Direct Mail 101

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Introduction To Direct Mail Marketing

Direct Mail 101

  1. 1. Introduction to Direct Mail The Basics of Direct Mail Marketing Rev 1/2009
  2. 2. Let’s Talk About Direct Mail Around $60 billion dollars is  spent each year on direct mail Why is so much money spent on  direct mail? It Works!
  3. 3. On any given day, the average customer will be exposed to 2,904 media messages, will pay attention to 52 and will positively remember 4.
  4. 4. Today’s Media World Mail Amplifies all media
  5. 5. Think About This…… 55% of Americans read a newspaper  95% have telephones  98% have television sets  E ve rybo dy’s got a mailbox 
  6. 6. Attributes of Direct Mail Flexibility Target ability   Measurability Accountable   Privacy  Convey  Builds customer  complex relationships messages Personal  Tactile Great ROI   Creates impact 
  7. 7. Direct Mail vs. Mass Media M a s s M edia D irec t M a il A dvertis ing  Rifle approach  Shotgun approach  Measurable  Difficult or  Personal impossible to  Generates measure response  Generic  Creates an image
  8. 8. W hy D irec t M a il? Direct Mail can help the customer: Prospect for new customers  Generate qualified sales leads  Establish and maintain relationships  Cross-product sell to existing  customers Generate customer loyalty  Solicit potential donors  Communicate information 
  9. 9. Direct Mail Response Rates Typical Direct Mail campaigns bring in around 1-3% response rate 1 to 1 Marketing campaigns, personally relevant campaigns can achieve 10- 20% response rates Multichannel Marketing will help boost response rates
  10. 10. Other Advertising Response Rates Overall Average Response Rates  Telephone 7.44%  Direct Mail 2.55%  Catalog 2.41% The media with the poorest overall response rate performance were those with the least capability to narrowly target customers  TV 0.24%  Newspaper 0.31%  Magazine 0.35%  Radio 0.48%
  11. 11. People Like to Get Direct Mail What’s the first thing you do when you  come home? Most people sort mail into 2 piles:  Relevant  It’s personal   They know something about me A g oo d o ffe r s e n t to th e rig h t pe rs on Junk  Stuff that’s not for me   Goes right into the trash can A g oo d o ffe r s e n t to th e w ro n g pe rs o n
  12. 12. People Like Direct Mail 56% say receiving mail is a “real  pleasure” 94% value the privacy of mail  55% “look forward” to discovering  the Mail they receive 67% feel Mail is more personal than  the Internet Source: USPS
  13. 13. The Mail Moment 98% of households collect, assess,  and sort mail every day 77% say they sort their mail  immediately …while only 57% of households  check their personal e-mail on a weekly basis On average, peo ple s pend 30  m inutes eng a g ed with their mail when they sit down to manage bills,
  14. 14. People Like Direct Mail Mail gets message into waiting hands  98% of consumers bring mail in the day it’s received  77% sort through mail immediately  Mail takes you to the person in charge (the Mail  “CEO”) 90% determine what mail to keep for review  81% review financial documents  84% are principal grocery shoppers  The Mail Moment is an opportunity to reach  consumers to shape opinions and influence decisions M ail c re ate s a m om e n t yo u w on ’t w an t to m is s Source: USPS
  15. 15. People $pend through Direct Mail Consumers spend around $600 billion a year  through direct mail. Businesses spend more than $200 billion per  year. More than $100 billion is donated to charities  On average in the United States $167 is  spent on direct mail marketing campaigns per person each year. ($60 Billion Industry) W ith a n o ver $2,000 per pers o n return, tha t’s a 13 to 1 R O I !
