TK's Korner

Sexton Printing recently hosted a "Direct Mail: Raising Response, Lowering Cost", Seminar that was full of helpful ideas and suggestions along with some advice from the experts.

In this issue of TK's Korner, I'll attempt to give you some of those helpful suggestions, info along with sources and case studies to further research the questions you may have.

To start, let's dive into Direct Mail:

Direct Mail deals with building and maintaining one-to-one relationships between brands and customers, with the purpose of establishing an image for the brand and selling products to customers.

Why Direct Mail:

1) Interactivity-it is a 2 way communication-(push/pull strategy)

2) Acquisition-gives you the ability to attract new customers

3) Retention-

     A) CRM-(Customer Relationship Management)
     B) ROC-Return on Customer
     C) LTV-Life Time Value

4) Loyalty-Customer Satisfaction

While the brand perception should be identical, the objectives per target group will be differentiated, and therefore also the investment level, media, messaging and offer.

Media are complementary instead of replacing one another. IE offline direct mail drives web traffic.

Advertisers and consumers prefer a tangible object, something that can be held or touched. People prefer paper to something that exists only electronically. "How many of us read an entire document on the computer screen?

Follow up is key to direct marketing activities and therefore to direct mail:

1) A mailing invites customer to react

2) Their reaction is then followed by another mailing

3) All of these steps are measured and can therefore guide future action

4) By tracking the results, you can easily calculate the cost per response (inquiry or sale).

5) This measurability is a major advantage for marketing compared to other marketing communication tools.

Developments in information technology have provided direct mail professionals with a wealth of possibilities and have propelled the use of direct mail/direct marketing:

1) Increased computer processing power

2) Availabilty of customer addresses

3) Software to help identify and select the right customers

4) Ability to digitally print variable personalized data

5) Expanding number of mass media options.

The power of direct mail to address every customer as one person vs the mass medias "one size fits all". Customers appreciate direct mail when it's relevant, respectful and rewarding to them.

Closing Rates by selling to people you know is easier:

1) New Customer=5-20% closing rate

2) Repeat sale to lapsed customer=20-40% closing rate

3) Repeat sale to existing client=60-70% closing rate

Loyalty is closely related to customer satisfaction. Companies need to be better at anticipating consumer questions and complaints.

Response Rates of Direct Mail depend on:

1) Address list used

2) Timing

3) Creative Execution

4) Incentive

5) Type of product or service

6) Familiarity with product or service

Who Responds to Direct Mail: (in descending order)

1) Customers-3 to 8 times more likely to respond or buy

2) Respondends-but not yet made a purchase

3) Former Customers

4) Referrals

5) Those who bought different type of product or service

6) Those who bought similar product/service from competitors

There are a variety of opinions on what makes up a successful Direct mail program. Listed below are a few of them. You'll notice that they basically have the same criteria with different percentages:

50-20-20-10 Probability of Success:

50%=List

20%=Offer

20%=Creative

10%=Timing

40-40-20 Probability of Success:

40%=Quality of List-better data=better results

40%=Quality of Offer, incentive: is it a good offer sent to the wrong person

20%=Creative-copy supports the imagery

NOTE 78% of DM is thrown away unopened. This is due to the average consumer receives 27 pieces of mail per week.

Once direct mail arrives, consumer needs to open and read. The envelope or exterior needs to motivate them: size, text, pictures, offer or incentive, call to action etc.

What people tend to do with direct mail:

40% open & read

20% open only

40% not open at all

After consumer reads content, we want them to act, get involved or stimulate them:

1) Respond by deadline

2) Early bird price advantages

3) Limited offers

4) Etc.

It is predicted that .046% is the average response rate for a general broadcast black n white static piece.

How to Increase Response: (from the basis of .046% standard black n white mailer)

Personalization Drives Response 2004 study)

1% response rate for broadcast black n white no personal info

+1.5% response rate to black n white with personalization

+1.5% response rate with 4cp no personalization

+2% response rate with 4cp with personalization

+6.5% response rate with 4cp and a deeper personalization in form of purchase history

Versioning: different groups receive different versions based on criteria, content, language changes for specific audience. Typically black copy file.

Hybrid: Offset printing plus variable copy

Customization: Altering each document to meet requirements of certain group. Guidance based on a certain criteria. One to four color images change plus copy.

NOTE it's not the quantity that is sent out, but the number of responses you get back that matters.

Variable Data Results:

34% faster response rates

48% Repeat orders

25% Increase in Average order volume

NOTE when BRC is "pre-completed" with recipients name & address, return rate increases 13%.

Projection on how to Lower cost per response by using VDP personalization

Projection on cost per sale and ROI using VDP personalization

Data Base is the most important lever:

1) must be clean

2) must be well defined

3) limited target group=data mined and clearly detailed

4) will outscore an ill defined, broad targeted group

5) Drayton Bird's direct marketing expert estimates a good database might imply:

A) 6x's higher response rate with good data base

B) 2x's higher response rate with good offer

C) 2x"s higher response rate with if the timing is right

D) 1.25x's higher response rate with good creative

E) 1.2x's higher response rate with response possibilities

NOTE: 18% of Americans relocate, 2% of your list moves monthly

Mail list hygiene:

1) merge/purge

2) zip code sort

3) address standardization

4) delivery sequence file

5) delivery points for bar-coding-specific delivery points

Budget allocation for Direct Mail:

Direct mail allocation is on the increase. Today, 25% of marketing communication budgets are spent on direct mail across Europe. One of the largest markets is UK, where direct mail expenditure has grown >165% the past 13years. It is estimated that direct mail generates 26billion worth of income for consumer advertisers every year in the UK.

