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.

If you have more questions or would like to discuss a recruitment campaign for your school write me an email at david@marketmappingplus.com, or call 616-956-7129.

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.

If you need to learn more about tracking response and learning which source is most effective in generating leads give David a call at 616-956-7129 or write me at david@marketmappingplus.com.

Thursday, January 14, 2010

Increasing response using the 40-40-20 rule

In days gone by, businesses sent out a direct mail piece to everyone in their area. It was called a saturation mailing and is still done today in some circumstances. The problem is, a saturation mailing is just that. EVERYONE in your area with no regard to their actual interest or ability to buy what you are selling are sent your direct mail offer. In those days a 1 - 2 % response rate was expected and most of the time and effort in putting the mailing together was focused on the direct mail piece itself.



Well, times have changed. Typical response rates have dropped to .1 to .3% for untargeted direct mail. The increase in direct mail competition is high as you can see in your mailbox each day. So, with costs going up and response rates going down, what can you do to become more effective in your direct mail program? Like in real estate, direct mail has two key mantra's...FOCUS FOCUS FOCUS and TEST TEST TEST. What do these mean?



Basically, Focus centers on the shift from a design mentality (what it looks like) to an offer being sent to the RIGHT market segment. This is where the 40-40-20 rule comes in. You need to focus your attention on the following items:



40% of your time and effort should center on the offer, or what you are asking your prospective customer to do.



40% of your time and effort should center on the list, or who you are inviting to purchase from you.



20% of your time and effort should be spent on the design. What it looks like is much less important today than it was years ago simply because people look at the offer and who sent it rather than what it looks like.



As an example, I recently got a mailing to invest in a high dollar gold investment. The letter specifically states "...being a part of this exclusive high income group...." to which I asked myself...hmmmm, what high income? This firm purchased a list without really focusing on who they are sending it to and if the person actually meets the criterion they are looking for. Maybe the company was wrong in their selection criterion or maybe their list broker made the mistake. Regardless of the error, I should NEVER have gotten this letter. I don't remotely qualify for anything they are selling. Another direct mail piece in the trash! Wasted postage, printing and list costs.

What should you do then to become more effective?

First, look at what you're selling from your customer's perspective. In a retail world, ask where customers are from (zip code maybe?). Look them over. Are they older? younger? Affluent looking? There are keys you can see with customers that will help you better identify who you need to find. The list is important and even the kind of store you are will dictate who you want to reach. If you're selling wood working tools, you need someone into home improvements/wood working...not a woman into clothing. Define WHO you want to reach, who is your best customer and then find a list that matches that specific demographic.

Second, create a compelling offer. The use of Free, Save, Limited Time Offer, are just a few that have been effective in the past. The offer should identify why your prospect wants or needs what your selling. Copy should strike an emotional chord in their mind since an emotional image can be very powerful. Focus on the benefits of buying from you, versus your competitors. Finally and this is the most important point, remember, you need to be compelling to get them to buy!

Third, the design. Yes, I am not telling you that a quality graphic designer is unnecessary, or that you should send out a boring text only mail piece. But, make sure that what you are mailing looks attractive to who you are sending it to, AND that it incorporates some key elements. Those elements are:
  • Keycode area to effectively track who is receiving the mailing so when they use the mailing to buy, you know EXACTLY what group of people or list this came from.

  • Include images/copy that either addresses their interest in your product/services OR reflects past purchases that they have made with your company. Variable data printing was another of my blogs and can help you better understand the effectiveness of this technique.

  • Don't overwhelm the prospect with too much information. Pick one or two items that they may be interested in, and sell those. If you have a sale going on, focus on a few items that they may want and have them bring the coupon in with them for the discount.
ALWAYS have a call to action! Come in today to receive your discount. Limited quantity available. Limited time offer. Those are a few ways of getting people to respond in a timely manner.



Finally, direct mail, as with all advertising media is not an end all and be all for advertising. It can be highly personalized, targeted and can put YOUR company's products and services in front of a key prospect who is looking or interested in what you are selling. More is less in this day and age. The time when you sent out 5000 direct mail pieces and made money are over Today less is more. Send 500 to KEY prospects and if done correctly you will find your response rates are up, expense is down and your break even point is more easily reached! Once you have them as a customer, the lifetime value of a customer comes into effect, which...is another blog!



If you have questions, don't hesitate to contact me at David@marketmappingplus.com or visit our website at http://www.marketmappingplus.com/

Monday, December 7, 2009

Enhance Response with Variable Data Printing

So many direct mail pieces today are still addressed "Resident" or "Our friend at" showing that the sender has NO idea who they are mailing to, nor do they apparently care. Cost/piece is their only criterion and that cost/piece mentality will kill them ultimately. About once a month I get a direct mail piece from a window replacement company offering to provide a quote on replacing my windows. Since I live in an apartment (a complex with 700+ units) imagine the cost of this mailing and all of the recipients who are not remotely qualified to begin with. If they are mailing to just my zip code they are wasting over 47% of their mailing on UNQUALIFIED PROSPECTS! If we look at our local Sectional Center they would be throwing away 28% of their total mailing costs.


As I'm writing this, I just got a recorded telemarketing call from a mortgage refinance company offering to take advantage of low rates today in refinancing my home mortgage. As an apartment renter, it's a waste of my time, their time and money and it takes me away from running my business. Yes, I opted out. But why did I get this call in the first place?