  16. 16. Recipient Advantages of Direct Mail Convenience  Study and re-read materials  Written record  Review quickly  Show information to others 
  17. 17. The Beginning… Every successful Direct Mail program begins with one important question: “What is your customer trying to accomplish? ”
  18. 18. The Beginning…… Direct Mail Components Creative/Design  Lists / Databases  Offer  Package  Data Processing  Personalization  Production 
  19. 19. Lists Many say that the LIST accounts  for as much as 40% to 60% of the success of a mailing 40-40-20 rule 
  20. 20. T he W ro ng L is t Great Offer T he  Beautiful Copy W ro n  g L is t Stunning Design  Strong “Call to  Action”
  21. 21. T he R ig ht L is t The Right List…  Has the right geographic  location Has the demographics that fit  the best potential customer profile Has the quantities available to  satisfy marketing needs
  22. 22. L is t L ing o List Rental – Licensed usage of a list  Multiple Usage – Use of list more than  one time (for a period of 12 months) Demographics – The statistical  characteristics of human population (age or income) used especially to identify markets Psychographics – Lifestyle  characteristics of a consumer database (buying preferences, hobbies, etc.)
  23. 23. T ypes o f L is ts House Lists  Response Lists  Subscription Lists  Contributor Lists  Inquirer Lists  Compiled Lists  Consumer Lists  Business Lists 
  24. 24. H o us e L is ts A list of current customers and  prospects This is the real value of a business  Its important to capture as much  information as possible Baseline info  Name, address, zip+4  Purchasing History  Additional Demographics  Birthdays, family status, housing, etc. 
  25. 25. Types of Response Lists Buyers  Subscribers  Expires  Inquiries  Members  Change of Address  Attendees  Donors 
  26. 26. Response Lists Customer Lists  People that have responded to specific  direct mail programs and offers Victoria’s Secret, L.L. Bean  Subscriber Lists  Subscribers to magazines, newsletters and  subscription services Subscribers to People Magazine, Golf Digest,  etc.
  27. 27. Response Lists Warranty / Registration Lists  People that have bought and  submitted warranty or registration cards for specific products Owners of appliances, Dell  PCs, Sony TVs, etc.
  28. 28. Response Lists Advantages  Highly targeted  Higher response rates on related  products and services Lists available to cover virtually any  product or service
  29. 29. Response Lists Disadvantages  High cost of rental (7.5 to 15 cents  per name – or more)  Requires approval of mailing piece You probably cannot use to market a  competitive product Difficult to purchase for very specific  geographic areas  Most lists do not have sufficient counts to satisfy demand
  30. 30. C o m piled L is ts Business Lists  Consumer Lists  Compiled from  multiple public domain records Telephone books  Government records  Census Data 
  31. 31. C o m piled C o ns um er L is ts Current Resident 1124 Elm St S Evanston, IL 60606 Occupant lists  Full saturation – no name, just “Occupant” or  “Resident” (Also known as OCC/RES lists) Consumer lists  Includes name  John Adams 1124 Elm St S Evanston, IL 60606
  32. 32. C o m piled L is ts Benefits  Wide coverage  Easy to obtain  Low price - $.02 - $.05 per name  Volume discounts  Disadvantages  Not as highly targeted as response  lists
  33. 33. Compiled Business Lists Always include business name and  mailing address Contact names  Necessary when mailing to large  businesses Outdated data can hurt your response  rate Title or function is often just as effective  Business demographics  Include type of business, sales $, number of  employees, etc.
  34. 34. B us ines s L is ts Often don’t have contact names  Most lists are compiled  Available universes are smaller than  consumer lists (about 15,000,000 total establishments) Major Suppliers  Acxiom   Dun & Bradstreet  Experian  InfoUSA  Trans Union Business Information Services
  35. 35. Information Contained on Business Lists Company Name and Address  Job Titles  Business Type (NAICS Codes  – formerly known as SIC Codes) Business Size  Number of employees  Sales volume 
  36. 36. T he K ey to L is t S elec tio n Find out as much as possible about the present customers…then get as many more prospects as you can who are just like them!
