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"List, Offer, Package" in the Age of Online Marketing And Site Usability

In the traditional offline world, direct marketers have the mnemonic, "list-offer-package." Meaning? The largest factor in determining the success of your marketing effort is the list, or the population you're reaching. If the list is good -- that is, if the list is large, and if the folks on the list are interested in what you have to sell -- you'll succeed. Here's an example. If you had a list of die-hard collectible fans (say, the 12 month buyer file from the Bradford Exchange or another collectibles cataloger) and you mailed them a collectible plate offer, you'd probably enjoy a strong response rate, perhaps 1% or so. Send the same offer to a random set of names from the white pages, and you get a thousandth of the response, something like 0.001%. Three orders of magnitude difference, just based on the quality of the names. Market to the right folks, and things get much easier. Now say you're marketing your plate to the same file, but testing two offers. The test offer is free shipping with 90-days-same-as-cash (buy now, pay later), while the control is the same plate at the same price without those two benefits. You might see a response of 1.2% for the test vs. 1.0% for the control. A 20% lift, based on the quality of the offer. Not as large effect as the list effect (which came in at 10000% in this made-up example), but 20% is still a big deal. Now say you're marketing your plate to the same file with an improved creative package. Say you're testing two mailing pieces -- your standard mailer against a spiffy package with better copy, layout, and photos. You might see a response of 1.25% for the control vs. 1.2% for the control. That's a 4% lift, based on the quality of the package. 4% is nothing to sneeze at, but pales against 20% or 10000%. How does this relate to online marketing, paid search, and site usability? The same "list-offer-package" applies. The fast way to double your site sales is to double the traffic, or double the relevance of that traffic. That's where online acquistion tools like paid search comes in. Pull that lever hard, and as far as it can go. Next, the next most influential lever is offer: is your website selling the right merchandise at the right price with the right services? Finally, the smallest lever on the machine is package: how does your website look and operate? Now, I'm not arguing web merchandising andwebsite usuability aren't important. They are. Critically so. It is a marketing crime to bring traffic to your site and not do everything one can to convert those visitors. But unless your site is so badly broken as to be practically inoperable (many sites are; that's the subject of another post), then site improvements are a third-order effect, after your offer and value proposition (the second order effect), and after your traffic volume and traffic quality -- the first-order effect. Pull all three levers and pull them hard, but understand which has the largest impact.
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