Direct mail marketing is widely used by businesses in nearly every industry, from grocery store weekly sale circulars to real estate agency postcards promoting the latest property listings. This offline marketing channel is still leveraged so often because it is cost-effective with a typically consistent rate of return. According to the Data and Marketing Association, direct mail has an average return of one-half to two percent. In other words, for every 100 pieces you mail, two to four people will likely respond and half that number will make a purchase. This is a high rate of return for a marketing channel when you compare it to television, radio, or even digital advertising. Yet with strategic planning, you can often reduce marketing spend on direct mail while simultaneously driving up response rates. The key to amplifying the value of any direct mail campaign can be found in the mailing list.
Defining Your Recipients
When a business decides to launch a direct mail campaign, one of the first considerations should be the recipients. Who would be interested in this piece? There is no one right answer to this question. If you’re running a local pizzeria, the answer would likely be residents who live within driving distance of your restaurant. However, the answer may be completely different if you’re a real estate agent who specializes in vacation homes or a business that sells a specialized product within a specific industry.
The broadest consideration is whether you are selling to businesses or consumers. In the case of business lists, they are compiled based on their SIC (Standard Industrial Classification) codes issued by the U.S. government. These can then be narrowed down by “number of employees” and “gross revenue.” Thus, if you are selling a specific tool used by large air conditioning manufacturing companies, you could narrow down your list of recipients to those listed with the SIC code for air conditioning and warm air heating equipment and commercial and industrial refrigeration equipment manufacturing. From there, you could refine it more by narrowing down the list to only companies that make over $100 million per year.
With consumer lists, the process of creating a targeted mailing list is far more complex. You will likely have to “model” data, which means assuming that certain individuals are part of one group because they are part of another. Let’s say that you want to reach affluent homeowners. There is no list that provides specific details of income level. However, you can narrow down the list to zip codes that have a large number of high-value homes. It’s likely that your target audience is residing in these homes.
If you’re not 100 percent certain of who you should be targeting, take time to carefully analyze your existing customer list. This will provide you with a wealth of demographic information. You will see patterns in who is buying from you. If it’s men ages 40-60, who are homeowners, you can begin to refine your criterion for a paid mailing list to target this profile.
It’s also likely you’ll have multiple types of individuals who are likely to be interested in your products or services. In these cases, you may want to consider creating unique, targeted campaigns for each defined group. Because you will have a smaller run for each direct mail piece which translates into a higher per piece cost, the response rate will be higher because you’ve refined your messaging for the recipients. And with each mailing, you can then track results to determine what works and what doesn’t.
Refining Your Message
With a targeted list, you have an opportunity to develop direct mail pieces that resonate specifically with your audience. This begins with the type of piece you choose. Carefully consider whether a postcard mailer is sufficient or if you would generate greater response with a tri-fold brochure, catalog or letter. Once that’s been established, you can focus on the content. The words and images you use can speak volumes to your potential customers. The real estate agent who promotes a new listing via direct mail has the chance to take potential buyers on a tour of the house through the use of engaging photography and words. Likewise, the pizzeria that has a tantalizing image of a large combo with a valuable coupon can propel recipients to call in their delivery order for dinner.
To create the piece that will turn recipients into customers, it’s wise to enlist some marketing help either in the form of an agency or contractor or by choosing a service provider that offers high-quality templates that you can modify to reflect your brand image. A poor quality direct mail piece will have little success even if your mailing list is high quality and targeted.
You will also want to put careful consideration into your call to action. What do you want the recipient to do once they receive the piece? This will depend on the value of the product or service you’re selling and the complexity of the sales process. In the case of the pizzeria, the call to action is simply to buy a pizza. However, the supplier that is selling parts to a manufacturer may need to use the direct mail piece to build general awareness. This is likely the first step in a long sales cycle that includes calling for more information and proactive engagement from a sales representative.
The Quality of Your List
Along with defining who you want to receive your direct mail piece, it’s also important to carefully consider the overall quality of the names. Not all lists are created equal, and a cheap, poor quality list is no value at all. You will want to ensure that the percentage of deliverability is high. If the provider can’t guarantee at least a 90 percent deliverability rate, you’ll waste money on direct mail pieces that never reach your target recipients. Quality direct mail lists should be regularly updated to remove addresses where mail is undeliverable or the recipient has moved away. Don’t hesitate to ask important questions pertaining to the quality of any list you’re contemplating buying. If the list looks suspiciously inexpensive or if the provider can’t give you details on how they are regularly updating it, move on.
Putting It All Together
Very few businesses use direct mail exclusively to generate new business. In most cases, it’s one component in a larger, broader-based marketing plan that also includes digital marketing, public relations and even signage in the case of brick and mortar retailers. It’s important to carefully consider how direct mail fits into your overall plan.
Digital campaigns can be used to collect names and addresses that can be added to targeted lists. Direct mail pieces can include details about your online presence. There is more crossover than ever before between offline and online marketing, and those that have the versatility to market via digital and print methods will find their direct mail campaigns to be the most successful.
Direct Mail Isn’t a One-Time Effort
The most successful marketers will tell you that you have to build brand exposure over time. A single direct mail piece may generate some response, but the rate will increase with each additional mailing. Drip direct mail campaigns that drive a message over an extended period of time can be particularly successful. These can take a recipient through the entire sales cycle.
By thinking of direct mail as a process and not a singular project, you can also hone in on messaging based on results. As you better understand your audience, you can improve upon your direct mail pieces and refine your targeted list. In other words, a little patience and the ability to change and adapt are needed to be successful at direct mail. With the right approach and a targeted list, direct mail is one of the most cost-effective marketing tools for nearly any business.