Making Direct Mail Work for You, Part 2
During part one, I recommended the best lists come from your leads or prospects.
What Determines Response?
Your response from any mailing you do on behalf of your business will be directly affected by the following:
1. The list. If you mail to the wrong target audience, then you can’t expect many responses, if any.
2. Your direct mail piece is opened. The biggest direct mail hurdle is your piece being placed in the A pile, or the mail considered important enough to be opened. You can help to make sure your piece is opened with a copy on the envelope (i.e., teaser copy, headlines, testimonials, etc.) to make it more innovative and interesting.
3. The headline. If the headline and first sentence of your letter or piece fail to motivate recipients to continue to read, then the letter is a waste of time.
4. The offer. The offer must be both compelling and time-sensitive using an expiration date, limited time only and any other perceived urgency to respond. That way, they rush to get the deal as it’s only on for a little while.
Thinking about Response
A successful direct-mail campaign is all about “ROI” (Return on Investment), not Percentage Response Rate. Instead of being concerned about the percentage of responses you are likely to receive or a low-percentage return, focus on your return on investment.
For example, if your average customer value is $2,000 (i.e., how much the average customer will spend at your business during his or her time there). If you decide to place a Val-Pak ad which costs $320, then your ROI is 600% if just one client signs up.
That’s a much different way of looking at the value of advertising: 10,000 direct mail pieces may only generate two calls and one client signing up (i.e., a 0.12% response) but your ROI is 600%.
Almost all business owners don’t understand the main two distinctions about the use of direct mail.
1. The best way to increase your gross revenue and net income is to learn and implement the methods which result in higher average client value. You must determine how to ask for larger down payments, higher monthly payments, more expensive upgrades — and, of course, client retention.
2. How much you can feel good about spending advertising dollars is in direct proportion to your average customer value. Increasing customer value increases your options to fill your business.
There are many excellent books on this subject. I recommend Dan Kennedy,Ted Nicholas, Joe Sugarman, Gary Halbert, and John Carlton, and of course mine!