  37. 37. T hing s to C o ns ider Where are the customers located?  3 mile radius, city, state, nationwide, etc.  Do they have certain demographics?  Families, Homes, Income, Education, etc.  Do they have buying preferences  (psychographics)? Wine, Fishing, sports cars, etc.  Are they a specific type of business?  Restaurants, retail, schools, etc.  Do they already own a certain product?  Boats, computers, homes, etc. 
  38. 38. The Offer
  39. 39. T he O ffer What the consumer or contributor looks  for and responds to from the piece. Always think from the addressee’s  standpoint…“What’s in it for me?”
  40. 40. T he O ffer Four Types of Offers: The benefits of membership  Sale - discount off the full price  Free - free gift…..or “buy one get one free”  Guarantee - trial offer or money-back 
  41. 41. The offer…continued Gives consumers or contributors a  reason to respond to the Direct Mail Piece….. “A C all to A c tio n ”. The offer should tell the customer or  donor the details. What exactly should they do? Bring it in? C all, Fax, E -mail, S ubs cribe, or S end in money.
  42. 42. The Key Steps….. G uide yo ur c us to m ers to : Make the offer clear.  Don’t offer a variety of products/services that  will muddy the message. Choose one product to spotlight. Be specific.  If you are asking for money...  Th e n A S K !!!! 
  43. 43. 3 Things All Successful Direct Marketers Know The consumer, not the product, must 1 be the hero. Communicate with each customer or 2 prospect as an audience of one. 3 Answer the question, “Why should I?”
  44. 44. The Package
  45. 45. C o m m o n P a c k a g es #10 Packages  Newsletters  Announcements / Thank You  Seasonal / Charitable  Postcards  Catalogs, Program Guides  Calendars  Statement Processing  Membership Mailings  Personalized Notepads  Self-mailers  “Solutions That Stick”  1 to 1 variable color 
  46. 46. D irec t M a il P a c k a g e Design of the “vehicle” is very  important. Quick read (Postcard)  Detailed informative letter  Invitation  News  Notices  Color Brochures 
  47. 47. Marketing Considerations What’s the Who’s the competition audience? doing? What What’s special response is about my desired? product/offer? What’s the Why should ONE most the audience important act NOW? benefit?
  48. 48. Design Considerations Who’s the audience? What’s the budget? Is our message clear? Are we providing an easy response method?
  49. 49. Definition of “Good Mail” Tangible, personal  communication Connects with the recipient in a  striking way Compelling feel, look, line of  copy, etc. that makes the recipient feel important Provides an experience 
  50. 50. Direct Mail Package Financial implications will  typically drive the design of the package along with the expected ROI of the project or campaign. Calculating the breakeven will  help determine what vehicle or package the customer will use for their program.
  51. 51. Direct Mail Package Return on Investment (Example)  10,000 piece mailing  Cost per piece = .30 ($3,000)  Postage @ .14/each = ($1,400)  3% response @ an avg. $25 gift  300 gifts = $7,500  ROI Return on Investment = $3,100 
  52. 52. Samples
  53. 53. Data Processing CASS (Coding Accuracy Support System) A USPS testing program offered that evaluates and certifies the accuracy of addresses through postal coding software. CASS Certification is required
  54. 54. Data Processing CASS What will it do for the customer…. Address matched to National Address listing  of USPS, verifies deliverability Standardizes address block (removes  punctuation, abbreviates, zip correct) Appends +4 to zip, creates delivery point  barcode If address does not match:  Kicked out with code detailing reason for  undeliverability
  55. 55. Address Hygiene NCOA - National Change of Address: An addres s correction service provided to mailers through US P S licensees Required for First Class automation mailings  unless ancillary endorsement line is preprinted on piece. 4 years of Data - updated every 10 days  Includes reporting options for customer  Eliminates back end cost and data entry of  ancillary endorsement service
  56. 56. Address Hygiene NCOA - National Change of Address What will it do for the customer…. Update movers on data file  Mail piece gets delivered to the correct  address the first time, no delays Important address updates available for  customer to update their list Complies with USPS move update  requirements Eliminates cost of address correction fees and  data entry costs
  57. 57. Endorsements R e turn S e rvic e R eques ted • N o fo rw a rding , o nly return. N ew a ddres s no tific a tio n pro vided. M a ilpiec e returned w ith new a ddre s s o r re a s o n fo r no ndelive ry a tta c he d. C ha ng e S ervic e R eques ted • N o fo rw a rding o r return. N ew a ddres s no tific a tio n pro vide d. S epa ra te no tic e o f new a ddres s o r rea s o n fo r no ndelive ry pro vided; m a ilpie c e dis po s ed o f by U S P S Fo rw a rding S e rvic e R e que s te d • Fo rw a rding a nd re turn. N e w a ddre s s no tific a tio n pro vided o nly w ith re turn. M o nths 1 thro ug h 12: m a ilpiec e fo rw a rde d. M o nths 13 thro ug h 18: m a ilpiec e re turne d w ith ne w a ddre s s a tta c hed. A fte r 18 m o nths o r if unde livera ble a t a ny tim e: m a ilpiec e returne d w ith rea s o n fo r no n-delivery a tta c hed.
