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11 Questions That Make Direct Mail Pay for Itself

January 18, 2012 By Keith Goodman
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Just like any aspect of your business—whether it's financial, marketing, developing a new product or hiring a sales staff—your direct mail needs to have a plan. This especially holds true in marketing: You are investing your hard earned money (or the owner of your company's money), and you need to get a return on this investment.

Here are some of the things you need to look at to have the highest potential for success.

  1. What do you want to accomplish?
  2. What is a customer worth?
  3. What is your budget?
  4. Who are you targeting?
  5. How will you follow up?
  6. How will you track the results?
  7. What basis will you use to determine success?
  8. What is your offer?
  9. What format will you use?
  10. How will you communicate the program to your staff?
  11. What is the time frame for your program?

Let's look at each of these individually

1. What Do You Want To Accomplish?
This is your strategy! You might be trying to set up appointments to demonstrate a new software program or trying to get your existing customers to come back to your store for a special new product preview. Each approach would have its own unique messaging, offers and, most importantly, financial models.

2. What Is a Customer Worth?
What are you willing to pay for a new customer?

Before you spend any more money on advertising, you need to know this number.

Let's look at an example: If I were to bring a busload of customers to your business, how much would you be willing to give me for each one of those customers? The bus is fully loaded with 64 passengers, and every one of them was prequalified, ready to buy your product or service with cash, checks and credit cards in their pockets. How much would you be willing to pay me for each of those customers? $10, $100, $1,000? Or how about $10,000? Any one of those answers would be right depending on your business model. You need to know your number.

3. What Is Your Budget?
How many new customers do you need get this year and what are you willing to invest to get them? Not only do you have to get new customers to increase your revenues and grow your business, but you are going to lose customers that you are going to have to replace. No matter how good you are at running your business and how much people love working with you, you are going to lose customers that must be replaced. They are going to go to your competitors, they are going to relocate, and some will pass away.

With that said, now you need to determine how many new customers you need and how much you will invest on a monthly or quarterly basis to keep generating a steady flow of new customers while simultaneously keeping you old customers coming back and, if done correctly, keep generating referral business.

4. Who Are You Targeting?
In order to understand who your target market will be, it is important to understand who your best customers are. Do you have a strong understanding of who you customers are?

  • If you are a local business, how far do try travel to do business? If you are national, are there specific geographies that larger percentages of your customers are located in?
  • Are there specific demographics—such as age, income, family status or home ownership—that play a major role in whether prospects do business with you?

5. How Will You Follow Up?
What is the process that needs to take place for your company? Who will take the initial call?Can the sale be made on the first call or visit, or is it a complex sale that requires one or more sales calls and, like the contractor, estimate, plans and contracts?

It is important to have these processes established as part of your precampaign plan so you do not have to create these processes on the fly when your program is in mid-stream.

6. How Will You Track the Results?
If you don't track the results, there is no way to know if the campaigns are profitable and if you are wisely investing your hard-earned money. This process needs to be established and in place before a campaign is launched so you make sure all of the leads are properly tracked and can be easily accessed and integrated into your reporting.

This can be as simple as entering them into a spreadsheet or even keeping the different coupons in a box or envelope; or as complex as creating offer codes and response fields in a CRM system that provides real-time reporting and integration into commerce and ROI reporting systems.

7. What Basis Will You Use To Determine Success?
Most campaigns will be based on the number of customers that are acquired and the revenues associated with those customers. With those numbers, you can easily calculate what it cost you to acquire a new customer, how much revenue was associated with those customers and ultimately the ROI that you derived as a result of the campaign. 

8. What Is Your Offer?
In the society we live in, we are constantly bombarded by advertising with one offer after another. You will need to construct an offer that has what I call the "get them off the couch" appeal. How many times have you seen a mail piece come across your kitchen table or desk with no offer or incentive to call? I see them all of the time, and for the most part they prove to be highly ineffective.

9. What Format Will You Use?
The selection of the format is something that actually comes further into the planning process than many people realize. I have been asked countless times, "What is more effective, a letter or a postcard?" My answer is, "Yes!"

They are both effective, it just depends on what you are trying to do, who you are targeting, what is your product or service, what is your budget, what needs to go in the mail piece, and how complex the message is. Once you have made the above decisions, the choice between formats will be much easier.

10. How Will You Communicate the Program To Your Staff?
Make sure you have communicated all aspects of the program to anybody that will have a chance of communicating with an incoming prospect as a result of the campaign. This includes not only the salespeople, but customer service and receptionists as well. Make sure they have a copy of each version of the mail piece, they know what the offer is, any associated discount codes, how they are entered into the system and the location of any associated documents such as reports or white papers that are offered.

11. What Is the Time Frame for Your Program?
When you mail will be determined by what you are trying to accomplish. They key determining factor is: How soon do you need to start generating sales?

There are several things that need to be done correctly in order for your campaign to be successful, and each one of them takes time. If you cut corners and try to unreasonably accelerate the process, two things are going to happen. One, you will significantly increase the chance of a serious error by yourself or your direct mail provider. The other is that you will pay additional rush fees that can considerably increase the cost of the program, thereby decreasing the ROI.

Start your plan now.

Don't wait until the last minute to plan out your next campaign. Start working on it early. Get feedback from your employees or business associates and use the plan when working with your direct mail vendor to make sure you are all on the same page.

To download a business plan template you can go to www.modernpostcard.com/marketingkit

Keith Goodman is vice president, corporate solutions, at Modern Postcard. You can reach him at keithg@modernpostcard.com.


 

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