Why do brand marketers still use direct mail when digital marketing is cheaper? Because it works!
A study by the Direct Marketing Association found that direct mail to prospective customers elicits response rates of 1.44% for oversized mail, 1.28% for letter-sized direct mail, 1.12% for postcards, and .94% for catalogs.
Direct mail campaigns to existing customers showed response rates of 3.95% for oversized mail, 3.40% for letter-sized, 2.47% for postcards, and 4.26% for catalogues. You see the path to success – capture new customers and then continue to nurture those relationships, increasing engagement and ultimately sales.
Brands can capitalize on this local marketing tactic by planning new customer acquisition programs designed to achieve specific goals. Building a well-rounded direct mail marketing campaign consists of four easy steps: (1) develop a customer profile, (2) buy a list that best fits the profile (3) design the offer, and (4) track the effectiveness of the mailing.
- Develop Your Customer Profile
The first rule of marketing is to define and understand your audience members. Once you can identify what they are interested in and align that with your own goals, the messaging practically writes itself.
Characteristics to define a customer profile for an individual:
- Demographic, for example age, gender, income, single or married, children
- Lifestyle, such as active athlete, hobbyist, green enthusiast, etc.
- Purchase preferences, online, mail order
- Life events, just moved, recent home buyer, retiree
- Geographic, customers in proximity to channel partners with the correct traits
Characteristics to define a profile for business customers:
- Business Class, based on the North American Industry Classification System (NAICS) standard
- Business Bio, annual sales, number of locations, growth in industry, etc.
- Geographic, business customers with the correct traits in proximity to channel partners
Creating this customer profile is the starting point for implementing the copywriting and creative process, plus it should be reviewed periodically to accommodate for changes or evolution in the marketplace.
- Choose Your List
Now that you have defined your customer profile, you have to select a list of individuals or businesses that fit that criteria.
Three main types of purchased lists are compiled, response, and house and are available from a third party.
- A compiled list is put together from publicly available sources like the census, telephone listings, voter registrations, and proprietary sources like surveys. Compiled lists are segmented into groups like “new home buyers.”
- A response list is gathered from people that have previously responded to an offering of some kind; third party companies generate response lists of names, address, and other customer data from inquiries, opt-in subscriptions, purchases or surveys.
- A house list is an “in-house” list developed by a company or often a publication where the entity essentially sells access to the list.
There are lists for purchase available to suit even narrow customer profiles. For example, if you are a solar panel manufacturer selling through channel partners that install them in the field, you can buy a list of green conscious consumers that are homeowners, with medium to upper income, within 25 miles of your channel partners’ locations.
- Design Your Mailing
Now that you have identified the traits of your best customers and purchased list data of prospective customers with those same traits, the most important thing is to craft a relevant offer. Here’s how you can make sure to resonate with your audience:
- Identify a pain point, and briefly describe why your local channel partners have the best solution to that pain point
- Conduct focus groups to test and understand common rejections to the offer; answers to those rejections should be written into the message content
- Test your headline, even if the focus group is just in your office
- Provide multi-tiered offers in terms of pricing and commitment; think gold, silver, and bronze
- Include buzz phrases like “Free Consultation,” or “Free 30-day Trial”
Tips on General Design and Execution:
- Personalize the design and copy if you can tap into list data like names and dates. Direct Mail pieces that are specific to the recipient elicit higher response rates. “In all cases, personalized campaigns do better than static ones,” according to the Caslon Response Rate Report. Depending on the customization elements and nature of the campaign, response rates can be 3x greater, creating a much lower cost per lead.
- Use hand written addressing to get more people to open direct mail letters or view postcards longer.
- Have an attractive visual layout and graphics that match the nature of the product or service; advertising a health club is different than promoting wealth management services
- Track Your Mailing’s Performance
Brands that send direct mail on behalf of channel partners must track response rates and conversions to iterate and improve. To measure direct mail you need to put in place:
- Dedicated landing pages direct mail recipients can go to find out more information and complete the action of purchase, booking, etc.
- Call-tracking or a dedicated phone number to record inbound call volume and peg volume to closed sales
- Coupon codes that customer can redeem at channel partner locations to capture redemption
Very Important: To comprehensively understand redemption, data should flow back to the same marketing resource management (MRM) platform that houses the lists, asset manager and all other operational tools for carrying out direct mail fulfillment. The centralization of direct mail efforts on an MRM platform that is integrated with a company’s CRM is the lynchpin for closing the loop between marketing and analytics.
Companies have built entire business models on the effectiveness of direct mail; it is not to be overlooked. That being said, brand managers must appreciate that direct mail campaign design is a delicate process that builds on each previous step. Get it right and developing new customers and monetizing existing customers can be done easily.
About the Author
Gary Ritkes, President of SproutLoud, oversees all Business Development and Marketing for the company. Gary, a pioneer in the emerging vertical of Distributed Marketing Technology, is an industry leader and innovator with 20+ years experience in graphic communications and marketing strategy. Gary has been involved with SproutLoud since the inception of the company. Prior to joining SproutLoud, Gary was VP of Marketing for Rex Three, Inc., SproutLoud’s first and largest vendor among its network of providers. He has served many Fortune 1000 clients and worldwide advertising agencies in providing marketing technology direction and optimization. He was an original founder of U.S. based Earth Color Group and co-founder of Advanced Digital Services (ADS), which was sold in 1996 to publicly traded Katz Digital Technologies. He has served as a board member of the local chapter of the American Advertising Federation chapter and other national industry associations, including the DMA and AGA.More Content by Gary Ritkes