Direct Marketing Best Practices
Let's face it; we live in a world where your industry has likely been commoditized. The only differentiating factor for many companies is the data they have and how they choose to use it. Consumers expect and respond to personalized, relevant, and timely offerings. This requires data. And data means, defacto, that all your measurable marketing, is direct marketing, regardless of channel.
Depending on your business model, getting people to spend/donate/deposit their money is likely what it's all about. Direct Marketing (DM) is Database driven. As such, it is a huge revenue driver. It's the only marketing discipline that can say "Give me a dollar, I'll give you back a buck fifty." Hence the need for Direct Marketing best practices.
Most people have a very low opinion of Direct Marketing - the derogatory terms "spam" and "junk mail" are proof of that (which would also explain why up to half of it winds up deleted or thrown away ... unopened). But the volume of "spam" and "junk mail" into the consumer's mail box remains substantial. The Gap alone deploys over a billion e-mails in a year. In the offline world, according to Mail Monitor, U.S. households received 3.8 billion credit card offers in 2008. While this represents a 27% decrease from prior year, that is still a lot of mail to compete with. While this downward trend continued for most of 2009; in the final months of 2009, we started to see Direct Mail coming back. As the Dow Jones Industrial Average tends to be a leading indicator of Direct Mail volume, the prognosis for 2013 looks more encouraging. Hence the need for Direct Marketing best practices.
When consumers do interact with communications, they tend to do so only from entities with which they are already familiar. That challenge, presents an opportunity for marketers who view Direct Marketing as an integral part of any successful CRM program - the initial customer contact being the first step in a long term relationship.
Whether you're using Direct Marketing to acquire customers/donors/members or just trying to increase your company's share of consumer spending, we hope you'll find plenty of useful tidbits on Direct Marketing best practices on these pages.
Note that all the digital direct marketing techniques used today originated in the offline world of direct mail. Given that fact, and the reality that direct mail is not dead yet, you will find content for both intermingled on these pages. Don't be put off by that - skip what is not relevant. Better yet, skim the content, as in all likelihood, it will inform how you approach your digital direct marketing.
Database Development
When having a discussion about Direct Marketing, very quickly the conversation turns to database development. Everyone's database requirements are going to be different. As a guideline, the question that should be asked is "What data will be needed in order to carry on a meaningful dialog with customers online, via mobile, by mail, by phone, or in person?" The data collected should be actionable data - not just "nice to have." At a minimum, consider:
- Name of individual and/or organization
- e-mail address
- Social handles e.g. Twitter
- Mailing address, including zip code
- Telephone number (mobile or landline)
- Source of inquiry or order
- Date and purchase details of first inquiry or order
- Recency/frequency/monetary purchase history by date, dollar amount, by product
- Credit history and rating (scoring)
- Relevant demographic data e.g. age, gender, marital status and lifestyle data
- Relevant organizational data e.g. SIC code, size of firm, revenues, number of employees
- We would also add "household size." Much can be derived about a customer based on the number of occupants
With any database you develop, keep in mind that it does deplete itself 25% a year. People move, their demographics change, their attitudes change. For this reason, Direct Marketing best practices dictates that the database should be kept current through ongoing updates and annual cleaning e.g. using maintenance services provided by the U.S. Postal Service or other type service provider. As with any investment, make sure you weigh the cost/benefit of such services.
Next, with consideration as to what the database will be used for (list query or analysis), the conversation moves toward not only the record layout but also the front end query tools (build vs. buy). In planning, building or managing your database/data warehouse, don't skip the 10 Mistakes To Avoid.
Mail Lists
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There is a reason we are discussing lists before we even talk about creative. The reason being is that the list is the most important part of a Direct Marketing campaign (digital or offline). Far too many marketers spend an inordinate amount of time tweaking and word smithing creative and copy and spend a fraction of their time on the actual list selection. Creative will only affect about 20% of your response rate. The other 80% will be list and offer. The list therefore is the one area in a campaign where the marketer should spend most of their time. There are two major types of purchased lists available. The first kind of list is compiled information taken from directories, magazine subscriptions, phone books, motor vehicle records, etc. Probably the most common of these is a geographic list e.g. all the residents within a 5 mile radius of your office. While this type of list will usually not yield the greatest results, another alternative is to segment (see also analytics) a compiled list by demographics (age, sex, income, etc.). |
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The second type (and much more valuable) is called a direct response list. These are lists of people who have bought or responded to direct marketing. In some cases it will make more sense for you to buy a mail order list. The people on this list have bought something from direct response methods (mail, print ads, infomercials, etc.).
As this can be a complicated purchase, use a list broker. Good list brokers have access to all the necessary information for finding and renting (these lists tend to be rented rather than purchased) the best mailing lists. Just tell him or her to whom you want your mail to go. Bring the list broker into the picture at an early stage to help define the market. Provide a "wish list" of selection criteria that includes demographics, SIC (Standard Industrial Classification) selections, desired income or sales, number of employees, age, sex, and on and on it goes. Then give the broker time to do a professional job. Putting together a targeted list recommendation takes time.
The broker's services are generally free to the list renter (they are paid by the list seller). Prices are often quoted on a cost per thousand name (CPM) - paying a higher fee for known responders. The names are rented for one time use only. Your company will then own the names of responders. Payment is usually on a net name arrangement i.e. agreement on the percentage of the names supplied for which the full list rental charge must be paid - 65%, 75%, 80%.
The SRDS lists nearly every public list available for rent - it's considered the bible for direct mailers. Just glancing through the SRDS you can find lists of buyers of almost anything that has some affinity to what you're selling. These lists vary from credit card buyers from BMG Music Service to those who have purchased teeth whitening products through the mail.
Your DM agency should be able to purchase your list for you. If not, consider these agencies:
Acxiom - bypass the middle man and go to The Source for most agencies on your own
Harte-Hanks - list reseller
Dun & Bradstreet - list reseller
InfoUSA FormerlyDatabase America, offers a comprehensive family of list services for both Consumer and Business programs.
