How to succeed with direct mail

What is a successful Direct Mail campaign?

The expectations of some business people tends to be unrealistic in relation to the response that can be expected from the average Direct Mail campaign. Whilst some people expect a response rate of 75-80%, the reality is that most campaigns will only return a fraction of that amount. Does this make them unsuccessful? No. Basically any Direct Mail campaign that pays for itself can be considered successful. Before embarking on any Direct Mail campaign there are a few things you need to understand ...

1. Work out your costs. This includes the cost of printing, envelopes, any implements that you put in the envelope, the cost of buying or acquiring a direct mail list and obviously postage.

2. Know your margins. You need to know the net profit you make from anyone who buys your product or service. By understanding how much you actually make from each sale, you’ll be able to work out the %response required to make your campaign profitable.

3. Life Time Value. Don’t view each new customer that your campaign brings in as a once-off-sale. You will normally lose money on the first sale to a new client. The average business will need to sell to a client 2.5 times before it begins to make a profit from them.

With this in mind you need to focus on bringing the customer back on a regular basis. Therefore any Direct Mail campaign which covers its cost initially will turn out to be profitable in the long term. A realistic response would be between 20-35%.

What makes a successful Direct Mail campaign?

Understanding that our aim is to achieve between 20 and 35% response to our campaign, we need to look at the individual components of that campaign. We’ll deal with these components, one by one, in a moment, but first we need to identify them individually.

Targeted Lists - You don’t want to mail to anyone who would not be interested in your product or service.

Headline ... This is the most important part of your direct mail letter. If it doesn’t grab your readers interest immediately, your campaign will fail.

Body Copy - Once your headline has got the reader in, you need to convey the benefits of buying your product or services in a clear, believable and easy to read fashion.

Objects - Putting items in with your letter can greatly improve your response. Things like Minties, balloons, rubber bands and tissues can all be used to make your letter stand out and increase the chances of your letter being read.

Envelope - This is the first thing your prospect will see. If you don’t put some thought and effort into designing an effective envelope, chances are your letter won’t even get opened.

Phone Script - Unless you’re selling directly off the page, you need to have an effective follow-up phone script. This can mean the difference between a 9% or a 25% response rate.

The 7 Steps to Writing Great Direct Mail Letters

1. Why (Use Direct Mail)?

Before writing anything, you need to work out whether direct mail is for you.

Obviously, you have a suspicion that it is (or you wouldn’t have invested in this package), but you need to compare it’s potential returns against other available ways to market yourself.

For example, if your market is broad and your offer is VERY appealing, why not use the newspaper instead - it’s easier and probably a cheaper way to go. Or what about radio?

Direct mail is ideal when you have a specific group of people you want to advertise to, and there is a way to reach them. Here’s a perfect example event management companies. They know who their target market is (businesses that hold regular functions and events), and they know how to reach them (look up their address and send them a letter). Direct mail is perfect.

On the other hand, direct mail is probably inappropriate for a fast food outlet - the market is probably too broad (anyone looking for a quick, cheap meal at lunchtime) and it’s hard to reach them through the post (where would you find their addresses - you don’t know their names?).

Of course, direct mail is always ideal for follow up strategies - that is, marketing to people you’ve already dealt with.

Writing them a letter to say ‘please come back’, or ‘here’s our latest product’, or ‘it’s time for a service’, or even just ‘thanks’.

Remember though, direct mail letters are very often thrown away. Simply sending a letter is no longer enough. If you’re going to mail out letters, be prepared to follow up each one with a phone call.

2. Who (Are Your Target Market)?

Before you even buy the envelopes for your Direct Mail campaign you need to identify exactly who it is you’re trying to reach. Precisely who is your target market?

A failure to answer this question will cost you hundreds in wasted dollars and lead to a poor conversion rate. For example, imagine a company who sells in-ground swimming pools doing a mailing campaign to a block of high-rise rental apartments. To avoid costly mistakes, you need to know who your potential customers are before you start mailing your letters out.

Knowing your target market will also enable you to write in a way that your prospect will relate to. Using terms and phrases that are commonly used by your prospects will greatly increase the effectiveness of your letters.

So let’s get specific - who are the people most likely to be interested in your product or service. Here are some guidelines ...

Age: How old are they? Don’t just say ‘all ages’ or ‘a variety’. We want to create a mental picture of your average customer. Think of an age that symbolises most of your customers.

