I like direct mail because I can measure the results, right down to the dollar. No other advertising medium can be tracked the same way. Try to calculate the return on investment (ROI) for print, radio or television advertising or social media and you will always be guessing. Direct mail lets you manage your costs and precisely calculate your ROI.
Developing a direct mail campaign is a six-step process, none of which can be executed without careful planning. Pay attention to every element or your campaign will fail. Here is a brief explanation of how to proceed.
1. Establish your objective. Note the use of the singular. Too many organizations make the mistake of trying to accomplish multiple objectives with a single mailing. That’s risky, even foolish, because of the nature of direct mail. You have very little time to get your prospect’s attention. Unless your message is focused on a single objective, your piece will end up in the trash.
Some common objectives include acquiring new customers, stimulating trial purchase, and building or rewarding customer loyalty. Pick one and focus your message on achieving that single objective.
2. Determine a budget. You will find far more prospects than you can possibly afford to contact. So you’ll have to determine what you’re prepared to spend. You don’t have to carve it in stone. As you move through the other steps, you may have to adjust your budget, and it’s okay to do so. But having a number in your head and on paper is better than flying blind.
3. Target your customers with a good mailing list. I use Info-USA for my lists, but you can get one from any reputable direct mail house. Work with your list broker and make sure he knows who you’re trying to reach. If you’re selling home furnishings to women, he should be able to segment the list and identify women who have made similar purchases. Figure out the geography you want to cover. You can control your postage costs by limiting the geography of your target market, so explore this with your broker.
If you are mailing to your own list, try to determine whether it’s best to target your customers on the basis of recency of purchase, frequency of purchase, or total amount spent. Each segment needs its own messaging.
4. Write and design the piece. Books have been written about mailpiece design. The choices cover a broad range from a simple postcard to a long-form sales letter to a tube or lumpy mailing. You’ll need outside help managing this part of the process. Direct response copywriting is a special art form, and I cannot overstate the importance of good design. If you insist on writing your own piece – very likely a big mistake – at least have it professionally edited.
Start setting aside pieces you receive that catch your attention. I keep a swipe file that has several folders. One is for headlines, another for envelopes, and another for postcards. I also save pieces that have a great first paragraph, strong guarantees, good use of testimonials, and other tactics. When I need an idea, I go to the swipe file to see what others have done. I can’t tell you how helpful a good swipe file is. I’d be lost without it.
5. Print and mail the final piece. A lettershop addresses, labels, sorts and stuffs your envelopes before you mail them. Many times the shop can also handle the printing, but if you have a very large quantity to mail, you should get quotes from commercial offset printers. Always get written price quotes, and ask if the printer you choose has worked with your lettershop in the past. The lettershop you use will tell you how much the postage will cost, and you need to pay the postage in advance.
6. Now that the piece is in the mail, there is one more step – analyze your results. Common metrics include your response rate, cost per response, break-even response, cost per piece mailed and ROI. Once you’ve made these calculations, the piece you mailed becomes what’s called your “control.” Your job with the next mailing is to beat the control. Tweak the headline, change the offer, add more testimonials, add a lift note, etc. The possibilities are endless. Over time, you’ll be building sales and developing expertise that few people take time to acquire.
If you’re looking for resources to learn more, I have a few books you should buy. One is Million Dollar Mailings, by Denison Hatch. Another is No B.S. Direct Marketing, by Dan Kennedy and The Ultimate Sales Letter, also by Dan Kennedy. You can also get information from the United States Postal Service.
If you need help with direct mail, give me a call. I’ll be glad to help.
How can you justify the expense of DM when the response rates are so bad? It doens’t make sense to spend money to get a return of 2 or 3% or even worse than that.
The response rate is not the most important measure of success. You have to calculate your ROI. For example, one client sells a capital equipment upgrade to manufacturers and warehouses. His typical sale is about $30,000 and his commission is 20% as an independent contractor. He closes the sale on 50% of the people who invite him in to do a free energy audit of the plant.
He sends out a mailing of 300 that costs him about $1,200 each time he does the mailing. This is for printing, postage, labeling, lettershop fees, etc. He gets a response rate of 1.5%. Sounds terrible, but it means each mailing is generating about 4 inquiries. Even if he can only close 25% of the leads he gets, he makes $6,000 on each mailing that costs his $1,200. But usually, he’ll get two sales out of each mailing. The response rate might seem to be terrible, but direct mail is feeding him a steady stream of leads and sales.
Nice post. I learn something more challenging on different blogs everyday. Thanks for sharing.
Best regards Alex