Tuesday, February 16, 2010

Why use direct mail in an age of electronic communication?

I get this question frequently from clients. Why print, pay postage and a mailing list when I can get an e-mail list or join a social networking site and reach people less expensively? The reality of life is, unless you have a strong brand, or name that is easily recognized, new forms of marketing (e-mail, social networking, twitter) are difficult to use until you reach an effective "economy of scale" with your lists. You still need to find a way to drive people to your website, read your tweets, or go to your social networking site and that method is typically direct mail.



Why you may be asking use direct mail? In reality direct mail is the most effective method of reaching a highly targeted audience with a highly targeted message. Let's look at the facts.



In the past, we used to do saturation mailings at relatively low cost. You sent your message to everyone to get the lowest postage possible, and hoping that at least a few of the people you mailed may be interested in what you were selling.



Today, saturation mailing is typically wasted mail. Postage costs have increased to a point where it's no longer cost effective to mail everyone. That fact coupled with the increase of data that is directly related to lifestyle interests, you will find that you can focus your message to a much smaller market segment and lower your costs, while at the same time, increasing response rates.



Here is how to view direct mail.



The Mail Piece

This is the key element to direct mail. They get something they can hold, review, put on the refrigerator and keep if they like. It can contain a call to action either driving them to your website, to become a fan of your social networking or listen to your tweets. Remember, there is no delete button for direct mail. Even mail that has been thrown away can be retrieved if you havn't taken out the trash yet. Typically once you hit delete it's gone.



The List

This is the most important part of the use of direct mail. The ability to HIGHLY TARGET your message to people who are MOST interested in what you are selling. Say for example, you are a sporting good store and want to focus on spring water related products that you sell. Let's also say you have a market area that serves Kent County Michigan. What is the true effect of targeting?



We can evaluate your products and determine that people who are into watersports are a key market segment, also, families with children, people who are into boating/swiming and water skiing are also key market segments. So let's see what the effect of targeting can be:



All available households 207,963

Add income $30,000+ 131,466

Add Water Sports interest 66,022

Add Grand Children 3,565



As you can see, narrowing your focus helps you weed out those people who are not interested in what you are selling. You could also narrow the focus using age, tighten income a bit and children present in the home. The number of ways to slice and dice your market are endless. And, with each drop in quantity, your printing/postage and list rental costs will go down.





You can measure your response.



Yes, I know, click throughs measure just that, click throughs. Was it a mistake that they clicked? An automated click? They meant to delete but clicked through? You have no idea. With direct mail, if keycoded properly (and EVERYONE should keycode their mail pieces and offers) you can track not only who is redeeming your mailing, but WHO is responding. A keycode should track each demographic segment used to generate the list. That way, you can see if one segment is responding in greater numbers than another. For example, say you selected age, income and children present in the home. A code of BD3 could represent an age range of 25 - 34, income of $30,000 - $39,999 and 3 children present in the home. This is VALUABLE information for you to use in further refining future campaigns. Direct mail can help you evaluate an offer or offers. For example, you mail 3000 postcards, one with one set of copy and offers on the card, the other with a different offer. Track response by market segment and see which responds best! Future campaigns will become more effective with that type of testing. Remember, direct mail is like real estate. In real estate it's location, location, location. Direct mail's mantra is test test test.



Personalized



Sure you can personalize your e-mail. If I had a dime for every e-mail I get addressed to Sheila, Bob, Mary or some other name I'd be rich today. Direct mail lists are accurate. They are updated (or should be updated) on a regular basis. Personalization can be the head of household, spouse or some other name depending on where the list is coming from. A personalized message (used along with variable printing) can be a VERY effective way of targeting and getting the message across. Everyone likes to be acknowledged and by using a name, you are creating a tie with your company that says "I know who you are!"



Remember, direct mail is not dead. You simply have to become more effective in how you use direct mail. Use direct mail to build your e-mail database, drive people to your website and to send your offer to people who actually WANT to purchase what you have to sell.

Tuesday, February 9, 2010

Using Multiple Lists to Improve Response

I was looking through some past orders and came across a client in Detroit who I felt best understood exactly what it meant to use multiple lists to develop an effective direct mail campaign. In a nutshell, what this means is rather than using only one, or two lists, a business or non-profit should look at their prospects from different perspectives. Here is how it works.

You are planning on purchasing 50,000 prospect names for a mailing. Rather than purchasing one list with 50,000 names, purchase 5 lists with 10,000 names each, or 10 lists at 5,000 names. When it comes time to pull all of these lists together there should, of course, be the same name in different places. For example, if you're a sporting goods store, and purchase a list of golfers who responded to a survey and golfers who subscribe to Golf Digest magazine, you may find the same name on both lists. Typically, businesses don't think about this, and throw the duplicates away. However, these duplicate names are 1000% more valuable to you than the master list. WHY? A multi-hit file identifies those people who have a stronger interest in a topic or area than most others. If you appear on 4 related golfing publications, you MUST be an avid golfer.

So, the question then becomes what to do with the multi-hit file? Basically these are names you have purchased and have the right to use. If a name appears on 3 lists, you can mail them up to three times if you like with no penalty from the list owner.

Next, key code EVERYTHING!!!!!!!! This way, when people respond, ask for the code on the mailer, or have them bring it into your store and track who is responding. You will find that in many cases one list will draw a higher response and have a higher ROI (Return on Investment) than another list. Track this information, and when purchasing new lists, use those lists with a higher response rate first and at a higher quantity than last time. You will find that your response rates will increase and your ROI will go up as well.

Finally, evaluate what you're offering them. If you are promoting a $10 item on average, did you know you can likely increase your gross sales by 50% by increasing the average item cost to $15? People respond to what you ask them to. Don't be a scrooge when trying to attract and sell new prospects on your businesses products or services.

In a nutshell this is how it works.

  1. Purchase multiple lists
  2. Merge/Purge these lists against each other
  3. Create a "multi-hit file" to capture duplicates between files
  4. Mail the master lists using a key code to track list source
  5. Mail the multi-hits and compare response rates with the original mailing
  6. Future mailing quantities should be adjusted based on which of the multiple lists performed best and which one's under performed.

Market Mapping plus LLC can help set up a program to track performance and teach you how to effectively increase response rates and your Return On Investment for your direct mail program.