Resources

Print this page

Add to Favorites

• Understanding Direct Mail  

 
This newsletter is about an area of much confusion - yet an area of significant potential profit for you and your business - Direct Mail.

What sets the smart business owners and managers apart from the rest is that they are willing to take the time to really understand Direct Mail. There are many myths and a lot of nonsense surrounding Direct Mail.

You may want to print out and keep this web page - because in my continuing efforts to help you and your business create exponential success - I am about to share the essentials of Direct Mail that you really should know.

I would be surprised if the contents of this web page were not worth at least a few thousand pounds to you over the next year - if you apply all the principles we are going to cover. (By the way, if you're totally new to the subject 'Direct Mail' simply refers to anything you send people in the post - letters, brochures etc.)

First lets dispel some of the myths about Direct Mail.

My favourite is 'Direct Mail doesn't work.' This ingenious conclusion is arrived at by the fact that you and I throw most of the mail we receive in the bin - therefore the logic is it's a waste of money. The truth is that 90 out of 100 people may throw your mailing in the bin, but if 5 people glance at it, 5 more read it and one of those 5 buys from you - you may well have a highly profitable mailing.

Direct Mail is a numbers game and you have to enter into it in the knowledge that most of your mailings will probably go unread. (One of the important factors is to make sure that your mailing is so compelling that people DO 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 is that there is a magical percentage conversion rate that a successful mailing campaign should receive. In other words, you should 'expect' 3% (or whatever) 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 plays a significant factor. If you're selling CDs at £9.95 you'll probably get a different response rates 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.

Let me explain what I mean - and this is really, really important so please re-read this paragraph until you get it.
Direct Mail is statistically 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. For a typical business, that's going to be somewhere between 500 and 2500.

Any mailings you consider will fall into two categories:

• The first is mailings to your existing customers.
• The second is mailings to potential new customers.
  

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

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 renting 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.
3. Always include a letter with any brochure you send - it will increase the response rate.
4. Make sure that the contents of your mailing focus on the benefits 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%
   

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.

Back to Top