idea, relying on a database to methodically build relationships and communicate with customers. … We are going to use the database to understand exactly where the individual is in the sales process so we can communicate directly to the individual … Internalizing this new information will help us determine the next step for each customer, as well as the communication needed to get the customer there.

The Power of Finance
… Convergence uses finance to determine the appropriate investment spend as well as the expected value of the individual. We use differential accounting, the process of burdening only the direct cost of goods sold and overhead, as a new source of funds to invest in future marketing and advertising. Rather than trying to estimate the lifetime value of the individual, we’ll take a more pragmatic approach and project the expected value over a set period of time. This could be as short as a few months or as long as several years.

Most folks determine their marketing and advertising costs based on a percentage of sales from this year’s static profit and loss. Working that way is about as precise as pulling a number out of a hat. Convergence uses a much more efficient model based upon real-time accounting. By gathering information from an individual after the transaction, we can determine his or her worth. Using the power of statistics, we’ll arrive at weighted averages for sales and costs that we can trust. We’ll understand the contribution margin to profit and use that knowledge to drive marketing and advertising costs. In other words, you’ll work with actual, proven statistics that relate to sales to build a model that works for years to come.

Richard Rosen is president and CEO of the marketing agency Rosen. This is an excerpt from his new book, “Convergence Marketing: Combining Brand and Direct for Unprecedented Profit.” Rosen has brought his innovative marketing approach to clients as diverse as General Electric, Dell, MetLife, Viking River Cruises and TaylorMade Golf. He can be reached at http://www.rgrosen.com.