Equifax, and Trans Union - Two of the major credit bureaus that sell lists based on their databases
Abacus - mostly catalogs
Medical Information Bureau - compiles medical records from insurance companies and doctors
The only sure test to ascertain the accuracy of your list is to deploy/mail out and wait for undeliverable pieces. To help mitigate undeliverable's, Direct Marketing best practices would have you find out how current the list is (when last cleaned), clean your list internally before you mail - remove obsolete and duplicated names. Enter all address changes - for high volume offline mailings, consider using the National Change of Address service. This clearing house will match the Postal Service's list of forwarding orders against your computerized list, for a fee. Put a return address on the outside of your envelope; for bulk mail, include the phrase "forwarding and return postage guaranteed." You will pay to send mail on to the new address or back to you, but you'll know which names are still good.
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Test the list (maintaining a statistically valid test, of course). As a list is not a true random sampling, attempt a systematic sampling - nth name sample. See how well the list performs. Track frequency of purchase, collections, conversions, renewals. Track the performance by list. In general, a 5,000 name test is usually adequate. If you rented a list, you deserve 95% deliverability or better. If undeliverable's exceed this figure, ask for reimbursement for those names. If you get more than 10% back, get your money back on the entire purchase and switch to another mailing list house. Not all brokers will guarantee this level of performance, so choose accordingly. Understand what list brokers can and cannot do for you. If you mail primarily to existing customers, be vigilant about getting the names right. After all, your reputation for personal service will be seriously questioned if you mangle your customer's names. Screen out duplicates - Repeating the identical offer to the same customer in the same mailing costs you needless money, and presents you as a nuisance - |
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particularly when combining names from more than one list, weed out duplicates. Computer mailing list software can do this to some extent, but don¹t leave it up to the computer. It will either miss close matches or eliminate some unduplicated names (for instance, two households in the same building, or two branch offices at different addresses). So go over the list visually. If you see an uncommon name at both a street address and a P.O. box with the same first three zip code digits, it may be the same person. Look, too, for variant but close names at the same address. Don't forget, street and business names get equally mangled.
Consider using a data mining service to clean up your existing database and any ones you may purchase.
Match your list to your offer - It should go without saying - sell to the people who want to buy/donate. Identify the problem you can solve, and mail only to those who need that benefit.
Importance of the Offer
The offer can mean the difference between success and failure in a Direct Marketing campaign.
Same offer presented three different ways (Bob Stone's " Successful Direct Marketing Methods:")
1. Half price!
2. Buy one - get one free
3. 50 percent off!
Each statement conveys the same offer, but No. 2 pulled 40 percent better than No. 1 or No. 3. Consumers perceived No. 2 to be the most attractive offer.
While the offer can often mean the difference between success and failure, don't overestimate the power of the offer either. Offers that sound too rich, or that overshadow the product or service often will either stymie the response or attract the wrong type of customer - customers chasing a free offer are not likely to have high repeat purchase behavior.
Offers run the gambit from price to trial to discount to upgrade etc. Whatever your offer, make sure that the offer is clear and concise. And more importantly, make sure your offer:
- Fulfills a perceived need
- Has a good perceived value - especially vis a vis competitors
- Is practical
- Is unique
- Is appropriate given the customer, the brand
- Has a clear connection with the brand
Creative Brief
Prior to developing your Direct Marketing campaign, Direct Marketing best practices require you to write a Creative Brief. The main task of the Creative Brief is to inform the creative team and to inspire them. The Creative Brief reduces all the information that has been gathered from research and other sources - funneled down to a single idea (the broad idea that needs to be communicated). The Creative Brief should give the creative team a realistic view of what the DM needs to achieve, a clear understanding of the people that the DM must address and it gives clear direction on the message to which the target audience seems most susceptible. In a nut shell, it keeps the copywriter and the creative team focused.
Creative Briefs should be just that - brief. Too much information can be as damaging to a creative team as not enough. As Jon Steel states in "Truth, Lies & Advertising:" "If it's not relevant to the consumer, it's not relevant to the brief." Remember, the brief is meant to inspire, not constrain creative thought.
A good Creative Brief includes the following elements
- Assignment - A top line account of the program. Describe what you want done in terms of Media (e.g. sold DM acquisition package). Is this one execution or a series? Are you testing?
- Background - A succinct description of the current business situation, the problems that the DM needs to overcome, along with a clear sense of why the initiative is being undertaken and/or any research findings that maybe pertinent.
- Product Description - List of features. Communication priority of features, historical performance, research findings.
- Objectives - Outline as quantitatively as possible the desired impact that the program will have. DM that is designed to "increase frequency of purchase" is different from DM that is trying to "generate trial" or "awareness." The first objective involves talking to existing customers and persuading them to use your product more often, which means changing habits. The second requires addressing non customers and persuading them to use it for the first time, which means not only establishing new habits but maybe even overcoming prejudice and misperception.
- Target Audience - Define precisely as possible the primary audience, secondary audience. Current consumer perception, desired perception. A relevant message must be communicated in a manner that is relevant to your audience. Too broad an audience may mean a message that is acceptable to all, but not motivating to any. Include as much real understanding of your target's lives and minds to give the creative team an intimate understanding of what makes these people tick. Any quantitative research findings or anecdotes garnered from research can be very useful here. If the brief reflects only guesswork, then be sure to admit it.
- Positioning - Underlying brand message
- Competition - What categories are you competing in? Who are your specific competitors? What are your competitor's strengths? What are their weaknesses? What do you know about their marketing approach? Business trends in the marketplace.
- Consumer take away - What is the message that should be communicated - rather than what the DM should say verbatim. Ideally it should be a single idea that is expressed in a single sentence - the one thing that is most likely to make people do the desired behavior. It is usually based on the product/service, an observation about the customer, or an attribute of the category.
- Tone - e.g. "very promotional, exciting, sales oriented."
- Offer - make sure it is compelling and not "me too."
- Restrictions and Mandatories - Operational restrictions (e.g. paper size, stock, weight), budget, legal fine print, timing, versions, languages, logo requirements.
- How the initiative will be measured
- Other Relevant Background - Often what's missing in "other" stuff e.g. articles, competitive samples, results, reports.
