In the classic sense, direct response has always been about getting the first order, meeting or beating breakeven, then keeping that new customer in the funnel long enough to actually make a profit. Keeping customers in for a couple of cycles and THEN losing them was acceptable. Winners and losers are the only scorecards. CLTV – Customer Lifetime Value is the scorecard of consumer direct response. At least it used to be.
It’s not that CLTV has become unimportant, but the importance of customer satisfaction has become the new driving force as inertia is no longer a strong enough force to keep customers from canceling and saying good-bye. There are a number of reasons for this which include increased consumer sophistication and ease of returns on platforms like Amazon.com. Returning something used to be a much bigger hassle than it is today. That puts power back in the hands of consumers (a good thing) and forces marketers to deliver a better product, offer better service, and create a sense of trust between the customer and the company.
As a side note this does not mean I personally like getting emails from EVERY Amazon company from which I buy something asking me about my ‘experience’ and also asking how many stars would I give the company. I received something I bought in the mail when promised, as promised. There was not one exceptional thing about the ‘experience’. And that’s fine! Marketers on Amazon could do a much better job of following up than asking for a rating every single time.
Yet it’s not a bad thing that companies from which I buy things on Amazon are interested (seemingly) in my satisfaction. It makes them try harder. Although were I to be unsatisfied, I surely would not be waiting for a rating email to get me to contact the company to try to rectify the problem.
I am seeing this from friends, customers, and associates of mine who are longtime direct response professionals. For them the days of ‘go get the order and we’ll hang onto them as long as possible’, whether that be by mail, TV, radio, digital or otherwise, are waning. The idea of creating a brand – and one of high value, is finally intersecting with the transactional nature of direct response advertising. This can be seen in the approach of the new guard of direct response advertisers like Casper, Harry’s, Dollar Shave, Warby-Parker and others. The products from these companies are for the most part unexceptional. The creation of a cool and interesting brand along with compelling offers (a big direct response element) makes for a deeper and longer lasting customer relationship. These companies will have to continue to deliver value for their customers even when the customer is not an active buyer. You might not be in the market for another mattress but there are other bedding products that Casper would like to sell you until you’re ready to buy another mattress.
Even if the model is to create and sell a variety of products direct-to-consumer, creating a strong brand to support product sales is more important today than ever before. It’s where I’ve always stood and where we stand as a strategy and execution shop. We’re in the right place at the right time and the trend in my view is positive.