Sex: Are they male or female? ‘Half and half ’ is too broad.

Practically every business is split one way or the other. Give it some real thought - which gender does business with you currently.

Income: How much do they make? Do they earn a great living, meaning that quality is the big issue, or are they scraping for every dollar, always looking for a deal. It’s essential that you find this out.

Where do they live: Are they local, or do they come from miles around to deal with you? This will dictate how you communicate with them.

3. Where (Do you find a suitable list)?

Now you’ve identified the ‘who’ you need to find a way of reaching them.

Although there are many lists available to you, not all of these will be targeted.

There are basically 3 ways to acquire a Direct Mail list.

Buy one from a broker - This is a quick, but expensive way to get a mailing list. Most brokers can provide you with lists that target particular geographic or demographic segments of the population. For example you can buy a list which will give you the names and addresses of women aged between 30-55, with an income of over $40,000 per year who live in a 7 km radius of your store.

Whilst brokers can provide you with very specific lists, they tend to be far more expensive than general lists that they already have compiled. Cost will normally dictate how targeted you can be when buying a list from these companies than general lists that they already have compiled.

You’ll find these companies listed under ‘List Brokers’ or ‘Mailing Lists’ in the Yellow Pages.

Mail to someone else’s list - Find a non-competitive company with a similar target market to your own. Then simply ask them if you could mail to their list or include your letter with one of their upcoming mail-outs. The success of this relies on you having a good relationship with the business in question. Although this method can be hit and miss, it can be a very inexpensive way of reaching potential customers.

Create your own - This is one of the fastest and least effective ways to put together a list of people who are interested in your product or service. The quickest way to compile your own list is to run a competition. To enter, people simply need to write their name and address on the entry form provided and then drop it in a box. By offering one of your products or services as the prize you have a greater chance of reaching only those people who are genuinely interested in what you have to sell.

To set up this competition you need to have tickets printed and a venue to run it in. Approach a shopping centre, sporting club or retail outlet to see if they’ll let you leave your tickets and entry box on their premises. Alternatively you can run it as a cut out the coupon competition in the local paper. If the prize you offer is of a high enough dollar value, the paper may run it for you free of charge. Contact their Promotions Manager and explain your idea. You’ll need to stress the interest the competitions going to create and how it will increase the papers circulation.

4. What (Do You Want To Say To Your Prospects)?

There’s often heated debate about which type of direct mail letters work best, but there’s never a disagreement about which type don’t - those with no obvious purpose.

For example, if you write a letter that says ‘Hi, my name’s Harry. I cut hair, I’ve been doing it for 12 years’, it’s unlikely people will call. Your letter needs to give them a good reason to read, then a great reason to do something towards dealing with you.

Your letter needs to have a clear purpose, and take people from point A to point B. Point A is your headline, which should identify where they are now. The body of the letter leads them to Point B, which is where you tell them why they should act right now, and how to do it.

Most important is understanding your customers. If you understand the needs, wants and position of your customer, you can sell almost anything to them. For instance - mailing a letter to 47 year old women with a headline that says ‘Concerned about menopause? Here’s why you don’t need to be ...’ could yield excellent results. Or what about a letter to 17 years old that says ‘Forget the fake ID ... here’s how you can get access to Sydney’s best nightclubs before your 18th’. Or how about a letter to struggling musicians that says ‘Tired of people passing your talent by? Here’s how to take the bull by the horns and get famous ... within 14 months’.

These letters reach out and speak to the people reading. If you don’t understand the people you are writing to, you’ll inevitably get off on the wrong foot with them. Imagine sending a letter to new mothers that said ‘Is your baby bored? Here’s why you should take it to Dreamworld ...’. The readers would be downright confused - anyone who’s ever had a child wishes for a moment of peace, not more excitement.

Before writing anything, you need to decide exactly what message you want to communicate. Then you need to decide what you want the recipients of your letter to do about it.

Here’s a great example...

Harry, the hairdresser, mentioned above, decides to write a letter to his past customers.

Considering the abysmal result of his past ‘Hi, my name’s Harry’ letters, he resolves to get more specific. This time, he has a clear message (Harry has a new automatic re-booking system that makes life easier and saves you 20%), and specific objective (encourage customers to use the new system, and book in for a haircut within the next 2 weeks).

Now the letter has a good chance of working.

It pays to remember that simply asking people to act now (or for that matter, telling them to act now) is rarely enough. You need to give them a good reason why NOW is the time to do something.

