| This article reviews basic
information about mailing lists, about Direct Mail and
reviews steps to be sure your Direct Mail results are
effective from the very beginning. Direct Mail Marketing
can be effective for companies mailing to consumers
or businesses, for higher or lower-priced products and
for larger or smaller companies.
If you'd like more
information about list selection or direct mail strategies dealing
specifically with consumer versus business-to-business, high or low
priced products or large or small company applications, contact
Direct Marketing Resources Group. We're in the business of helping
businesses use Direct Marketing to IMPROVE marketing results. 1. List Selection And List Availability
Today, the variety of available mailing lists and list databases
is mind-boggling. List varieties span from familiar magazine subscribers
and credit card companies to absurd left-foot, tennis-shoe collectors.
Mailing lists allow you to either pinpoint several hundred names,
mail to the entire US or the Glove. If you have the budget and strategic
justification, you can reach the majority of households and businesses
anywhere.
Of the estimated 100,000 mailing lists in the US list marketplace,
total names exceed 10 billion.
With virtually entire populations reachable by mailing lists, the
issue isn't list availability, but selecting the right lists.. With
so much to choose from, how can you be sure you chose the most effective,
most responsive lists? 2. Define Your Customer Market - Current
or Desired To
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Determining which lists will perform most effectively starts by determining
the characteristics of your preferred customers. Then 1) find lists
containing as many of these similar characteristics as possible and
2) always look for lists sourced to being previously responsive to
direct response offers. 3. Existing Customers Are A Gold Mine
of Information. To
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You can't know enough about you preferred customers. Current and
past customers provide the most important information you'll need
to predict and select future customer prospects.
If you are looking to expand beyond your customers' characteristics,
make sure new prospects at least qualify for your product. For example,
you will not sell many lawn products to apartment dwellers, nor will
you sell dating services to married couples (we assume).
Determine specific characteristics of your typical customers. Are
they older or younger? Are your products for people with or without
children? If you're opening a new bank branch, are most households
on your lists near the new branch? Is your product or service 'market
specific', like golfing or fishing, or do you sell to the general
public? 4. The Three Most Important Direct
Marketing Elements:
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1) TEST
2) TEST
3) TEST
Define your market by peoples' buying tendencies and lifestyles,
not by product sales history.
Armed with this basic customer list information, you can begin researching
outside lists. A good place to start is the SRDS Directory of Direct
Mail Lists published by Standard Rate and Data Service, Inc. This
directory has a wealth of data on over 25,000 lists and contains a
small education.
Plan to spend about 3 to 4 hours getting familiar with the SRDS Directory.
Another source for mailing lists is the Internet. Using the Altavista
Search, for example, entering mailing lists results
in over 3 million references.
If you don't have time to review the SRDS or 3 million sources on
the Internet, you can consider contacting a list broker (also listed
in the SRDS) or direct mail consultants to assist you. List brokers
generally don't charge for their time, however, asking some brokers
to help you find the most effective lists can be like asking a car
dealer which is the best brand of car to buy. Many list brokers are
inclined to recommend the lists they manage, because it is more profitable
for the broker.
A good direct mail coach or consultant may be your best bet. Better
still, read as much as you can about list selection and acquisition.
Know what you're dealing with in general and then engage consultants.
Like architects, attorneys or CPA's direct marketing consultants
are paid for their time, expertise and experience.
If a consultant's practice does not include list management or list
brokerage, expect their list and direct mail advice to be more objective
and impartial than list brokers. List brokers generally work for list
owners, not mailers.
Direct Marketing advisors often can also help with many other facets
of direct mailings besides list selection. If you engage direct marketing
specialists, don't hesitate to ask lots of questions about their experience.
Get references from their current and past clients.
How can you know which mailing lists you've identified will work
best? Only by mailing and comparing list results can you know which
lists work best. Lists that work best you use again. Less effective
lists you drop.
No successful direct mailer has ever survived and grown without knowing
what works and what doesn't, without a formal testing program.
And although direct marketing testing is not limited to just mailing
lists, proving which lists work best is of key importance.
Once customer profiling identifies your best list testing candidates,
test a portion of them all. After proving which lists test well, step-testing
confirms first-time testing results, but at larger quantities. Step
testing eventually leads to 'roll-out' mailings. Step-testing
helps manage risk by assuring larger scale roll-out mailing results
are similar to list test results.
