What Response Rate Will Your Direct Mailing Get?

Posted on January 26, 2009 by Jodi Kaplan

You want to start a direct mailing campaign, but you’re not certain what your response rate will be or how much money you can expect to earn. Every campaign for every company is different, but here are seven ways to estimate what your response rate will be.

1. Whether you’re trying to generate leads or actual sales.

The response rate for a mailing with a free guide or consultation will be higher than one asking for a sale because there’s less of a commitment.

2. The relationship between the appeal of your offer and the investment required.

A chance to win a free Ferrari will get a high response rate because it has a high appeal, and a low commitment.

On the other hand, a mailing offering a prospectus to buy vacation homes in Vermont will have a lower response rate because purchasing a home requires an investment of many thousands of dollars.

3. Generally, response rates go up as prices go down and vice versa.

For instance, if you sell $5 ink cartridges, you may need a 2% or 3% response rate to make money on your mailings. On the other hand, if you sell Ferraris and a letter mailed to 2,000 people nets you three sales (a response rate of only .15%), you’ll be very happy.

The important thing to keep in mind is how many sales you need to make a profit on your mailing.

4. Whether the names are current buyers or prospects.

The response from people who have already bought something from you can be double that of those who haven’t.

5. If your list is your own house list or a rented list.

The house list will perform better than an outside one, because your own customers already have a relationship with you.

6. How well the names on the list match your target audience.

The more closely the names you select match your ideal buyer (business size, industry, job title, etc.), the more likely it is that they will respond to your offer.

It is better to reach 5,000 of the right people than 50,000 of the wrong people.

Again, in-house lists will perform better than one you buy or rent from someone else. Even when mailing to your own list, it’s important to make the right selection of people from that list. Choosing the wrong people can be disastrous. Someone at Ebiza (an online catalog company) mistakenly send a big holiday mailing to customers who were “least likely to buy again.” The results were so bad the company went out of business!

7. The “creative”.

This includes the words you use, the design, the colors, the paper, the size of the mailing, whether it’s a postcard or a letter, and how many components it has.

BONUS

A new report from Mailer Mailer on email marketing campaign results shows that the email open rate across all industries averages 15.25, and clickthroughs were 2.16%. Get the free Mailer Mailer report here.

What’s the most critical part of any direct marketing campaign?

Posted on January 13, 2009 by Jodi Kaplan

Without this one thing, the whole campaign falls apart. Unfortunately, it’s also often the most overlooked part of a marketing effort. It’s not the graphics, or the words, or the size of the brochure that matters the most. It’s not even what you’re offering or the price.

The key to success (in fact up to 40% of your return) is… the list.

Teenagers won’t buy your denture cream (no matter how slickly produced your ad is).

Since the list is so important, treat it carefully. Don’t look for the cheapest list, look for the list of people that best matches your target audience. It’s tempting to get compiled lists (like those from InfoUSA) because they’re inexpensive. But there’s a hidden cost – bad data. Purchasers have reported up to 27% error rate (a clean list has an error rate of 2-3%).

Good B to B lists can cost up to $275 per thousand names, so choose wisely. Look for lists of purchasers, attendees, or subscribers. Ask for a data card. This is the list’s biography. It shows when the list was last updated, the pricing, the demographics of the people on the list (age, income for consumers or titles, industries for businesses), and the different selections available. A selection is a subset of the list, for instance, only people in manufacturing businesses or only people with incomes over $50,000.

Where do you find lists?

Call a list broker. (contact me and I’ll give you the name of a good one). List brokers have access to thousands of data cards on thousands of lists. Tell him (or her) your target audience, your product, and your offer (what you’re selling and for how much). Also, send a sample of your brochure or a link to the Web page for the product.

Check direct marketing publications. Direct magazine or DM News. Both are free, and keep their subscribers up to date on new lists.

Contact trade publications in your industry. Many will rent the names of their subscribers.

Build your own. Create a newsletter, e-book, or free offer, and build a list of people who want to hear from you.

Is Direct Mail Dead?

Posted on November 16, 2008 by Jodi Kaplan

A DMA study published in 2007 reported that 6.8 million pieces were mailed in the previous year, compared with an average 1.9 million emails.

The key is (always): list, offer, and creative.

If the list is no good (not relevant, not responsive, not clean) the whole thing falls apart, regardless of what medium you are using. Compiled lists (from telephone books, directories, or other passive sources) can be appealing when you’re starting out, because they’re cheap. However, they should be a list of last resort for a number of reasons. One, the people on those lists haven’t bought anything or responded to any offers. Two, the lists are not updated. Three, reasons one and two will cost you money and depress your response.

If the offer is no good or not relevant (sending a coupon for Depends to a list of college students), or too complicated, or hard to respond to, then response will go down.

If the creative (the copy and design) is unappealing, doesn’t catch readers’ attention, etc. then it goes in the wastebasket.

Personalization, “lumpy” mail (sending a USB drive for instance), multi-channel marketing, and a coordinated campaign (repeat mailings) can all help, but concentrate on the list, offer, and creative first.

A Quick Way to Get More Sales

Posted on October 2, 2008 by Jodi Kaplan

In April 2007, B to B magazine reported the results of a study showing that 91% of advertisers fall to include a call to action in their ads. So, if nobody is using them, why do you need one? And what is a call to action anyway?

A call to action is just asking someone to do something. It tells people what to do in order to get your product or more information. It can be as simple as, “call me”, “click on a link” or “mail this card.”

If you don’t ask, you won’t receive! And, you’ll stand out even more from those other 91% of businesses who don’t have one.

Without a call to action, your prospects will flounder around trying to figure out how to contact you (and get what they want). It’s a bit like going rowing with only one oar. There’s lots of effort and circling, but not much progress.