It has often been said that the success of a direct mail campaign can be broken down into three primary components:
1. The mailing list or target audience
2. The offer or incentive for the customer to buy the product
3. The creative package or communication message conveyed in the overall package
Experts in the field of direct mail have gone further to say that 40% of a campaign's effectiveness is driven by the mailing list, 40% by the offer, and 20% from the creative package.
While this might be true from a big picture point of view, the following is a brief overview of 11 key strategic factors to consider when initiating a direct mail campaign.
Items 1-5 discuss campaign basics, items 6-8 introduce areas that focus on capturing information from your campaign, and items 9-11 look at goal setting, tracking and analysis.
Knowing the customer or decision maker for your product/service is instrumental in developing a successful direct mail campaign. For a simple example, if you are a developer of Hawaiian time share condominiums, it would probably be better to avoid soliciting people that already live in Hawaii.
Whether your mailing list is created based on demographics such as "gender" or "zip code," or behavioral attributes such as "likes to play golf," it is critical to understand your intended buyer/customer and select a mailing list within an appropriate and useful target audience.
Every direct communication should include an offer or incentive for the customer to buy your product/service. It might be a premium such as a toaster, or a discounted price. It also could be something intangible such
as saving time. Either way, the more intrinsically valuable your offer is, the more likely that your audience will respond in a positive manner.
A general rule of thumb is that money tends to produce the best results. A word of caution - a lucrative offer such as 50% off might generate a wonderful response rate; however, it also can be an expensive proposition. So, be careful that you do not give away too much.
3. Creative Package -- Message & Copy
What is your product? What are its benefits? Why does your audience need it? Where does the reader sign up, and by when? These are examples of the critical messages that need to be clear, concise, and even repeated several times in your communications. If your readers are confused, they will not buy.
When developing copy, assume your reader has a short attention span. It is best to use short sentences, bullet points and headlines that can be read quickly. Finally, while grammar is important, your English teacher is not grading your letter. Feel free to take creative license.
4. Creative Package -- Format & Graphics
Using different type styles such as bold, underline and ALL CAPITAL letters can be used to draw your reader's eye to key messages. Headlines and/or changes in font sizes can do the same thing. However, be judicious in your use of these techniques, as over use will lessen the impact.
Consider highlighting your offer, call to action, and response date, while using headlines as an opportunity to state benefit messages throughout your communication piece.
5. Call to Action
The bottom line with any direct mail piece is to get your reader to take action. Do you want your prospect to fill out an application or do you want them to call for more information? Either way, it is important that you are very clear as to the action you want them to take and by when. Do not be shy about repeating it.
Generally speaking, a single-page direct mail letter might have the call to action listed three times: in the middle of the letter, in the last paragraph, and in the post script.
6. Outer Envelope
Consumers tend to be cynical with regard to direct marketing. It is often viewed as "junk mail" and something they do not need. Therefore, it is critical that the outer envelope give your reader a compelling reason to open the envelope and read the entire message.
If the outer envelope cannot convey importance, the mail will undoubtedly be thrown away - unopened. Compelling reasons to get a reader "inside the envelope" can include an offer and/or benefit message. On the other hand, if you are mailing to active / current customers, your logo may be enough to get to open the envelope.
7. Testing Multiple Variables
A benefit of direct mail is the ability to obtain and measure responses. However, it can be hard to know exactly which element(s) drove the positive response. Maybe your audience wanted your free airline ticket offer. Perhaps your green letterhead caused them to respond. Or, maybe your product is exactly what they needed.
As a result, consider creating "test cells" by mixing key variables of your campaign. For example, divide your mailing list into four parts and send:
Offer A with Copy X to 25%
Offer B with Copy X to 25%
Offer A with Copy Z to 25%
Offer B with Copy Z to 25%
See section 9 regarding tracking and measuring.
8. Multi-Wave Mailings
Another testing opportunity is mailing a 2nd and possibly even 3rd letter to the same person approximately 1-4 weeks apart. A general rule of advertising is that people do not really see and/or internally comprehend a marketing message the first time around. Using this rule of thumb, it might take your target market 2-3 "viewings" to open, comprehend and internalize your message enough to buy your product/service.
Subscription mailings and grand opening announcements lend themselves to multi-wave mailings. However, a promotion for a 2-day sale probably does not warrant using this approach.
9. Creating Tracking Measures
Establishing accurate measurement tools such as promotion codes and/or coupons cannot be overlooked when designing your direct mail campaign. Without them, you cannot truly determine if , and to what extent, your efforts were successful.
For example, if you are selling newsletter subscriptions, ask your customer to mention the coupon or read a promotion code when they sign up. Keep track each time a customer mentions or reads the code so that you can be sure they were responding to your letter, versus signing up on their own. (This information will become critical when measuring the programs financial success - Section 11.)
When testing multiple variables (as described in Section 7), use a separate promotion code for each test cell.
10. Setting a Budget
When setting a budget, consider the following types of expenses you will typically incur: Mailing list (this could be free if you are using your own customer file), paper, printing, postage, cost of the offer, lettershop expenses such as merge/purge and mail sort, and any advertising agency or graphic artist fees.
Also, be sure to understand the difference between your "fixed costs" (i.e. postage) and "variable costs" (i.e. printing). This is will help you make better decisions about running another direct mail campaign in the future.
11. Measuring Financial Success
The financial success for a campaign can be measured in many ways. Cost per new accounts (CPA) and return on investment (ROI) are two examples. To calculate a CPA, take your total program expenses and divide by the number of new accounts acquired. A simple ROI equation takes the total program expense minus the additional money generated as a direct result of the campaign.
Before you get too far down the planning process, you might want to make some response rate and budget assumptions for your campaign. Take a look at the CPA and/or ROI and ask yourself, "Will these customers spend enough money (either now or in the near-term) to justify the campaign's expense?" If the answer is "yes", move forward with the campaign using the campaign goals you set forth.
In conclusion, direct mail can be a very important element of your marketing mix. When used correctly it allows for high target market selectivity, personalization, testing, and most importantly, it enables you to measure results. So, take the time to consider the details of a successful campaign -- you will be glad you did.