Increase Profits with Excellent Execution
As we hurtle towards more expensive media in Q4, perhaps you might take a fresh look at previously overlooked sales processes. And because you can generate profits from seemingly minor opportunities, you might want to investigate revenue additions. As we've heard, "The Devil is in the Details". Well, so are some real profits. Here's how one client picked up $100K a year in free money. In another example, we show how Total Quality Management (TQM) is adding up to big bucks for a big infomercial producer.
Our prominent lead generation client in the work-from-home category has proven that specialized relationships can add to your bottom line and even subsidize more expensive media purchases. Turn trash into gold!
Every two weeks, Full E-Media downloads the new batch of useless leads from the Client and then manages the process of mailing, emailing or marketing on a pay-for-performance basis. Because Full E-Media's clients only pay for success, they don't care how old, over-used or inefficient these leads are. The Full E-Media process includes management of opt-outs, complaints, sourcing and testing of new offers, billing and reporting. In the end, all the Client has to do is cash the check. Obviously, the process was a little involved in getting set up and the 40% hold that Full E-Media earns as a management fee seemed steep. But today, The Client has an extra $8,000 per month.
Consider the benefit of small additions to your revenue streams --especially when done in a partnership setting. Your partner will work thier butts off to make both of you profit but could also help you afford expensive consultants or let you venture into more speculative media. That extra $.30 in revenue per lead, could really add up. Chase it down.
THE CASE OF THE MISSING REVENUE
Every once in a while, we all get lazy and start resting on our laurels. We stop challenging our assumptions and 'suddenly' a once hugely profitable business goes the way of Woolworth's, Sear's Catalog, Fingerhut and the Pony Express. Even great ideas need excellent execution and constant improvement. That's why we're introducing the idea of Total Quality Management (TQM).
Amoung other things, TQM is a management process that looks not at break-thru, knock-it-out-of-the-park initiatives. Rather, the idea is to systematically sweat the details and eek out a series of 2-5% improvements that add up over time. That's right, four singles make a home run. Don't swing for the fences, look for small improvements.
As an example, our new infomercial client was smart to add a short-form component to their hugely successful, long-running, 30 minute program selling self-help tapes. By adding a :60 DRTV component to their 30 minute media mix, they not only reached new customers, but they helped support the 30 minute runs. With their short-form Per Inquiry campaign, hundreds of new leads a day are pouring in--and they are closing them well. Compared to the number of units they sell in long-form, short form is a drop in the bucket. But profits are up. They're making money and hey, they've got a major new marketing initiative that's helping them grow.
And we're finding even more money is being left on the table. Email addresses are not being remarketed to. Direct mail packages haven't been updated in years. They don't load these callers into a predictive dialer. They don't sell their leads. The call-to-action is a free premium --but it's a free cassette tape. (Know anybody with a cassette player?) Each one of these little peices doesn't make or break a business. Heck, they're profitable! Why pay attention to the little things, right?
But look at two killer effects we've found in just a few weeks:
Of all callers, those who provide an email address are 45% more likely to buy the product. By concentrating on those who give their email address, product returns are down and another 1% of all callers are closing as a sale.
The cost of sending a direct mail package to those who did not buy on their initial call has escalated by 75%. By offering the new format of a lighter weight CD-ROM instead of a cassette tape, the actual mailing cost dropped into a lower postage category. Postage costs in 2006 are expected to drop by $210,000. And the new format has proven to increase sales by 6%. If the new format continues to hold at current lead volume, this minor tweak will translate into $1,600,000 in new sales in 2006.
Sweating the details is proving to be highly profitable. Ready for your campaign's updated workout?