See, most purchases can be delayed forever. It’s one thing to create desire, but it’s another to actually get people to part with their cash. Every month, customers have to decide what to spend their money on. It could very realistically be a decision between buying your lovely oriental statuette, or buying the kids school shoes.

Every buyer has priorities. Of course, there are ways to re-arrange these priorities.

If you offer a special deal on the statuette, the customer may think “well, the kids can wear those tatty sneakers a little longer - but I won’t get this deal on this statuette again”.

The question is, how do you offer a great deal without slicing your profit margin drastically. There’s a couple of ways. First, make sure you are selling products or services with a high margin. Often, that’s not possible try getting a high margin on petrol. If you have the option of gearing your business towards higher margin items, do so - it’s much easier to come up with great deals.

If you can’t do that, you need to find items or services that are highly valued by the customer, yet have a low cost. Extra service is an old standby, information booklets are another one. Even better are services you can get for free from other businesses. For example, a hairdresser could offer to introduce their clients to a beauty salon, if the beauty salon agrees to give every customer a free facial.

5. How (Will You Write A Letter That Works)?

It’s a common misconception that you have to be a great writer, or some wizard with words to write a letter that works. That’s rubbish - most of the most successful letters are written by people who know the people they’re writing to, and know how to come up with a good offer. Their writing skills are irrelevant. Simply going to a database of stressed out execs and saying ‘100% less stress in 10 minutes or it’s free ... guaranteed.

Normally $15, we come to you, phone 4563 4525 for a FREE introductory session’ is enough. It doesn’t matter what language you use, or even if you make spelling mistakes.

It might sound funny, but most people won’t even know.

At the end of the day, people won’t buy from you just because you can write letters so good that a publishing company might offer to produce them as poetry. By the same token, people probably won’t avoid buying from you because you can’t spell quixotic, superfluous or rhetorical.

As long as your message is clear, quick and targeted well, your letter will work. It’s really like serving food - if you are serving a delicious meal, it’ll taste just as good delivered on paper plates as on your best silver. People may prefer it on the silver, but if you’re serving to people hungry for what you’ve cooked, they’ll eat anyway.

There is only one sin you don’t want to commit - getting off the point, or rambling too long. If every word and every sentence says something important to the sale, fine. If your letter is full of guff, people will lose interest very quickly. The same applies if you stray from your initial intention and message.

Here are some other guidelines for getting your letter just right ...

Your headline - Tell people exactly what they will get out of reading the letter ... the headline lets prospects know whether they should bother reading on. It needs to promise immediate benefits. For example ‘Here’s how to make $4500 extra income this month (just by sleeping in 2 hours later)’ or ‘Save 56% on your insurance bill’.

The other approach is to invoke curiosity. This is harder to do effectively, but better if your product doesn’t contain a striking benefit. Here’s a good example ... ‘Here’s why 3 out of 4 Australian children will lose their hair before they reach 17’ or ‘4 reasons to call George’s Gym before July 15 and say “I’m a willee-wrinklewowee’.

Most importantly, your headline needs to stop the reader dead in their tracks.

Another trick is to speak directly to them in your headline. For example, why not make your headline something like ... ‘George, here’s how you can make an extra $19,000 this year and make Harriet happy’. If you have your customers first names, this is easy to do with computer software.

Create a strong introduction - the first couple of sentences are incredibly important. They tell people whether they should read on in depth or start skimming. 9 out of 10 times they’ll skim (or trash the letter entirely).

Here’s a couple of powerful intros that help get higher readership ...

‘Before you start skimming, just stop. Stop and think about where your life is heading’ or ‘You don’t know it yet, but the next 5 paragraphs contain the secret of earning a fortune, without breaking your back’.

You need to immediately let people know that they’re doing the right thing by reading. Here’s another ‘cut them off at the pass’ style intro ‘I know you’re tempted to throw this letter away without reading it, but I have a warning for you’.

Of course, in most cases your first paragraph will just support your headline.

For example, ‘you’re probably a little disbelieving. In fact, I’m certain that you think I’m pulling your leg, but let me show you why that headline is 100% true’.

Include a strong, specific call to action ... if you don’t tell people what to do, they probably won’t do anything.

Give them precise instructions on what to do - who to call, which number to use, when to do it and what to ask for. Here’s a good example - ‘Call Gordon Harris now on 9345 6756 and ask for your 45 page personal astrological analysis chart’.

