Most direct marketers have a blind spot!

They worry endlessly about the offer, headline, copy, order form, guarantee and even the price. They study lists, pour over demographics and calculate recency, frequency and purchase size. E-zine circulation stats are hotly debated as well as web design and merits of e-mail follow-up.

Yet, direct marketers are in total denial about one part of the marketing mix. It's ignored, scoffed at and never tested. This one factor has a growing power to satisfy your customer, make a powerful distinction between you and your competition, and make a real difference in your sales and profits...

This element has a great deal of influence on a little-known stage of the sales process, I call your “second sale.” And in a moment I’ll tell you why ignoring this “second sale” is costing you sales!

What I Learned From My First Direct Marketing Guru

I started my first direct mail venture when I was about twenty. I had recorded and produced a self-hypnosis course, and sold it through classified ads. This was back in the early days of cassettes, and LP records still dominated the market.

I didn't know a lot about direct mail, but I was very proud of my product. So I packaged it in an attractive, multicolor album jacket.

I also had a few dealers. One, a seasoned New York pro, hand made a fortune selling hypnosis items by mail. He was as helpful as he was knowledgeable, and quickly offered this sage marketing advice.

“The Package Don’t Count, Kid”

“Look kid,” he confided. “Don’t waste your money. When they see it, they've already bought it. Wrap it in newspaper if you want. I don't care what it looks like. They don't care what it looks like. You get it, kid? The package don't count."

Thirty year later, that's still the common wisdom: the product's appearance doesn't count. And it's especially true about information selling.

But I think this “common wisdom” is wrong. Dead wrong!

Times have changed, and product packaging has become the direct marketer's “blind spot.” I'm convinced that it's time to ignore ”common wisdom.” Because here's the truth about this point of view:

Cheap packaging and low-quality production are just excuses for extracting every penny out of the immediate sale, with no regard for the big picture. Packaging is important, especially now, because of the overlooked “second sale.”

Times Have Changed — So Have Some Of The Rules

Years ago, the customer generally saw an ad that made an offer he couldn't refuse. The product was often sold directly from the ad for somewhere between $1.98 to $9.95.

The customer bought a money order at the post office, or sent cash (paying by check delayed the order). He wrote a letter, licked a stamp and mailed it off. The purchase finally arrived about six weeks later.

If what the customer ordered didn't appear attractive and nicely packaged, it wasn't such a big deal. Why? Because much of the stuff sold in this price range was “novelty”. The buyer didn't really expect too much for his $1.98 or so. And much of what was offered for sale by mail back then was on the “junk” side of the line.

Besides, in order to get a refund, the buyer had to write a letter explaining his dissatisfaction, repack the product, buy stamps to return the package, then wait for weeks. And there might not be a refund. That's a lot of work to get a few dollars returned.

Today, your customer's purchase requires little effort. All it takes is a phone call to an 800 number and a credit card. In anywhere from 24 hours to a few days, his package is at his door.

What's more, if the customer is unhappy, all he has to do is reseal the package and give it to the UPS driver, or drop it in the mail with a note that says, “Please credit my card.” That's all. It's easy, fast, and sure. Very little effort!

Today, getting a refund is virtually guaranteed. Why? Because the seller can't afford to jeopardize his merchant status. So regardless of the reason for the return, the customer is going to get his charge card credited. This means that two things in the transaction have changed over time.

 

1. It takes less commitment on the customer's part to place an order. There's no money order to buy, no check to write, no hassle. He just picks up the phone and makes his purchase. It doesn't even feel like spending money.

2. Getting a “no-hassle” refund is easy and guaranteed. Your customer is virtually certain that he can get a refund on his credit card purchase, with no (or few) questions asked.

What does this mean to you? Now you might find that your customer is less sold on the product when it arrives, knowing his final decision can be delayed until he's had a chance to look it over. The credit card has made this possible. And that's not good news for you.

Can you see that we're dealing with a completely different dynamic now? A new kind of customer? Unlike the old days, he hasn't paid his money before he receives what you sold him. He has the purchase BEFORE he has received his credit card bill and paid his money.

