Changing the Channel [Book Summary]

Changing the Channel [Book Summary]

CHANGING THE CHANNEL, by Michael Masterson and MaryEllen Tribby

About the authors - Michael Masterson is a successful entrepreneur who has overseen the launch of numerous companies that have grown to multi-million dollar businesses.  Mr Masterson helped launch and is a consultant to Agora Inc., a leading direct marketing company.  MaryEllen Tribby is Publisher and CEO of and has 20 years of experience in publishing and direct marketing.

Changing the Channel examines 12 marketing channels and argues the benefits of multi-channel direct-response marketing campaigns.  The relevant acronyms are:

  • MCM - multi-channel marketing - offering customers more than one way to buy your products.

  • DRM - direct-response marketing - a form of marketing designed to solicit an immediate response that is specific and quantifiable.  DRM differs from Branding.  Branding wants the customer to remember the product, whereas DRM wants to get the customer to provide information or to open his wallet.

  • LTV - lifetime value of your customers - the profit you make from a customer over his lifetime.  LTV is important to know so you can determine how much you can spend to acquire a new customer, and to retain an existing customer.

Direct-response online marketing (direct-email)

Direct-email differs from direct-mail in important respects:

  • Direct-email is much cheaper than direct-mail, and has greater speed (so you can test your offers faster).  You can communicate with your customers more frequently.

  • Because of anti-spamming laws, you can only send email to customers who have "opted in" to receive them (whereas with direct mail you can send letters to anyone).

The CAN-SPAM Act lays the following rules for direct-email:

  1. All emails should have an unsubscribe option.

  2. You must include a full postal address at the foot of your email.

  3. The addresses of people who have opted out of your list shouldn't be sold to other marketers.

  4. "Subject" and "From" lines should accurately describe the message.

Because of the restriction on spamming, you have to develop a two- or three-step programme.  You might, for example, buy banner ads, or an insert ad (an "e-newsletter ad" or an "e-news sponsorship"), or pay for an endorsed promotion, or pay for a Google AdWords campaign.  The purpose of such efforts is to direct responders to a landing page, where they can either:

  • Purchase your product; or

  • Sign up for a free gift (e.g. an e-book or information package) that they would receive in return for their permission to let you send them advertising promotions in the future (a name/email collection effort).  This is called permission marketing.

Only after you have created a list of thousands of willing prospects would you be able to send out an e-mail sales letter.

There are 10 important principles of direct e-mail advertising:

  1. Copy is king.  The success of your promotion depends on (i) the quality of the list you mail to (this is the most important), (ii) the offer you present to the prospect (this is second in importance), and (iii) the copy you use.  Even though copy is the least important factor, it is the hardest to get right, which is why copy is king.

  2. Long copy out-pulls short copy. Hundreds of test have shown that longer copy is better than short copy.

  3. When it comes to long-copy, the lead is 80% of the game.  Your copy has three parts: the lead, the body, and the close.  The lead carries the responsibility of conveying the "big idea" of the sales message and provoking an appropriate emotion in the reader.

  4. In crafting a lead, stick with the proven six:

    1. Offer/promise

    2. Invitation

    3. Problem/solution

    4. Secret

    5. Story

    6. Prediction

  5. Leads range from the very direct (an obvious sales pitch) to the very indirect. Each approach has its strengths and weaknesses. Decide which is best for your copy.

  6. Make your lead well-balanced. A well-balanced promotion has four aspects (this is the "secret of the four-legged stool", because if your promotion has all four legs it will be well balanced and won't fall over):

    1. Idea

    2. Benefit

    3. Credibility

    4. Track record

  7. Make your headlines and bullets more powerful by focusing on "the four U's":

    1. Uniqueness

    2. Usefulness

    3. Urgency

    4. Ultra-specificity

  8. Every product needs a USP (unique selling proposition).  The USP is what makes your product stand out from the competition and gives the prospect a good reason to buy from you.

  9. Benefits are better than features - and deeper benefits are better than superficial benefits.  E.g. don't tell your prospects that the car you are selling has good tires and suspension; those are features.  Tell them that because of those features they'll be able to manoeuver easily through rush-hour traffic and avoid accidents with dangerous drivers.

  10. Write to one person at a time in the language you would use if you were talking to that person face-to-face.  That does not mean informal language, but it does mean conversational language.