Step testing takes time, which demonstrates how direct mail marketing
is not a "quick fix", one-shot, overnight wonder.
It is impossible to over-emphasize the benefits of Direct Mail Testing.
Conducting direct mail marketing, without first testing the lists,
offers, package formats or copy/creative using small test quantities,
will probably "results" in few results or sales whatsoever.
Maybe you'll get lucky. Maybe you can take your chances and
skip any testing. An untested program may enjoy some initial success,
but how much will this success be repeatable and predictable?
Identifying which components cause success allows
success to become repeatable.
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Success must be repeatable to be predictable. Results must be repeated
to be reliable. Without Testing you may have some success, but you
haven't learned how to repeat this success. How lucky is that?
Prior testing has shown where some test "variables" caused
great success but success was diminished by other direct mail "variables"
- wrong lists, poor copy, weak offer strategies.
Without isolating "test variables" under proper test
conditions, results effectiveness is usually misleading
and inaccurate. Nothing determines Direct mail Success
or Failure more than the effectiveness of List Selection
and Testing.x
5. The Importance Of The Offer
To Topics The Offer is one of the simplest and most dramatic
ways to improve direct marketing results. An
Offer is your proposition to the customer, what you
will give the customer prospect in return for taking
the action you want. See
full article on offers
What does the Offer include? Your product ... the price and payment
terms... any incentive you're willing to throw in (like a free gift)
... and any specific conditions attached to the offer like ordering
before a certain date. 6. Why is the Offer is so important?
To Topics
- Because the right offer can sell almost anything.
- Because it can mean the difference between success and failure
of a promotion.
- Because it can make a successful promotion dramatically more
successful.
- Link to more offer related info at page bottom
7. Can You Afford Direct Mail and
Testing? To
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Do you have the budget for a well-planned, well-executed mailing
program including list testing? Most mailers, new to direct mail,
overlook many cost factors to direct mail, especially start-up costs.
In 1997, standard rate postage is 32 cents per piece. Most response
mailing lists cost between $50 to $100 per thousand names. Most mailing
lists are rented, not purchased with minimum one-time usage quantities
of 5,000 or more.
With such list minimums, using one list will automatically mean a
mailing of 5,000 or more. Looking at just postage and an average list
rental cost of $75 per 1,000 - without any mailing piece - minimum
mailing costs are $1,600 for postage and $375 for list rental totaling
$1,975. Testing 5 lists at 5,000 each, costs for list rental
and postage alone would total $9,825. Adding package
development, list processing, fulfillment, program
management and other costs can easily bring a 25,000
quantity testing program to $50,000 to $60,000 or
more. More About Testing.
8. Direct Measures - Results
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Direct Mail, unlike other forms of Marketing, is totally measured
by the cost- per-response and the cost-per-sale. Direct Mail is a
scientific way to market a product and measure the exact cost of that
marketing.
The right product offered to the right person, at the right time,
at the right price and at the right place... is the essence of "DIRECT"
Mail. On the other hand, the right product offered at the right time,
at the right price, at the right place... TO THE WRONG PERSON ...
is the essence of "JUNK" Mail.
All Direct Mail Variables Are Important, But...
Finding the right mailing lists is one of a number of important "variables"
that will determine whether you succeed or fail with Direct Mail.
Focusing totally on lists can be dangerous. Lists, offers, package
format and creative variables of direct mail are all important and
all need balanced development. But all direct mail variables are certainly
not equally important.
You mailing results are influenced by may controllable and uncontrollable
factors. Unpredictable circumstances are beyond your control, but
can have significant impact on results. Bad economic news, postal
rate increases, adverse regulations are factors you can't controls.
The lists you select, the appeal of the incentive offer, the persuasion
of your letter and brochure copy, the appearance of your package are
elements you can and should control and measure as carefully as you
can. No single variable will have as much impact on the
success or failure of direct mail as which lists you
select. Creative elements of the mailing piece are
important, but selecting the right audience and having
an effective solicitation strategy will impact response
results more than strong Creative. More
About Results. 9. How Do I Choose?
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The purpose of list selection is to determine which lists are most
responsive. First-time mailers need many list choices, not one list.
At first, not knowing which lists are more effective is why testing
is key. Having more list choices is key to direct mail success. 10. List Brokers, List Managers and List
Processors To
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You should seek out and involve knowledgeable and experienced direct
mail and list professionals. Like a doctor, an architect, an accountant
or any other professional, direct marketing professionals provide
critically important services.
