Direct mail is one of the first marketing tools that a small business considers. Yet, it also is a tool that many abandoned because it does not seem to work.
Direct mail can deliver sales, but the key to success is in the execution. When done correctly, it is a fantastic tool for small businesses. It can generate new leads, convert existing leads into clients and increase sales from current customers.
Advantages of Direct Mail
Compared to print advertising, trade-shows and other marketing tools, direct mail offers unique benefits to the small business. For many, the most important advantage is that it can produce results with minimal expense. With direct mail, you can send a few dozen pieces for the cost of a postage stamp or thousands of pieces at bulk mail rates.
Using direct mail gives you control of the sales throttle. Unlike advertising or tradeshows, you can decide how many pieces to send each month, and you can launch the mail campaign when sales are needed to reach your financial targets.
Other advantages of direct mail are that it is measurable and testable. With direct mail, you can measure the performance of each mailer simply by counting the number of responses and tallying the resulting sales. If the performance is acceptable, continue to use the same direct mail piece. If it is not satisfactory, direct mail allows you to test new concepts to determine which list, image, headline and offer give you the best return on your investment.
Once you have established a direct mail campaign and have some history of performance, you will have your hand on the sales throttle. Your measurements give you the statistics that tell you how many pieces to mail, and when, in order to generate the leads, qualified opportunities and sales that you need for any given period of time. In an unpredictable world, this level of control is just what any small business needs.
Critical to Success
There are two critical factors to direct mailing success. However, for those that have had poor results, these two items are the ones that are most often breached.
Repetition, repetition, repetition. Many small businesses put together a direct mail campaign and plan only for one mail drop. This is the number one factor in direct mail’s failure to produce results. Like print advertising, you must plan to deliver multiple pieces to an individual before expecting significant returns. With the first few pieces, you expose prospects to your company and products. Subsequent mailings are then read with greater interest. This creates the opportunity for the next mailings to spark desire and spur the prospects to take action.
Never send one piece of mail. While the first mailer will generate some results, expecting sales from one mail drop is like throwing a “Hail Mary” pass in a football game. Always plan on delivering at least three pieces, and as many as six, to any individual before expecting positive impact on your bottom line. If your budget won’t support six mailings to 5,000 people, change your game plan to deliver six mailings to 500 people.
The second success factor is a call to action. To gain a response, you must ask the recipient to take action. Direct mail campaigns from small businesses often promote the company or products, but fail to ask the recipient to pick up the phone, hit a Web page or mail a reply. You get what you ask for. If you don’t ask the recipient to do something, you will get no action.
What Is Success?
Typical response rates to direct mail are 1 to 2 percent. Outstanding results are in the 5 percent range, and phenomenal results fall between 10 and 15 percent. This means that for every hundred pieces mailed, you should expect one or two responses. For a letter or postcard, this conversion rate will translate to $50.00 to $60.00 per response.
Beyond repetition and a call to action, the other factors that will contribute to success are the same as those stated in the August issue that discussed advertising. They are (in order of importance): the list, the offer, the copy and the creative (graphics).
The list is most important because if you send a great direct mail piece to a bad list, your results will be poor. When sending direct mail, you have two options for the list. You can use your house list or rent a list from an association or publisher. In most cases, you will want to use your house list (current prospects and customers) as the primary source and augment the list with rented names. The key to building a great list is to select a source that has a big population of individuals that want what you have.
When renting a list, the list source will give you many options to subdivide their database of names. So, you must think strategically to determine what characteristics are important for success. These may include industry, company size, individuals’ titles and expressed areas of interest. When renting a list. It will cost you $.125 to $.15 per name, per mail drop.
The second most important factor is the offer. It is the offer that is used in the call to action, and it is the offer that will get the recipient to contact you. Your offer must be something that has value to your target market. Some offers to consider are promotional discounts, free white papers or free samples.
Although it is third on the list of success factors, the copy of your direct mailer will have dramatic impact on the success of the campaign. Large, sophisticated organizations will test multiple combinations of headlines and body copy and calls to action to determine which is most powerful. Spend a lot of time crafting a powerful, yet succinct, message.
The final element is the creative. This is the graphic layout of the piece, including photos, color and font selection. In the consumer marketplace, creative is critical in getting a piece noticed and read. In the business-to-business marketplace, creative is important, but not nearly as critical. Business marketers find that a letter in a plain envelope gets opened and that a black and white postcard gets read. This means that you may not have to spend thousands of dollars for photography, layout and printing. It also means that you can focus more time on list selection, offer creation and copy writing.
Delivering the Direct Mailer
For small drops, it is feasible to have your staff print and mail the direct mailer. But keep in mind that unless you have a permit ($150.00 per year), you cannot mail at the standard (bulk) rate. Instead, each letter will cost you $0.37 in postage.
Bulk mail rates are available for as few as 200 pieces, and at this quantity, that is a savings of $25.00. With this cost advantage, standard rates are the way to go. You can avoid the permit fee, and all of the headaches associated with sending a bulk mailer, by contracting the services of a mail house. These organizations will import your database of names, label the pieces, prepare them for mailing and send them out, all for a modest fee.
Another alternative is NetPost from the U.S. Post Office. With this online tool, you can create a direct mail piece, have it printed and have it mailed without ever leaving your office. NetPost even provides templates for those that don’t want to pay additional money for the graphic design of the piece.
Direct mail is a great tool for small business. It delivers your message to a precisely defined target market. It gives you total control over the number of prospects you reach and the frequency with which they receive your message. Direct mail is measurable, testable and scalable. When used effectively, it is a powerful and profitable tool.
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