You can start your search for a list broker by looking in your
local Yellow Pages. Check out their references carefully before
getting involved. You're using your customers as templates for
additional prospects. Depending on your product line, you might
focus on ZIP codes, on subscribers to a particular magazine,
sometimes on income or on the number of kids.
List brokers have access to many thousands of lists. You'll
pay up to $300 per thousand names on a list, depending on the
complexity of the list (i.e., if you want not only name and address
but other demographic data). Brokers typically have a very thorough
understanding of their lists and can give you insights into the
best list for your use. The more you know about your current
customers, the better use you'll be able to make of your list
broker's experience.
You don't buy lists; you rent them, usually for a
single-time usage. If you want to send a second mailing later to
the same list, that's another charge. If you know you'll be
sending a series of mailings to a given list, mention this upfront
for a cumulative rate.
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You can't simply fold these names into your database of
customers. Not only would it be illegal and wrong, but you'd
also get caught. Every list is "salted" with
"ringers," names that aren't real but simply serve to
give away any mailing done to the list. If the list broker's
ringer gets a mailing from you for which you haven't paid the
usage rights, you're busted. You do your mailing with the
broker's list. Once people respond to your mailing, you're
free to add them to your own database of customers. Your list grows
and grows.
Waging a Direct-Mail Campaign
Once you've outlined your target market, staging a
direct-mail campaign has seven key steps:
1. Develop a mailing list. Put your description of the
targets on this list in writing, so you know exactly to whom
you're mailing. If you're mailing to a larger-sized list
(more than 20,000), you'll probably want to provide your letter
shop with Cheshire labels: Unglued labels that are affixed to your
mailing piece with special glue. These labels require machine
application at the mailing house. For smaller quantities, you might
just provide self-sticking labels. Your list supplier will provide
you the labels in whatever format you want.
2. Create a mailing piece. You don't just mail out a
brochure to your list. That gets too expensive, and your brochures
weren't designed for it. You need to create a direct-mail piece
with a strong offer that will spur the recipient to action. All
direct mail leads to the "call to action": What do you
want the recipient to do next? Mail back the business reply card?
Call the 800 number? Fill out the order form and fax it to your
number?
You can never be too pushy in direct-mail materials. You can
also be clever, cute, whimsical, even overpower, but only in
connection with being pushy. Your goal is to get action. You
don't want a direct-mail piece to inform. That's what your
brochures are for. You want action!
Designers of direct-mail pieces like to get create with
graphics. Your goal is to get the reader to respond to the offer.
Any graphics that don't contribute to that are not worth the
design and printing costs. According to most direct-mail gurus:
- Forty percent of a piece's impact comes from sending it to
the right list in the first place.
- Forty percent comes from the value of the offer.
- Twenty percent comes from the design or writing of the
piece.
3. Code your response vehicle. Whatever way you ask
recipients to respond, make sure you code your mailing. All you
have to do is assign each mailing a batch number, such as 11042103:
1104 is the month/year of the mailing; 21 is the identifier for the
particular list you mailed from; and 03 is the identifier for the
particular offer. Coding provides a simple device for revealing
just who has responded to which mailing and which offer. It makes
individual responses much more valuable, since you can easily
tabulate the different codes to see what's working the best for
you.
4. Test the campaign. Even a modest campaign of the few
thousand pieces can run up the budget with mailing and duplication
costs. So you should always test mail a portion of your mailing
list and check the results. No one can predict the response rate
you'll get; there are just too many variables.
What percentage of your mailing makes for a reliable test? Again
it varies, but most authorities would tell you to test 10 percent
of your list and no fewer than 250 pieces. This will give you
enough of a spread across the variables to make the results worth
something. Before you do your test, you should decide what response
rate will support your going ahead with the planned major mailing.
This will depend on your budget. Writers on direct mail duck the
issue of response rates because there are so many variables-and
because no one really knows how to predict response. Experience
suggests that if your rate is less than 2 percent, something is
wrong. Either your list is wrong, or your offer is too weak. If you
get a response rate above 7 percent for a mass mailing (without
giving away the farm), you've done very, very well.
5. Run the campaign. Keep your mailing pace in line with
your ability to handle the potential responses. Your test mailing
will give you some sense of the rate of customer response. Use that
as a gauge for how many pieces you should mail in a given week.
Mail only those pieces you can support with your sales effort.
6. Handle customer responses. You can't handle the
fulfillment end of a direct-mail campaign without considerable
planning. If you're asking respondents to request additional
information, what are you going to send them? How soon do you want
to mail the information out? What else will you do with the
responses? In other words, how will you make maximum use of the
names you've spent so much time to acquire?
If you're a company with distributors or sales offices,
it's common to pass along the names of prospects so that
follow-up can be handled on the local level. The quicker the
response the better, since your speed in dispatching information
can quite justifiably be viewed as reflective of your commitment to
customer service. Why should respondents have to wait for
materials.
If you're mailing out product or samples, do you want that
handled from your main office? Many mail order campaigns depend on
fulfillment houses, professional organizations that handle the
logistics of sending out materials to large quantities of
customers. You provide the products and the prospects: They'll
take care of the rest.
7. Analyze the results of the campaign. This is perhaps
the most important, and underrated, aspect of the campaign. Did the
final results match what you expected from the test? What parts of
the demographics responded better than expected? Are there subsets
of your target audience that you can focus on in future
mailings?
Every direct-mail campaign you run should contribute not just to
your sales figures but to enhancing your customer database. In very
real terms, it represents the future of your business.
Excerpted from Knock-Out Marketing
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