Mailing list brokers operate like the Real Estate Multiple Listing
Services where brokers "co-broker" a home sale and split
the commission. Any mailing list broker can broker any mailing list
in cooperation with any other list brokers.
When a list broker is also operates as a list manager, the lists
under management yield higher commissions to the broker/manager than
other list options. List brokerage, list management and list processing
are best explained by an example.
All major magazine publishers use a select few companies specializing
in brokerage, managing and processing subscriber lists. If a mailer,
seeking a specific subscriber list, contacts the magazine (the list
owner), he will be referred to a list management company.
The list management company will often also handle list brokerage.
A list management company would also maintain the subscriber list
for the magazine's circulation department. and even provide the address
labels to mailers renting the magazine's subscriber list. One list
company handles brokerage, managing and processing the magazine's
list rentals. 11. List Differences
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The first step is understanding what kinds of differences there are
in mailing lists. Mailing lists are usually distinguished by how they
came to exist. The two basic types of list are 1) response-active
and 2) passive.
If you think about how names wind up in a list, you get a sense of
these two major list types. A list of names "compiled" from
motor vehicles registered in a state, is a passive list. A customer
list of recent mail order buyers, is a response-active list. 12. List Rentals, Not Sales
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Mailing lists are rarely for sale. They are rented for one- time
usage for a pre-determined price on a cost per 1,000 names basis.
Most list rentals require a minimum order of 5,000 names or more. 13. Response Lists
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Beginning with response-active lists, there are two important "response-active"
groups: buyers and non-buyers. There are many non- buyers, or inquiries
who request product information or enter sweepstakes but never make
a purchase. Some mailers call these people "suspects". Then
there are people who have actually made a purchase by mail. 14. Response Lists - Pros and Cons
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Mail order buyers are often the most response-active lists. They
are people who, with their check book or credit card, have demonstrated
their interest in buying a given product and have demonstrated their
comfort buying by mail or ordering by phone.
Selecting lists, with proven direct response purchase history, is
most effective, when products purchased are similar to the price level
and the product being offered. For example, a list of subscribers
to a magazine that costs $18 a year, may be sourced to a post card
purchase. Magazine subscribers also have an obvious interest in reading.
Because they ordered an $18 subscription, by mail, doesn't mean this
list will be responsive to Encyclopedia Britannica, which may cost
hundreds.
Response lists are more expensive and often don't include enough
names when used in smaller geographic areas. 15. Compiled, Passive Lists
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Compiled lists are the second major type of lists. They are considered
"passive" since they are "second generation" lists.
They've been compiled from existing lists such as telephone directories,
voter registration lists, motor vehicle records or county property
tax records. 16. Compiled Lists - Pros and Cons
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The problems with compiled lists, as far as mail order responsiveness
is concerned, are several.
-
First, compiled lists are not as current as response lists and
are updated less frequently.
-
Second, compiled lists are too broad. Everyone who owns a car
or phone is not a very targeted audience.
-
Third, compiled lists have no indication of mail-order purchase
history or responsiveness.
Compiled lists do offer something response-active lists can't - sheer
size. Compiled lists are often much larger than response lists.
Compiled lists like Donnelley DQI, Metromail, Polk or credit bureau
files often number 80 to 90 million households - virtually all households
in the country.
Compiled lists offer substantial coverage - or "penetration"
within a limited geographic area. Good penetration lets you "saturate"
almost every household within tightly defined geographical areas.
Compiled lists also offer a wide variety of demographic selection
like income level, sex, age or marital status. 17. List Usage Security
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To secure lists from unauthorized usage, most lists are "seeded"
with addresses of people who monitor mail delivery. There are even
list monitoring companies who quickly determine when lists are being
used more than once. 18. Purchase Responsiveness
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In the past 10 or 15 years, only 30 to 35 million US households,
out of over 80 million, have purchased products and services by direct
response or mail order methods. The best consumer lists contain names
of these 30 to 35 million people who have actively responded with
purchases or donations.
Selecting consumer market lists with a direct response purchase history
immediately focuses your target audience. This also protects you from
including "mail junkies" - avoiding people who frequently
request information, but who rarely ever buy.
