By Peter Hercky & Michael Pasqua
There are three key elements of a successful direct mail program: the right list, the right creative package and the right offer. These factors are interdependent, and if any one of them is faulty, the campaign’s effectiveness will be compromised.
Each factor brings with it a host of potential pitfalls for your business. Finding the right list is a matter of research. Developing the right creative package comes with talent and experience. Making the right offer is always perplexing.
Let’s being with the right offer. Next time you decide to promote using direct mail, use this list of select the one most appropriate offer for your product:
- Free Trial is a very appealing way to get your product in the hands of prospects. The premise is that consumers can return it if they don’t like it, or pay for it if they do. The downside is that you may have to chase them for the money or product.
- Guaranteed Refund is closely related to a Free Trial, but now you have the money before they get the product. Net result is the same, but response rate tends to be lower because people hesitate parting with money when the gratification is not immediately realized.
- Free Gift is offered either with the mailing or sent once an order is placed or a payment is made. Very effective, also expensive.
- Urgency is a favorite tactic among direct mailers. “Place your order within 48 hours and deduct 20 percent off your total.” The recipient must act immediately or suffer the consequences of a higher price.
- Involvement has been popularized by the Publishers Clearing House by requiring that stickers be placed in various places. Creating involvement is a proven technique for generating response among consumers who are not overly analytical or unduly skeptical.
- Negative Option was popularized by Book of The Month Club wherein an item would be automatically sent unless recipients declare that they did not wish to receive it. Again, this technique is strewn with dangers because the recipient has the option of simply refusing receipt of your product and you are then forced to pay postage in both directions. This, is similar to the Free Trial technique in that there is a chance the prospect will open, try and use the product, then, hopefully, pay for it.
- Paying by Card makes buying easy. It combines Free Trial with Guarantee. The billing, albeit on a credit card, comes after the chance to use the product, which, theoretically could be returned prior to having to make a payment.
- Sweepstakes, also made famous by Publishers Clearing House, is a great response inducer. The chance to win a prize of $10 million, a 56” TV set or a cruise often moves people to respond. The problem with Sweepstakes is that they are governed by very inflexible regulations and are not restricted to buyers of your product.
In order to be successful, a direct mail promotion, like a stool, must stand on all three “legs”. These “legs” are the offer, the creative and the list. If any of these “legs” falls short, the mailing will falter.
Let’s assume you have a fantastic offer and that the agency has created an award winning creative package and enclosure.
Now we can turn our attention to the mailing list. There are several sources for such lists, but the first place to look is in your own database. Your current customers are the best prospects for your new “offer”. However, if your goal is to increase that database, you can access other list resources. These include: subscribers to a particular magazine, list brokers and list compilers.
We prefer magazine subscribers because we know so much about them. For example, if it’s a trade magazine, we already know the subscriber’s field of interest. We can further order our list by geography, plant size, job title/function, SIC code and most importantly, by how recently that name was qualified. If it’s a paid, consumer magazine, we may not have the option to be as specific, but, as there is such wealth of information available about the aggregate readership, we may not need to be as specific. For example, if you sell a photography-related product, just about any subscriber of Modern Photography might be a viable prospect.
Assuming for that no magazine subscriber list meets our specifications, we can turn to list brokers. These providers rent out lists that belong to other companies or organizations. Brokers do not maintain or manage lists; they only act as representatives for the lists’ owners. Matter of fact, some magazines rent out their lists through brokers because it’s a task that may not be profitable enough to justify a staff and office space.
List compilers, on the other hand, are those who rent out lists that were either purchased or garnered elsewhere. The most common source of compiled lists are telephone directories. If you’re selling anchovies to pizzerias, you can rent a list of these outlets by geography. Some compilers will create unique lists by performing what is called a merge/purge process wherein two or more lists are merged and then purged of duplicates. Thus if you’re looking for accountants whose hobby is golfing, a compiler may merge a list of accountants and one of golfers and purge those that do not match the desired criteria.
Now that the basics are out of the way, let’s turn our attention to analyzing the quality of the list we’re about to use. Here are some questions you might ask if you opt to use a broker or compiler: 1) who owns the list? 2) how are the names gathered? 3) how current is the list?
Once you have answers to these questions, here’s another one to ponder: should you insist on mailing only to a name or might you consider addressing your mailing to a job title/function? If the list is only six months old, as many as 5% of the names on the list are no longer valid. And, as is probably the case in your company, if a letter is addressed to someone who has moved on, a letter addressed to that individual is likely to be either forwarded, returned or discarded.
Conversely, if your mailing is addressed to “Comptroller”, whoever is sitting in the Comptroller’s chair on the day your mailing arrives (personalization issues aside) is the one to receive it. Although this is an efficient way of reaching the right person, the down side is that you don’t know with whom to follow up.
Advertising, public relations and direct mail, are classified as Mass Communications and they differ from Personal Communications such as trade shows, sales calls and telemarketing. Although accurately labeled in the sense that they address a Mass Audience, the description goes counter to what would make them effective. It is an accepted fact that Mass Communications works best when it speaks to the viewer/ listener/reader on a one-to-one basis. Only in this way can it address his/her wants and needs, using words, phrases and nomenclatures that are particularly meaningful to that individual.
For this reason it is imperative that the creators of Mass Communications know that one, singular prospect intimately. The two classic headings for describing a target market are demographics and psychographics. However, we’ve discovered a third and developed a fourth.
Whereas demographics is the basic way of describing a prospect, it is a mistake to use it exclusively. Demographics are determinable characteristics of a market segment. Gender, ethnicity, profession, education, age and household income are assessable facts about an individual. Knowing that your target prospect is white, male, a mechanical engineer with a master’s degree between the ages of 35 and 54, earns between $50M and $75M, is extremely useful in preparing a promotional message to that individual.
However, if you also know that your prospect’s psychographic make up is of a contented traditionalist, an outer directed emulator, pragmatic and an early adapter (call us for the definition of these terms, if you like), you’d know how he/she approaches the purchase decision making process.
It would also be helpful to know the prospects’ behavioristics with respect to your product and the product category. Behavioristic variables include: Purchase Occasion (is this business or personal), Benefits Sought (bargain, service, reliability, quality), User Status (non-user, potential user, new user, regular user) and Usage Rate (light, medium, heavy).
Finally there’s what we call buyeristics. Studies have repeatedly shown that people follow one of four buying patterns that, once established, tend to remain relatively constant. The four patterns are: price, performance, prestige and protection (brand loyalty or comfort). These appeals are not necessarily mutually exclusive, but, knowing which category is most likely to buy your product, enables you to promote more efficiently and effectively with a focused message to a receptive audience.
About the authors
Peter Hercky and Michael Pasqua are founding partners of Hercky Pasqua Herman, an award-winning full service advertising, marketing and public relations agency specializing in business-to-business clients. The firm offers a full range of services to clients in every budget category across a broad span of industries. Contact Hercky Pasqua Herman, 324 Chestnut Street, Roselle Park NJ 07204, telephone (908)241-9474, email [email protected].