TARGETING YOUR MAILING

We cut our section on direct mail into three parts to emphasize a tough point: sending out a direct mailing is never as simple as joining a letter to a list. You need a business strategy to go with your letter and your list.

In direct mail, strategy means numbers and projections. The only way to come up with effective direct mailings over the long haul is to test your offers, your lists, and your projections in a series of mailings.

Mass mailers generally aim for a response rate of 2%-5% on their direct mailings. In your initial mailings you will rarely know precisely what to expect. That's a problem, because the difference between, say, a 3% and a 1% response rate can well be the difference between a very healthy profit and a very big loss.

Many people think that with a new client the first order is the hardest to get. In direct mail, that's not quite true. Direct mail expert and professional list broker Ed Burnett argues in his Complete Direct Mail List Handbook that the hardest part of direct mail is converting a one-time customer into a regular. That's why many catalogue companies will create special orders targeted specifically at their one-time buyers to persuade them to make a second order.

• Simply expressing price in different ways can dramatically affect your orders. This is especially true for promotional offers. Direct marketing pioneer Edward Nash gives a classic example of an actual test he did of price strategies for a subscription to a monthly magazine sold on newsstands for $1 per copy. (Nash doesn't reveal when he conducted the test, but we suspect it was a long while back). Nash offered:
  • One year for $6
  • 50 cents per copy
  • Half price
  • Six issues free
  • Save $6
  • Save 50 percent
• The best offer did three times as well as the worst. Nash won't tell which did best, but we're pretty sure it was the offer of saving $6. (Does this save you the trouble of doing your own tests? Only if you're selling magazines.)

Think someone else might already have done your direct mail research?

You might be right. If your target audience overlaps significantly with the audience for a particular magazine, your best bet might be to target your mailing to the magazine's subscribers. The publisher will already have a lot of information about them, and generally buying subscriber lists is less expensive than buying similar lists from a broker.

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