Winning Combo: QR Codes and Direct Mail

Quick Response codes can be scanned with a SmartPhone to display text, take the user to a website, or dial a phone number. They represent a revolution in direct response advertising and yet another way that marketers are breaking down the barrier between a company and its prospects or clients. In fact, according to ScanLife, the prevalence of Quick Response codes as an advertising medium increased by 700 percent in 2010. And they’re even more popular this year.

5 tips for using QR codes effectively

QR codes are a marketing tool that you shouldn’t ignore. Yet it would be a mistake to use Quick Response codes just because they’re cool. Follow the 5 tips we’ve outlined here to ensure that when you use QR codes in your direct mail, you’re doing so purposefully – and effectively.

1. Where you’re going matters. A great map isn’t much good without a great destination. You can use QR codes to display text – a coupon code, perhaps (see our Quick Response code below). You can use them to display your phone number (again, breaking the barrier between your targets and their response). Or – most popularly – use them to take people to your website (or a targeted micro version of it).

If you use the Quick Response code to take people to your website, think about what device they’ll be using when they visit your site – likely the same SmartPhone they used to scan the code. It isn’t really necessary to have a sophisticated mobile website, as long as your site is designed to display well on a SmartPhone (most new website platforms do this automatically).

Better yet, consider creating a mobile-friendly microsite that you use just for people responding to your QR code. The beauty of Quick Response codes is how they let you specifically target your offer and the messaging associated with it.

2. It’s all about your audience. Even among SmartPhone users, in America at least, Quick Response codes are still foreign – so give your mail recipients a bit of help on how to use the QR code (a “Scan me with your SmartPhone barcode reader” can suffice – you might also offer suggestions on where to get the code reader, like the Droid Market or iPhone App store).

3. Integrate the Quick Response code into your offer. We talk a lot here about the importance of a great offer. Direct response marketing (which includes, of course, direct mail) is all about enticing your target to action – and what better way to do that with a can’t be refused offer. As you design your Quick Response code campaign, think about what you’re offering, and about what you’re getting. Send a postcard with a QR code inviting prospects to sign up to join your special discount club – they get special discounts, and you get their e-mail address and phone number (two more ways you can communicate with them).

4. Use QR codes to integrate your direct mail and online marketing efforts. Quick Response codes are a brilliant way to connect your offline marketing efforts with your online marketing efforts. When mail recipients scan the QR code, take them to a microsite that allows them to sign up for special deals and useful information; you can even offer recipients the option to sign up for mail, e-mail or SMS-based messages – so you’re really communicating with your targets the way they want to be communicated with.

5. Be purposeful. Sometimes new trends in marketing (or anything else) are simply flash-in-the-pan fads that suck up marketing resources that should be going to tried-and-true channels. Not so with QR codes; the fact is that SmartPhones have revolutionized our lives, and will continue to do so – mobile marketing is not a fad, it’s the wave of the future (integrated with other channels, like direct mail, of course).

QR codes and Direct Mail

The process of creating a mail piece with a Quick Response code is essentially the same as creating any other piece, with the added step (during the design phase) of including a high-resolution QR code. There are some great QR code generators online; here are just a few options:

Kaywa – the simplest Quick Response code generator, it allows you to generate a QR code for a URL or phone number, or about a paragraph worth of text (see our example below).

iCandy – a bit more sophisticated than Kaywa, iCandy allows you to track scans. If you’re serious about integrating Quick Response codes into your marketing efforts, measurement is key.

Once you’ve designed your mailer with the QR code included, TEST, TEST, TEST!

Make sure that it can be read by a variety of different Smartphones.

PIPE Funding Through Direct Public Offering is the “New” Venture Capital

What is PIPE funding?
Let’s begin with the definition of “PIPE funding” and how it differs from venture capital, private equity and other investment vehicles. PIPE stands for “Private Investment In Public Equity”. It is essentially the process resulting in hedge fund, venture and/or private capital investment into a registered public company in exchange for equity ownership, normally at a discounted price.

What is the relevant history of PIPE funding?

In the fourth quarter of 2007 there was a dramatic increase in the amount of funding provided to public companies due to the credit crunch extraordinary strains now inherent in the sub-prime marketplace. According to Robert F. Kyle, Executive Vice President of Sagient Research the PIPE market hit historic levels in 2007 with over $45 Billion raised in the fourth quarter alone. That one-quarter total exceeded any annual total over the past twelve years.

