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article imageOp-Ed: How to create the perfect piece of direct mail

By Daniel Taibleson     Nov 22, 2013 in Business
Despite the prevalence of digital marketing, letter-sized direct mail outperforms email With an existing customer response rate of 3.40 percentto 0.12 percent, a 2012 Direct Marketing Association study found.
Oversized mail and postcards also outperformed email at 3.95 and 2.47 percent. Prospect response rates were proportionate, with mail pulling 1.44 percent to email's 0.03 percent. Direct mail's cost per lead was also lower, at $51.40 to email's $55.24, reports the Online Marketing Institute.
Direct mail done correctly represents a viable marketing strategy. Still, there is a huge difference between these average numbers and top response rates, just as there is a gulf between a .250 baseball hitter and Miguel Cabrera. What distinguishes an adequate direct mail campaign from a superior one? Several factors are key to connecting with the right audience, getting them to read your piece, and generating a response at a profit without busting your budget:
Set a Budget
To keep a direct mail campaign under budget, you must first have a budget. The Small Business Administration recommends companies set their marketing budget proportionate to revenue and profit margins. As a rule of thumb, a company generating annual revenue of $5 million a year or less, with profit margins in the range of 10 to 12 percent, should allocate seven to eight percent of revenue to marketing, with appropriate adjustments for financial specifics.
Direct mail spending should be factored into this budget as part of an overall marketing mix, with priority spending on media and campaigns that pull the best results. If you are operating on a shoestring budget or otherwise seeking to cut costs, consider using postcard printing as a cost-effective way to deploy direct mail.
Experian, whose predecessor TRW Information Systems and Services had been in the direct mail business since the 1980s, emphasizes that the impact of mailing list selection on direct mail success cannot be overstated. Key to selecting the right mailing list is understanding the different types of lists, their corresponding response rates and their best practices.
Lists of your own current and past customers, called house or in-house lists, generate the highest response rates, and should form a major component of a smart direct mail campaign. Direct response lists consist of people who have responded to other offers resembling yours, and get the second-highest rate of response. Compiled lists use resources such as directories to identify prospects with specific demographic characteristics, and tend to generate the lowest rate of response. Cloned lists seek to compile contacts with characteristics duplicating your current customers. When using a mailing list, understand what type of list you're using. If you rent a list, choose a reputable broker, and know which type of list they're renting you.
Open Rate
MailChimp, an autoresponder service that supports direct email marketing, has tracked the percentage of recipients who open commercial email, called the "open rate," and found that this varies from about 25.2 to 48.6 percent, depending on industry and company size. Open rate is harder to measure in direct mail, but what the two media share in common is a core principle: if they don't open it, they can't read it. Boosting your open rate is thus one of the keys to success.
Open rate increases when your mailing piece attracts your audience's attention and interest, convincing them they should read what you sent them instead of throwing it out with the other junk mail. Factors that influence your open rate include how you address your recipient, what you say on the outside of your package to give the reader an incentive to open it, and how you design the look of your package. One reason postcards work effectively is they don't require unsealing to open.
Once an addressee opens your piece, the next task is to get him to continue reading long enough to respond. Whether or not this happens is a function of your copywriting quality. Proven copywriting formulas aim to grab attention, hold interest, generate desire, and compel action. Keys to applying this effectively to direct mail include creating compelling headlines, and providing response mechanisms like self-addressed return envelopes.
More than four percent of mail is undeliverable as addressed, costing the U.S. Postal Service $1.4 billion a year, a 2011 National Postal Forum report shows. Your direct marketing campaign can incur proportionate postage costs if you don't take steps to make sure the addresses on your list are deliverable. Using USPS Coding Accuracy Support System (CASS) software will help you avoid this problem.
Bob Bly, one of America's leading direct mail copywriters, says after poor list choice, the second-biggest mistake most direct mail campaigns make is failing to track results. Testing alternate wordings of direct mail, a process known as split testing, can help you identify high-performance pieces, while saving you money on under-performing campaigns.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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