The Unpublished Secrets of Direct Mail Marketing

In 2001 the United States Postal Service delivered 21 billion pieces of direct mail.
In 2006 the United States Postal Service delivered 32 billion pieces of direct mail.

Yes that is billions and it represents an increase of 65% in five years. I think we received about half of these at our house.

So what is Direct Mail?

Simply put, it is an advertising message mailed to a client or potential client. Direct Mail comes in three forms:

Direct mail to existing customers. Usually this is a single mail piece meaning the only message the client sees is yours! Here you are marketing ONLY to consumers who have already done business with you. This varies in cost, but plan on spending at least $0.50 per piece. You can easily spend a lot more. For $0.50 you can expect to mail a single sheet, printed on both sides. If your product is a higher ticket transaction you may want to spend more on your piece. A nice catalog will cost more than $1.00 each to print and mail. Some companies spend $3.00 or more. The question you have to ask yourself is what is a client’s business worth to you.

This cost includes postage using bulk rate (the least expensive). For tips on how to save on mailing costs, visit www.bulkmail.info. For a more technically accurate snoozer on this topic, visit www.usps.org/national/pubcom/bulkmail.pdf.

Shared mail. Shared mail is when you share the printing and distribution costs with other advertisers. Val Pak and Reach Magazine are great examples. They are remarkably efficient at reaching a large number of households for a very reasonable price. For example, Val Pak will deliver 10,000 HH starting at about $350. The downside is that these products rarely offer product exclusivity, so you have to make sure your offers are HOT!

Rented Lists. Birds of a Feather Flock Together. Rented lists allows you to take the power of the individual mailed piece and prospect for new clients. The more accurately you can profile your best current customers, the better this program will perform. List brokers will rent you the names and addresses of individuals that match your profiles. The easiest to match are demographic variables like, sex, age, “live within three miles of my store”. But the most powerful matches come when you can provide your broker with more information – “owns a car that is four or more years old” or “lists gardening as one of their hobbies”. The more specific the profile, the better the results. And the higher the cost. The more variables you include, the smaller your target becomes, but this is good news! The perfect advertisement is the one going to a qualified prospect at the exact time they are ready to make a purchase.

Work with a reputable vendor. You can do direct mail yourself, but using a reputable vendor assures that you will be placing a timely, quality piece in the hands of your clients. Here in Toledo Ohio, I have worked with the following companies and have had excellent results.

Miami Systems, Mike Sands (419) 893-7619 x14, MikeS@miamisystems.com

Valpak and Reach Magazine, Jim Slattery (419) 475-4100, JSlattery@reachusa.com

Direct Mail Works!

The single most effective advertising that you can do is to advertise to your existing customers first. Don’t believe me? Go to MyCustomersAreDifferent.blogspot.com and read “How to Capture New Customers”. I have made a fortune advertising to some one else’s best customers – the ones you thought you owned. Existing customers are seven times more likely to make a purchase than a new customer.

The Law of Three. Regardless of which method you choose, remember The Law of Three. Commit to using the product you have selected three times regardless of the perceived results of the first flight. Frequency builds action. It takes time for advertising to find its audience.

Direct Mail Doesn’t Work!

Response rates are scary. In “the good old days” it was well known that you should expect a 2% response rate. Today that is not necessarily the case. Direct Mail to existing customers can easily generate a 2% response. I have seen 7% to 11% response rates. I have also seen 0% response rates. Want a great response rate? Send out a great offer! Not average. Not “the usual”. Be aggressive. Be unexpected. And also keep in mind that you can not take percentages to the bank. You take dollars. When measuring response rates, focus on the sales dollars generated. This is an easy metric to understand.

Do the math. Make sure you track the response. All three flights. Put an envelope under the counter and put the redeemed coupons in it. Write down how much they spent. Clip the coupon to the sales order. Do something. Don’t ask your customers if they saw your ad.

As much as 80% of all Direct Mail goes straight from the mailbox to the trash can. So what can you do to keep your advertising piece from being one of the “never viewed” pieces? Don’t hide who you are. Big bright logo on the envelope. Try printing a message on the envelope (yes this costs a few cents more) giving the customer a reason to look inside. “103 new fabrics to choose from.” “Save $20 on your next…”

Finally don’t forget to use Co-op Advertising Dollars. Check with your vendors to see what is available. Yes it is a lot of work, but it is FREE MONEY. A reputable direct mail vendor will help you with the documentation.