Better still - tell them to act, then mention that you’ll be phoning in the next couple of days to discuss the letter and offer further.

Include concise and convincing body copy ... the body copy is the actual text between the intro and the call to action.

You don’t need to be a great writer to do this part well - it’s more important that you get the point across clearly, in as few words as possible, and in logical order.

After you write your first draft, go through and edit viciously - that is, cut out any sentence or word that doesn’t need to be there. Next, read it aloud and make sure it flows. Lastly, have a couple of people check through, and ask them to tell you what they got out of it. Ask them to explain it back to you, just to make sure you’re getting the point across. Ask which parts were boring, and don’t be afraid of the criticism. You didn’t set out to be the world’s greatest writer anyway, so any comments should be helpful, rather than hurtful.

Sub-Headlines - If your letter is a long one (anything over 2 pages), it’s important to break up your text with sub-headlines. These are short mini-headlines that guide the reader through the letter and pique their interest. There’s nothing wrong with making each one as attractive as your main headline.

Use a PS - One of the most important aspects of the copy is the PS. In fact, the PS is often the most read part of the letter. It pays to include a major point right at the end - for example, an extra special bonus if they take up the offer in the next 3 days.

People tend to read the PS because it’s unexpected - they are surprised that someone has forgotten to include something. Some professional copywriters use up 3 or 4 PS’s and write up to half a page for each. It sounds crazy, but it seems to work.

Make the layout ‘fun’ ... when writing your letter, forget everything you learned in school about writing a ‘business letter’ (for some people, that shouldn’t be too hard).

Indent paragraphs, splash bold throughout, use bullet points and give everything lots of space. If you look at your letter and think ‘my god, that’s a lot’, you need to take another look at your layout.

Perhaps it needs to be spread out. Or maybe you need to take a paragraph and put the main points next to bullets.

Watch out for letters that are too long or too short ...

The number of pages is less important than the actual layout. If spacing it out spills the letter over onto 3 pages, rather than 1, that’s ok. Just as long as it looks ‘fun’ to read.

There’s a common perception that a 1 page letter will always be read.

There’s some truth to that, but there’s also a lot of mistruth mixed in there too. If the letter is packed solid with text, just so it’ll fit on one page, people will be more turned off than if it were 4 pages and spaced.

Likewise, if it’s uninteresting and un-targeted, people won’t read it out of politeness. And if it doesn’t have enough meat and reasons to act, people won’t do anything. You need to say enough to get them inspired to do something, but not so much that they run out of time, or get bored.

Avoid anything that’s hard to read ... type your letter in a standard font: Times New Roman or Courier. Whilst another funny font may look ‘nicer’, it’ll be hard to read.

Remember, people aren’t interested in playing games by trying to decipher your bizarre typeface - they just want to know if they should bother reading, and if they like what they read, what they should do.

Don’t make things confusing - it’ll only obscure your message. Avoid being an artist - be a business person.

Include a gimmick ... the very best direct mail letters contain some sort of gimmick, something out of the ordinary that makes them memorable and interesting.

Here’s a few examples ...

A letter headed ‘Here’s why life is sweeter when you’re with MGA Insurance’ included a lollipop ...

A piece of salami was sent with a letter - the tie-in was that one rotten piece can bring down a whole company. At the time, the ‘salami incident’ (where a piece of salami allegedly poisoned and killed a young girl, subsequently destroying the company) was still fresh in the minds of the readers. The letter was for an employment agency, which helped you weed out the ‘rotten apples’.

50 cents was taped to the top of a letter - the headline was ‘I’m so eager to show you the new range of Piaggio Motorcycles, I’ve already paid for you to phone me’.

A small bag of fertilizer was mailed with a letter to agricultural wholesalers the headline was ‘Here’s 30g of Australia’s most advanced fertilizer. Here’s why you’ll soon need 30 tonnes of the stuff ...’.

A gimmick is a brilliant way to get attention, and stop people in their tracks. It’s also great of you’re following your letter with a phone call. Imagine calling after mailing the letter with the piece of salami. Instead of the usual ‘oh, I don’t know - I may have read it ‘ reply, you’d get ‘oh, that letter’.

Envelope ... there’s mixed opinion on whether you should write anything on the envelope.

People will open anything in a plain white envelope with their name on it - it could be a bill, a notice from the government or a cheque. Who knows?

