The Power of Direct Mail

DIRECT MAIL refers simply to anything you send to people in the post – letters, brochures, etc, and can, if properly understood, realise significant profits for you and your business. You could consider using this method either to compliment your online marketing activities or, depending on your product ir service, as an alternative to doing everything online.

This post is designed to introduce you to the basic principles of Direct Mail and to dispel some of the myths surrounding the subject of Direct Mail. It also clarifies the key guidelines that you should follow to run a successful and profitable direct marketing campaign.

First, let’s address the argument that ‘Direct Mail doesn’t work.’

This sweeping statement is made based on the fact that most people throw away their unsolicited mail and, therefore, it must be a waste of money. What you have to remember is that Direct Mail, like so many methods of marketing, is a numbers game and the fact is that, even if only 1 person out of 100 who receives your mailshot buys your product, it can still be a profitable marketing campaign. (One of the important factors is to make sure that your mailing is so compelling that people DO open it and read it – but we’ll come to that later.)

So the reason that Viking Direct and many other big companies bombard you with mailings is because they work. These companies have spent a fortune testing and fine tuning their mailings – they know what works and what doesn’t. But here’s a word of warning – it is true that a significant amount of direct mail does not work – and that tends to be the mailings conducted by small and medium sized businesses who do not really understand what they are doing. When it’s done well direct mail can make your profits soar. When it’s done badly it can eat up your marketing budget instantly. So be careful.

The second myth to be dispelled is that there is a magical percentage conversion rate that a successful mailing campaign should receive. In other words, you should ‘expect’ 3% of the people you mail to buy from you. This is absolute nonsense – and it’s very dangerous nonsense.

• First of all, the price of what you are offering is a significant factor. If you’re selling CDs at £9.95 you’ll probably get a different response rate than if you’re selling million pound yachts.
• Secondly, it’s not the percentage response that counts – it’s whether the mailing is profitable or not.
• Thirdly, and perhaps most importantly, nobody can ever predict the response from a direct mail campaign. This is why TESTING is absolutely imperative in Direct Mail.

You should never embark on a Direct Mail campaign without testing it on a small scale first. Why? Because the beauty of Direct Mail is that it is statistically very predictable. If you send out 2000 letters and get 20 responses, you can predict with some certainty that if you send out 4000 letters (to the same group) you will get somewhere in the region of 40 responses. Equally, if you send out 2000 letters, get 1 response and lose money on the mailing, it is highly unlikely that if you send out 4000 letters you will have a profitable mailing.

Why is this so important? Because far too many people spend a fortune on a glossy brochure, mail out 10,000 copies to a dodgy list, get a terrible result and lose thousands of pounds. I’ve seen this again and again and it can really harm your business.

So always test your mailing on a small scale first. It needs to be small enough to be an amount of money you can afford to lose if it doesn’t work out but large enough to be able to hopefully generate at least 7 or 8 responses.

Any mailings you consider are likely to fall into two categories:

• Mailings to your existing customers.
• Mailings to potential new customers.

If you do not currently do much direct mail, and you have a list of existing customers, you should start by mailing these companies or individuals.

Let me be more explicit. Every client I have ever worked with who has existing customers has been sitting on a goldmine of untapped profits because they have not been utilising direct mail with these customers.

Think of something you can offer these customers, send them a letter and measure the response. If it works, mail them again next month and measure the results. If it keeps on working, keep on doing it.

Then there is using Direct Mail to attract new customers. This is an art and science in itself – and you may want to bring in outside help – but again there are some fundamentals which you will want to follow. Here are eight of them to keep you going:

1. Remember to TEST any Direct Mail campaigns for new customers on a small scale before rolling them out.

2. Consider testing rented mailing lists relevant to your target group. There are thousands of highly accurate mailing lists which can be a great way of reaching new people. A favourite of mine in the UK is www.hilitedms.co.uk but if you Google ‘list brokers’ I’m sure you’ll find many more.

3. Always include a letter with any brochure you send – it will increase the response rate. People buy from people and this will personalise your mailing.

4. Make sure that the contents of your mailing focus on the BENEFITES of your product or service. You want it to be about your potential customer and what you can do for them rather than just being about you.

5. Don’t limit Direct Mail to pure selling. You can use it to say ‘thank you’ to customers. You can use it to ask for referrals or to introduce your customers to a company you’ve partnered with. It’s only limited by your imagination.

6. If you repeat a successful mailing three weeks later you can expect a response rate around 50% of the original.

7. Test mailing postcards – they are cheaper than a normal mailing and in some cases will produce a higher response rate.

8. If you follow up a mailing with a phone call you can increase the response rate by up to 1000%. This is not for everyone but it’s worth bearing in mind.

Direct Mail is a huge subject but these principles should help you make a start on your next campaign and avoid costly mistakes in the future.

By: Steve Peirce