Articles
Build More Value into Direct Mail to Improve ROI
By David Henkel, President, Johnson & Quin
In a slowing economy, both retailers and their customers seek ways to control their budgets. Retailers closely scrutinize marketing campaigns, measuring costs against the unforgiving bottom lines of response rates and sales growth. Customers, too, rethink their spending, look for sales and promotions, and do their shopping with fewer, selected retailers. In this money-conscious environment, it becomes critical for marketing professionals to communicate their company's messages and offer promotions that set their company apart from the competition, foster customer relationships, and generate sales.
So, how can you implement a successful direct mail campaign that delivers a true return on investment? The answer is to build more value-as opposed to cost-into marketing programs, employing budget-conscious strategies that still deliver results. Below are some tips to help you reach customers effectively while maximizing your marketing dollars and driving the revenues your company demands.
A little personalization can add value and stretch dollars
Today's database and printing technologies enable the creation of highly personalized communications that can include almost any type of customer information. While these campaigns generate a very high response rate, they also tend to cost more to produce, partly because they require data mining and other pre-production processing. Additionally, in some case these campaigns can go so far as to raise privacy issues among customers. For instance, gym members probably don't want to see their weight displayed in a direct mail piece announcing a membership promotion.
A cardinal rule for personalization is, if the customer information doesn't directly tie into your overall message, don't use it. Too often marketers get caught up in the creative aspects of what's possible and lose sight of the real goal-communicating your company's messages. Build each campaign around only one or two specific ideas, such as, "We're in your neighborhood and we're offering a discount to only select customers."
Stick to the basics with personalization to gain the benefits for the least expense. Customer information such as gender, age, and geographic location has legs for broad marketing campaigns-they don't require mining the database too deeply, and won't trigger privacy alarms. Consider preprinting static, full-color mailers with a personalized, laser-printed greeting inside. Customers will still get the message that you know who they are and understand their needs.
An especially effective way to improve your response rate and lift sales is to mail a personalized note accompanied by a laminated gift card with the customer's name on it. Gift cards can be used in almost limitless ways, such as: to promote a one-day-only in-store sale for customers in a specific zip code range; to drive traffic to your Web site; to offer a free one-day trial club membership for friends or family. They can also include a promotional code to make tracking response relatively easy and accurate.
Cost-effective, attention-grabbing campaigns
Take a step back and determine if you really need photo-quality color. While full color is cheaper to produce than ever before, it still costs more than the alternatives. Consider using highlight or spot color as it will have an eye-catching impact if everything else is in black and white. Compare the cost of black and white production vs. color, and then measure that cost difference against the campaign's sales goals. However, full color does make sense in some cases, especially in the real estate industry where seeing a life-like photo of the property is essential, the expected sales returns are relatively high, and mail quantities are low.
Also think about using a more cost-effective paper or substrate for the mailing. Paper mills have developed a number of lightweight paper stocks with enough body and opacity for color printing and/or printing on both sides. For instance, a 20# BRE will cost less than a 24# BRE, and most recipients won't notice the difference. Additionally, consider using the paper your printer inventories. This will save you the time and expense of special ordering. Finally, do you really need a separate envelope? A postcard or self-mailer might work just as effectively for significantly less cost-for both production and mailing.
Effective database management is key to ROI
Make sure your mailing list is up-to-date and meets all USPS automation requirements to qualify for the best postal discounts, eliminate waste, and ensure your communications are delivered to the recipient. Even recently-compiled mail lists include a predictable number of customers who have changed their names or addresses. Or, what was once a valid delivery address may now be a parking lot.
Fortunately, mail list processing is fully automated using USPS-certified software. In many cases, new addresses are supplied and invalid delivery points are flagged for removal. Depending on the specific direct mail campaign, a retailer may also want to strike canceled accounts or "non-collectibles" from their list. Fully automated mail also includes Intelligent Mail® Barcodes (IMBs) that tracks each piece to ensure delivery. These can indicate approximately when a piece is delivered, letting you coordinate mailings with related campaign elements such as TV/radio ads and in-store or Web-based promotions. Even retailers who mail smaller volumes can deploy these technologies and commingle their mailings with those from other mailers to qualify for the lowest postal rates.
Put it to the test
One final tip for maximizing ROI relates to testing your campaign. Perhaps the response to a test mailing is disappointing. Rather than scrapping the whole design, change one or two elements and test again. This saves the expense of starting over and is a valuable means to determine exactly what it is that works-and what doesn't.
Marketing professionals today have a wide range of tools they can deploy to communicate with customers. The trick is to use these tools wisely, effectively, and add value without increasing costs. Less can be more in developing a campaign that generates impressive response rates and sales within your budget parameters. Careful planning is key. Review all available options and determine what is most appropriate for your company, campaign, message, and customers.
