Direct mail and email can be very cost-effective ways of marketing your business, allowing you to reach large numbers of customers at low cost. Email offers immediacy and low cost, while well-designed direct mail can really stand out.
Whether you are using direct mail or email, you need to be sure you are contacting the right people with the right message. Monitoring responses allows you to track effectiveness and improve future mailings.
1. Is it for you?
Establish who your target audience are
- You may want to mail your existing customer base
- If you are targeting new prospects, the closer the mailing profile is to your existing customer base, the better the response rate will be.
- Build your own mailing list for the best response rate.
- Targets for business products are often easier to identify than targets for consumer goods.
Decide what you want to achieve with existing customers
- introduce new products;
- bring forward sales with a special offer;
- keep customers informed and build loyalty.
Decide what you want to achieve with new prospects
- test the market and generate interest;
- collect names and addresses or phone details so you can follow up;
- make immediate sales.
Identify what the costs would be
- Compiling your own mailing list or renting an external mailing list.
- Writing and designing the mailing. This may include additional enclosures (for direct mail) or supporting online content (for email marketing).
- Any physical production and postage costs. You may not need to pay additional postage costs to reach existing customers if you can enclose 'stuffers' with other mail you are posting anyway.
- Labour costs. By the time you have planned, carried out and followed up the mailshot, labour may be your largest cost.
- Any external services such as using a mailing house.
Assess likely response rates
- Response rates vary widely. Testing and monitoring each campaign will help you improve future response rates.
- A typical response rates for direct mail to new prospects is around 4%. This compares to around 0.1% for email marketing, which is often seen as spam.
- Response rates for existing customers should be much higher. A personalised and targeted mailshot to your best customers, making them a good offer, could result in a 100% response rate and even a 100% conversion rate (they all place an order).
Decide whether mailing is the right option
- Compare the costs of the mailing with the likely results. For example, the value of the extra sales you hope to make or how much you think the new leads will turn out to be worth.
- To be worthwhile, a mailing needs to deliver a high response rate (and ultimately a high conversion rate), a high value per response or both.
- Consider alternative ways of achieving the same objectives, such as advertising, PR or exhibiting.
2. Your own mailing list
The quality of your database is the most critical element in achieving a good response rate.
It pays to create your own list
- The response rate will usually be much better than the response from any bought-in list.
- Your existing customers are always your best source of new orders and leads. Incentivise them with an 'introduce a friend' offer.
- Keep track of any sales enquiries and people you meet at exhibitions and events.
- Ask suppliers and other business contacts about potential customers.
- Train staff to obtain full contact details from customers including email, address and telephone numbers. For business customers, include details such as function or job title.
- Never throw away a name. Gather leads from customer lists, trade show visitors, responses to advertisements and warranty cards.
- Make sure you comply with the Data Protection Act and your other legal responsibilities.
If you plan a significant volume of mailings, use database or CRM software
- Decide how much information you want to hold, and how to organise it, before choosing your software. Small mailshots can be done with word processing software and spreadsheets.
- Keep track of when each name was last checked or amended.
- Record when you last mailed each person, how often they have been approached in the last year and whether they have responded to any of your marketing campaigns. Regular mailings improve response, but too many alienate customers.
Your database is a valuable business asset and must be managed
- Data inputting must be checked and validated, or it could ruin the mailshot at the outset.
- The quality of the database declines unless it is regularly 'cleaned' and added to. Cleaning eliminates the names of 'returns' (email bounce backs or letters returned to sender).
- Experts say an uncleaned list is unusable within three years. Many email addresses are out of date in six months.
- Consider including a reply-paid card or email code in your mailshots, so your customers can confirm or amend their details.
- Even if all 'returns' are eliminated immediately, the database should be checked regularly.
3. External mailing lists
If you want to reach out to a larger slice of the market, renting a mailing list is usually the most cost-effective method.
Many lists can be rented or bought in
- Specialist magazines or websites, as well as conference or exhibition organisers, are a good source.
- Most directories rent out their lists and will send out the mailing on your behalf. Simply copying their list and using it (without permission) is a breach of their copyright.
- Some trade associations allow access to member lists. It is worth approaching your own industry body if you operate in a niche sector.
- Most business support organisations offer a wide range of lists. For small mailshots, such lists are often cheaper than those provided by other sources.
- You can find list owners, brokers and managers who adhere to the industry code of practice through the Direct Marketing Association.
- If you want to blanket-mail every household in a certain area, Royal Mail Door to Door may be your best option.
Identify your needs, in writing
- Be clear about the sort of person (or company) you wish to target. Lists can be specific and tailored to your requirements.
- A good business list will include the names and titles of the decision-makers as well.
- Know the number of names and addresses you need.
Shop around until you find the right list at the right price
- £100-£120 per 1,000 names is average. Lists of consumers tend to be less expensive than lists of businesses.
- Specialist lists cost more. For example, a list of wealthy private investors might cost £200 per 1,000. A good business list of people who have previously responded by mail - ie they are mail responsive - will cost at least £200 per 1,000 names.
- Additional information (eg telephone numbers or email addresses) usually costs extra.
- Consider using a list broker to find the best source of data.
Check the quality of the list
- The more recently the list has been rented by someone else and updated, the better it will be.
- Check a few names you know to see whether they are on the list.
