By Stephanie Marchant. GamePlan Financial
Friday, February 15, 2008

Direct mail can be a very effective way to boost your sales. There are, however, time-tested do’s and don’ts. If you understand the basics, you’ll create a very effective marketing tool.

Mass customization

Direct mail is the only medium that allows you to customize your message to a specific group of people who are predisposed to have an interest in what you’re telling them. The real beauty of direct mail is that it’s like using a laser instead of a shotgun; targeting your prospects with a message that resonates with their needs, eliminating the waste of other advertising vehicles like newspapers and magazines, radio and TV.

A direct mail campaign consists of three components: 1) The mailing list, 2) the offer or call to action, and 3) the creative execution. T he rule of thumb for effective direct mail is a good list of prospects, which contributes 40 percent of the campaign’s success, the offer, 40 percent, and the creative execution, 20 percent.

The mailing list

The list can consist of current clients to increase existing business, or to attract new prospects, you can purchase a list from a list broker, which then can be filtered by nationality, age, geography, income, buying patterns and education. If you want to target specific industries, publications will often offer their mailing list for purchase.

The smaller the list, the smaller the return

Direct mail on average gives between a .5 percent to 2 percent return. Even with the best of lists, there are still variables out of your control, such as timing, seasonality and real interest. Perhaps the recipient just met with a financial advisor, or is related to one, or is a chronic procrastinator.

If you mail to 200–300 prospects, for example, you won’t see much of a return on your expense. If you’d like to reach a smaller audience, such as in this case, it might be more cost-effective to mount an outbound telemarketing campaign. In general, the yardstick for a minimum direct mail campaign should be 2,000 prospects. Budget for as large a list as possible. The response rate shouldn’t matter based on your market size, but the relevance of your message does.

The offer

Just telling your prospective clients who you are and what you do usually is not enough to make people respond. It’s been proven that if you want to increase your response rate, offer your prospects something tangible, such as a free book; something they will know they won’t get unless they pick up the phone. An initial free consultation may sound appealing, but people generally know they’ll get that free anyway, and it’s something that they can put aside and eventually forget about.

Make sure the offer is something that resonates with your audience. If your subject matter deals with retirement planning, offer a book on retirement planning, or something having to do with retirement.

The creative execution

Letter or postcard? Good question. Letters usually have a higher response rate for financial information, but are much harder to craft, and lack the immediacy of a postcard. And, they can be more costly to mail because you can’t get special, discounted postcard mailing rates.

Keep the message simple. People give a time window to direct mail before it’s either discarded or saved — about the same amount of time they devote to a billboard — about 3-4 seconds. If you don’t grab their attention right away with a message relevant to their needs, it goes in the circular file.

Make them a promise. Don’t just talk about what you have to offer, solve a problem for them; whether it’s retirement income for life or the promise of a stress-free retirement, then link that promise to what you offer.

Testing

Testing is the most important component of a successful direct mail campaign. In order to execute a successful campaign, you absolutely have to know what your prospects respond to — otherwise, it’s like throwing spaghetti on the wall to see if it sticks. The easiest thing to test is the offer. Mail several different offers to see what people respond to the most. Or, you can test letters versus postcards. If you fail to test and your campaign has a lower-than-hoped-for response, you’ll never know why.

The budget

Successful direct mail campaigns are rarely one-hit wonders. In order to break through the clutter in the mailbox, you should mail at least five times a week in three-week cycles. This strategy is sometimes called a “drip” campaign in order to build mind share. It’s also a good idea to mix up the creative execution of each mailing so people won’t think they’ve already read your mailing and discard it.

A successful direct mail campaign takes time. Anyone hoping for a quick hit in sales with one small mailing will probably be disappointed with the results. It takes patience, follow-up, and a large enough budget to execute.

More tips on follow-through

Even if the results are less than you hoped for, the good news is direct mail is also a good platform for long-term branding. The more you get your name out there, the more people will recognize your name when you call.

If your list includes phone numbers, it’s a great opportunity to call and initiate the conversation by asking if they received your direct mail piece, and even if they don’t remember, it’s an opportunity to establish a dialog.

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