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Exposing the Pricing Web Mystique for
Direct Marketers
By Don Lange
Direct Marketing News
March 2002 — Throughout the 1980s and well into the 1990s most data companies who catered to direct marketers were accomplished at charging ridiculous fees for what amounted to very little actual work. Simple tasks such as data fulfillment were being priced out at fees ranging from $10 to $20 per thousand along with so-called "set-up" fees which tacked on a $30 to $50 flat charge anytime a data operator had to roll his chair across the room. Then things began to change. With the rise of the pc-based environment and a new crop of programmers who could converse with marketing people without resorting to techno-babble it was discovered that pricing could go down as low as an average of $7 per thousand without causing massive layoffs or compromising technical progress.Why? It was because the mystique of data management was blown open. There was a rise of database capabilities within traditional marketing companies who discovered that extracting random samples from fixed field databases did not take a Masters in engineering or a daylong process that required dropping everything else. Goodbye to the set-up fees and goodbye to an unhealthy dominance of an industry by mediocre data companies. Today's dominant data companies are in fact marketing companies that can separate the fact from the fiction when it comes to pricing.
The point of this rant against data companies (the survivors have all cleaned up their act and have dropped pricing to be more competitive and realistic) is that the same thing has happened in the last few years with the web development companies.
In the DOT COM world there was a ton of money raised and a subsequent spending spree on web development. Web companies got fat by being able to quote out huge amount of dollars for not much work. When a lot of the DOT COM companies went bust, the web development companies were left with some great deals on office furniture but not a lot of business to sustain them.
Enter the more mainstream organizations that discovered that the web was a great place to develop strong prospecting and retention tools online. You would think that the development companies would recognize that it would be in their own best interests to make sure these companies thrived. Instead, it seems that they found a whole new source of blood to latch onto.
A perfect example is the traditional direct response companies. Many direct marketing companies have web sites where they would like to implement a means to collect data from customers either for ongoing communication or to sell their existing product or service.
What does this require? Two things. A Form and a Database.
First and foremost it requires a form that validates the name and address information. In the online world validation is one of the most important processes. It is a program that checks to make sure that each of the required fields of information is filled in. It also makes sure that there is logic in how the field is filled in. For example, a postal code must consist of letter, number, letter, number, letter, number, an email address as an "@" sign, etc. "This is all very important but not that complex. If you're paying more than $500 (tops) for the development of a form then you are paying too much. If you're being asked to pay anywhere near that for a form that only collects an email address then do two things. One, re-examine your strategy. Collecting only email addresses is a DOT COM formula for failure strategy. Two, call around.
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