Sales: What Works Now

Q: Is E-mail replacing direct mail? Is direct mail going the way of the dodo bird, or what?

Direct mail has suffered some huge blows, namely, higher mailing costs and the anthrax scare. And the anthrax scare will drive up costs further as the U.S. Postal Service integrates new security measures and equipment. What that means for entrepreneurs is pretty devastating: they can no longer rely on direct mail to launch a new business or grow an existing one.

"It looks like our golden age of direct marketing is coming to an end," agrees Steve Leveen, the owner of Levenger, a 14-year-old catalog of reading-and-writing-related products in Delray Beach, Fla., and former Inc 500 company. The company did not suffer any fallout from the Florida anthrax cases, but Leveen harbors grave concerns for the future of direct mail. He predicts that E-mail marketing will supplant direct mail.

"It's becoming more and more expensive to acquire customers the old way -- by mailing catalogs to unsuspecting recipients," he says. "It's kind of a crazy way to run a business. Response ranges from 1% to 5%; so from 95% to 99% doesn't result in any action and quickly finds its way to landfill. I have to believe postage rates are going to go up radically in the next several years. The anthrax scare is just going to turn up the heat. Companies and individuals have one more incentive to get away from snail mail. And they've become more comfortable shopping online." More than 30% of Levenger customers now order on the Web. "Companies like ours are making much more active attempts to reach current customers by E-mail," Leveen says. "It's more targeted, and we can account for past purchases. We're using technology to be small. We can simulate the small-town merchant. Internet marketing puts a whole new spin on the idea of 'It's cheaper to keep the customers you have.'"

One caveat: E-mail is not yet a great tool for acquiring new customers. "A paper catalog is still our main way to entice new people to order and to go to the Web," says Leveen. Old technologies, he adds, have a way of sticking around like the fountain pens Levenger sells. "Rising costs will open windows for companies that can mail more economically. There's always an opportunity for new companies to go against the trend."

Q: What selling tactics are out?

Customers are on edge, and you've got to tread lightly. But there's still much debate about what exactly is in or out. "There was a period of too much overselling, teleselling, and selling the future," says Joe Lassiter, who teaches sales management at Harvard Business School. "Customers are not going to tolerate intrusive selling anymore. And they're going to demand that the existing product work and not the next release."

Robert Miller, the shaman of Strategic Selling, will be happy if he never sees another PowerPoint presentation. You may love your product, but flashing one product slide after another is a quick way to never get asked back again, he says. Buyers just don't have the time or the appetite for the kind of self-centered sales pitch Miller fondly refers to as "show up and throw up." He is just as passionately against cold calling, which he labels "barbaric." "Cold calling is a total waste of time," says Miller. "I can't believe anyone still does it."

Robert Miller, meet Robert Pfender.

Pfender, co-owner and director of sales at Cargo Express Inc., an international transportation brokerage based in Yardley, Pa., routinely cold-calls the owners of prospective customers. In so doing, Pfender goes over the heads of those companies' traffic managers, who typically negotiate the rates for transporting their goods around the globe. He explains why he still values a selling technique so many love to hate: "When we go to the regular channels, they'll simply tell us, 'Oh, this is our rate.' You run into a lot of apathy. That's the biggest thing that salespeople in this business are up against. If you tell a traffic manager he could save $10,000 to $100,000, he doesn't really care, because he's not going to benefit from it, and if there's a screwup, he'll take the blame. The owners are extremely aware that there's a lot more to this business than price, and so we approach them from a management perspective. Those are the guys who are willing to pay for premium service, and those are the guys we're interested in. We're not bottom feeders, even in tough times." Cargo Express grew nearly 4,000% from 1996 through 2000, reaching $18 million in sales.

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