Anatomy of a Direct Mail Communication
The Direct Mail letter is not an ordinary correspondence. The only similarity is the salutation and signature. While not every letter will have these features, if your letter is to sell, and not just to convey information, you should have most of the following elements (B2B lead generation letters, especially to top management, follow slightly different dynamics):
The Headline
First, Direct Mail best practices will have you consider the headline/"Johnson Box." Yes, there is usually a headline, but not always. It is a short, terse copy positioned in a box over the salutation that focuses the reader's attention on one quick benefit or promise (or two). It gives the reader a reason to spend valuable time with your letter. It also helps close out other random thoughts and provides a context for what is about to follow. Like a good advertising headline, the letter's headline identifies not only the product benefit but also the prospect (implicitly or explicitly) to whom the letter is targeted.
If your company letterhead is designed as an attention-getter at the top of the page, you may want to consider placing it at the end of the letter instead. In this way, your logo won't fight for attention with the headline. You're not selling your name, unless you're a readily recognizable corporation.
Try to make a promise or allude to some key benefit. Refer in some way to the offer, perhaps in a subordinate line. Remember, the offer is what the reader will eventually act upon. Try a "headline group." A headline, subhead and one, two or three short bulleted phrases that extend the headline message provides more information in a key location. It promotes greater involvement than one headline.
The Opening
The "opening" is the first sentence or first two sentences following the salutation (personalize the salutation - no standard salutation e.g. Dear Fellow Tennis Nut).
"I am writing to you about.." or "I want you to know about..." are not Openings. Frankly, the reader doesn't care what YOU want. S/he cares about himself or herself. This is a key place to say something about him or his/her needs which your product will gratify. Most letters are won or lost in the first sentence. Therefore, present your offer in the Opening and keep it short. Write to a person - not a list. If your company or organization has a preexisting relationship with this person, acknowledge it. As in print advertising, the copy should proceed from the headline.
The best way to lose the reader is to begin talking about yourself and your organization. A Direct Mail best practices phrase to keep in mind is, "Talk about my lawn, not your grass seed!" Another famous ditty that speaks to this situation is: "Tell me quick and tell me true Or else, my friend to hell with you. Not how this product came to be, But what the damn thing does for me."
Offer Preview
After the Opening, make a brief reference to the offer: "...and you can discover it, (prove it, enjoy it) FREE, without obligation with the certificate enclosed." Now the reader knows you're not going to be asking him for money.. maybe. The reader can relax. The response device begins to set up the response behavior. It's also smart to "merchandise" the offer by referring to it at several points throughout the letter. "When you send for your free demo and get it up and running, you'll quickly see..." Be innovative! The Broadway musical "Hairspray" generated more than $1 million in ticket sales from a Direct Mail campaign that sent CDs with three songs from the show.
Sell Copy
From the offer preview, Direct Mail best practices will have you get right into the benefits that your reader will realize when s/he tests, previews, examines your product. Generalizations weaken, specifics strengthen, supply evidence. Stay in second person throughout your letter. You're talking to the reader (one person, not a market) about the reader, not you, and you're talking about yourself and your product only in terms of what it will do for reader. Use "you" and derivatives "yours", "you'll".
Understand motivation when it comes to purchasing. People buy to:
When writing your DM copy, reach your customers at a deeper level - the emotional and psychological levels. |
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Remember you're selling the offer, not the product. It's much easier to sell a 30-day trial or a free examination than it is to sell the product itself. You'll discuss payment terms later. Try to lead off sentences and phrases with benefits. "You'll make firsthand contact with hundreds of the most active, most involved sales prospects in the industry in just two short days.." "As one of America's elite 'Million-Plus' convenience stores, you are in a unique position to increase sales, slash operating costs and grow your business rapidly with xyz.." Repeat important points and benefits throughout the letter. Question your prospect, e.g.. 'Are you finding it hard to make ends meet?'
To catch skimmers; get their attention with bulleted lists, dashes, check boxes, numbering, asterisks, bold type, italics, arrows - use them liberally. Consider handwriting in the margins (no more than four words). For two page letters, use 'orphans' (sentences that don't finish on the same page) to make readers turn the page to read on.
With each communication, your goal as a marketer is to increase your customer's permission, not decrease it. A fundamental tenet to commit to memory is the "98% Rule." That states that if you have a 2% response rate, then for 98% of your customers, that DM piece, arguably, was irrelevant. When you send out your DM, speak to the 98%. Too many marketers speak only to the 2% and ignore the majority of their potential customers.
Individual words are simply tools - depending on your audience, certain words will resonate e.g. Health, Money, Security, Excitement, Freedom. With that said, the most important words that do tend to resonate across industries are:
- Free
- No Obligation - People want to be reassured that there are no strings attached
- Limited time only or this offer expires on X - creates a sense of urgency
- New/Announcing/At last - people like to think they are getting in on the ground floor of a new thing. Making a mailing an announcement increases its attention getting powers.
- Now - denotes news. An attention getter.
- How - makes the reader want to know the answer.
- Fast/Faster - as people are more time constrained, they are looking for more efficient ways of doing things.
- Only - conveys uniqueness and/or attainability
- No salesperson will call - who doesn't like that?
- Guarantee - coveys a sense of no riskSingle space the letter, double space between paragraphs. Don't crowd too much on a page.
Use Subheads To Introduce New Thoughts
To avoid eye-glazing, mind-numbing, wall-to-wall copy, use subheads to introduce new thoughts and to move from one part of the letter to the next. Leave plenty of white space. Write in short sentences. Short paragraphs (no paragraph longer than five sentences). Present a list of benefits or features in list form: Each item preceded by a bullet (*) ...instead of in a linear paragraph. Use color, underlines and italics to punctuate critical information. The mark of a good letter is the ability of the reader to have a full appreciation of the offer by just reading the headline and subheads (without reference to the body copy).
