Almost all marketing is about a series of activities, one building on the next, to achieve results. There’s almost no kind of marketing that works after just one attempt: not TV commercials, not social media, not email. It all takes a slow and steady build of activity to wear your prospects down until they have to buy from you.
If you’ve ever had a passing acquaintance with direct mail, you’ve probably heard that a 1% response rate is pretty good. In many cases that’s correct.
1% response rate is great if you’re selling a high-ticket item like a mortgage or expensive machinery. Then getting one person out of a hundred to call you is great—that’s all you really need or in some cases, all you can handle. Some industries traditionally expect and have higher response rates depending on a variety of factors.
Your first step to determining what your response rate is figuring out the cost of sending the mailing is. This includes everything—design, printing, handling, postage, everything. Depending on how many you’re sending, this might be a hefty number. This is your breakeven point. You must sell at least this many goods or you’ve wasted time (and money!) on the whole project.
Next, you need to determine your closing rate. Chances are that not everyone who contacts you will immediately buy. Some will need more information. Depending on your product, your industry and your selling skills, this might range from 70% all the way down to the single digits. Look at past interactions to determine what a reasonable average closing rate is.
Finally, determine how many sales you want to make and how much profit (not cost, profit) each new customer brings in. Be realistic—sure, you want to double your customer base, but is that really realistic? Could you handle it even if it was?
How do we put all these numbers together? First, determine how many prospects you need to make the sales you want. Do this by taking your number of desired customers divided by your closing rate. For instance, if you want 100 new customers and typically close 50% of sales. You’ll need 200 customers to make the sales you want. Simple, right? Next, multiply your desired number of customers by your average profit to make sure you can break even.
Still with me? Let’s break that down with a real example. Let’s say, hypothetically, it costs $10,000 to send one direct mailing. You typically close about 50% of sales. Each new customer brings in $500. You’ll need to make 20 sales to just break even, which means you need at least 40 prospects. So a reasonable goal might be 60 prospects so there’s money left over.
Still need help figuring out how to make smart direct mail goals? Contact Premier Advantage Marketing, a direct marketing agency. We can help you make sense of it all—and most importantly, make money.
The world is unpredictable. Every day we find new surprises no one could have seen coming. But when it comes to marketing your business, you can make some educated guesses. For instance, if you’re an insurance agent living in Florida, you can bet that at some point in the near future, there’s going to be a hurricane. If you’re a mortgage broker, you can look at housing trends and predict when more people are going to buy. Maybe you don’t think that’s going to be for months to come, but a little preparation now can save you in the long run.
You’ve sent out a direct mail campaign you think is brilliant. Only trouble is, you’ve got to prove it. How can you demonstrate ROI and show your bosses that the investment was worth the time? Here are a few simple ways to tell just how effective your campaign was:
By now, you’ve probably heard that the US Postal Service will stop Saturday mail delivery in August, 2013. How will this affect your direct mail marketing efforts? Less than you’d think.
First, we want to allay any fears that the move has something to do with the death of mail. Mail service is still alive and well, and will be for the foreseeable future. The shift away from Saturday service is an attempt to control costs at an agency that’s losing money largely in part to internal decisions relating to health care and pensions, not the volume of mail being sent. Also, it’s worth noting that packages will still be delivered on Saturdays, giving you a chance to stand out from the crowd with dimensional mailers or other special items for your best customers or biggest prospects.
Sometimes, even the best-laid direct mail marketing campaigns can fall flat. But wait—were they really that well-laid? If your direct mail efforts haven’t been getting the returns you want, here’s how to start figuring out where it went wrong:
- Wrong list. Your direct mail success starts and ends with the strength of your mailing list. Without a good mailing list, the most brilliant campaign in the world is doomed to failure. Maybe you purchased a list that hadn’t been properly cleaned and wasted time sending to people not at that address. Maybe you simply targeted the wrong group of people or cast too wide or too narrow a net. Whatever happened, you didn’t get your message in the hands of the right people.
- Right list, wrong message. On the other hand, maybe you mailed to a carefully chosen list of demographically and psychographically attractive prospects and scrubbed that list with the greatest care and you’re still hearing crickets. In that case, you need to consider that you sent the wrong message to the right people. When you were selecting those likely prospects, did you stop and consider what really matters to them? Did you focus on stability and security for Baby Boomers? Did you not give enough information about your new insurance program? There was some disconnect in your messaging between the people you wanted to reach and the way you reached them. Back to the drawing board.
- Wrong time. Maybe your message was exactly right and delivered to precisely the right people—at just the wrong moment. Maybe you were pitching mortgages just after the 2008 housing meltdown or maybe you were trying to sell snow shovels in July. You miscalculated the timing, either because of the calendar or because of external events, and as a result, your mailing was ignored.
- No call to action. Maybe the message was all right, delivered to your exquisitely clean list at the perfect moment. People looked at your letter or postcard with rhapsodic joy…and put it aside because it didn’t tell them what to do next. You didn’t give them a clue about what they were supposed to buy, who they were supposed to call or why they were supposed to care. It doesn’t matter how right the rest of the pieces of your campaign are if no one understands how they’re supposed to respond.
The good thing about all these problems is that they’re solvable. All it takes is a slight adjustment of strategy, a little change in the way you approach direct mail marketing, and you’re back in business. Need help finding out what went wrong with your marketing? Contact Premier Advantage Marketing, a direct marketing agency. We’ll help you untangle it all and make sure every part of your marketing is working together in perfect accord.
Usually with direct mail marketing, people attribute all success to list strength and the design of the piece. Both of those are critically important, don’t get us wrong. But the best list in the world with the most glorious design wouldn’t amount to a hill of beans without great words sealing the deal.
It’s about the copywriting.
Once at a networking event, I was handed a business card. Well, a business scrap. It was a person’s contact information on a sheet of regular printer paper and cut into a card shape. The second I tried to put it into my card case, it crumpled like, well, a sheet of printer paper.
Some people will say that “card” was better than nothing, but I disagree. Sometimes, a sloppy showing is worse than no showing at all. It was true for that particular networker, and it’s true of your direct mail.
We go to a lot of trade shows. In the past few months, we’ve been at trade shows for mortgage brokers, bankers, credit unions, financial professionals and much more. These gatherings are powerful opportunities to meet face-to-face with your customers and potential customers and find out what’s really on their minds. But when used in conjunction with a direct mail marketing campaign, they can also be a huge selling tool.
Some people will tell you that great marketing starts with an idea, some tiny creative germ of a message that’s going to help you sell your product.
Those people are wrong.
Great marketing starts with a goal. An objective. An idea of what you want your marketing piece to do. Without that clear outcome in your sights, the best idea in the world isn’t going to help you sell anything. Great creative work starts with a clear understanding of your audience, your goals, and your outcomes. Only then can you start adding pretty words and shiny pictures.