For a long time, we direct marketers have been facing the twin threats of declining response rates and increasing mailing costs. Anthrax, 9-11, a sluggish economy, and continuing terrorist threats have further depressed direct mail response rates, making it even more difficult to
stay profitable.
Following are some ideas that may be able to help you reverse this situation, boost your response rates, decrease your mailing costs, and make your packages perform well again:
* Implement integrated marketing campaigns.
In the merge-purge list universe, e-mail lists are largely separate from traditional mailing lists, making it difficult to coordinate a marketing campaign combining paper direct mail and e-mail.
The records in a private-use database can contain both e-mail and physical addresses, and you can track who has received postal mail, e-mail, or both -- and when. So you can easily do an integrated campaign combining print and the Internet to improve your results and lower your costs.
Many marketers use a combination of paper direct mail and e-mail marketing because it allows them to “touch” their customers and prospects more frequently and cost-effectively than paper direct mail alone. While e-mail marketing is unlikely to make conventional direct mail obsolete, more and more marketers are changing more and more of their promotions from print to Internet. Advantages of e-mail marketing include lower production costs, zero postage and printing, the ability to get campaigns out in days instead of weeks, and faster generation of leads and orders.
* Build your email list.
Work diligently to obtain the e-mail addresses of as many of your customers and prospects as possible. On reply and order forms, offer periodic e-mail alerts on topics of interest, such as product upgrades, price changes, or service notices. The catch: to get these valuable free e-alerts, the prospect must give you his e-mail address.
When you run your house files through an e-mail address appending service, the match rate is typically 10% to 30%. If you have 50,000 customers and prospects without e-mail addresses, appending can find and add e-mail addresses to 5,000 to 15,000 of these records or more.
* Use selects intelligently.
Mailing lists offer a wide range of selections. You can segment business lists by job title, number of employees, industry or SIC code, and types of products purchased. With consumer lists, you can select segments of the list according to sex, age, income, presence of children in the household, average size of order, credit card holders, sweepstakes participants, demographics, psychographics and many other factors.
Selections, which cost $5 to $10 extra per thousand, almost always pay for themselves, and often can boost results substantially. For instance, a company regularly mailed catalogs promoting its factory safety products. When they analyzed response, they saw that sales to Fortune 1000 companies were poor compared with orders from small and mid-size firms.
Reasoning that corporate mailrooms were screening their catalogs as third-class mail, they split their database into two segments: (1) Fortune 1000 and (2) “other” companies. The “other” companies got their next catalog sent third class as usual. But catalogs for the Fortune 1000 companies were put into an envelope and mailed first class. Sales increased substantially.
* Be smart when mailing to your house files and rented lists.
Smart mailers are using a variety of tactics to get more productivity out of lists at less cost.
Direct marketers are doing more list swaps (exchanges). There is a tendency for mailers to refrain from mailing their customer and inquiry files too much. This frequently results in not mailing their house file enough. The most successful mailers today are segmenting their customer files using recency, frequency and monetary (RFM) attributes and mailing to the most productive segments more often. You should increase the mailing frequency of your house file until it no longer produces a better response then your best rented prospecting file.
When mailing to B2B rented lists, restrict mailings by company size and penetration. For smaller companies, mail to one contact per site. For larger companies, you probably want to mail to multiple contacts -- the key players in the decision-making process. It is also a good idea to stagger these mailings so that no more then 5 pieces of mail hit the mailroom in a single day.
Someone once said, “Success is achieved by attending to details and doing the small things exceedingly well.” In direct mail, the creative -- writing and designing mailings or e-mail promotions -- gets all the glory.
But being prudent with list and database strategies can often mean the difference between a promotion that barely breaks even vs. one that is profitable in testing and can be rolled out successfully. It’s not very glamorous, but it can make you a lot of money. And in any economy, that’s kind of exciting.
About the author:
Stevan Roberts is CEO of Edith Roman Associates, ePost Direct, and Database Direct providing postal and email list brokerage and management, database and Internet marketing based in Pearl River, NY; e-mail stevan.roberts@edithroman.com. He is the co-author of Internet Direct Mail: The Complete Guide to Successful E-Campaigns (McGraw-Hill).