Use words of one syllable as much as possible. Don't assume that the person you're writing to is as literate as you are. Even if s/he is, s/he's distracted, and s/he's trying to extract the key information s/he needs, often by just scanning your letter. Which is another good reason to use sub heads...bulleted listings ...and...ellipses.Edit out unnecessary words and phrases and "write like you talk." Make sure every word plays a part in your sales message. If it doesn't, scrap it. Be ferocious in your editing BUT don't be miserly for the sake of minimizing your word count if it's at the expense of full explaining a benefit. Remember Thomas Jefferson's point - "The most valuable of all talents is that of never using two words when one will do." The ability to sell is more important than the ability to write.
The Offer
When you've fully described the many ways your product will benefit the reader, show the reader how to acquire this fabulous program. Or, rather, how the reader can realize these benefits right NOW. Spell out your offer in detail. What does the reader get? Incorporate a hook to encourage immediate response e.g. free booklet, free sample. If you're offering a premium, this is the place to sell that a bit, too.
If at all possible, and if appropriate, date your offer. An expiration date helps to keep your package from going up between the lamp and the tape dispenser for further consideration. Again, agreement doesn't do it. Only acting on that agreement right now results in sales.
The Guarantee
No one wants to make a mistake. Especially not an expensive mistake. Relieve that fear with your guarantee. By law you must refund legitimate requests up to 30 days anyway, so why not make it a virtue? Don't worry that your guarantee somehow sheds doubt on your product. The guarantee speaks to your performance as a business person they can trust, not to your product. But don't hawk it as a "Money Back Guarantee." or "Full Refund If Not Satisfied" kind of thing. That's negative. A Free (or Risk-Free or No-Risk) 30-day Trial is the same thing, expressed in positive terms. "Examine it, try it, use it for a full 30 days without risk." That's an invitation, not a warning.
The Call To Action
Even after all that, you can't assume the reader will do what you want him to do, right now. But that's what he must do. So spell it out and make it easy. Ask them for the action you want - tell them exactly what to do. Does s/he complete a reply card, call a toll-free number, complete a questionnaire, check a box? Detach a reply card? Is there a postpaid or self-addressed reply envelope to use? Ask the reader to do all that right now because that expiration date will be here before they know it. Because they really want to try this, but if they let it go until "later," they will forget.
Punctuate the call to action with the signature signed in blue ink. After all, this is a letter from an individual to an individual. Make sure that is clear.
The P.S.
After the headline and first sentence, the P. S. is the most read part of a Direct Mail letter. Use that important space to repeat a key benefit, or add a twist or an another idea to something you've already said. Also repeat your call to action here, in slightly different words. The mnemonic for the basic function of all direct marketing, but especially for letters. Get Attention. Arouse Interest. Stimulate Desire. Prompt Action. And it ain 't over until the "fat lady" returns the order form!
Now that you've written the letter, put yourself in your reader's shoes, what do you feel when you read the letter? Does it stand out from all the noise that you'll be competing against?
In our own post script to this section, conventional DM wisdom has it that 2 page letters have a higher response rate than 1 page letters. While we're confident that this learning is the result of exhaustive testing, our experience has not borne this out. People will read a letter for as long as it interests them. In our experience, tightly written 1 and 2 page letters had the same response rates. If you have something to say and can say it in a compelling way in 1 page, our recommendation is to go with the 1 page letter.
Other Direct Mail Package Elements
DM programs can take many forms. The letter tends to be one of a series of elements included in the Direct Mail package - other elements include the outer envelope, a brochure or lift note, acceptance form, and a business reply envelope. Make sure all elements do their part, and look like they are part of a cohesive package. And most of all, inside the envelope - create a friendly atmosphere that makes the reader feel special and recognized. The more pieces the better - varying colors and varying sizes.
Brochure
Most mailing packages require a brochure or lift note in addition to the letter. The higher the price of the product, the more involvement there will be on the part of the prospect. The purpose of the brochure is to complete the selling job for the fence sitter. In considering the brochure, ask:
- Is the brochure designed with your prospect in mind?
- Is the presentation suited to the product being offered?
- Is the brochure consistent with the rest of the mail package?
- What is the idea behind the brochure?
- Does the headline stick to the key offer?
- Is the product dramatized to its full advantage?
- Does the entire presentation follow a logical sequence and tell a story?
The lift note, on the other hand, asks a final question and is usually on cheaper paper.
The brochure, in some Direct Mail pieces, can affect up to 25% of the final decision making process.
Acceptance Form
Many prospects read the acceptance form before anything else in the envelope as they know it's the easiest way to find out what is being offered and at what price. For this reason, restate your offer, benefits and expiry date. The acceptance form should look valuable (too valuable to throw away), be able to stand alone and do a complete selling job. The acceptance form affects anywhere from 10 - 12% of your final response rate.
Make this form appear valuable - it impels the reader to do something with it - which is what you want, after all. High on the list of techniques to make these forms look valuable are certificate borders, simulated rubber stamps, and serial numbers. Make sure you name your form with some sort of benefit e.g. Free-Gift Check or Reservation Certificate. Whatever you do, don't call it an Order Form.
Envelope
Don't ignore the outer envelopes when developing your Direct Mail campaign. The envelope has one job - to get itself opened. Making your DM package stand out in the mail box is not the objective. Prospects are looking for an excuse to throw your Direct Mail communication away - so tease, excite or dazzle. Whatever will get the job done. Make it so that if the prospect throws out your communication, they are giving something up.
In weighing the elements, the outer envelope affects about 10% of the final decision of whether to respond or not.
Typically, the closer you can make your envelope to look like personal correspondence (e.g. #10 envelope) the better, since people sort their mail over the trash can. That means you only have only a split-second for them to decide if they'll open your letter or not. Window envelopes look like bills so don't use them, however it does guarantee that they'll be opened. Labels are impersonal. Address printed directly onto an envelope gives a much more personal touch. Handwritten envelopes, in the past, have had by far the best impact because they are the most personalized of all addressing methods - but test into this as, for some, hand written notes may cause suspicion.
Test, test, test. Test outer envelope copy. Test instructional copy, test a provocative statement or graphic. If you're giving away a premium, feature it on the envelope.