Why is PIPE funding growing so quickly?
Mark Twain once said “I am more interested in the return of my investment, rather than a return on my investment.” This statement echoes the primary advantage to an investor found in PIPE funding with regard to exit strategy. When an investor makes an investment into a company, a major concern is exit strategy. With PIPE funding the company is public therefore the investor has control over his or her ownership and can buy more, or sell at any time. Private companies normally cannot provide investor liquidity until an exit strategy is identified and executed which normally comes at great risk and over an extended period of time. This is the reason PIPE funding has increased over the last 12 years. Another benefit of investing in public vs. private entities is disclosure. A public company is required to disclose financial information and is regulated by the SEC. Investors all over the world, including hedge and venture fund managers, institutional bankers and individual investors, view this information. Another main advantage for a public company is the ability of management to retain control. Venture capital and angel investors normally demand board seats and majority voting rights. In our experience, companies that take their company public and attain PIPE funding maintain majority ownership, allowing them to execute or modify their strategy to achieve the company’s growth objectives as they see fit.

Does your company qualify to go public?
Not every company is positioned to be a public company and we advise that companies always seek counsel from an industry expert specializing in PIPE financing and the DPO process.

- Would your friends and family invest in your company? If not, there is little chance anyone else would. This might sound simplistic, however in our experience this is perhaps the most powerful litmus test of all.

- Does your company have the potential to reach a national or even global market? For example, a local flower shop with 10 locations would not be in a good position to go public. However a flower shop with national growth aspirations such as nationalflowers.com may well be a viable candidate due to its national market plans and growth strategy.

- Does your company have a strong and experienced management team? A strong management team is the backbone of any company. Over the years we’ve seen a sharp increase in the number of start-up and early stage companies going public to raise capital. However, to attract investors these companies must demonstrate consistent revenue growth and/or a history of success within a related industry. We often use the example of a local banker who wanted to commercialize a golf ball he developed and patented to distribute nationally. With no history in that field, his chances of being successful in the public offering process were diminished. However, if that same inventor had a proven history with similar development projects, his chances of going public and obtaining funding, even without existing revenue, would be greatly improved.

- Do you know how much capital your company needs? If your company is looking for less than $1 million, then the process of going public would be to costly. The typical funding opportunity for a new public company is between $1 million and $10 million. However, established companies with revenues in excess of $3 million, routinely obtain greater sums once public.

- Can the company generate cash or create value? All public companies must perform in order that their stock price continues to trend in the right direction. If a company is unable to demonstrate the ability to generate cash or to create value in the minds of investors as a private company, chances are it won’t as a public company. Half the battle for a public entity is creating interest, a “buzz”, about the company’s potential or its product or service. This is critical not only to attract investors initially, but also to help sustain the health and growth of the company ongoing. If a company has a good story to tell and a product or service that meets a need on a regional, national or global scale, then the PIPE funding process is an excellent funding solution to consider.

How much does the going public process cost?
The IPO process, which involves an underwriter such as Goldman Sacks or Merrill Lynch can cost a company as much as $10 million. Direct Public Offerings (DPO) for small to mid-sized companies where no underwriter is required because of the stock exchanges and sources we use cost around $100,000. The other major difference with the DPO process is the exchanges. Most Direct Public Offering shares are held on the OTC Bulletin Board, often referred to as Pink Sheets.

In Conclusion
PIPE funding has been increasing at steady pace over the last 12 years due to the increasing amounts of capital allocated to hedge funds and private equity groups that invest primarily in public entities. The opportunities for emerging companies, as well as investors, are tremendous.

The advantages for private companies to go public through DPO include:
- Low cost compared to IPO
- Access to a wider variety of investors
- Access to greater business growth investment funds
- Maintain operating control by the company’s management
- Higher market valuation

The advantages for the investor in public entities include:
- Access to company data and financials resulting in risk reduction
- Integrated exit strategy

Although investors in public entities may not hold board seats or maintain voting rights, leveraged ownership speaks volumes to company leaders and can be a very powerful motivation to continue to move the company in the right direction. So, “exit strategy” certainly entails greater benefits than just the opportunity to liquidate an investment.

Direct Email Marketing – Is it Worth Trying?

As you go about developing a marketing plan for your Net based business enterprise (or, for that matter, for a venture that exists in the brick and mortar world) you will want to make certain that you consider all of your promotional alternatives. In this regard, you will want to consider frankly the value of direct email marketing. There are a number of benefits that you can realize through marketing this way. In fact, when all is said and done — when you consider the pros and cons associated with this type of marketing — you will be able to determine whether this type of promotional approach is worth it, whether it will be valuable to your own business venture.

First of all, direct marketing using email is cost effective. Indeed, you can reach a significant number of people through using marketing using email for a mere fraction of what other types of solicitations can cost.

Second, this marketing by email is easy to develop. There are some types of marketing schemes that take a long time to pull together. Such is not the case when it comes to email marketing.

Finally, the fact is that although some people complain about direct marketing, the reality is that this marketing by email is effective. The rate of return between “pieces” sent out and “responses” received is considered to be at the high end when it comes to direct marketing. (Naturally, you will want to make very certain that you comply fully with all statutes, regulations and rules pertaining to direct email marketing on the Net.)

Now it is up to you to decide if you should try this type of marketing.