In today's economy, every successful company is market driven. An overstatement? Of course. But only a slight one. Marketing, these days, is too important to be left to the marketers -- which is exactly why you'll welcome a new book called MaxiMarketing, by Stan Rapp and Tom Collins. MaxiMarketing is a marketing book for chief executives. The authors come out of the numbers-driven direct-mail business, and CEOs wary of marketing hype will especially like their emphasis on measuring marketing success directly, in sales and profits. Thanks to the personal computer, the authors point out, you can easily calculate both the costs of a specific marketing effort and the immediate responses it generates -- inquiries, qualified leads, orders. More important, you cannot get software that will let you measure those costs against the lifetime value of the new customers attracted by the effort. The key: tracking the new customers through repeat sales and cross-promotion of other products.
Rapp and Collins offer plenty of examples. Soloflex Inc., a maker (and direct marketer) of home-exercise machines costing several hundred dollars apiece, ran magazine and television ads inviting readers and listeners to send for a free 22-minute demonstration tape. The tape cost the company $150,000 to produce, plus roughly $6.50 per copy for materials, dubbing, and packaging. After six years in business and 60,000 free videotapes, the company calculated that up to 40% of those who requested them actually bought a Soloflex -- exactly the kind of hard numbers that you can't get from most advertising. The next step, presumably, would be to sell those same qualified customers other, related products -- continuing, of course, to track the returns on the original advertising and videotape investment.
Rapp and Collins deal with the full range of contemporary marketing techniques, albeit unevenly. They'll tell you more than you probably want to know about catalog sales, and less than you should know about public relations and special-events marketing. Their discussion of advertising is down-to-earth and sensible: they advocate a middle course between ads that entertain and those that straightforwardly convey your selling proposition. (Odds are, say Rapp and Collins, you won't be able to pull off a dazzler in either department.) And they don't forget what they call the "hardworking scullery maid" of marketing, sales promotion. Properly done, the authors claim, sales promotion can frequently generate the most new sales per dollar, and at the least risk.
Nearly all of the authors' examples of clever sales promotions are drawn from the consumer arena: the Virginia Slims Book of Days appointment calendar promotion (special packages that have been selling out in early December for nearly 20 years); the free sampling done by Helene Curtis of Finesse hair conditioner (which put it at the top of its category); and the $500-off coupon Chrysler mailed to its loyal customers (tied to the sale of 130,000 cars and trucks). But there are lessons for nonconsumer companies as well. Too often, business-to-business marketers labor under the impression that their hard-nosed corporate customers won't be susceptible to such transparent come-ons as coupons, sweepstakes, and other freebies. It is these same tough executives, of course, who are likely to be loyal customers of one of the airlines' numerous frequent-flyer programs -- which themselves are among the better examples of what Rapp and Collins mean by maximarketing.
-- Steven Pearlstein
* MaxiMarketing, by Stan Rapp and Tom Collins (HC, McGraw-Hill, 19987, $19.95)