Postage stamps are much more personalized than franking or any other postal mark. Bulk rate is the dumpster rate. After taking the proper steps to get the best list, don't blow it by being cheap on the postage. In fact, the Post Office freely admits that 20% - 30% of all bulk mail gets thrown out for various reasons. The reason is simple; when your mailman's sack gets heavy, which letters do you think s/he would dare not deliver? That's right - bulk mail. So if something looks like it's junk mail it is more likely to get tossed. So in order to get your mailings respected (by the post office and your recipient) all your mailings should go out first class and use a real "live" stamp.
Customer Contact Strategy
Direct Marketing best practices dictates that you create a plan for multiple contacts. People will move in and out of different needs and wants as they go through changes in their life. Here's an example: Let's say you're an owner of a furniture store and you sent me an offer for deeply discounted furniture. Well, you probably wouldn't have much luck because my house is full of furniture. But what if when your second (or third or fourth) offer came, my fiancee had left me and taken with her all our furniture. Now, all of a sudden, I'm a very eager customer. That's why using multiple mailings often leads to double-digit returns. With each subsequent mailing, tweak the offer. After 5 mailings, if your prospect hasn't purchased from you, it isn't likely economical to continue mailing that name.
MAIL, REMAIL, ROTATION
After you've dropped your initial mail, test remailing the top 1/3 of your best performing list within 10 days of initial mail. Many times you will get a response rate between 40-60% of your initial response rate. Then use a model or rule-based decision for name rotation.
How do you identify the top 1/3 for remail? Typically any list or any score in your list that is double your normal net response rate, warrants being in the top 1/3.
The 12 Most Common Direct Marketing Mistakes (B2C, B2B)
1) List Selection
A great communication, with superior copy and scintillating design, might pull double the response of a poorly conceived communication. But the best list can pull a response 10 times more than the worst list for the identical piece.
The most common direct marketing mistake is not spending enough time and effort up front, when you select - and then test - the right lists. Remember: In direct marketing, a mailing list is not just a way of reaching your market. It is the market.
The best list available to you is your "house" list - a list of customers and prospects who previously bought from you or responded to your campaigns, ads, public relations, or other communications. Typically, your house list will pull double the response of an outside list. Yet, only 50% of business marketers we've surveyed capture and use customer and prospect names for mailing purposes.
When renting outside lists, get your ad agency or list broker involved in the early stages. The mailing piece should not be written and designed until after the right lists have been identified and selected.
2) Not Testing
Big consumer direct marketers test all the time. Publishers Clearinghouse tests just about everything...even (I hear) the slant of the indicia on the outer envelope of a direct mail piece.
Business-to-business marketers, on the other hand, seldom track response or test one communication piece or list against another. As a result, they repeat their failures and have no idea of what works in direct marketing - and what doesn't.
A mistake. In direct marketing, you should not assume you know what will work. You should test to find out.
For example, one copywriter wrote an acquisition piece for a very well known magazine. His mailing became the "control" package for 25 years. That is, no package tested against it brought back as many subscriptions.
The envelope teaser and theme of that successful mailing was "32 Ways to Save Time and Money." Yet,the copywriter says that when he applied the same theme to subscription mailings for other magazines - it failed miserably.
3) Not using a letter in your direct mail package
The sales letter - not the outer envelope, the brochure, or even the reply form - is the most important part of your direct-mail package. A package with a letter will nearly always out pull a post- card, a self-mailer, or a brochure or ad reprint mailed without a letter.
Recently, a company tested two packages offering, for $1, a copy of its mail-order tool catalog. Package "A" consisted of a sales letter and reply form. Package "B" was a double postcard. The result? "A" out pulled"B" by a 3-to-1 ratio.
Why do letters pull so well? Because a letter creates the illusion of personal communication. We are trained to view letters as "real" mail, brochures as "advertising." Which is more important to you? One recommendation I often give clients is to try an old-fashioned sales letter first. Go to a fancier package once you start making some money.
4) Features vs. benefits
Perhaps the oldest and most widely embraced rule for writing direct marketing copy is, "Stress benefits, not features." But in business-to- business marketing, this doesn't always hold true. In certain situations, features must be given equal (if not top) billing over benefits.
For example, if you've ever advertised semiconductors, you know that design engineers are hungry for specs. They want hard data on drain-source voltage, power dissipation, input capacitance, and rise- and fall-time...not broad advertising claims about how the product helps save time and money or improves performance. We know marketers who have tested many communications, selling engineering components and products of OEMs (original equipment manufacturers), and found that features and specs out pull benefits almost every time.
The engineering and scientific marketplace does not respond to promise or benefit-oriented copy. They respond to features. Your copy must tell them exactly what they are getting and what your product can do. Scientists and engineers are put off by copy that sounds like advertising jargon.
In the same way, I suspect that doctors are swayed more by hard medical data than by advertising claims, and that industrial chemists are eager to learn about complex formulations that the average advertising writer might reject as "too technical."
In short, the copywriter's real challenge is to find out what the customer wants to know about your product - and then tell him in your communication.
5) No offer
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An offer is what the reader gets when he responds to your communication. To be successful, a direct marketer should sell the offer, not the product itself. For example, if I describe a new server to an IT professional, my communication is not going to do the whole job of convincing people to buy my server. But the communication is capable of swaying some people to at least show interest by requesting a free brochure about the server. Make sure you have a well-thought-out offer in every communication. If you think the offer and the way you describe it are unimportant, you are wrong. |
Here are some effective offers for industrial direct marketing: Free white paper, free technical information, free analysis, free consultation, free demonstration, free trial use, free product sample, free catalog.
Your copy should state the offer in such a way as to increase the reader's desire to send for whatever it is you offer. For example, a catalog becomes a product guide. A collection of white papers becomes a free information kit. A checklist becomes a convention planner's guide. An article reprinted in pamphlet form becomes "our new, informative booklet - "How to Prevent Computer Failures.'"
From now on, design your fulfillment literature and white papers with titles and information that will make them work well as offers in direct marketing. When one of my clients decided to publish a catalog listing U.S. software programs available for export overseas, I persuaded her to call the book "The International Directory of U.S. Software," because I thought people would think such a directory was more valuable than a mere product catalog.
