A Direct Hit
Georganne Fiumara rented her first post-office box on a rainy day 14 years ago, and has received more than 250,000 letters since then. In 1983, Fiumara created Mothers' Home Business Network, a national networking organization for work-at-home mothers. She believes direct mail is a tried and true marketing method, enhanced by technological advances that allow you to build your business quicker and more extensively than ever before.
In his book, Mail Order Selling (John Wiley & Sons, $19.95, 800-225-5945), Irving Burstiner, Ph.D, a marketing and business management professor at Baruch College in New York City, cites the advantages of using direct mail to promote your homebased business. They are:
- Selectivity--the ability to send your advertising only to people and organizations who can use and pay for your product or service.
- Flexibility--the freedom to use either the simplest or the most elaborate presentation, ranging from a single-sheet mailer to an entire package, and the flexibility to test all sorts of minor changes in your mailing pieces.
- Control--unlike the random placement of a newspaper ad, your mailer stands alone, and you have room to tell the entire story with illustrations, testimonials and guarantees.
- Knowledge of results--by coding every mailing, you can identify the source of each order as it arrives.
The one drawback all experts cite, however, is cost, particularly in light of rising postal rates. The following suggestions will help you capitalize on the advantages and offset the costs of using direct mail to build your own homebased business.
Create a Strong Package
Analyze direct mail from other companies. Get on as many mailing lists as possible, then save your direct mail for one or two months. Compare the various elements--the type faces, ink colors, the types and colors of paper. "There's a reason for every piece of paper in the mailing," Fiumara says. "Watch for the same words that appear in many of the mailings. As your collection increases, you'll begin to see that each company mails its own version of the same package. Pay particular attention to the mail sent by the most prolific and successful companies, for they will include the best and most proven elements in their packages."
The average family receives at least 10 direct mailings a week. "Your envelope and its contents have seconds to make an effective first impression," Fiumara says. The look and feel of each insert must attract attention from the moment it's taken from the mailbox.
Pay attention to the following elements:
1.The outside envelope. Most direct-mail experts advise you to place "teaser" copy on your envelope to encourage prospects to open it. "Envelope copy such as `Look inside to learn how to save money at the supermarket' can be effective sometimes," Fiumara explains. "But consider that if you put such copy on the outside of the envelope, you save the recipient the trouble of opening the letter."
2. The letter. There are four main ingredients in every successful direct-mail letter. The letter must attract attention, clearly explain plain the benefits to your potential customer, address any possible objections and call the reader to action. Long letters usually work better than short letters, Fiumara says, especially on high-ticket items.
3. The brochure. Your brochure should be an extension of your letter. It's a place to tell your product's story with pictures and details. Some people will look at the pictures first, then decide if they should read the rest of your package.
4. A response form. Your package should have a separate response form and a reply envelope. The form should be easy to use and easy to fill out. Be sure to include your telephone number in case the prospect wants to ask a question or place an order by phone.
5. A reply envelope. Many businesses enclose postpaid envelopes for future orders. "Even if you don't supply postage, the addressed reply envelope is an essential component of your direct-mail package," Fiumara says. "If a potential customer has to look for an envelope, they may put it down and have second thoughts."
Define Your Market
What is the importance of choosing a target market? Wouldn't it be easier to choose potential customers from the phone book? You'll waste time and money by simply mass marketing with direct mail, according to Dan Harrison, managing editor of DM News, a national direct-marketing newspaper in New York City. "Businesses have determined that targeting a specific group of people who are most likely to buy your product or service keeps costs down and profits up," Harrison says. He cites the simple example of a company that manufactures golf clubs. "You would want to reach golfers, and specifically those golfers who had not purchased your product before. One way to do that would be to rent or buy subscription lists to golf magazines."
The best list to use when your product isn't a one-time purchase is your own list--often called a "house list"--that includes the names of customers who have inquired about your product, as well as those who have already purchased your product. "These customers know you, your product and your company," says William Bond, author of Homebased Mail Order (McGraw Hill, $14.95, 800-262-4729). "Build your business by keeping your house list up to date, and continue to use it by regularly mailing offers to those customers."
Bond says a house list can generate the strongest response. An added benefit: You can rent your house list to others for additional profits.
A mail-response list is one you rent from another company--possibly within your industry--for a set price, such as $75 per thousand names. Why would you rent names from a competitior? "Say you are starting a construction magazine--these people have qualified themselves by purchasing other construction publications, or another product similar to yours, in the past six months," Bond says.
You may want to consider using a list broker, a specialist whose services may include research, selection and recommendations. Some list brokers specialize in specific types of lists, such as business or international lists. One resource for locating list specialists is the bimonthly directory, Standard Rate and Data Service (SRDS) Direct Marketing List Source (SRDS, $384 per year, 800-851-SRDS). This directory is available in many public libraries.
Hundreds of variables are connected with any mailing--millions if you consider that each person receiving the message can be regarded as a variable, according to Nicholas Diehl of the Direct Marketing Association (DMA) in New York City, a national direct-marketing trade organization. Response rates can vary widely depending on a number of factors: the medium (the actual direct-mail piece), the product (life insurance vs. crystal vases), the offer (free trial vs. discount coupon), the price ($500 vs. $9,950) and the mailing list (established customers vs. new prospects). "Normal response can vary from .1 percent to 50 percent or more when very targeted, relevant mailings are sent to longstanding customers," Diehl says. "The important thing to remember is the promotion cost and what it represents out of the funds available."
For More Information
There are three ways to learn more about direct-mail promotion--through research, educational seminars and professional consultants. A number of books have been published on the direct-marketing industry and are available from public and business libraries.
The Direct Marketing Association (DMA) is a national trade organization for direct marketers. Membership fees are decided on a sliding scale, beginning at $770 per year. The DMA houses a library of more than 700 books and directories on direct marketing and related topics, and more than 2,500 portfolios of award-winning direct-marketing packages that include the campaigns' purposes, marketing strategies, target audiences, media used and response rates. It also maintains a database of 1,600 DMA members who provide direct-marketing services in such categories as direct-response advertising agencies, telephone-marketing service bureaus, direct-marketing research firms and list services.
For a catalog that highlights many of the direct-marketing industry's books, a free brochure that lists a variety of direct-marketing institutes and seminars across the country or to find out more about joining, call the DMA at (212) 768-7277.
DM News, 100 Ave. of the Americas, New York, NY 10013, (212) 925-7300
Direct Marketing Association, 1120 Ave. of the Americas, 13th Fl., New York, NY 10036, (212) 768-7277
Mothers' Home Business Network, P.O. Box 423, East Meadow, NY 11554, (516) 997-7394