Direct Marketing Basics 2

Advertising is the best way of getting your message across to the largest possible number of people. But for most of us it will be more cost-effective to approach the individual prospect directly and by name. That’s direct marketing.

There are four key elements to a successful direct mail campaign:

The mailing list. The best mailing list is always the one that contains the most potential purchasers, and you’ll have to work hard to get this right. The very best list consists of your own contacts, especially satisfied existing or past customers, since you won’t have to work so hard to convince them of your credentials, but you’ll probably need more names than your inhouse database can provide. You might go to a professional list builder who can compile a list of specific names from various sources. But for most purposes you’ll call on a list broker – a company that specialises in renting out mailing lists, usually on behalf of someone else (the ‘list owner’); your payment normally gives you the right to send a single mailing to the names on a rented list, though you can negotiate a multi-use rate.

The offer. However it is packaged and presented, your mailing must somehow answer the question “What’s in this for me?” That is the ‘offer’ or the ‘proposition’ that you’re making.

Content. What you actually send out in your mailing obviously depends on what you have to sell, but at a minimum it will probably be a letter (perhaps personalised via a mail-merge) and maybe some enclosures (a catalogue, order form, ready-addressed reply envelope). Your recipients won’t complain too much about receiving information from you provided that they perceive it as useful or valuable. The kind of mailings that qualify would include …

  • ‘last minute’ reminders, especially when the deadline is fast approaching
  • special offers, particularly those that are restricted in some way to the recipients of the mailing
  • advance information about new products
  • useful insights and news about something the recipient finds relevant – for B2B contacts this might be news about happenings in their business area, for consumers you might offer showbiz or sports news.

The response mechanism. You need to make it easy for the recipient to respond, for instance by enclosing a reply-post envelope.

These factors are a good indicator of priority for most direct mail campaigns. In other words, the quality of the list of recipients is The Big One: but the design of the sales letter is less important than the actual offer.

Set Objectives

Any marketing activity needs some clearly defined goals, and direct mail is no exception. So before you do anything else, make sure your have an answer for the basic question: What do you want to achieve?
More sales right now? More enquiries to be followed up later? Either way you should aim to put specific numbers on your targets. Response rates to direct mail vary greatly according to the nature of the list and what you have to say in the mailing piece, but for posted mailings you can expect something between 0.25 and 3%. Email campaigns usually generate better responses, in some cases as high as 10 or 15%.

And don’t forget that there will be two other effects from any direct mail campaign:

  • More names for your inhouse database. Even if your list was originally rented, as soon as someone responds to a mailing that name becomes yours. Whether or not you have been able to convert the enquiry into a sale right now, the contact is like gold dust for your future marketing efforts,
  • A changed image for your brand or your company. Any contact from you will say something about your organisation – how intelligent it is, how classy, how caring … Hopefully you’ll be able to improve the company’s image, or simply reinforce an already good feel and raise the profile of your business.

Spell out the message

You need a concise, explicit statement of what you’ll be saying to your audience – a giant clearout sale, new products and services being launched, come and see us at a trade show, enter our competition. In
effect this also answers the question “why should I care?”

The message is useful for concentrating the mind. It may also appear unedited as part of the content of your mailing. And think in terms of The Offer — whatever it is that invites, provokes, even requires the prospect to take some action in response to your mailing. You should be clear about the offer – and you should have only one offer if you don’t want to confuse the recipient (multiple offers also result in a reduced response rate). Be very specific about what the prospect must do to benefit from the offer – phone us, subscribe, send back the reply card, come to the store.

If you’re looking for new business, don’t forget that customer acquisition isn’t cheap. If you want a prospect to switch from their current supplier, your message must contain a strong reason to try you out. And the best reason to try something new is that the something new is free. The classic freebie is a sample. After trying the product or service, the prospect will hopefully find it a superior choice and switch permanently.

