Direct mail can be a very important element of your marketing mix. When used correctly, it allows for high target-market selectivity, testing and personalization. Most importantly, it enables you to measure results.
Here is a brief overview of 11 key strategic factors to consider when initiating a direct mail campaign.
- List: Knowing the customer or decision maker for your product/service is instrumental in developing a successful direct mail campaign. Whether your mailing list is based on demographics like “gender” or “zip code,” or behavioral attributes such as “likes to play golf,” it’s critical to understand your intended buyer/customer and select a mailing list within an appropriate and useful target audience. (For example, if you are a developer of Hawaiian time share condominiums, it’s probably best to avoid soliciting people who already live in Hawaii.)
- Offer: Every direct communication should include an offer or incentive for the customer to buy your product/service. This might be a premium such as a toaster, or a product at a discounted price. It also could be something intangible such as saving time. The more intrinsically valuable your offer is, the more likely that your audience will respond in a positive manner.A word of caution: A lucrative offer such as 50 percent off might generate a wonderful response rate, but it can also be an expensive proposition. Be careful you don’t give away too much.
- Creative Package — Message and Copy: What is your product? What are its benefits? Why does your audience need it? Where does the reader sign up, and by when? These critical messages must be clear, concise, and repeated several times in your communications. If your readers are confused, they will not buy.When developing copy, assume your reader has a short attention span. Use short sentences, bullet points and headlines that can be read quickly. And while grammar is important, your English teacher isn’t grading the letter. Feel free to take creative license.
- Creative Package — Format and Graphics: Different type styles such asbold, underline and ALL CAPITAL letters can draw your reader’s eye to key messages. Headlines and/or changes in font sizes can achieve the same result. Consider highlighting your offer, call to action, and response date, while using headlines as an opportunity to state benefit messages throughout your communication piece. Be judicious in your use of these techniques, as over-use will lessen the impact.
- Call to Action: With any direct mail piece, the bottom line is getting your reader to take action. Do you want your prospect to fill out an application or call for more information? Either way, be very clear as to the action you want them to take and by when.Don’t be shy about repeating this. Generally speaking, a single-page direct mail letter might have the call to action listed three times — in the middle of the letter, in the last paragraph, and in the post script.
- Outer Envelope: Consumers tend to regard direct marketing as “junk mail,” something they don’t need. Therefore, it’s critical that the outer envelope give your reader a compelling reason to open the envelope (an offer and/or benefit message) and read the entire message. If you’re mailing to active/current customers, your logo alone may be enough to get to open the envelope.
- Testing Multiple Variables: How can you know exactly which element(s) drove the positive response to your direct mail piece? Maybe your audience wanted the free airline ticket offer. Perhaps your green letterhead caused them to respond. Or maybe your product just happened to be exactly what they needed.Consider creating “test cells” by mixing key variables of your campaign. For example, divide your mailing list into four parts and send: Offer A with Copy X to 25% Offer B with Copy X to 25% Offer A with Copy Z to 25% Offer B with Copy Z to 25%
- Multi-Wave Mailings: Another testing opportunity consists of mailing a second and possibly even third letter to the same person approximately one to four weeks apart. As a general rule, people don’t really “see” and/or comprehend a marketing message the first time around. It might take your target market two or three “viewings” to open, comprehend and internalize your message enough to buy your product/service.Subscription mailings and grand opening announcements lend themselves to multi-wave mailings. A promotion for a two-day sale doesn’t warrant using this approach.
- Creating Tracking Measures: Establish accurate measurement tools such as promotion codes and/or coupons when designing your direct mail campaign. Without them, you can’t truly determine if, and to what extent, your efforts were successful.For example, if you’re selling newsletter subscriptions, ask your customer to mention the coupon or read a promotion code when they sign up. Each time a customer mentions or reads the code you can be sure they’re responding to your letter, versus signing up on their own.When testing multiple variables, use a separate promotion code for each test cell.
- Setting a Budget: Typically, you will incur the following types of expenses: mailing list (unless you use your own customer file), paper, printing, postage, cost of the offer, lettershop expenses such as merge/purge and mail sort, and any advertising agency or graphic artist fees. Be clear about the difference between “fixed costs” (i.e., postage) and “variable costs” (i.e., printing). This will help you make better decisions about running another direct mail campaign in the future.
- Measuring Financial Success: Two ways to measure the financial success of a campaign are cost per new accounts (CPA) and return on investment. To calculate a CPA, take your total program expenses and divide by the number of new accounts acquired. A simple ROI equation takes the expense of the total program minus the additional money generated as a direct result of the campaign.Before you get too far down the planning process, you might want to make some response rate and budget assumptions for your campaign. Take a look at the CPA and/or ROI and ask yourself, “Will these customers spend enough money (either now or in the near-term) to justify the campaign’s expense?” If the answer is “yes,” move forward using the campaign goals you set forth. Vistage associate Rob Engelman is president of Engelman Management Group, a marketing consulting firm based in Deerfield, Illinois.