Why Direct Mail?
With all the choices marketers have today, why is direct mail a good option? In many situations, direct mail gives you more ‘bang for the buck’. The return on investment (ROI) of direct mail, done properly, is significant. According to the Direct Marketing Association report The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the Us, “Each dollar spent on direct marketing yields, on average, a return on investment of $11.69, versus ROI of $5.24 from non-direct marketing expenditures.” This is a statistic that can’t be ignored. Depending on the opportunity, how it is handled and the client expectations, it would be difficult to understand aversion to this kind of a return on the dollars spent for this type of advertising. Of course there are many things to be considered.
Not every marketing opportunity is the same, and not every direct marketing campaign will yield the same results. It is certainly true, however, that direct marketing in the form of direct mail lends itself to significant, predictable and measurable results. The process of combining direct mail with other channels amplifies the potential lift of a well-planned campaign. The addition of e-mail, personalized URLs and personalized landing pages to direct mail will ‘lift’ the results, but it is in fact the usage of direct marketing that lays the groundwork and provides the vast majority of the ROI in multi-channel campaigns.
The “40-40-20” Rule
According to USADATA, 40% of a campaign’s effectiveness depends on the list. It’s the ‘Right Person’ part of the equation. Think about it: If you are addressing the wrong prospects, nothing else really matters … your campaign is doomed. The offer and the creative must be right to maximize the opportunity, but no amount of pretty pictures will really help you sell snowblowers to people who live in the desert. So how do you get the message to the right people? If you are looking for new clients, you need new data, and for direct mail the data is the list. The list is the key, the 40%. Just as with the offer and the creative, you need the best possible list. The sales leads and lists you acquire should have the freshest and most accurate data available for the opportunity
The list should be highly focused on the correct target audience, and of course usage must comply with all regulations on privacy, not just to ensure that you are not breaking laws, or industry standards, but because your prospects are increasingly aware of and concerned about appropriate and respectful use of information.
What Makes a Good List?
Although this would seem to be obvious, for direct mail campaigns to achieve success, the document must get to the intended recipient. It must be deliverable, and correct addresses are the key. Outdated, inaccurate lists increase production costs, postage costs, reduce the overall ROI and worst of all, waste the opportunity. In best-case scenarios you should expect that 92% to 96% of the addresses are ‘good’. And don’t forget, lists with correct addresses degrade with time as people move or their situation changes.
Accuracy of Demographics
Lists should be compiled from multiple sources of data with cross-verification to provide the best results. Although you can buy lists from any number of sources, you want to be sure that the supplier of lists you contract with maintains proven and reliable methodology in their collection of information. And, as with deliverability, the accuracy of the list regarding demographics requires timely collection and usage of the data.
Who is the Target?
According to USADATA, the most popular base categories include:
- Consumer (including demographics, lifestyle and life stage)
- Business (including key executives)
- Resident / Occupant (for saturation postal rates)
- New Mover / New Homeowner / New Mortgage o Specialty (e.g. New Businesses, Canadian, Educator)
Of course, these are major classifications that begin the ‘narrowing down’ process. What other characteristics might make a recipient a better target? What are the things about the product, service or message that would appeal to a particular group or audience? Your list provider should be able to consult with you and your client to find these answers.