6) Superficial copy Nothing kills the selling power of a business-to-business communication faster than lack of content. The equivalent in industrial literature is what I call the "art director's brochure." You've seen them: Showcase pieces destined to win awards for graphic excellence. Brochures or e-mails so gorgeous that everybody falls in love with them - until they wake up and realize that people send for information, not pretty pictures. Which is why written, unillustrated sales communication can often pull double the response of elaborate and colorful work. In the same way, direct marketing is not meant to be pretty. Its goal is not to be remembered or create an image or make an impact, but to generate a response now. One of the quickest ways to kill that response is to be superficial. To talk in vague generalities, rather than specifics. To ramble without authority on a subject, rather than show customers that you understand their problems, their industries and their needs. What causes superficial copy? The fault is with lazy copywriters who don't bother to do their homework (or ignorant copywriters who don't know any better). To write strong copy - specific factual copy - you must dig for facts. You must study the product, the prospect and the marketing problem. There is no way around this. Without facts, you cannot write good copy. But with the facts at their fingertips, even mediocre copywriters can do a decent job. Don Hauptman, author of the famous mail-order ad, "Speak Spanish Like a Diplomat!," says that when he writes a direct marketing piece, more than 50% of the work involved is in the reading, research and preparation. Less than half his time is spent writing, rewriting, editing and revising. How much research is enough? Follow Bly's Rule, which says you should collect at least twice as much information as you need-- preferably three times as much. Then you have the luxury of selecting only the best facts, instead of trying desperately to find enough information to fill up the page. |
7) Saving the best for last
Some copywriters save their strongest sales pitch for last, starting slow in their sales communication and hoping to build to a climatic conclusion. A mistake. The typical prospect reads for five seconds before s/he decides whether to continue reading or discard your communication. The copy must grab your prospect's attention immediately. So start your communicaion with your strongest sales point.
Some examples of powerful openings:
- "Which produces the best ad results - an 800 phone number? Company phone? Coupon? No coupon?" - from a letter selling ad space in a specific magazine.
- "14 things that can go wrong in your company - and one sure way to prevent them" - an envelope teaser for a mailing that sold a manual on internal auditing procedures.
- "A special invitation to the hero of American business" - from a magazine's subscription letter.
- "Can 193,750 millionaires be wrong? - An envelope teaser for a subscription mailing.
- "Dear Friend: I'm fed up with the legal system. I want to change it, and I think you do, too." - the lead paragraph of a fundraising letter.
- Some time- testing opening gambits for sales letters include: asking a provocative question;
- Going straight to the heart of the reader's most pressing problem or concern;
- Arousing curiosity;
- Leading off with a fascinating fact or incredible statistic; and
- Starting the offer up front, especially if it involves money:
- Saving it, getting something for an incredibly low price, or making a free offer.
Know the "hot spots" of your direct marketing communication - the places that get the most readership. Those include: the first paragraphs of a letter or e-mail, its subheads, its last paragraph and the postscript (80% of readers look at the P. S.); the brochure cover, its subheads and the headline of its inside spread; picture captions; and the head- line and copy on the order form or reply card. Put your strongest selling copy in those spots.
8) Poor follow-up
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Recently, a company phoned to ask whether I was interested in buying its product, which was promoted in an e-mail I'd answered. The caller became indignant when I confessed that I didn't remember the company's copy, its product, its mailing, or whether it sent me a brochure. "When did I request the brochure?" I asked. The caller checked her records. "About 14 weeks ago," she replied. Hot leads rapidly turn ice cold when not followed up quickly. Slow fulfillment, poor marketing literature and inept telemarketing can destroy the initial interest that you worked so hard to build. |
Here are some questions you should ask yourself about your current inquiry fulfillment procedures:
- Am I filling orders or requests for information within 24 hours?
- Am I using telephone follow-up or questionnaires to qualify prospects? By my definition, an inquiry is a response to your communication. A lead is a qualified inquirer - someone who fits the descriptive profile of a potential customer for your product. You are after leads, not just inquiries.
- Am I sending additional communications to people who did not respond to my first mailing? Test that. Many people who did not respond to mailing No. 1 may respond to mailing No. 2, or even No. 3.
- Am I using direct mail to turn non-responders into responders? E-mail followed by direct mail can generate two to 10 times more response than e-mail with no direct mail follow-up
- Does my inquiry fulfillment package include a strong sales letter telling the prospect what to do next? Every package should.
- Does my inquiry fulfillment package include a reply element, such as an order form or spec sheet?
- Does my sales brochure give the reader the information he needs to make an intelligent decision about taking the next step in the buying process? The most common complaint I hear from prospects is that the brochures they receive do not contain enough technical and price information.
Don't put 100% of your time and effort into the lead-generating mailing and 0% into the follow-up, as so many mailers do. You have to keep selling, every step of the way.
9) Use words that resonate
This mistake is not using the magic words that can dramatically increase the response to your mailing. General advertisers, operating under the mistaken notion that the mission of the copywriter is to be creative, avoid the magic words of direct marketer, because they think those magic phrases are clichés. But just because a word or phrase is used frequently doesn't mean that it has lost its power to achieve your communications objective. In conversation, for example, "please" and "thank you" never go out of style.
What are the magic words of direct marketing? Free. Say free white paper, not white paper. Say free consultation, not initial consultation. Say free gift, not gift. If the English teacher in you objects that "free gift" is redundant, let me tell you a story. One firm tested two communications. The only difference was that communication "A" offered a gift while communication "B" offered a free gift. The result? You guessed it. The free gift offer in communication "B" significantly out pulled communication "A." What's more, many people who received communication "A" wrote in and asked whether the gift was free!
No Obligation. Important when you are offering anything free. If prospects aren't obligated to use your firm's wastewater treatment services after you analyze their water sample for free, say so. People want to be reassured that there are no strings attached.
No salesperson will call. If true, a fantastic phrase that can increase response by 10% or more. Most people, including genuine prospects, hate being called by salespeople over the phone. Warning: Don't say "no salesperson will call" if you do plan to follow up by phone. People won't buy from liars.
Details inside/See inside. One of those should follow any teaser copy on the outer envelope. You need a phrase that directs the reader to the inside.