  58. 58. Endorsements T em p— R eturn S ervic e R eques ted • P ie c e s returned w ith ne w a ddre s s o r rea s o n fo r no ndelive ry a tta c he d. I f tem po ra ry c ha ng e o f a ddres s , piec es fo rw a rded; no s epa ra te no tic e o f te m po ra ry c ha ng e o f a ddre s s pro vide d. A ddres s S ervic e R eques ted • Fo rw a rding a nd re turn. N ew s epa ra te a ddre s s no tific a tio n pro vided. M o nths 1-12: m a ilpie c e fo rw a rded; s epa ra te no tic e o f new a ddre s s pro vided (m a nua l $0.50, elec tro nic $0.25 e a c h). M o nths 13-18: m a ilpiec e re turned w ith ne w a ddres s a tta c hed. A fte r 18 m o nths o r if undelivera ble a t a ny tim e: m a ilpiec e returne d w ith rea s o n fo r no ndelive ry a tta c hed.
  59. 59. M a il C la s s ific a tio ns First Class Automated Mail  500 or more pieces (average .35 cents per  piece up to 1 ounce, letter size) Usually delivers in 1 - 3 days  Standard Automated Mail  200 or more pieces (average .25 cents per  piece up to 3.3 ounces, letter size) Usually delivers in 7 - 10 days  Non-Profit  Requires Non-Profit authorization from Post  Office (average .15 cents each, letter size)
  60. 60. M a il C la s s ific a tio ns Important to Customer  Cost of stamp / piece  Speed of deliverability  Test results  Publicly funded organizations, Standard  mail tends to be more favorable For-profit entities, First Class mail pulls  better response N o te: A stamp can be added to a non-  profit mailing, thus giving the look of a First Class Mailpiece.
  61. 61. M a il C la s s ific a tio ns 1st Class Mail - (1-3 day  delivery) Personal Correspondence  Bills  Statements  Proxy’s  Refer to RATEFOLD (handout) for postal rates.
  62. 62. M a il C la s s ific a tio ns Standard Mail - (7-10 day delivery)  Solicitation Mail (Fundraising)  Donor Mailings  Membership Mailings  Coupon Mailings  Product Roll Outs  Registration Mailings (Conventions or  Conferences) Refer to RATEFOLD (handout) for postal rates.
  63. 63. Applying Postage to Mail Piece Stamp  Precancelled – no post  office markings Affix inline on inkjet or  offline off inserters Meter  Meter inline on  inserters or offline on inkjet NON-PROFIT ORG. Indicia  U.S. POSTAGE Preprinted (litho) or PAID  inkjetted MAILED FROM ZIP CODE 06101 Permit numbers  PERMIT NO. 2990 Mailed from zip code 
  64. 64. The End!

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