At First Chair Partners, we have a client who has a web application. That client does about $16MM in revenue annually, on about 21,000 subscribers. Want to know how they’ve driven most of these subscribers?
Yup, direct response. You know, that type of marketing that bombards audiences with relentless messages, hoping they’ll eventually cave. When we first engaged with the client, I have to admit - I was a little disgusted at the thought. I mean, direct response? Really?
That said. It works. It works well. And there’s a lesson in there.
There are a lot of things out in the world that you or I don’t like. Popup ads, direct response marketing, billboards, commercials, dumb social games on Facebook. But, just because we don’t like them doesn’t mean they’re not successful and effective. Don’t get me wrong, I hate the idea that DR drives so much revenue (well, I love it and I hate it), but the numbers don’t lie. $16 Million. Hard to argue with that kind of cash flow.
Now, the counter argument goes like this: “Yeah, that may be so, Justin, but if they used more sophisticated techniques and approaches, they could be doing $30M, so they’re actually doing damage”. But is that true? It’s a beautiful straw man, but my suspicion is that oftentimes, these arguments are suspect (not always, but more than the parties involved would like to admit). To quote the intro of a show I sometimes listen to on XM Radio: “In God we trust; all others must bring data”.
So, here’s the deal. When you’re discussing things like this with someone, keep a bit of humility. You may see the world a completely different way (“Popup ads?! Seriously?!”), but the person on the other side is just as convinced. Often, they have data to back it up, and unless you’ve got data that can refute theirs legitimately, it might be best to listen and critique objectively, instead of turning to emotionally entrenched positions.
I’ll be the first to admit that when I heard about the direct response thing, I was legitimately put off. My gut was to jump all over it as an antiquated strategy that could surely be replaced by something more sophisticated. But $16 Million. I don’t have data to refute that. We can test new initiatives, see how they stack up (Cost of Customer Aquisition comparisons, all that), but ultimately, I have to admit - DR is working. A lot of things I don’t like are working.