Marketing - Direct Mail
Lists, response measurement, some tricks

Direct mail is a way of promoting your software product by sending prospects mail. It is a way of directly communicating to a list of people. 

List Selection 

A list is the names and addresses that you use to send your direct mail piece. This list is very important to the success of a mailing. Some experts place 40% - 60% of importance to the list and 40% - 60% to other combined factors, such as offer, sales letter, and timing. 

You rent a list from a company - as opposed to buying a list. You can rent a list for one-time use, n-time use, or unlimited use. However, until you test the list, it would be best to rent it for one-time use. Once you determine which list works for you, then you can start negotiating multi-use lists. 

Be aware that list rental companies track the use of your list. They include "seed" names that you will not be able to identify. These seed names show if you use the list more times than you rented it for. 

Once a name on the list contacts you, whether to buy or simply inquire, you can then use that name any way you want. They are considered your customer now. 

You rent lists from a variety of sources: 

Compiled List: Names and addresses from a common source - such as a phone book. These lists are the lease expensive, but have the lowest response rate. 

Mail Order Buyer Lists: Names and addresses of people who have responded to direct mail in the past. Lists can be selected by lifestyle or special interests. These lists respond better than compiled lists. 

Publication Lists: Names and addresses of people who subscribe to a particular magazine. General interest magazines tend to have a lower response rate than special interest magazines. Special interest newsletters have a small circulation, but if this group is your target market, it can have a better response rate than other lists. 

Donor Lists: Names and addresses of people that are of interest to non-profit organizations. 

House Lists: Names and addresses owned by a specific company of customers and inquires of their product. 

You can narrow lists down by demographic information, such as gender, geographic location, income, homeowners, frequency of purchase, recency of purchase, and monetary (amount) of purchase. Recency of purchase tends to be a good indicator of response rate. The older the names, the less likely the response - although you must test your lists to determine how old is old. 

Make sure that the company renting you the list has merged/purged it for duplicate names, has updated the names and addresses using NCOA (National Change of Address), and cleaned the file (removed all non-deliverables from the list). You should have in your contract you get credit for names that are returned for non-delivery. 

You should merge/purge the file against any customer list you already have, or any other rented lists you have. 

Prices are usually given in cost per thousand. There is usually a minimum order - such as 5,000 names. There is usually a cost to select based on certain criteria. Price ranges can be from $50/M to $300/M for a base price. Each source varies. However, the cheapest list may not be the most cost effective. You need to look at cost per acquisition once the mailing is complete. 

Common Measurements 

Cost per acquisition = Total Cost of Mailing / Number of Responders (people who ordered). 

Cost per piece = Total Cost of Mailing / Number of People Mailed. 

Response rate = Number of Responders / Number of People Mailed. 

Response rates to prospects (non-customers) average around 1%. 

Response Mechanism 

One of the most important parts of your direct mail piece is the response mechanism. This is the device that the prospect will use to place the order (or request information). 

In designing your response mechanism or order form you need use all you have thought about so far - your offer, your product, the benefit it gives your customers, the price, and the risk reducer (such as a money back guarantee or a free trial period). 

Make it easy for the prospect to place the order. Give them many ways to do it - telephone, e-mail, fax, mail back order form. 

Tell them exactly how to pay for the order. 

The response card should be easy to fill out, offer as few choices as possible, be short, and be easy to read and understand. 

Although using a postcard may be cheaper, people will not put confidential information on a postcard. They will not put credit card number or even name and phone number on something everyone can read. Use a business reply envelope, even if it is a little more expensive. You will get a higher response rate. And make sure the response card fits in the envelope without folding it. 

Involvement devices work. Give the prospect something to do, such as check a box to order or place a sticker or stamp on the order form. 

Give the order form a look of intrinsic value. Use the bond-like borders, seals, stamps, and other money look a-likes. 

Product Brochure 

This piece of the direct mail can be made a little more "slick" than the sales letter will be. The brochure will describe your product, the technical specifications, the benefits to the customer, testimonials from other customers, any free trial period, and money back guarantee. 

Include the company's name, address, phone number, fax number, and web address. 

Sales Letter 

The first line of a sales letter is a headline. It should give the reader immediately the benefits of the offer being made. This is the first thing a reader will read. 

The P.S. at the bottom of the letter is the second thing a read will read. Be sure to add a P.S. to your letter, giving the offer, the benefits, the free trial period, and the deadline. 

The average length of the sales letter is 4 pages long. Two pages long is considered a short length letter and six or more is considered a long length letter. Printing on both sides of a page test as well as one sided print. 

The use of push dates test better than no push dates. A push date is a deadline for the prospect to order - "PLEASE RESPOND BY MONDAY". If you are going to use a specific date, allow for at lease three weeks for delivery for third class mail. 

Envelope 

The first thing the prospect sees is the envelope. Some people use this to print a "teaser" copy on the front of the envelope. This could be used to hint at what great offer lies inside if they just would open the letter. 

The risk is that the teaser copy immediately tells the prospect that this is another advertisement junk mail piece, and it may not get opened as a result. 

If you do use teaser copy, make sure that whatever is promised on the outside is fulfilled on the insider. Otherwise the person will be angry, and therefore, no sale. 

Testing and Tracking Response 

On your response card, you can assign a code so you can keep track of what the customer is responding do. What list did you use, what offer, what sales letter, what brochure, what price, etc. There is no limit to the things you can test via direct mail. For example AA-123-MA-1 could translate to the first mailing of list source AA, sales letter 1, brochure letter 2, price 3, in Massachusetts. 

If you are testing price, make sure that everything else is constant. Use the same list and the same direct mail piece, with just the price changed. 

Some Tricks That Work 

Remember that direct mail is a personal medium. The more personal you can make your mail look, the better response you will get. 

Stamps work better than metered mail. Stamps look more like a personal letter. 

First-class stamps provide a fast delivery, but don't necessarily improve response rate version third-class stamps. 

Flamboyant color just for the sake of color does not pay off. If you decide to use some color for conservative enhancement, browns and greens do not work as well as aquamarine blues, cold and warm grays, warm reds. Some other successful colors have been bright orange, yellow ochre light and/or a metallic gold. 

Soft white book and antique-finish papers work better than slick superwhite paper. Cheap thin paper makes the product look cheap. 

Address labels perform worse than computer printed addresses directly on the envelope. 

Make a dummy sample to determine folding of paper, size, and most importantly weight. Postage is very expensive, and if you go over the designated weight set by the post office, you will be paying for it. See the post office for the weight and size limits for first-class and third-class mail. 

People like to do things. Checking a box, using stickers and stamps, work to improve response.