True, you do have the customer's money credited to your merchant account. But if he should change his mind — if he's even slightly disappointed — that money moves out of your account and back into the customer's pocket. It's effortless for him, and you lose big!

Why is your loss so large? Well, for starters, you lose the profit of the sale. But you also lose the costs connected to getting the order, packing the product, restocking it and replacing any missing pieces.So today, you need to make what I call the “second sale.”

The Secret of the Second Sale

When your product arrives at the home of this less-committed buyer (who knows he has the option of an easy refund), your customer must be able to easily and quickly assess its value and quality, or your product will be returned. And that decision is made based on perceived value when your product arrives. This is your second sale.

Remember, your customer isn't buying novelty products for $1.98. That “glow in the dark tie” that looked so cool and daring in the ad (and wasn't when it arrived), may not have been worth the effort and hassle to return it for a refund.

But your package of audio and video tapes and manuals that sells for $40-$1,500 is a different matter. That's a serious expenditure, with definite expectations of performance. Yet, when your customer opens the package, how can he possibly judge the worth of the information it contains (which might make or save him millions)?

The truth is, he can't. So he makes a judgment on your product's value based on past experience. And experience tells him that good things come in nice packages. Cheap packaging means inferior contents. He shops by this rule: Even though he'll deny it to your face, your customer judges your product based on how it looks.

If you don't believe me (or even if you think you're an exception to the rule), let me tell you about someone I know who sells the same product, packaged three different ways. What she sells is clearly visible in each package. In the plain packaging, the item sells for $19.95. It's $49.95 in the two-color package. And she get $69.95 for the very same product in the deluxe full-color package.

What's the difference between the $20 and $70 product? A little less that $1 in packaging. The product is exactly the same. And what's the difference in sales? She sells five times as many at $70 than she does at $20 — all because of an extra dollar spent on packaging.

“Of course,” you say, “that's retail selling. The customer is looking at the product at the time of sale. And that's precisely my point.

Nowadays, your “actual sale” is often the “second sale” : that moment when the product arrives and your customer has to decide whether to keep or return it. And at that crucial time, what does your customer see? How your product looks. Your customers are making their buying decision now, exactly like they would if they were buying at retail. And packaging pays!

They must judge the wisdom of this purchase based on their past buying experiences. They can't know all that's inside. At most, they can sample a tape or thumb through the pages. But they can get clues from what their eye (and ears) tell them about its physical qualities. Are the tapes listenable? Is the manual an amateur product?

And your guarantee usually forces customers to make an immediate judgment. They can't possibly discover the real value contained in your information during the free 10 day or two week trial. They need to make an appraisal at that moment — as soon as they open the box. So they use the only yardstick they know. Does it look like a good product? Do your materials look like they could fulfill the promises you made?

This is the moment when your investment in packaging will earn you many times its cost.

Good Packaging Is Very Affordable, Even For The Small Publisher

Packaging cost have become more reasonable, too. You can deliver your information in an attractive package, affordably. And additional dollar or so in eye-appealing production is worth it, especially when your product sells for perhaps several hundred dollars. Look at it this way. If better packaging reduced returns by 10%, or increased sales a few points, what would that be worth to you?

Recently, a friend expressed his frustration with one of the largest direct mail information publishers. He said it this way:

“His information is usually good. But every time I open his package, why do I have to look at a piece of low quality junk? I always feel taken. If this guy's made millions, why isn't he willing to spend a few cents to make his ideas not look like junk? Is he just cheap?”

This is a sophisticated buyer. He know that the true value of the product is its content. But, like any customer, when the material is in his hands (the point of the second sale), much of his decision is based on how he feels about the product. And how your customer feels about what he's just bought from you is based on his experience that says valuable products look like quality products.

I've upgraded the packaging on my new titles, and I plan new packages as I reprint older ones. Common wisdom says I'm foolish. But I believe my pride in the content and appearance will be reflected in increased sales. And I'll keep you posted on whether this holds true. You'll have to judge for yourself if this is your blind spot.

The Direct Marketing Training Center

Top of page