Business Times

Evolving Marketing - Direct marketing and deal of the day websites

By Jagdish Hathiramani

With technology, and especially the Internet, impacting all facets of life in Sri Lanka, the Business Times looks at two companies that are currently gaining popularity because of the mostly online services that they offer; the first of which was evolved into an all new form due to the advent of electronic mail and the Internet and the second that was born from it.

Direct Solutions International - Direct Marketing agency
Commenting on the direct marketing and its extension into the electronic, Priyanga Hapugalle, Chief Executive of Sri Lanka-based 10-year veteran Direct Solutions International, says that, internationally, this industry has "thrived for almost 200 years and retailers such as Sears Roebuck have used mail order catalogues over many generations successfully." He also adds that "direct mail has been used in Sri Lanka in some form or the other with PBN Direct being the very first direct mail agency in the country in 1992 and it established an organised direct marketing culture with a comprehensive database of Business to Customer (B2C) and Business to Business (B2B) markets. It also introduced specialist creative and message strategies and also the first fully fledged customer loyalty programme created in Sri Lanka for Serendib Hotels. BUSINESS 5000 was a Do It Yourself (DIY) direct marketing software and database tool it introduced with much success amongst B2B marketers."

With regards to the shift to e-mail databases and maintaining their accuracy, he reveals that "Direct Solutions is a specialist consultancy and training service provider for direct marketing. We have Data Search, a dedicated data agency that compiles its own data as well as works with selected data partners. In addition, we also manage client data (even on client sites) and profile and data mine to identify and satisfy new market opportunities and via response tracking. A dedicated team of data analysts work on a data brief that we create based on the client requirements for targeting and all data is regularly refreshed in order to ensure accuracy."

Mr. Hapugalle also notes that direct marketing offers clients the ability to "forecast Return on Investment (ROI) and response rates fairly accurately. We would however always test the many variables available to direct marketers such as the database, offer, message, medium, etc. to fine tune and improve the results continuously. Past experience would definitely suggest effective strategies and forecasting when taking up all new projects.

However, Mr. Hapugalle also notes that, locally, "direct mail will slow down and give way to digital marketing solutions in general. However, as in the West, direct mail will have its specialist role to reach specific target markets and product offers where a paper based or even a 3D piece of communication will generate a better response. As consumers, we may have to weed through hundreds of electronic messages in our daily inbox, but we all look forward to the old fashioned letter that arrives to our doorstep or office desk as it is rare."

Meanwhile, speaking on the future of his field, he says that, "apart from the online solutions, we are very excited about the targeting and creative possibilities in mobile commerce. Proximity marketing is another area we are working on which will enable retailers and even service providers to target prospects on location with relevant offers. Through various research studies we have established that the local consumers are more enticed by instant gifts and competitions than saving rewards for long term benefits. So we have to be careful in duplicating strategies that are successful in any other market for the sake of it.

Social media is a fantastic marketing tool for marketers, if handled with care. We are presently engaged in launching a middle eastern TV channel to an international audience and have channeled much budgets in to social media as it has huge opportunities for targeting specific and active audiences.
We are right now conceptulaising and introducing to a FMCG client a strategy that will help them to track the purchase of each and every product its loyal customers purchase even from a small boutique. This is powered by technology and a lot of common sense marketing. So that’s what Direct Solutions will promise the market always..."

Anything.lk - Deal-of-the day website
The next innovation that the Business Times is highlighting is a Sri Lanka focused Groupon style deal-of-the-day website equivalent with its own unique twist. If you have never heard of Groupon, Reeza Zarook, Chief Executive of the two month-old Anything.lk, compares and contrasts: "The basic model is that of Groupon without the 'group element'. The collective buying idea was used by Groupon to persuade businesses to offer large discounts - but note that there is no guarantee by such business models. If those businesses, such as our competitors, fail to reach the minimum target no one gets the deal. So, a business could lose valuable interested customers. For us, we have no minimum limits - if one buyer wants the deal they can get it. Our partners have all offered over 50% discounts without minimums and yet we can offer such great offers."

Commenting on innovations unique to the Sri Lankan experience, Mr. Zarook notes: "The other difference in reach is through the payment option. We offer the standard credit card payment, but also cash through pick-up or delivery. The pick-up/delivery option was copied by two competitors, and we're sure the others will follow suit. The final payment option is using your mobile phone to complete the transaction. This is something that no other site globally has, which means that finally e-commerce is no lomger the preserve of the minority who own a credit card. There are only about 850,000 cards in issue, many people have two cards.

Our other main differences, which are global difference, is that we reach to a much wider audience, through being tri-lingual and also through the Dialog connection. The tri-lingual difference means we reach completely different market segments. Group on a single language offering, and so are our competitors. We asked ourselves the question: Why should we freeze out a segment of the population purely based on their language of preference? Both our website and our customer care team work in whichever language the customer wants to work in... This is a big difference."

Talking about the Sri Lankan experience, Mr. Zarook adds: "Social media marketing is very new to Sri Lanka. The first part of the process is getting the business to understand the offering. We are a tool of their marketing strategy, and one that most likely they had not thought about beforehand. The objective of what we do is to make more people, from a different market segment, aware of the business and what it can offer. If seeing is believing, trying is conclusive. The objective is therefore to bring in as many new people as possible, not earn profits.

We contact businesses that we feel could use our services, but an equal number of businesses contact us directly. We sit with the business managers and work out how to structure the offer such that the business can rationalise what it costs to run this offer. There is no commitment upfront from the business other than making the offer available, and obviously paying us our fee - based on what we sell. i.e. if we sell zero vouchers, we get paid zero. It’s what we call 'Pay per Performance Marketing.' There is zero risk to the business owner. The commission to us is fixed per voucher sold - so its a directly measurable cost of acquisition of the new client."

Signalling Anything.lk's progress locally since its launch, Mr. Zarook reveals: "We launched just under two months ago, and we're still very much in the starting phase. That said, we have some impressive statistics, such as 80,000 unique visitors since launch and over 18,000 Facebook fans, with over 90% of the daily deals business being done by Anything.lk. We have a number of things that we plan to launch in the next few months that will make Anything.lk even more attractive to our customers.

We are backed by the Srivorakul brothers, who were the founders and core shareholders of Ensogo.com, the number one daily deals site in Thailand, Philippines and Indonesia. The business was so successful that within one year of launch the brothers sold out their shares to LivingSocial.com, the second largest business after Groupon.

The other key investor is Rebate Networks GmbH. (www.rebatenetworks.com) who have added Sri Lanka to their portfolio of 31 countries in which they have invested in daily deals companies. Having both Ensogo technology and Rebate's processes give Anything a huge advantage in starting up."

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