MARKETING FOR THE FUTURE - Why direct mail?

WINNING DIRECT MAIL: How to set your direct mail apart from the crowd.

According to research commissioned by the Direct Marketing Association, direct mail advertising expenditures in the U.S. for 2001 reached a new high of $44.73 billion. Unsurprisingly, that same year, more than 93 million direct mail pieces were mailed through the U.S. Postal Service (USPS) - that's more than 45 percent of the USPS's total mail volume.

Of course, with so many pieces competing for attention, mailers are constantly grappling with the question of how to make their direct mail pieces stand out from the crowd.

What's the secret of success? Marketing consultant and direct mail expert Katherine Barr, of Katharine Barr & Associates, last week discussed this important question at a seminar titled "Winning Direct Mail," held in The DMA's Seminar Center in New York.

According to Barr, direct mail has several major advantages over other types of advertising. First, today's direct mail lists are extraordinarily segmented, she said, noting that very specific groups of consumers can be identified so mailers can ensure the relevancy of their offer.

In addition, direct mail offers the benefits of measurability and - the key to "winning" direct mail - testing. Said Barr, "Testing is a huge advantage. It enables you to determine what works and to identify the 'winners'."

When testing, she continued, it's important to "test smart." Barr encouraged mailers to follow the basic rule outlined by Dick Benson in his book, Secrets of Direct Mail: "Any test idea you honestly believe can economically increase response is worth testing."

The word "economically" in that sentence is the key, she noted. Be realistic. "Don't test a four-color business-reply envelope that requires a 115-percent increase in results to break even."

Before testing, Barr suggested that mailers conduct careful calculations to make sure the test will pay off. One way to do this, she suggested, is by using California-based consultant Hugh Chewning's pre-test worksheet, which shows mailers how to compute how much of a lift their test needs to break even. To access this worksheet, click on http://www.the-dma.org/news/wkst.pdf.

When it comes to beating your control package, it's important to note that certain factors have a greater potential impact on response rates. DMA research assigns the following potential increases to elements of direct mail campaigns:

• List - 100- to 1000-percent potential increase in response
• Offer - 100- to 500-percent potential increase in response
• Package - 50- to 300-percent potential increase in response
• Copy - 10- to 300-percent potential increase in response
• Timing - 10- to 50-percent potential increase in response

As a result, Barr advised mailers to test big things - such as list, offer, and format - if they want to achieve a large increase in results.

To improve direct mail offers and improve response rates, Barr quoted 11 strategies developed by Hugh Chewning. They are:

• Offer something "new" or "free."

• "Flip-flop" your offer. For example, instead of writing "You're paying $400 too much for insurance" - a negative, confrontational statement - try "Save $400 on your insurance.")

• Use specifics. Specific numbers attract attention and gain credibility because they look "real." Test copy that says "Save $389.43" instead of "Save $400," and see which pulls better.

• Test a premium. The key is to use something with the highest perceived value and lowest actual cost, Barr noted, which is why books, reports, research, etc., tend to work well.

• Test new price levels and or suggested donation levels.

• Provide a guarantee. And make it as strong as you possibly can, Barr added. She cited Lands' End's "Guarantee, period" philosophy as an example of one that works. If you have a very weak, limited guarantee, Barr continued, don't include it as it will only depress response rates.

• Offer "early bird" savings or gifts. This technique creates an urgency for the response and encourages recipients to respond quickly.

• Sell only one thing at a time. Don't complicate your direct mail piece by offering too many things at once, Barr elaborated. Recipients should read your direct mail piece and understand clearly what you want them to do.

• When possible avoid percentages. Instead of "Save 25 percent," say "Save $19." Try "3 out of 5 consumers agree," in place of "60-percent of all consumers agree." Percentages are abstract, while numbers are real and more meaningful to consumers.

• Use comparisons people can relate to. Don't ask someone to make a donation that will "help feed hungry people." Asking for help to feed "one hungry child" will be more personal and compelling to the recipient.

• For political fundraisers, rather than ask for money to elect a candidate, raise money to defeat the opponent. Most people feel more strongly about what (or who) they dislike, than who they like, Barr explained.

Above all, Barr encouraged mailers to remember the following four customer-centric premises when creating winning direct mail:

• First premise: You're not just trying to make a sale; you're trying to gain a long-term, loyal customer.

• Second premise: First, set up a positive dialogue with your customers through direct-response techniques; then, constantly test and measure to determine what pleases the customer. The customer is always right.

• Third premise: Customer-service is an important part of our business. Properly treated, the customer will tell us what to sell, when to sell, how much to sell, and the best offer to use. Use direct mail vehicles to collect this input whenever appropriate, and then use the feedback to craft better, smarter and more effective customer communications.

• Fourth premise: Nothing must destroy your credibility. Choose spokespersons with care, and honor all promises made in communications to build strong customer relationships.
  
  Article taken from the Direct Mail Marketing Association - online library 2/18/04

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