Remember all those free CDs? Yep, that was us. And boy
did they bring in customers.
When we first began working with EarthLink in 1998, they had
little brand awareness and fewer than 150,000 customers. Although
they had raised substantial cash reserves through their IPO the
year before, they had yet to find a way to acquire customers at a
cost consistent with their ROI model. So unlike many Internet
startups, they decided not to burn through their cash to build
their customer base. (In retrospect, it was pretty smart
thinking.)
We persuaded EarthLink to implement an inexpensive test to
understand the potential acquisition cost of new subscribers for
their dial-up Internet service through various media. We tested
direct response television, online, radio, marriage mail and direct
mail. Only direct mail and DRTV met our exacting ROI targets.
Working quickly to exploit these findings, we profitably mailed
over 40,000,000 pieces for EarthLink in the following 12
months.
Each successive mailing wave featured multiple offer and
creative tests, as well as dozens of list tests. Through an
assiduous dedication to testing, our customer acquisition cost
declined dramatically over the course of the year even while
circulation quantities increased geometrically.
Our initial DRTV test was for only $100,000 in cleared media.
But having identified successful networks and dayparts, we were
soon spending this amount weekly, acquiring thousands of customers
and building brand awareness in the process.
In our first year working with EarthLink, we helped them grow to
over 500,000 dial-up customers. Within 24 months their membership
eclipsed 1,500,000 and reached 3,000,000 within 4 years.
Along the way, Direct Partners' expertise in direct response,
database analysis and print production on a massive scale helped
EarthLink launch their DSL, cable, wireless and voice-over-IP
services. But we still keep a few of those old dial-up CDs around
to remind us of the way it all began.