| There are three key elements to every direct | | | | of $50,000 who live within 10 miles of your store. All of |
| marketing campaign: the list, the offer, and the creative. | | | | these examples are likely to do better with a compiled |
| Experts seem to agree that the single most important | | | | list than a response list. This is good news if you |
| element is the list. In fact, many direct marketing | | | | understand the demographic profile of your customers |
| professionals claim that the relative ratio of importance | | | | since compiled lists are generally less expensive than |
| is: 70% list, 20% offer, and 10% creative. It is ironic, | | | | response lists - costing between $40 and $70 per |
| because this is also the element that is least well | | | | thousand versus $90 to $125 per thousand for |
| understood by small business owners and most often | | | | response lists.Response lists are the best choice if you |
| over-looked.Before you start it is important to | | | | need to cover an entire market of prospects with |
| understand the intent of your campaign and develop a | | | | similar characteristics. For example, if you are selling a |
| direct mail marketing campaign. Two common goals | | | | specialized software engineering tool, or to every |
| for small businesses are to either (a) convince existing | | | | Certified Public Accountant in the State, there are lists |
| customers to buy more (loyalty programs), or (b) | | | | available from publications that serve these markets. |
| convince new customers to purchase for the first time | | | | Often information is even available on how frequently |
| (sales prospecting).Loyalty Programs:The value to your | | | | these prospects typically respond to offers they |
| business of any particular customer is known as | | | | receive. Response lists, especially among those who |
| Lifetime Customer Value - this represents the sum of | | | | are shown to respond, can produce higher response |
| all purchases that customer will make from your | | | | rates - thus justifying the higher price.Both types of lists |
| business over the lifetime of the customer. It almost | | | | are not always available for all audiences. So a little |
| always easier to convince an existing customer to buy | | | | research may be required to determine what is |
| more of your products or services, assuming satisfied | | | | available for your target market.Once the correct type |
| customers, then to sell to new customers. In fact, | | | | of list is determined the next step is to decide how |
| repeat sales are essential ingredient for realizing | | | | many names are required. This comes back to your |
| lifetime customer value (LCV).Loyalty programs seek | | | | direct mail marketing plan. First, decide how many |
| to maximize LCV by building an ongoing rapport with | | | | customers you are trying to acquire.The answer is not |
| existing customers. Imagine the local realtor who sends | | | | as simple as "as many as possible". Consider how |
| a monthly newsletter, the neighborhood garage that | | | | many responses you can handle. If the goal is to have |
| sends out a note when it's time for a regularly | | | | customers call you, and you only have one person to |
| scheduled oil change, or a local retailer who sends out | | | | answer the phones, then you probably don't want |
| invitations several times a year for private sales | | | | 10,000 prospects calling you at once. It is a simple rule |
| events for "preferred" customers only. These are all | | | | of marketing that the further you get from the initial |
| examples of loyalty programs.To do a successful | | | | point of contact with your prospects the less likely |
| program of this nature it is essential to know who your | | | | they are to buy. Thus, you only want as many |
| customers are. Most businesses keep a list of current | | | | prospects as you can service at any given moment in |
| customers - this is called a house list. The most basic | | | | time.Similarly, if you have a restaurant that only has |
| list will include a name and contact information (e.g. | | | | seats for 100; it doesn't make sense to attract 1,000 |
| address, phone number, email address, etc.). However, | | | | new customers to your doorstep on any given day. If |
| the more detailed information that is available the more | | | | you have the chance to acquire a new customer you |
| useful the list will be. For example, it is simple to see | | | | may only have one chance. Another simple rule of |
| how purchase history, income level, gender, and | | | | marketing is that it is ten times easier to get a new |
| personal data can all lead to more targeted marketing. | | | | customer to try your business the first time, then it is to |
| The more targeted a program the better the chance | | | | get them to try it again if they have a bad experience; |
| of success.Given the importance of repeat purchases, | | | | plan to acquire only as many customers as you can |
| and the role that loyalty programs can play in driving | | | | service - and serve them well. In the long-run this is a |
| those sales, it is important to gather information on | | | | far more powerful plan.With your target in mind just |
| your existing customers. Some businesses routinely | | | | work backwards. For example, if you are trying to |
| gather this information (e.g. auto mechanics, plumbers, | | | | attract 100 new customers, and you believe that 2% |
| and appliance repair people require a completed | | | | will respond to the promotion, of those 50% will buy, |
| work-order for every customer). For other types of | | | | then you will need 10,000 names (10,000 * 2% * 50% = |
| businesses, a little more creativity may be required (e.g. | | | | 100). Response rates will vary depending upon the |
| the "club card" that Safeway offers, or a weekly lunch | | | | accuracy of the list and attractiveness of the offer. |
| give-away by a local restaurant for those customers | | | | Direct mail professionals often use a 2% response |
| willing to put their card in a fishbowl).When building this | | | | rate as the benchmark for a successful campaign. |
| type of list be sure that it is "opt-in". This means to tell | | | | However, much higher response rates are possible |