Direct mail, today, has become an extension of brand experience via advertising and packaging. The image expressed through direct mail is consistent and coherent with other means of communication. It adds up to overall brand feeling.

Testing:

1) You must be testing all the time

2) 3-5% of budget should be towards testing

3) Never send out a non-tested package

4) Always test outside of package, envelope etc

5) Must be engaging, seductive, motivating

6) Hang offer on outside, lead to inside or other side

7) Would you like ____, then look inside for more etc

8) Visual supports copy, copy is part of offer

9) How do I make you believe I'm sincere, honest, etc.

What to test:

1) copy

2) imagery

3) size

4) components

5) the offer

6) paper quality-has improved responses by 10-16%

7) Best place to start letter copy or envelope teaser

8) Learn from what doesn't work, was it the offer, time, copy, vehicle, target

9) Losers can be winners

Ask Questions:

1) Attention-does it grab

2) Interest-does it generate

3) Desire-does it stimulate them to open or look at it

4) Action-does it create a call to action

Offer:

1) Engaging

2) Seductive

3) 1^st obligation-Question; "Why should I...(do what)?"

A) go to web site

B) peel back label

C) etc

D) Try to make people do something that they might not do otherwise

Call to Action:

1) What do I want you to do

2) Why should you do it

3) When do we want you to do it by

4) Instruct customer how you want them to do it ( directly vs subliminally)

Return on Investment info:

1) TV=1to 5-for every $1 spent, you get back $5

2) Direct Mail=1 to 11-for every $1 spent, you get back $11

Print is still the best way to develop a brand:

A) loyalty

B) most trusted media overall

Wow, that's a lot of info. Where to start?

First, you must understand / know your Target Market in order for you to create and design an offer that gets noticed or acted upon. Who/what is your target market as it pertains to:

1) Gender 4) Location 7) Buying objectives 10) etc.

2) Age 5) Hobbies 8) Likes/dislikes

3) Income 6) Industry 9) Life Buying History

The more specific your target, the better use of your marketing dollars and hopefully the bigger ROI will be. A mail list company can assist you in obtaining this data. If you need some sources, please give Tom Kubinski a call at 651-255-1225.

Some things to consider:

Competition-You'll need to answer the following in order to compete:

1) Who are they

2) What are they offering

3) Who are they trying to reach

4) How are they trying to reach their targets

5) How often are they contacting them

6) How will their offer compete with yours

7) What ideas can you use and improve on

Your Product / Offer-here you'll need to figure out

1) What are you selling/offering

2) What's special about your product

3) What makes yours stand out from the rest in capabilities, benefits, look, design etc

4) What will it do for your target market-write out in short and focused sentences on the benefits/comparisons

Once you have clearly defined your target audience, understand their demographics and psychographics, have done research on your competition and clearly defined your offer, you are now ready to start the process of creating something that stands out from the rest.

Copy & Design-develop a design profile that can serve as a guide. One that the sense of style matches those of your target audience and specific image of your company. Keep in mind that you'll want to cover it in a less is more approach by telling them:

1) Who you are

2) What do you do

3) Who do you cater to

4) What can you do for them

5) Where are you located

6) Call to Action-state your offer in every element of your package, define what you want them to do and repeat your call to action several times

7) Make it Easy for them to Respond-If you want to sell them something, make it easy to order. If you want them to go to a specific page on your web site, make it easy for them to click and go there. Also include how they can contact you.

Images

Big, Colorful, Eye Catching and different in some manner
The use of techniques like spot coatings, foils etc to highlight specific areas
Black and White images can be used along with 4color to show a negative situation in B/W with the positive/solution in a 4color
Since it is going through the mail,coatings to protect the piece is highly recommended

Some TK's Korner issues that may assist you with this section are:

1) Duotones, Tri-Tones, CMYK Quad-tones

2) Creative Coating Techniques

3) Using Desktop Techniques to Your Advantage

4) Picking the Right Paper

I hope this issue has been helpful in letting you know more about Direct Mail, what you can do to make the best impression, how you can ensure you mail stands out from the rest and what critical elements you should consider. If you would like more information for your next printed project, to see some of the really cool samples I have or regarding this article, please give Tom Kubinski a call @ 651-255-1225.

More info listed below that you may find of interest:

Tools Folding Options, Binding Options, and Envelope Options

Referrals are greatly appreciated. If you know someone who I should contact, please let me know.

If you would like to join me on one of our upcoming tours, if there is something that you would like me to address, or if you know of someone who might like to receive TK's Korner, please let me know via e-mail at tkubinski@sextonprinting.com or phone. Take care and have a great day.