There are two types of lists that you can market to:

  1. Your house list

  2. Outside lists

House lists can be divided up as follows:

  • Hot Leads - people who have opted in to receive emails from you but have not yet made a purchase.

  • Buyers - people who have opted in and have purchased one product from you.

  • Multibuyers - people who have opted in and purchased more than one product from you.

  • Cancels and Expires - former customers.

Outside lists can be divided up as follows:

  • Hot Prospects - people who have purchased a similar product from your competitor.

  • Good Prospects - people who have purchased a related product from your competitor.

  • Okay Prospects - people who have something in common or meet certain criteria.

Direct mail

There are five forms of direct-mail formats:

  1. Tabloid - 13x10 in size, this is a mail piece designed to look like a newsstand tabloid, with eye-catching headlines and colors.

  2. Catalogue - with product listings.

  3. #10 package - common envelope size, with a "teaser" printed on the envelope.

  4. Invitation package (aka 6x9) - a warm and friendly package with a business reply envelope (BRE) inside.

  5. Postcard - usually containing a soft offer (i.e. not asking for immediate cash).

The five steps of direct mail are:

  1. Contact a "list broker" and order a sample amount of each recommended list (5000 names is the usual test quantity).

  2. Hire a copywriter to write the sales letter.  He comes up with two distinct ideas and writes two letters.

  3. Print the quantity of direct-mail packages that you need for the test (50% for each of the two letters).  Each of the groups is uniquely coded so you can track how each mailing has performed.

  4. When the orders come in, you can easily determine which of the two sales letters worked better, and if you sent to several lists, which list worked better.

  5. You then mail the letter that performed better to a significantly larger number of names. When sending out this second mailing, you might test another variable (such as introductory price or the guarantee).

When the results of the second mailing come in, you analyse them and make a third mailing to the best performing lists and using the best copy, testing again another variable.  And so forth.

When selecting a list, watch out for the:

  • Purchase Channel - whether the list is direct-mail sold (i.e. all the names are direct-mail respondents) or compiled (i.e. the names are from directories - which typically are less responsive).

  • AUS (Average Unit of Sale) - if you are selling high-end lawnmowers for $4,000, you don't want a list of people who only purchased gardening gloves for $9.95.

  • Universe size - how large the list is.

Your offer must be strong.  The "10 Tests" rule for a strong offer are:

  1. Is your offer specific?  Will the prospect understand exactly what they get?

  2. Is your offer exclusive?  Make your offer just to a select few.

  3. Is your offer valuable?  Your offer may be inexpensive, but it won't sell unless it has high perceived value.

  4. Is your offer unique?  Is it only available through your business?

  5. Is your offer useful?  Make sure it helps your prospects save money, save time, do their jobs better, etc.

  6. Is your offer relevant?  Do prospects want what you are offering?

  7. Is your offer plausible?  Does it sound too good to be true?

  8. Is your offer easy to acquire?  Make your order forms clear and simple.

  9. Is your offer urgent?  Are you clear about the deadline of your offer?

  10. Does your offer have a guarantee?  Strengthen it with a money-back guarantee.

Your copy must follow these rules:

  • Don't proselytise.  Preach to the converted.  Target the sales effort to people who have already demonstrated an interest in buying products similar to yours.  Trying to sell a watch to someone who has never bought a watch before through the mail is an uphill battle.

  • Start with the prospect.  The prospect doesn't care about you or your product; he cares about himself.  Ask yourself, "What is my best customer thinking about? What's keeping him up at night? What is he dreaming about?"

  • The lead is 80% of the sale.  The lead needs to make a strong, emotional case for the product.  The body copy then makes the rational argument.

  • The lead is yours to win. The body is yours to lose.  The lead is where the emotional pitch is made - winning over the prospect's heart.  The body offers the rational proof.  A common mistake is to provide insufficient proof of all the claims that you make.

  • Check the copy with the "four legged stool" test.

  • Make every offer irresistible.  Close your sales copy with an irresistible offer - one that is simply too good to refuse.

Social media

You should not pitch your product to bloggers directly - if you send them a hype-y marketing/PR message, they see right through it.  The trick is to have a real dialogue - to familiarise yourself with their blogs and views on business and life.