Limited time only. People who put your communications aside for later reading or file it will probably never respond. The trick is to generate a response now. One way to do it is with a time-limited offer, either generic ("This offer is for a limited time only."), or specific ("This offer expires 9/20/87."). Try it!
Announcing/At last. People like to think they are getting in on the ground floor of a new thing. Making your communication an announcement increases its attention-getting powers.
New. "New" is sheer magic in consumer communications. But it's a double-edged sword in industrial mailings. On the one hand, they demand products with proven performance.
The solution? Explain that your product is new or available to them for the first time, but proven elsewhere - either in another country, another application, or another industry. For example, when we introduced a diagnostic display system, we advertised it as "new" to U.S. hospitals but explained it had been used successful for five years in leading hospitals throughout Europe.
10) Not knowing your audience
Avoid "manufacturer's copy" - copy that is vendor-oriented, that stresses who we are, what we do, our corporate philosophy and history, and the objectives of our firm. You and your products are not important to the prospect. The reader opening your sales communication only wants to know, "What's in it for me? How will I come out ahead by doing business with you vs. someone else?"
Successful direct mail focuses on the prospect, not the product. The most useful background research you can do is to ask your typical prospect, "What's the biggest problem you have right now?" The sales letter should talk about that problem, then promise a solution.
Do not guess what is going on in industries about which you have limited knowledge. Instead, talk to customers and prospects to find out their needs. Read the same publications and attend the same seminars they do. Try to learn their problems and concerns. Too many companies and ad agencies don't do this. Too many copywriters operate in a black box, and doom themselves merely to recycling data already found in existing brochures.
For example, let's say you have the assignment of writing a direct marketing communication selling weed-control chemicals to farmers. Do you know what farmers look for in weed control, or why they choose one supplier over another? Unless you are a farmer, you probable don't. Wouldn't it help to speak to some farmers and learn more about their situation?
Read, talk and listen to find out what's going on with your customers.
In his book" Or Your Money Back," Alvin Eicoff, one of the deans of late-night television commercials, tells the story of a radio commercial he wrote selling rat poison. It worked well in the consumer market. But when it was aimed at the farm market, sales turned up zero. Mr. Eicoff drove out to the country to talk with farmers. His finding? Farmers didn't order because they were embarrassed about having a rat problem, and feared their neighbors would learn about it when the poison was delivered by mail. He added a single sentence to the radio script, which said that the rat poison was mailed in a plain brown wrapper. After that, sales soared. Talk to your customers. Good direct marketing - or any ad copy-- should tell them what they want to hear. Not what you think is important.
11) Failing to appeal to all 5 senses
Unlike an ad, which is two-dimensional, direct marketing can be three-dimensional and can appeal to all five senses: sight, hearing, touch, and smell, taste. Yet most users of direct marketers fail to take advantage of the medium's added dimension.
Don't plan a mailing without at least thinking about whether you can make it more powerful by adding a solid object, fragrance or even a sound. You ultimately may reject such enhancements because of time and budget constraints. But here are some ideas you might consider:
Pop-ups. Pop-ups in a direct mail piece can increase response up to 40% when compared with a conventional flat mailing. You can have a pop-up custom designed for your mailing or choose from one of many "stock" designs available.
Money. Market research firms have discovered that enclosing a dollar bill with a market research survey can increase response by a factor of five or more, even though $1 is surely of no consequence to business executives or most consumers. Has anyone tried using money to get attention in a lead-getting industrial mailing?
Sound. Have you seen the greeting cards that play a song when you open them because of an implanted chip or some similar device? I think that certainly would get attention. But as far as I know, no one has used it yet in direct mail.
Product samples. Don't neglect this old standard. Enclose a product or material sample in your next mailing. We once did a mailing in which we enclosed a small sample of knitted wire mesh used in pollution control and product recovery. Engineers who received the mailing kept that bit of wire on their desks for months.
Premiums. An inexpensive gift - such as a measuring tape, ruler or thermometer - can still work well.
One recommendation and warning: A lot of us, including us, need to be a little more imaginative if we want our communications to stand out in the prospect's crowded mailbox. At the same time, we must remember that creativity can enhance a strong selling message or idea but cannot substitute for it. As one copywriter warns, "Cleverness for the sake of cleverness may well be a liability, not an asset."
12) Management by committee
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Do you know what a moose is? It's a cow designed by a committee. Perhaps the biggest problem we see today is direct marketing being reviewed by committees made up of people who have no idea (a) what direct marketing is; (b) how it works; or (c) what it can and cannot do. For example, an ad agency creative director told me how his client cut a three-page sales letter to a single page because, as the client insisted, "Business people don't read long letters." Unfortunately, that's an assumption based on the client's own personal prejudices and reading habits. It is not a fact. In many business-to-business and fundraising direct-mail tests, we have seen long letters outpull short ones - sometimes dramatically. |
Why pay experts to create communications based on long years of trial- and-error experience, then deprive yourself of that knowledge base by letting personal opinions get in the way.
Here are some things you can do to become a better direct marketing client:
- Reduce the review process. The fewer people who are involved, the better. At most, the communication should be checked by the communications manager, the product manager and a technical expert (for accuracy).
- Resist the temptation to meddle. Point out technical inaccuracies and other mistakes. But don't dictate the piece's content, tone or style.
- Make a commitment to judge direct marketing copy not by what you like or by aesthetics, but by results - which can be measured accurately and scientifically.
- Become more educated in direct marketing by reading books. I recommend " Successful Direct Marketing " by Bob Stone as a good place to start.
- Know what's going on in the industry. Subscribe to at least one of the top direct marketing magazines/newsletters. Also, keep in touch with industry developments by reading the more broadly based marketing publications.
- If you challenge your direct marketing pros, be willing to spend for a test. In direct marketing, the answer to "Which concept is best?" is the same as the answer to the question, "Which communication piece pulled best?"
Because nobody can argue with results.
Test, test, test
"Even if you're on the right track, you'll get run over if you just sit there." - Will Rogers
In order to create an effective marketing communication, experiment and then monitor the results closely. Whatever you do, Direct Marketing best practices dictate that you test new offers on your "control" before developing new creative.