Before renting lists, be sure you know how many names on the lists
have actually purchased or contributed by mail. Ask if purchases or
contributions were generated by direct response methods. And even
with lists containing names generated by direct response, find out
about response-related selection factors such as:
-
Purchase recency
-
Purchase frequency
-
Average order value.
19. Purchase Recency
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Recency refers to the year, month or week when purchase or contribution
transactions happened. Make sure the majority of the names have recent
purchase activity. 20. Purchase Frequency.
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Frequency indicates how often the individual has made purchases in
a particular time period. Choose list segments with higher purchase
frequencies. 21. Purchase Monetary Value
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Total dollars spent or average purchase price is often indicated.
Be wary of small average dollar purchases.
In Direct Mail Marketing, attention should first be paid to list
selection and list segmentation. Your choices for list selection are
already indicated by the profile of your customers.
Companies considering direct mail and other forms of direct marketing
need to involve outside assistance with the right experience. At the
beginning, more reliance must be placed on experienced assistance
when more things are unknown. 22. Avoiding failures To
Topics
Failure is typically caused by numerous firms lacking the qualifications
to assist with developing direct mail effectively. Effectively means
at a desired or required level of profitability.
If your marketing results rely on an advertising agency for a great
deal of your marketing results, you may consider using your agency
for help with Direct Mail too. However, take notice of how much your
agency distinguishes profitable marketing from creative marketing.
You should be abel to check If many of their past and current client
testimonials include kudos for increasing profitability. If the
ad agency is more concerned with Advertising than Marketing, you may
want to consider assistance from more of a marketing services firm.
As suggested earlier, make sure anyone who helps with your Direct
Mail is well-qualified in list selection, incentive offer development
and direct mail testing.
Many ad agencies are primarily focused on pleasing their clients.
They are often firmly told what to do by their clients even though
their clients pay them for their advice and experience.
Ad agencies are often in a difficult spot. when it comes to Direct
Mail Marketing. They may know strategies like direct mail are more
effective and more in their clients' interest that other marketing
strategies. Usually, ad agencies are not comfortable recommending
direct mail since they have less experience with direct mail than
they do with general awareness advertising. General Awareness
advertising suffers from generating little, if any, measurable results.
In Direct Mail, the creative variable is less important to achieving
success. If you have the right offer, the right product, offered at
the right time, in the right place and you have targeted the right
person with the right interest and the right demand for your product...
but you don't have award winning photography or 4-color printing...
you will still do well. 23. Conclusion. To
Topics Direct Mail Marketing has been described as both an "art that
becomes a science" - and at the same time - "a
science that becomes an art".
The Scientific Method is defined as "a continuous, controlled
experiment" that lets the scientist test a series of variables
using a process of elimination. Bingo. Same definition for Direct
Marketing Testing.
As we've advised in this article, you should put the highest priority
on testing mailing lists and solicitation offers. first since these
two variable have the highest potential to impact your marketing results.
Only with a structured testing program - a continuous controlled
experiment - can you be on your way to direct mail success. Without
testing and retesting, you sharply increase your chances for failure.
Sound expensive? It is. But nowhere near as expensive as the price
of Failure.
As successful results are generated, Direct Mail builds a foundation
of scientifically proven results allowing success to build and build.
That's why Direct Marketing has become the predominant form of Marketing
today.
Mailing lists are the key to Direct Mail and Direct Marketing Success. Regardless of the direct marketing strategies or tactics you use,
the end result is usually some form of list. Any consideration
of Direct Marketing should not begin without a solid
orientation and foundation in mailing lists and the
resources available to manage them effectively.
Author
Since 1975, George Wehmann has acquired direct marketing
experience with organization such as Readers Digest
Condensed Books, Krupp/Taylor USA, American Express
Card Division, Merrill Lynch Realty and other leading
direct marketing companies. Wehmann's experience also
includes programs developed for many small to mid-sized
companies.
Direct Marketing Resources Group, Inc. (DMRG) helps
companies and organizations use Direct Marketing to
effectively improve marketing results. Results improvement
methods, repeatedly proven for the past 30 years,
are included in DMRG workshop and seminar programs
conducted publicly and privately.
In addition to Marketing and Direct Marketing training,
DMRG provides direct assistance formulating, planning
and executing RESULTS EFFECTIVE & ACCOUNTABLE
marketing programs.
More indepth article about
Offers To Topics
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