Done correctly, direct mail is a strong component of an advertiser's media mix. A critical first step of any successful direct-mail campaign is an understanding of your target audience. The best way to accurately determine your target audience is to gather as much information on your current customers as possible. This takes much of the guesswork out of identifying who you want to reach. Ideally, you would want to know their full address, date of birth, specific product interest, and gender. This information is valuable in finding traits about people most likely to purchase your product or service. You will want to analyze the data or hire someone to analyze the data for you. You'll want to profile your target audience. It is important to identify the traits that can be used in segmenting lists to purchase for your mailing.
There are several different types of lists for purchase. Lists can be broad and general in nature, targeting just age and income, or specific in nature, targeting people who have expressed interest in a specific product or service you offer. It is also important to concentrate your dollars in the geographic area that has the highest likelihood for purchasing your product or service. Understanding the geography around your location is vital. There may be geographic barriers that prevent people from coming to your location. Obviously, you will not want to waste advertising dollars sending mail to these areas.
Once you have identified the segments that are most important for you to reach, the next step is establishing an annual plan to reach your target market. It is important to plan ahead. Direct mail has a long lead time from approval date to a mailing being delivered, and an even longer lead generation cycle. Certain segments have a stronger response at specific times of the year. Plan for these times of the year and target your mailing and creative appropriately.
A consistent plan to reach each segment of your target audience once a quarter will produce the most effective results. A successful strategy has been dividing the total target population into thirds and cycling through each third once a month, so you have made a connection with each person in your target audience once a quarter. You will need to identify when you want the lead generation cycle to be complete for either a promotion or event and work backward from that date to determine when the drop date should be. It should always be at least six weeks out from the significant date, with approvals for creative, lists, and budgets needed two to three weeks from the mail delivery date.
Equally important is determining what creative will be used to deliver the message. Certain segments respond differently to different components of a direct-mail piece. Creative also can go through different response patterns. At one point, long surveys generated a high response rate, but in recent years they have been overused and do not generate the guaranteed response they once did. Brief, informational letters in combination with a consolidated survey have been one of the most successful pieces in recent months. Photos that are relevant and relatable for the target audience are crucial. It is also a proven lead producer to use a photo and/or a strong benefit statement on the outer envelope of the piece. All pieces must have a strong call to action, listing a phone number at least twice, and providing a Web address or preferably a unique URL to track all results directly back to each mailing. The more ways you provide your potential customer to contact you, the better.
Personalization has proven to increase response rate by at least 25 percent compared to a standard form letter. Taking personalization to an even higher level, use an interactive component with direct mail utilizing personalized URLs in conjunction with each piece that is mailed. By providing a personalized URL, or pURL, you can increase response rates an additional 10 percent. Pieces even can be customized to coordinate with the interests of your target audience segments, for instance photos relating to products each segment has identified as an area of interest.
For each mailing, you can map out the projected response and follow results as they come in accordingly. Most traditional consumer mailings generate a 1 to 1.5 percent response rate. If you have provided three ways to contact you, 20 percent of the responses will use the telephone to contact you; 20 percent will go online; and 60 percent will fill out the survey and mail the response back. Once the piece is in homes, you will start tracking the lead generation cycle. You typically will see 20 percent of the leads in the first week, an additional 25 percent the second week, an additional 40 percent by the end of the third week, with the bulk of the mailed-in leads coming in this week. You will finish up the bulk of the leads in the fourth week, wrapping up with the remaining 15 percent. You may see some residual leads in following weeks, but they are generally in low quantities.
Testing Is Key
For best tracking practices, all pieces should be coded. When pieces are returned, the codes will provide you with valuable information about those most likely to respond. This information will allow you to conduct predictive modelling to target other areas of potential for your prospective customers. Whether you have the mailed responses come back to your location or you have a third-party vendor tracking and analyzing the data for you, it is important to capture the tracking codes and response rates for the returned pieces. This will allow you to make improvements to your program, identify trends as they are occurring, and increase your responses and the quality of your direct-mail program.
Once you have implemented your direct-mail plan, it is important to introduce testing at regular intervals. A direct-mail program that never changes will stagnate, and results eventually will dry up. Testing new lists and different creative approaches can invigorate your program and provides you with learning about what is effective and what is not. It is important to test in small increments, so you don't risk the success of the overall program by putting all of your hope on a risky test. It is also important not to test at a lead crucial time of year unless you are using dollars that are above and beyond your base goal.
As each mailing reaches the end of its lead generation cycle, document all of the details of that mailing from the lists used—including creative and any unique offers or promotions associated with the piece. You will want to document the results in terms of leads received and dollars spent for each list and creative execution used. Throughout the course of the year, you will have learned what types of pieces had the best results, and by comparing trending to previous years, you will have created a valuable tool for predicting and modeling future results through past successes.
Stephanie Oehlert is media director at Gragg Advertising, where she oversees the media teams and their development and implementation of strategic media plans for all Gragg clients. She is also responsible for conducting market research, coordinating direct-mail campaigns, and managing weekly client analysis.