Deploy versions with different headlines, illustrations, body copy, and the like. Try different appeals. For instance, if one copy has a positive appeal, try a negative appeal e.g. "How to avoid costly mistakes" or "Not sure of the direction of interest rates?"
Test different price points. But only test one or two variables at a time. Code each version separately, and deploy them at the same time, to different people on the same list (random sampling). As results shift in favor of one version, vary another element. Test market and refine over and over, until you know your communication is a winner. And continue monitoring the results. Any marketing material will lose its punch eventually; when yours stops working, whether it's six months or six years after you introduced it, be ready to replace it. Remember, whatever you test, it is not likely valid after six months. So consider re-testing before you begin relying on old data. No mailing should go out without a test cell. Test, test, test.
Elements you can test are items like: personalization (and degree of personalization), promotional message (in subject line, on letter and/or OE), 800#, brochure, pre-paid business reply envelope (BRE), application shading, message on back of BRE, stickers, paper stock (letter and/or outer OE), color on the OE, subject line and OE teaser, expiration dates, premiums for response, telemarketing follow-up, letter length, etc.
While we don't want to understate the importance of testing, we don't want to overstate it either. On average, of the test factors/ideas you test, statistically:
- 53% make no difference to your response rate
- 25% help
- 22% hurt
Testing doesn't have to be expensive either. In fact, 4/5 of the factors that help response can be made with no associated cost.
A reasonable test is about 3,000 to 5,000 names, depending on how many names you have on your list. You can even test with as little as a few hundred (500 pieces is a reasonable minimum test mailing) -- but you won't get a statistically valid response. However, you will get an indication of the communication's success. Test everything. The difference in responses between a well timed and a poorly timed campaign can be as much as 100%." Consider what to test, when to test.
Remember, every company's experience is going to be different. Just because something has worked for one company doesn't mean it will work for you - many factors come into play e.g. the demographic and psychographics of your customer base, your company image just to name a few. So, test, test, test - take nothing for granted.
Direct Mail Response rates
As we mentioned earlier, only about 20% of your response rate can be attributable to Creative. The other 80% will be list and offer.
In planning your projections use the lowest responses you can safely count on; then you won't get burned if you're wrong. If a mailing starts to pull 2-3% response, it¹s clearly a winner (depending on the industry, offer and the objective, we typically see response rates of 0.5% - 1.9%). If you achieve a 5% response from people who haven¹t dealt with you before, consider yourself a certified genius. From existing customers (or donors), expect a much higher return (again, depending on the industry, offer and the objective) -- in rare instances, up to 50%. But 5-10% is more believable, and is a reasonable goal.
Twenty-one days into a mailing you should know directionally how the mailing is going. Forty-five days into the mailing you should have 90% of your responses.
For a more complete list of response rates, in our experience, click here.
For remail response rates, click here
At a 10% response, a 90 cent package costs $9 per sale (typical prices we've seen range from $0.37 to $5.00+ per mailed piece - if you rent a mailing list, you may have to add four to ten cents per name.). With a small mailing of 500 full-ounce pieces, at 90 cents per piece, your cost is $450 for the entire test. If your offer pulls fewer than three responses out of 500, it's not working. At three to five responses, you're in the ball game but you'll want to strengthen either your offer or your marketing piece. If you get more than five responses it's a winner; and if more than 15 responses come in, consider expanding the mailing.
For B2B (business-to-business) campaigns, again depending on your industry, objective and offer, we have seen that campaigns that have a somewhat generic approach (i.e. addressing neither B2B nor B2C directly in the creative) do better from a response rate perspective. This has been because lists for B2B campaigns tend to be notoriously bad. If you have an offer that is also attractive to consumers, don't exclude them in the creative just because you're mailing a business list as up to 60% of that business list could in fact be consumers.
Two words of caution in planning for your response rates - Hoover Vacuum. In 1992 Hoover UK concocted a loss leader type promotion of giving away two free round-trip airline tickets to selected cities in Europe for anyone purchasing just $150 worth of Hoover products. For purchases of $375, free flights where offered from England to New York or Orlando. Hoover executives were betting that a majority of buyers would not redeem the premium because of restrictions on travel. People quickly recognized that the airline tickets were worth more than the product and Hoover was overwhelmed with sales, but also with 220,000 requests for free airline tickets. They anticipated no more than 50,000 tickets would have to be issued. Maytag being the parent company at the time, bore the of costs of this promotion which unexpectedly grew to $72 million. Be conservative in your planning - plan worst case scenarios.
Two closing thoughts - in order to get people to open the Direct Mail they usually discard, consider augmenting your marketing strategy with radio to call attention to your mailings and precondition recipients to the benefits of reading and responding to your Direct Mail offers. And it should go without saying, repeatedly soliciting individuals with the same offer may eventually dilute response rates.. so plan ahead in your versioning strategy.
In benchmarking your response rates, you may find some useful information from the United Kingdom below:
For more on statistically valid testing, click here.
Direct Marketing Seasonality
Some propositions do better at different times of the year. Every product has its own seasonality. To find the right answers for you, develop a Seasonality List and test. In our experience, fund raising tends to have the highest response in November, September and February.
For retail, in our experience, the best in-home dates for "general" type promotions have been mid May, the Thursday of Labor Day week and toward the end of October for early November in-home. With that said, the end of the first week of January has also shown much promise (especially for CD clubs).
Others have found January to be the best month of the year in terms of cost per response. For these folks, if January were treated as 100%, then the rest of the months would compare as follows:
| Jan - 100% | July - 80% |
| Feb - 90% | Aug - 60% |
| Mar - 70% | Sept - 80% |
| Apr - 60% | Oct - 90% |
| May - 60% | Nov - 70% |
| June - 60% | Dec - 60% |
It all goes to show that you have to perform your own discovery. Let us know what you find out.
Technology
Acxiom's Personicx - household-level consumer segmentation system with a life stage focused methodology
Microstrategy - decision support software
Business Objects - Analytic and reporting
Marketswitch - optimization software determines the best offers for specific customers
BrainMaker neural network
Sites of Interest:
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