| your customers that you will be sending them | | | | with a targeted and attractive offer.When using a |
| information periodically and get their permission. Most | | | | response list the vendor can often provide you with |
| customers will give you permission willingly if they | | | | target counts. These may or may not be enough to |
| know you will periodically send them offers or | | | | meet your goals. You may need to combine several |
| information that are valuable to them (e.g. coupons, | | | | response lists to get the list counts that are |
| special offers, the weekly menu, etc.).No matter what | | | | required.With compiled lists the trick is to configure the |
| type of business you are in, building an accurate and | | | | demographic selects appropriately to produce the size |
| detailed house list is essential for maximizing lifetime | | | | list required. For example, if you need 10,000 names, |
| customer value. As we will see, it is also an important | | | | and you request all females within ten miles of your |
| first step in driving new sales.Sales Prospecting:Even | | | | business, and the initial list count is 100,000 names, then |
| with the most loyal customers there is a natural | | | | you may have to tighten your search criteria - possibly |
| attrition among existing customers. In fact, this attrition | | | | by adding another select (e.g. income level). In a similar |
| may not be the fault of your product or service - | | | | fashion, the demographic criteria can be relaxed slightly |
| customers move, customers die, lifestyles change, and | | | | if the name count is not high enough.In addition, this is |
| so do personal preferences. The bottom line is that | | | | not a strictly compiled or response list decision. If both |
| sales' prospecting is an essential part of maintaining | | | | are available, and the counts are sufficient, then it may |
| business growth.One of the most effective tools | | | | be appropriate to do some small test mailings to |
| available for sales prospecting is direct mail. According | | | | determine which produces the best results for your |
| to the Direct Marketing Association, on average, direct | | | | business, whatever type of list you choose. It is always |
| mail returns ten dollars for every dollar invested. | | | | best to do test mailings to a particular list, hone your |
| However, as noted earlier, the most pivotal element to | | | | message, and then mail to the larger |
| direct marketing success is having the right list. What | | | | list.Summary:There are two types of mailings that |
| does it look like? Where does it come from? Where | | | | should be used to drive any successful marketing |
| do you start?If you are prospecting for new | | | | effort: loyalty programs and prospect mailing. The best |
| customers you will probably not have their names. But, | | | | results are achieved for loyalty programs when a |
| names of qualified prospects are available through list | | | | detailed house list is available. For prospect mailings, |
| brokers - or directly from Zairmail. However, to buy | | | | lists must usually be purchased - a detailed house list |
| mailing lists it is essential to know what your best | | | | can also be incredibly valuable for purchasing the |
| prospective customers look like. That's where your | | | | correct list.There are two primary types of lists |
| house list comes in handy. Scanning through your | | | | available for prospect mailings: compiled lists and |
| house list you can identify the traits that are common | | | | response lists. The correct choice revolves around the |
| among your best customers. For example, you may | | | | type of customer you are targeting, geographic and |
| find that your best customers live within five miles of | | | | market reach, and total list counts that are available. |
| your business and have incomes less than $50,000. | | | | The best choice is based on a well thought out direct |
| This demographic information will help you purchase a | | | | mail marketing plan and realistic targets.Direct mail is |
| list of customers that will buy.There are two main | | | | the most powerful advertising medium available - bar |
| types of lists that can be purchased: compiled lists and | | | | none. Put the right offer in front of the right customer |
| response lists.Compiled mailing lists are comprised of | | | | and they will buy. If you need assistance we are here |
| information from public records and sources such as | | | | to help. Zairmail can help you purchase the right list for |
| the phone book, courthouse records, bankruptcy filings, | | | | your needs. It is our mission to put all the tools in your |
| mortgage deed records and more. On the other hand, | | | | hands to leverage direct mail and make your business |
| response mailing lists consist of individuals who have | | | | an overwhelming success.Wilson Zehr is a Partner in |
| responded to an offer either through the mail, phone, | | | | Cube Management ( a Portland, Oregon based |
| television, or through other means of mass | | | | company that helps organizations accelerate their |
| communication (e.g. a magazine subscription list, a | | | | sales. Mr. Zehr is also the founder of Cendix ( the |
| catalog mailing list, etc.).These types of lists must be | | | | leading provider of channel marketing tools distributed |
| understood - each has a set of unique characteristics | | | | enterprises. Mr. Zehr has over two decades of |
| that enables it to achieve specific and distinct | | | | experience designing and delivering marketing and |
| objectives. The key to success is to understand when | | | | software solutions for business. He also has extensive |
| it is most appropriate to use each kind.Compiled list are | | | | experience driving sales, marketing, and strategic |
| ideal for those businesses that need special | | | | alliances with many of the largest technology |
| demographic selectivity to target a well-defined | | | | companies in the world including: Oracle, Intel, Microsoft, |
| market, for instance targeting auditing companies | | | | Sun, HP, IBM, Xerox, and many others. Wilson Zehr |
| specializing in bookkeeping, manufacturers with 50 or | | | | can be reached at Cube Management, , 503.789.2676. |
| more employees, or families with household incomes | | | | |