A Direct Marketing Agency - Helping Brands Acquire and Retain Customers

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November 30, 2006

Understanding the new math is critical in opening a new channel

Back in the late 80’s and in the 90’s when companies were looking at offering a direct channel, the only real option was a catalog. E-commerce had not come of age yet. The rule of thumb that we told our clients was, “You’ll reap financial rewards if you do, BUT you must be prepared to not make a profit for three to five years while you invest in building a house file of loyal customers.” It required a high upfront investment due to all of the creative, prepress, printing, list rentals and, most importantly, the mailing costs. For many, this was too big of a pill to swallow.

Today, those upfront costs are much, much smaller. You still have the creative investment and perhaps some e-mail list rentals if you haven’t built a sufficient database of names, as of yet. You will not have prepress, printing and postage (the latter two being the largest expenditures for a cataloger).

The new math, made possible by the introduction of the internet, makes it much easier to succeed fast in opening a new channel for your customers.