Are You New to Direct Mail? - Marketing with Lists

Are You New to Direct Mail?

If you’re just starting out in direct mail there are some key ideas you should learn about. In the direct mail world there are three key elements to any campaign. They are:

  1. The Offer
  2. The List
  3. The Design

Most new users of direct mail focus on the design. Although design is important, connecting the offer itself to the people you are mailing it to is critical to the success of your mailing. In direct mail, efficiency is key. The more you can focus your message on your most valuable prospects, the higher the response rate you will have. By focusing your mailing, you will avoid wasting money producing and mailing offers to people who are unlikely to respond.

Tracking performance is also essential for the success of any direct mail campaign. By tracking responses to the first mailing, and each successive mailing, you can hone in on those market segments that are most responsive to your message.

Direct mail is a personal communication process. You know your prospect’s name and demographic details (you did select specific age, income, and dwelling types, didn’t you?), so why not speak to them personally? Remember: Everything in your prospect’s mailbox is competing for their attention. If you have an offer or message that meets their interests and speaks to them specifically, you you will have greater success rate, at a lower cost, than with a more general mailing.

Let’s look at an example...

Example: Women’s clothing store

We will do a mailing for a women’s clothing store. Our target is “Women, Age 30–54”, the key market comprising many of our store’s customers. Compare a “saturation” mailing, to everyone in a 5-mile radius of the store, with a mailing targeted to our key market. Here is how pricing and response rates may work out:

Saturation Mailing:
Everyone
Targeted Mailing:
Females, age 50–55
Number of Mailings44,34419,978
Mailing List Cost$1,638.09$959.00
Cost per Name$.037$.048
Estimated Result50 Sales50 Sales
Response Rate .1% .2%

By targeting your mailing, you can achieve a higher response rate and lower your costs. While the cost-per-name may be a bit more with a targeted list, you can see that the smaller, targeted list achieves the same result with fewer names. That's a smaller list to purchase, and, more importantly, far less cost for printing and postage. Why waste money and effort on the 24,366 prospects with no interest in what you are selling? For a simple 4×6" postcard, postage alone would be nearly $6,000 more for the untargeted mailing!

Return Expectations

Many new mailers are often surprised by the seemingly small return-percent numbers that direct mail tends to provide. While the numbers themselves may seem small—1–2% is considerable— remember that these responses reflect the people that are actively interested. Direct mail respondents have gone out of their way to respond to your offer. They are likely to become buyers, donors, or clients, so even a small percentage can translate into large returns, and pay for a mailing many times over. Furthermore, direct mail respondents can become long-term customers, an ongoing source of profit and positive referrals.

I had a job at one time where our first new customer cost us $1.00 to acquire however we made only $.75. A net loss on the transaction. But repeat business over a five-year period of time turned that initial $1 into $96 in profit for the company. Keep the long view; a customer is not just one person today, but one person many days over the coming years.

Market Mapping plus Inc. can help you identify and reach your target market! We work with small and new direct mailers all the time to help you understand the direct mail advertising world and how to be effective in using direct mail.

Call us today or IM us for any answers to your questions. Our goal is to help you increase sales and make you a success!

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