- If you rent a consumer list, check it has been cleared with the Mailing Preference Service (see Legal responsibilities).
Negotiate a deal
- Ask for the lowest minimum order from the list and test part of it. If there is a high minimum order (eg 5,000 names), you may be able to negotiate this down. Many list companies will impose a minimum order charge (often £300).
- Knock out flaws in bought-in lists, for example, duplications of branch offices.
- Insist on exclusive use for your type of business while you are doing your mailing.
- Agree a refund if a high percentage (say, more than 5%) of your mail packs are returned as undeliverable or your emails bounce.
Do not re-use a list you have rented for one-off use
- The list owner will have seeded it with a few names of their own people so that they can tell if you abuse the agreement.
- Everyone who responds to your original mailing becomes 'yours' and can be mailed again, as often as you like.
You must comply with the Data Protection Act
- You must follow the data protection principles. For example, keeping personal data securely.
- You may need to register with the Information Commissioner's Office.
You must not send unsolicited email to individuals
- That includes consumers, sole traders and partners in business partnerships. It does not include limited companies.
- Individuals can consent or 'opt-in' to receiving marketing emails.
- You can also send marketing emails to existing customers or enquirers that you have already been dealing with in regard to related products. You must give them the opportunity to opt-out both initially and every time you email them.
- You cannot sell or exchange your list unless customers have given their consent to being contacted by other businesses.
You should not send direct mail to individuals who do not want it
- Members of the public can register with the Mailing Preference Service (MPS) to opt out from receiving direct mail.
- Members of the Direct Marketing Association will screen their mailing lists against the MPS.
Always allow individuals and businesses to opt-out from future mailings or email
- Provide an unsubscribe address on all emails and mailings.
- Even when not legally required, allowing opt-outs helps improve the quality of your mailing lists.
4. The mailing
A well-produced mailing will create a better response rate. Quality is important - you are competing with all the other mail and email that is sent to your target groups.
Choose the right timing
- For business targets, do not send out mail just ahead of a public holiday. Mail in advance of key financial points in the year such as the end of the year and the tax year so that your message arrives when budgets are being planned.
- Saturdays and holidays are ideal for consumer products such as leisure and gardening items.
- A mailing promoting an event should ideally be sent four to six weeks beforehand and followed up with additional mailings.
- Staggering your posting dates will make it easier to control the flow of responses.
Create a compelling mailing
- Encourage readers to open it. Think about the appearance of the envelope or the subject line for an email.
- You have less than two seconds to convince the reader it is worth reading. The first few words are crucial.
- Focus on benefits.
- Include relevant enclosures (eg a brochure and price list). Emails can link to relevant pages of your website.
- Encourage responses. For example, you could include a reply paid envelope.
- Provide an incentive to reply promptly such as a time-limited discount.
Plan your follow up
- Depending on the nature of your mailing, it may be worth following it up with a telephone call or an email.
- Be ready to respond when orders come in. Poor service puts customers off. Decide in advance what you will do if the response rate is two or three times what you were expecting.
5. Testing and monitoring
A great advantage of direct mail is the ability to test a range of possibilities quickly and simply.
Split test different mailings
- Send out mailings with different messages, or change one item on each successive mailing.
- Test how different headlines or subject lines affect the response.
- Use order forms in different colours, keys or codes, or different landing pages on your website so that you can check which mailing is being responded to.
Test different offers
- For example, you could send out identical mailings but with different prices.
Test different sectors of the market
- Monitor the response so you can identify which targets are most interested.
Try different timings
- Assess how receptive targets are to emails at different times of day.
- Find out how responses vary for mailings sent at different times of the year, month or week.
Experiment to find out what works
- Once you know what works best, you can scale it up.
- If the response isn't good enough, you may want to try a different approach.
- Try to take into account whether responses are being delayed. For example, if mailshots are being passed to other staff or filed for future reference.
6. Using a mailing house
A small business can easily handle mailings of up to 1,000 items
- Beyond that, you might want to bring in temporary employees or use a mailing house.
Find potential suppliers
- Find a list of suitable mailing houses from the Direct Marketing Association.
- Look for a mailing house which is used to handling mailshots on the scale you need.
- Check what services they offer. These will include database management, providing (and printing) labels and envelopes, stuffing, stamping and despatch. Specify what you want.
Shop around for quotes
- Ask the mailing house to quote for supplying your envelopes and enclosures. The benefits of 'one-stop shopping' may be worth the extra cost.
- Ask if the envelope stuffing will be done (more cheaply) by machine, and if your envelope and enclosures are suitable.
- Ask how many extra envelopes and enclosures (usually 5%) you should supply, to allow for unavoidable wastage.
- You usually pay postage in advance, but there should be no mark-up on the cost.
- Check what postage discounts they can get. For example, by sorting the mail to get Royal Mail Mailsort discounts.
Check that the mailing house does a good job
- Let the mailing house know that you are maintaining checks.
- Include a few seed names (eg your employees), who can tell you when the mailing arrived, and in what state.
- Ask for a copy of the Royal Mail posting docket as proof of mailing.
- Find direct marketing guidance and suppliers from the Direct Marketing Association (020 7291 3300).
- Find out about Royal Mail services for direct mail and email marketing.
- Find out about your data protection obligations from the Information Commissioner's Office (0303 123 1113).
- Read more about the Mailing Preference Service (MPS).