Tag Archives: start-ups

The essential media channel most successful digital start-ups can’t do without…

31 Tuesday May 2016

Posted by in Advertising, Branding, Digital, Digital marketing, Direct Marketing, Marketing, Media, Sales Promotion

≈ 6 Comments

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Here’s a quick quiz for you digital marketing experts:

Question: What do all these online brands have in common?

Google, Uber, Kogan, Catch of the Day, Deals Direct, The Iconic, Hello Fresh, Helpling, styletread, carnextdoor, suppertime, Charles Tyrwhitt, Naked Wines, Virgin Wines, Marley Spoon and loads of other digital retailers…
(Hint: Direct marketers have an unfair advantage here)

Answer: they all rely on print as their most valuable media channel for acquiring new customers.

That’s right folks – print technology. You know, that ancient old-fashioned relic of a media channel, arrogantly ignored by so many naive digital marketers?

inserts

printed inserts are key to new customer acquisition

FYI a quick piece of digital advice – if you are an alleged digital marketing expert who advises clients to only use digital channels, or a digital marketer who only uses digital channels, you may need to rethink what you do. Because if you are not using the proven channels and only using the (often) unproven digital channels, you really should leave the industry. You’re giving it a bad name and costing marketers a sizeable fortune.

I’ve written previously about Google’s use of direct mail. You’ve probably received some of their mailings. So let me share the ParcelPush story with you.

Bjorn Behrendt is a successful German entrepreneur with a background in online direct marketing – also known as digital marketing. He launched styletread, an online shoe store, in Australia. He then sold it for loads of money. Now he’s launched another three digital start-ups in Australia to service digital retailers. And these start-ups are all print-based businesses.

Gotta love it when one of the fastest growing digital start-ups, which exists to service digital start-ups, is providing print services to those digital start-ups!

If you’ve worked in direct marketing, particularly online retail or mail order, you’ll probably already use printed inserts in fulfillment parcels to acquire customers. This channel is at least 50 years old.

But if you don’t have any DM experience this channel might be new to you. Bjorn discovered printed inserts when he owned styletread. Loads of other online retailers asked if they could put their inserts in styletread’s shoe boxes when they were delivered to customers – for a fee of course.

Long story short, Bjorn partnered with Australian Craig Morris and launched ParcelPush – a specialist business owning the rights to access online retailer’s fulfillment boxes/parcels. They pay to insert a branded envelope into them. Then they sell inserts into those envelopes to other online retailers. For example, in the Aussie Farmers Direct fulfillment box, they insert an envelope branded “Aussie Farmers Direct” and it is filled with third party offers and samples.

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This has become one of the cheapest channels for online retailers to acquire new customers. After all, they are making offers to people who have already bought a product online, so these prospects don’t need to be educated to shop online. It’s the same process as mail-order companies that used inserts to convert existing mail-order customers to buy other products by mail-order. What’s old is new again – again.

More importantly they are using tactile media – the media that affects all five senses – sight, sound, touch, smell and taste. Digital media only affect sight, sound and touch, so are relatively limited in their customer engagement ability. (I had to get customer engagement into a marketing blog to demonstrate my digi-credibleness). As I’ve said before the physical nearly always outperforms the virtual.

Most digital marketers struggle to make digital channels profitable for customer acquisition. The digital channels are much better for retention and repeat business.

Here are some samples of the inserts – all shapes and sizes:

Parcel Push 2

Parcel Push

In addition, and as a result of the success of ParcelPush, they’ve also launched two other print-based businesses:

www.letterboxpush.com.au – this is a competitor to the Yellow Envelope and other distributors of catalogues and brochures into letterboxes.

www.printpush.com.au – this is an online print business. Who’d have thought we needed another printer? But the ParcelPush print volumes have made it possible to offer good value printing – and distribution.

So if you want to succeed with digital marketing, here’s some career advice. Find a grey-haired direct marketer and buy them a drink. Then sit back and listen. They’ve lived through and created more disruption in marketing than anyone else in history. And they continue to do so. You’ll be surprised how fast your career takes off.

But remember, just because digital marketing techniques are new to you, doesn’t mean they’re new to the world. Technology changes, but human’s emotional reasons for buying remain constant…

Millions of users don’t a customer make, nor a profit, or even a business…

19 Tuesday May 2015

Posted by in Advertising, Branding, Digital, Digital marketing, Marketing, Social Media

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As those who lived through the first dot.con bubble know, the way to make money was to come up with an idea and con “investors” to throw buckets of cash at this amazing new e-thing. Nobody worried about making money because amazingly in the e-world, profits miraculously appear down the track.

And we all know how the dot.con bubble ended don’t we?

FB-bubble

It’s the same principle driving many of the “start-ups” today. Same process – just a funky new buzzword for launching a risky business. How lame does it sound to say you’re opening a new company? It’s much cooler to say you’re launching a “digital start-up“.

You carry even more swag if you are “crowdfunding” or “crowdsourcing” your start-up – WOW, just writing it has an aphrodisiac effect!

CF-2

But just as they did in 1999, the start-up owners have no plan to turn a profit any time soon, except from selling part of the start-up shares to investors. Many of these ‘business models’ are based on getting lots of users of free platforms – think Twitter, Yelp, LinkedIn et al.

The money will be made down the track by selling advertising based on the volume of users. Just like magazines and newspapers did for centuries. Although people have always paid a cover price for most print publications. But as news is now free online, paid publications are struggling.

your_ad_here_banner

The mistake here of course, is to believe users behave like customers and regularly return to shop. Therefore advertisers will be willing to pay to reach these users when they return.

The world doesn’t need any more “opportunities” in which to advertise. So why do these digi-people believe advertisers should make them rich? Why not create something of worth that people will buy? After all, most of their users would not pay for these social platforms if they cost money. One of the major reasons people use them is simply because the service is free.

And financial analysts are now rethinking some of these user-based businesses. On 30th April they took a dim view of the user-based platforms Twitter, Yelp and LinkedIn:

  • Twitter share price dropped 25+%
  • Yelp dropped 23+%
  • LinkedIn dropped 20+%

Read about it here.

As a result, marketing blogger Mark Kolier questioned Twitter’s value as a marketing channel: “What if Twitter isn’t an effective marketing platform?“.

So I ask the question:

Is Twitter the next Myspace?

As regular readers know, Twitter is failing to attract brands in significant numbers. Looking at how it is being used, I suspect it will go the way of Myspace – becoming a niche player. In Twitter’s case a service for vacuous celebrities; movie, TV, music and sports stars/shows; emergency services; journalists; public relations executives; government services; the odd data consultancy and some customer service departments.

Twitter probably won’t survive as a marketing channel for brands – particularly as it still hasn’t made it as one. It is a reasonable channel for individual consultants and publishers to promote themselves, but not for major brands.

You may disagree dear reader – but unless Twitter can become more relevant to big brand marketers and grab more revenue in a crowded advertising market, dominated by Google and Facebook, its future may not be in its own hands.

Lots of users, not lots of business.

twitter fail

And you can retweet me on that…