Marketing aimed at customer acquisition has leaped to the forefront in 2005 as many companies move away from more generalized branding efforts toward programs that yield measurable ROI. Measurement and account-ability are today's watchwords, and a conspicuous increase in spending on direct-mail programs is the result.
Direct mail produces a relatively fast and measurable return, and it's a great prospecting tool. Here's a look at the best ways to use direct mail to win new customers.
1. Plan for large mailings. There's a big difference between a sales letter and direct mail, which is generally sent to lists of at least 5,000 at a time. Your lists must be large, since even good response rates may fall between 2 percent and 4 percent. There's another difference, too. Direct-mail campaigns are built around a single goal--an action your prospects must take in order to move farther along in the sales cycle. Not surprisingly, mailings that are designed to produce leads yield higher response rates than those designed to close sales.
2. Choose the best format. In addition to catalogs, there are three basic types of direct mail: postcards, letters and packages (called dimensional mail). When creating your annual campaign, you can choose one type or all three. Postcards, preferably oversized to grab attention, can be an inexpensive way to alert prospects to an upcoming event. Successful direct-mail letters, on the other hand, are complex packages: They generally consist of a teaser envelope--which promises something appealing inside--a one- or two-page cover letter, various inserts expanding on the offer and often a business reply card with a return envelope. And if you want to virtually guarantee your mail gets opened, you can put it in a box. Last year, dimensional mail averaged the highest overall response rate--5.49 percent--of any direct-response medium, according to the Direct Marketing Association.
3. Assemble your campaign. Direct-mail marketing is rarely a do-it-yourself job. The steps include: designing and printing the creative pieces, choosing the lists, and delivering them both to a mailing house for labeling and distribution.
With customer acquisition as your primary goal, direct your team to create pieces that are relevant to the needs of your target audience and contain a strong offer. Studies increasingly show that interesting-looking packaging, as well as mailings that tout a special offer or discount, yield the best results. Also, be sure to provide alternative ways for prospects to respond, including a business reply card, a toll-free number, an e-mail address and a website.
A basic list allows you to pinpoint your ideal prospects according to geography and demographics or Standard Industrial Classification codes and job titles. Decide exactly whom you want to reach, and then obtain rental lists through list managers and trade and business publications or associations. Or engage a qualified list-broker to pinpoint and negotiate for the best lists for your campaign. It's a good idea to mail multiple times to the same list, and you can reduce your costs by negotiating for duplicate mailings at the time your initial list purchase is being compiled.
For best results, engage a mailing house that can personalize each piece with the name of the recipient and apply tracking codes to the response mechanism. And while metered mail is the norm, campaigns that require that extra bit of personal attention will get it if you choose to have stamps applied instead.
4. Test and measure results. Direct-mail success is measured one campaign at a time. It's essential to test various components of the campaign--the lists, your offers and creative approaches--in order to continually improve your response rates. The key is to test just one component at a time and make incremental adjustments until your campaign produces optimal results.