If you put a headline or message on the outside of the envelope, you run the risk of people dismissing the letter before even opening it. For example, if you received a letter that said ‘Inside ... your chance to buy a new Falcon’, you’d be able to instantly decide whether you needed to read the letter or not.

And that’s before you’ve seen the pictures or great deals.

Of course, there are good ways to go about it. What about a letter to business owners that says ‘Here’s how to get better accountancy advice and pay NO accountant fees’ on the outside. You’d probably have a look.

Always follow up with a phone call ... people generally don’t call straight off a letter - that’s just the nature of the game.

However, if you mail them a letter, then call soon after, you’ll be surprised by the leap in response. People have the chance to ask you questions, then order directly.

6. When (To Mail Your Letters)

If your product is perennial (that is, not seasonal), you don’t have to be too concerned about when to mail your ads. It’s more a question of which day, rather than which time of year.

With business clients, it’s usually a good idea to mail them a letter on Tuesday or Wednesday. People are usually feeling too busy on Monday, and pretty uninterested in thinking about anything new on Friday.

If your business is seasonal, you need to approach DM differently. For example, a swimming pool builder would find it fruitless mailing a ‘summer letter’ in winter. The business owner would need to adapt the appeal to suit the time of year.

7. What else (do you need to think about)?

Use this section as a final checklist - once you’re happy with your Direct Mail letter, run through and make sure you’re ready to get started. Here are a few things you may not have thought of ...

Staff Training: Do your staff fully understand the strategy you’ve implemented? It’s important that they understand the vital role they are to play in this strategy. If your new customers come in and find anything less than the highest level of service your Direct Mail campaign will fail.

Objects: Have you included an item with each letter? Check and make sure that all letters contain the object that you’ve mentioned in the opening paragraph. Your letter will not make much sense without it.

Check Stock and Staff Levels: It’s unlikely your Direct Mail campaign will bring in hundreds of people all at once (very few actually do), but you need to be prepared for a sizeable response. There would be nothing worse than having a rush of new customers come in only to find you have no stock or are too busy to serve them. Plan for your Direct Mail campaign by making sure you can cater for any increased demand.

Writing ‘Killer’ Headlines

The best headlines do 3 things - identify the right target market, provide benefits and generate enough interest to get them to start reading.

Let’s look at each one in more depth ...

Identify The Right Target Market: You need to make sure that your target market read your Direct Mail letter. Your headline needs to immediately speak to them. There’s nothing wrong with starting your headline with ‘MOTHERS’ or even ‘ATTENTION Ladies 37-40 with no children’. Of course, there are other more subtle ways, such as ‘Here’s how to make your Ford go faster’ or ‘Help the kids succeed at school this year’.

Provide Benefits: You need to give your readers reasons to investigate further. Think about it - what is really going to make them want to read. A headline such as ‘MEN: How you can have twice as much sex as you’re having now ... guaranteed’ speaks for itself. What can you say about your product or service - what is the main benefit? Once you’ve thought of that, try coming up with some more specific and interesting ways of phrasing it. For example ‘How you can make an extra $4500 this year and pay off those credit card debts’ is more interesting than ‘How you can make more money’.

Generate Interest: There’s nothing more powerful than curiosity. Compare these two headlines - ‘AMWAY: a new future for you’ and ‘How you make $1100 extra per week, by meeting 3 new people a month’. Both are for the same company, but one holds more interest value and is more likely to get you reading. Try getting the main benefit across without telling the whole story, and getting a bit of mystery in there. Of course, too much mystery can kill your whole ad. Who’d read an ad with a headline such as ‘Pure grunt’, ‘Big cheese’ or ‘Stilted’? No-one, as so many advertisers have discovered.

Break Even Analysis

It’s essential that you work out your costs up front. Otherwise, you’ll have no idea what you need to achieve in order for the campaign to be worthwhile. You may find out after doing the analysis that the campaign has so little chance of success, you need to go back to the drawing board altogether.

This analysis is for the whole campaign. After you’ve worked out your total fixed costs (for the campaign), you then work out your profit (your average dollar sale minus your variable costs), which gives you enough info to work out how many responses you need in order to break even.

Divide this number by the total number of letters you are planning to send out. This will give you a percentage response rate. As a very rough guide (every case is different), anything over 15% is stretching it. If you need that high a response, you might night to have another think about it.

The very best direct mail shots to cold, new lists get around 10 - 20% response. The average would be 5% The best direct mail campaign to existing clients can be around 50 - 60%.