Thanks For Your Order, Now Pay Me (1,252 words)
Maximizing Credit Offer Performance Through Better Billing
By David Rosen
The advantage of the credit offer in direct marketing stems from the way it increases gross response by fulfilling a cardinal direct response principle: Make it easy for the customer to respond.
Whether it takes the form of a "Bill Me" option on an order card or the all-out "Send No Money Now—We'll Bill You Later," the credit offer facilitates response (and encourages impulse purchases) by relieving the customer from having to reach for checkbook or credit card, or from thinking further about the actual expense of the product.
Combine that with a postage-paid reply vehicle (BRE or BRC) and you've done a good deal to make it not only easy, but quick and convenient for the customer to respond. As a result, the lift in gross response achieved by a credit offer vs. cash-with-order can be dramatic: 50 percent, 100 percent, 200 percent or even more.
But there's a clear distinction between gross response and net paid orders, and it's one no marketer can afford to ignore or underestimate. Credit offers live and die by payup performance, and it's the job of the billing series to obtain that payment. Apart from the factor of customer satisfaction, or how well the product actually compares with the expectations raised by the front-end promotion as the customer perceives it, nothing is more important than the billing series in determining how successful a credit offer will net out.
And yet it's remarkable how many direct marketers neglect their billing series, leaving the same controls in place for years without testing to improve performance (but continuously testing on the front end), and settling for "good enough" operational and creative fixes in billing that they would never accept for front-end promotions.
Does that describe your organization? If so, the path to more effective billing is not hard to find or particularly arduous to navigate—but it does require a certain level of commitment and perseverance over time. Here are some guidelines that will prove helpful.