Commentary: Media for the Online World
The Line Which Is Dotted
I went to high school with Alec Baldwin. (No, you didn't. You said you went to high school with Jerry Seinfeld. Well, yeah, it was a big high school...). Alec's Hollywood star rose when he did a film called Glengarry Glen Ross (http://www.uggr.com) with (among others) the late, great Jack Lemmon. It was about real estate salesmen.
General Motors' recent announcement that it will spend more on customer relationship marketing and less on traditional advertising brought me in mind of the movie. Alec in a berating and harassing lecture, tries to motivate a sad-sack group of salesmen with this great line:
"Only one thing counts in this life, get them to sign on the line which is dotted."
Selling cars, like selling homes, represents a classic "sales funnel" problem. The vast majority of people don't want a car or home right now, so most of the money spent advertising cars or homes is wasted. But each real prospect for a car or home isn't really worth money, either (although we like to think they are). Only signed contracts count.
Every marketing dollar GM spends, in other words, should be aimed at a signed contract. So why was GM such a big advertiser in the first place? The industry spent $12.2 billion on ads in 2001, with auto dealers being local TV's best customers. The answer is that it was actually cheaper to blast everyone with branding ads than it was to identify and seduce real prospects.
This has changed. Every dealer and every manufacturer now knows their buyers by name. They know what they bought and when. This customer database can be massaged to draw service revenues and, perhaps, accelerate the buying of new cars. If GM can seduce people into trading in cars just a few months earlier than before, that's a lot of signed contracts.
But computers also let GM, and dealers, better identify prospects. They might pay for leads from insurers, from repair centers, from all sorts of sources, and see how many of these prospects can be driven down the sales funnel. The more they can drive, the more the leads are worth.
Here in the 21st century it costs less to acquire, store, and access data than ever before. It costs less to identify prospects, in other words, than to blast every suspect with the same message, whether that's focused on brand, a car, or a dealer's specials.
What can publishers or TV stations do about this? I think what they need to do is develop the same personal relationships. It costs you no more to build a data record than it costs them, and the record is actually worth more to you, since that person buys a lot more than cars and homes.
The race is on, in other words, between advertisers and their clients to build relationships that generate permission that lead to trust when people decide they need cars, homes, boats, or any other considered purchase.
You can't just sell GM numbers and reach any more. You need to sell them names and knowledge. You need to help them get people to sign on the line which is dotted, because that's the only thing that matters.