Direct Mail

How You Can Get Started With Direct Mail Campaigns

Many businesses want to harness the incredible power of direct mail promotion, but are confused about how to begin. After all, direct mail is used profitably by practically every kind of business, from the smallest retailers to the biggest mail order firms. Making big money through direct mail happens all the time, but it also requires more planning and care than most other forms of promotion.

The most important key to successful mailing, is knowing when and how to start. Every company has a different market and objective; different ideas about who their customers are, how their mailings should look and what they will say. Although these things can only be decided by the companies themselves (so unique are their needs and goals), some things remain constant in virtually all direct mail situations.

The law of direct mail is this: it works by the numbers and by the rules. If you follow the rules you will be successful, if you don't, you won't. That's the promise and the punishment.

Because no other kind of advertising can be so precisely predicted and controlled, direct mail, sooner or later, is probably in your business's future. It's also for this reason that guessing or depending on others' opinions of how to sell your product (and to whom) is so potentially dangerous.

If you're nervous about wasting money in mailings that bring in no return, you're not a coward - you're smart. If you think that with a little help, thought and a carefully considered plan, you could get the hang of this direct mail thing and make some serious money... you're smart again. As any journey must, this one, too, begins with the first step.

When should you be using direct mail for your business? If you need fast money, have only a vague idea of who would want your product or service, or are still in the throws of trying to find out who your customers really are, direct mail is not for you -- not yet. Direct marketers call this "a fishing expedition". By the way, this couldn't be more accurate. Go fishing without knowing what kind of fish you're after, what kind of bait you will need, or where they can be found and you won't get many. Mail the same way and you won't get many responses. It's that simple.

When properly utilized, no other medium gets your customer's attention as well and holds it as long as direct mail; but you must know who your customer actually is. You must know this in no uncertain terms. Guessing or theorizing is expensive, frustrating and, won't work.

If you do not already have a database, you will soon. It's the basis for everything that you will be doing from now on. Whether you already have a list on your business computer or are planning to create one, you will be following the time-tested techniques of direct marketing. While not all databases are mailing lists, all mailing lists are essentially databases. A mailing list effectively becomes a database the moment that you begin to keep information about the people to whom you mail as well as their addresses.

In any mailing, the list - your list - is the most important component. You will hear this from experts over, and over, and over again. It's the most flexible and powerful part of your mailing effort. It will not only help you reach new customers and markets, but it will also keep track of them for you. After your list is groomed and developed, it will remember, remind and reveal to you marvelous hidden things about your customers as well as point out ways to develop more of them based on a "customer profile" or model.

Getting started

Begin by obtaining this information directly from the customers themselves. If this data is to be used in maximizing future mailings, make sure that it is the kind of information which list compilers and brokers typically include in their databases. This way, when it's time to rent or purchase new lists, you can speak a language the industry understands. If you want to enable professionals to help you, learn how they work, speak and operate.

Good information to track: age, income, gender, marital status, children, own home or rent, original source of customer, interests (defined by inquiries, past purchases; amounts, frequency of purchases, magazine subscriptions, etc.). Some information appears to be valuable, but in mailing list terms isn't. Vague categories such as: group designations ("Movers & Shakers"), stereotypes ("people with environmental concerns" or "New Age people") or generalities ("people who want to make money") are useless due to an inherently high level of inaccuracy.

If you are just starting out, you can use a more conventional means of advertising (display or classified ads for example) until you have enough buyers to determine this information - as it directly pertains to your business.

Start by mailing to your customers. Keep in touch; remind them who you are and what you have to offer. Mailings to those who have already done business with you statistically draw a response eight times greater than mailings to new names. Show your customers that you are interested in them by asking questions (the answers to which will be the data foundation for your customer profile). Professionals constantly create ways to increase their mailing lists by referral. A free gift to customers in exchange for the names of two friends who would be interested in what you offer is a typical and well-proved way of doing this.

Some businesses don't advertise their product or service directly but offer free information instead (especially if the ad is expensive or the mailing list is rented). In this way, you not only collect the names of people interested in your business, but also names of people who were motivated enough to respond to your offer.