But in our business a free sample often isn’t feasible. So consider a discount. The bigger the discount, the better the response will be. Calculating the relative rate of return can be tricky, of course, and you need to be confident about the costs of the discount; but a hefty discount now can win a lifetime’s worth of repeat business that might make it all worthwhile.

There’s a danger in making a really strong offer – your existing customers. If they’re satisfied with you, you won’t need to give up much margin to get them to come back. And if they perceive that someone else is getting a better deal, you will probably be penalised; the likely reaction is to shop around in the future.

A third option is a more creative interpretation of the freebie. “Free evaluation of your needs” or “Free report” might represent a lot of value to the prospect and involves little or no cost to you (the evaluation is a largely automated sales-oriented procedure, the free report is essentially a product brochure preceded by a more generic introduction). This tactic could work especially well with B2B deals – offer to analyse the customer’s current call spend and guarantee to better the deal they’re on.

Competitions are also effective, especially when combined with a decent offer – “Win a free trip to Paris just for allowing us to evaluate your mobile needs”. The key is to be creative.
 

Why Direct?

  • Direct mail has some very specific characteristics, and it will work if you can make the most of them.
  • Accountability: Both costs and results can be quantified and measured easily
  • Cost-effectiveness: In terms of response per pound invested, direct mail is one of the most cost-effective options available
  • Building customer loyalty: Direct mail can give customers advance information or special deals on products or services.
  • Customer profiling: A personal dialogue can help you to understand customer needs and expectations
  • Customer service: Establish your credentials as a caring, service-oriented, professional organisation – and pre-empt any possible customer dissatisfaction.
  • Integrated marketing: Direct mail works well alongside other media, for instance by providing a more personal angle for a broad-brush advertising promotion.
  • Precision: No other marketing technique allows you to focus so precisely on a target audience.
  • Reach: Everyone receives mail, but not everyone will see your ads in the magazines or TV channels you’ve elected to use
  • Speed: It can be quick and relatively easy to produce a direct mail campaign. The results appear quickly, too.
  • Confidentiality: With direct mail you can keep a special promotion secret right up to the time it is delivered to your customer. Direct mail is more discreet than other forms of advertising.
  • Timing: You can pick the best time for you, the best time for the customer, and maybe even the worst time for your competition.

 
 

TOP TIPS

Cutting direct mail costs

  • If your mailing is over 4,000 consult the Royal Mail to obtain discounts or ask your mailing house for advice. Learn the postal regulations and take advantage of all available rate discounts.
  • Reduce paper weight – you save money on paper costs and possibly postage as well. Use the lightest weight paper that does the job for you without compromising on quality.
  • Hugh Symons Communications can help you with artwork. We have an experienced in-house design team who will happily create designs for adverts/flyers/web banners for all our unity partners free of charge, or at a small charge for non-unity partners.
  • Don’t date material. Don’t print the date that the offer will expire unless it’s absolutely essential. Don’t date your letters. If the mail goes out late, you don’t want to have to reprint. If you have left over material, you might be able to use it next time.
  • Project future needs. If you know that you will mail 300m pieces in the next six months and they’re not all mailing at once, you can still preprint some components like Business Reply Envelopes.
  • If using a creative agency or a graphic designer, ask them to design your artwork so that you can use it more than once. Perhaps your brochure art can also be used for a space ad or on the web.
  • Try the simplest format first. The most basic direct mail package is the letter and reply card mailed in a DL envelope. But add a pop-up, a premium, a colour brochure, photographs, diagrams, special envelopes, or other extras, and costs quickly skyrocket. Does this mean "creative" mailers and gimmicks should be shunned? Not at all. But you should try the basic typewritten letter before any other format. Remember, the most profitable mailing is the one that generates the best response at the lowest cost. A glossy four-color mailing may tickle everyone’s fancy, but it is a waste if it pulls the same 5% as the plain but powerful one-page letter. Start with the plain old letter. Then add a new element – perhaps a second colour, a photograph, a see-through envelope or a brochure. If response goes up enough to justify the cost-great! If not, go back to the tried and proven letter.

 

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