Back to the purpose of this blog. The advent of Variable Data Printing has ushered in a new era in direct marketing. The days of sending everyone the same thing has changed, and you now have the capability of importing and using key, variable data for each UNIQUE prospect or customer. Imagine receiving an e-mail with the following:





Resident
1223 Main St
Any City MI 12345



with static copy and photos on the mailing.



NOW, imagine this image:



David Fant
1223 Main St
Any City MI 12345



My name on a billboard stating "David, your new car is waiting" then in the photos is a photo of the last car I purchased, and similar style/types of cars that are on sale, either new or used!



Which image has the greatest impact? Certainly the second one will get my attention quickly and appeals to my past purchasing pattern and interest. Even if this is a prospect mailing, behavior/interest information is available to append to prospect data to allow you to feature items that meet your prospect's interests. For example, consider a resort that has a spa, golf course, hiking trails, gourmet restaurants, exercise equipment and a swimming pool. If you purchase a prospect list that includes people who enjoy hiking and gourmet food, those should be the images on the mailer. If the prospect is into golfing, focus on that for the images/copy.



Office Technology Magazine did a recent survey of users of VDP and discovered the following facts:


Response rate was up 36%
Average order size was up 25%
Repeat orders were up 47%
Overall Revenue Profit was up 31%


These increases were based on a comparison between non-VDP mailers and using VDP for the mailing.


VDP CAN work. It requires a lot of thought, preparation and planning, but the results are WELL worth the effort. Market Mapping plus LLC can help you build an effective VDP campaign and help you track the results. Contact us today for more information.

Friday, December 4, 2009

Why Direct Mail WORKS

Every day I read news reports/articles that revolve around the demise of direct mail and the transfer of advertising/marketing dollars to the web, social networking and other new, recently available media for reaching customers. The problem is that this idea has been around for over 100 years. Back in the early 1900's with the advent of AM Radio, people proposed the demise of newspapers and magazines. FM Radio was the deathknell for AM Radio. Television was going to destroy radio as an entire industry. Cable was the end of broadcast television and the internet will be the end of cable television.

As you might have noticed, not one of the media that I mentioned has disappeared. In over 100 years industries have worked hard to reinvent themselves and provide a valuable service to their ever changing audience. However, one way direct mail has always fit into the mix is that it can integrate with any advertising media to reinforce and enhance the impact of your message.

Direct mail:

1) Is personalized so the person receiving the message can see the message is intended for them.
2) Is HIGHLY targeted. You can pick not only demographics, but lifestyle variables
3) Can be kept for future reference/use.
4) Can include a referral to the web, a coupon or call to action.
5) Is highly trackable which allows you to focus your message and refine your audience.

Many companies from Lands End to The Wall Street Journal to Columbia Records have all worked to integrate all forms of media into their advertising campaigns. The net effect of doing an e-mail blast followed by a direct mail piece, or a direct mail piece followed by an e-mail blast is to lift response, in many cases significantly. A recent presentation from the head of marketing at Lands End indicated that in a side by side test where they compared JUST e-mail, JUST direct mail and a combined campaign, the combined campaign lifted response AND SALES over 60%.

Wouldn't we all like to lift sales 60%?

Create direct mail that is targeted, with copy that is designed for the recipient, that is coded to track response and you will see that direct mail is NOT dead. It's becoming the medium of choice to drive people to the web. The medium of choice to track response. And the best supporting vehicle for your advertising campaign.

For more information on building and tracking effective INTEGRATED advertising campaigns, contact Market Mapping plus LLC and we can help guide you though the process and get you to increase sales through combined marketing techniques.

Wednesday, December 2, 2009

Customer profiling doesn't need to be expensive.

Today, markets are getting segmented over and over again. What used to work for direct mail or other advertising media have now fractured into ever smaller pieces of the pie. As an example, in the past, if you wanted a cooking show on a broadcast media you could sponsor a show on PBS or possibly one or two shows on commercial TV. Today, you can do broadcast tv, cable tv (multiple channels), the internet will provide instant information on cooking and cooking products.

The issue becomes more complicated when selecting where to advertise or market your products and services. Creating a custom profile can cost anywhere from $5,000 to $20,000 or more. Each profile will help you focus your message which means you can be more selective in where you advertise. More selectivity means higher response rates. Higher response rates will translate into higher sales and higher quality prospect contacts.

The process of creating a custom profile is simple. Taking a sample of your customer list (minimum of 2,000 names/addresses needed no older than 2 years old) demographic data will be appended to each record. If you have social media or advertising media information (how they become a customer in the first place that's an added plus). From here, household specific data will be appended and analyzed based on your specific market. You NEVER want a profile completed using a a larger market area than you actually draw from. (For example, some profiles are compared to nationwide figures.) This skews your profile and will NOT allow you to take into account local market demographic trends.

From here, Market Mapping plus LLC can do the analysis and provide a complete written report on who is purchasing your products and services, where they are located and where to find new customers in your area. An investment of $6,000 may seem high. But, over the course of a year you can save this in wasted advertising dollars going to a market segment that will never enter your store.

Contact us today to learn how a Custom Profile can help YOU reach your intended marketing goals.