By beginning in this way, you will be able to mail with confidence that you are getting your message to the right people: people who want to hear it.

Growing your list

Although you may have already started a mailing list of your own, there will soon come a time when you'll need to rent or purchase a list. Whether for testing a new market, or perhaps enlarging your in-house list, this new material should be the best you can get for your investment.

Renting (or buying) a list simply from a title or designation of those contained within can be risky if you don't know the right questions to ask. In the mailing world there are many people who contribute to the creation of a mailing database.

Who's who?

First are the compilers. Compilers take raw sources of names and addresses, type or scan them into the computer, then add market codes and USPS postal encode the records to yield the most accurate data possible. Phone books, directories, public records and other sources from which thousands of lists become available are all grist for compilers’ list mills. In addition to renting and selling these names directly to mailers, they also sell them to list brokers who in turn rent or resell them to mailers.

List brokers are the next vital step in the list and mailing process: they are in touch with many different mailers and lists. They know which lists have provided exceptional results; and those that haven't. These people converse with mailers, managers and other brokers, continually exchanging information. They know how to negotiate the industry maze better than anyone does and do so more effectively because of their contacts network.

Brokers consult with a mailer in order to understand his market, offer and target audience. They will then search out and recommend lists for a successful effort. In order to make sure that you are getting the best value, there are several questions that are important to ask them about lists that you intend to use.

What to ask

1. What was the source of the list?
It's vital to find out right away from where the list you will be using was obtained and by what criteria it was chosen. For instance, if it's a list of known mail order buyers, what did they buy; what was the amount of their average purchase; was the offer presented in a similar way to yours; etc.

6. Are phone numbers available for follow up?
Find out at the beginning. You may want to do a little telemarketing as well.

7. Is any usage information available?
Who else has used this list and what kind of success have they had with it? Try to get at least two references to call, and then call them; this is very important... Be sure that this is the company and the list for you.

8. Can an Nth sampling be pulled to give a representative test list?
Nth samplings are used when the number of qualifying records far exceeds the number required for a specific mailing or if a new list is being tested for response. "Nth" simply means every nth record is extracted from the master list. For example, if you wanted 5,000 records from a list of 50,000, the list company would pull every 10th record out to create your test list. This method of extraction insures that you are getting a truly representative sample of the larger list. If you do well on the test mailing, statistically you will do as well on subsequent mailings from that same list.

9. Can the initial sampling be eliminated from subsequent mailings?
If you are successful with your mailing to an Nth sampling, can the broker pull more records from the master list without giving you any repeats of the names used in the initial test mailing?

10. Is there a refund policy on nixies?
What is it? Most list companies have a basic rate of deliverability, guaranteeing that a certain percent will be delivered to their intended recipients (93% is usual). If more than 7% of your mail is returned, what, if any, is their refund policy? The standard amount, in this case, would be refunded postage on any nixies (a colorful term for undeliverable mail that has been returned) exceeding the specified 7%.

11. Will the names be output in zip code sequence? Zip+4 sequence? Carrier Route sequence?
Better yet, Presort sequence - with postage reports? If you can, get the records output in the most economical way - where postage is concerned. Find out if the records have been recently encoded with USPS postal codes and if the broker can determine and/or output these labels in the best (for you) presort order.

12. Are diskettes available (if needed) for PC systems?
Are 9 Track Tapes available? If you are going to either personalize your mailing piece or purchase this list for unlimited use, find out if the list company can output the records to magnetic media such as 9 track tape or PC diskettes. In all cases verify that a record layout will be included with your purchase. This layout will give: the number, sequence, and allowed length of the fields contained in your new list. This will save, in turn, hours of guesswork and lots of money.

Most list companies are highly reputable and sincerely want you to be very successful using their lists. They know that if you are you'll become a loyal customer. Any reputable list company will be more than happy to answer the above questions and will, in fact, respect you for asking.

The ways in which you can use your list are limited only by your imagination. First as a tool to stay in touch with your existing customers, then as a tool to increase marketing information and finally as a source of income all in itself, you mailing list is your most important business information asset. And, as with any worthwhile journey, any quest for success, it all starts with the first step.