Direct mail

1.1 A travel company sells holidays for £1,000 each, £250 of which is profit.

• If one person books a holiday, the mailshot has paid for itself.

1.2 A sandwich shop makes £1 profit on each £2 sandwich it sells. Regular customers spend about £5 a week, generating £125 profit each in a year.

• If the mailshot brings in two new regular customers, it has paid for itself.

1.3 A pottery makes a clear £5 profit on each set of mugs it sells. But customers do not buy more than one set.

• The mailshot would have to produce 50 new customers, just to pay for itself.

2.1 Are you trying to make immediate sales?

• What volume, by what date?

2.2 Are you aiming to get names and addresses of interested potential customers?

• How many new names?

2.3 Are you trying to bring forward sales to your existing customers?

2.4 Is the whole point of the mailing to allow you to make follow-up calls?

2.5 Is the mailing to provide information to existing customers?

3.1 Compiling or renting a mailing list (see 6 and 7).

3.2 The mailshot. The unit cost could be as low as the cost of a second class stamp, an envelope and a sheet of text.

• Costs - and, usually, response rates - rise in line with the number of enclosures you include (see 9).

3.3 Labour costs. By the time you have planned, carried out and followed up the mailshot, labour may be your largest cost.

4.1 Response rates to mailshots vary widely.

• A 1 to 2 per cent response rate is often regarded as normal. But a mailshot to your ten best customers, making them a good offer, could result in a 100 per cent response rate (they all reply) and even a 100 per cent conversion rate (they all place an order).

4.2 Timing is important.

• At what times of the year, month or week will customers be most interested in your product?
• For most businesses, the best time to receive a mailshot is midweek - when they are not too busy - and not just before or after a holiday.

4.3 Experiment a little before investing in any expensive mailshots, to find out what works.

• Results from one small section of a list should scale up if you have made sure it is representative of the list as a whole.

4.4 Responses may be delayed if mailshots are passed to other staff or filed for reference.

• Useful information on topics like transport, accommodation, office equipment and seminars may be retained for some time.

5.1 A small travel company planned a schedule of three mailshots in the run-up to its busy January-March booking period:

• September - invitation to a slide show.
• November - list of holiday ideas and special offers.
• January - a letter introducing the company's new sales manager, explaining how capable and experienced she was (and thus doubling her chances of selling to existing customers).

5.2 You may not need to pay for a separate mailshot to reach existing customers, as you can enclose 'stuffers' with other mail you are posting anyway.

6.1 Make up a list from the following:

• Existing customers.
• Contacts.

  Customers, suppliers and others may be able to suggest suitable prospects.

• Names in your sales enquiry records.

6.2 Do your own research, to add more potential customers to your list.

• Try web searches under relevant keywords to find possible outlets for your products.
• Directories in libraries list company details - ask the librarian to help you. But be aware that just copying a list of addresses and sending a mailshot to them is a breach of copyright.
• Trade associations, including Chambers of Commerce, have lists of members.
• The electoral roll, at public libraries and the Town Hall, lists individuals in the area.

6.3 Think about cross-selling, to get the benefits of someone else's list as well.

• If you sell shirts and another company sells cuff-links, you may be able to do a joint mailshot and halve your mailing costs.

  Or you can collaborate by swapping lists of customers. Be aware that customers should have given their consent to being contacted by other companies.

• If you keep a list of names and addresses, you must notify the Information Commissioner's Office (08456 30 60 60).

7.1 Get a list of 'list & database' members from the Direct Marketing Association and look in Yellow Pages under 'Direct mail'.

• Be clear about the sort of person (or company) you wish to target.
• Know the number of names and addresses you need.

7.2 Shop around until you find the right list at the right price.

• £100 to £120 per 1,000 names is average.
• Lists of consumers are less expensive than lists of businesses.
• Specialist lists cost more.

  For example, a list of wealthy private investors might cost £200 per 1,000.

• Many list companies will impose a minimum order charge (often £300).

You may be surprised at how specific lists can be. If you want a list of qualified female accountants in Ayrshire, just ask for one.

7.3 The best lists will offer:

• People (or businesses) who are similar to your existing or target customers.
• People who spend a lot, often.
• People who have recently bought similar products - or who buy by direct mail.
• Up-to-date names, addresses and possibly telephone numbers.
• A refund if a high percentage of mailings are returned or 'gone away'.
• Exclusive use of the list during the period of your mailing campaign.
• In the case of businesses, the names and titles of the decision-makers as well.

Check a few names you know to see whether they are on the list. The more recently the list has been rented by someone else and updated, the better it will be.

If you rent a consumer list, check it has been cleared with the Mailing Preference Service (see 10.3).

7.4 Be aware that you do rent the list.

List owners always 'seed' lists with a few names of their own people. If you use a list again without paying, the owner will know.

• Everyone who responds to your original mailing becomes 'yours' and can be mailed again, as often as you like.

7.5 If you want to blanket-mail every household in a certain area, using Royal Mail Door to Door may be your best option.

Call your local Royal Mail Customer Service Centre for information (08457 950950).

• For a local tradesman or a pizza delivery service, this may be the best way to become known in the area.

8.1 Do not waste the envelope.

• White envelopes are smart, but cost more.
• Hand-writing envelopes usually guarantees they are opened, but is time consuming.
• For larger mailings, a message on the envelope (eg 'free gift') can work well.
• Put your return address on the back of every envelope. This allows you to update your database if letters are returned.

8.2 Your letter should be written using the same techniques as an advertisement:

• Try to find an attention-grabbing headline.
• Offer a benefit in the opening paragraph.
• Tell a clear, simple, convincing story.
• Finish by prompting the reader to take action, and explaining how to do it.

8.3 Personalising a mailing, automatically or manually, will often boost response rates.

Use the target's name, rather than 'Dear Customer'. If possible, personalise the item in more than one place.

• For a letter, the ideal is to write the name in by hand and sign the letter yourself.

8.4 Think about what enclosures to include.

• Whatever else you send, do not forget your brochure and your price list.
• Pictures of your products can answer a lot of the potential customer's questions.
• Data sheets will help convince buyers.
• Copies of press cuttings and customer testimonials will give you credibility.
• Consider some form of special offer. This should be for a limited period, and include relevant terms and conditions.
• Include an order form and a mechanism to make replying easy.

  A Business Reply envelope or card, or a Freepost address, will increase response.

  A Response Services Licence (£76.70 plus a deposit of £45 for your expected responses) allows you to use both services. The only extra cost to you is the postage on the replies you receive, plus a small handling fee.

  A freephone number is more expensive. Charges may vary if you use your own number.

9.1 Ask for a list of suitable mailing houses from the Direct Marketing Association.

9.2 Shop around for quotes.

• Choose a mailing house which is used to handling mailshots on the scale you need.
• Ask the mailing house to quote for supplying your envelopes and enclosures.
• 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 per cent) you should supply, to allow for unavoidable wastage.

9.3 Take advantage of the Royal Mail's Mailsort postage discounts on mailings of at least 4,000 letters or 1,000 packets.

• Ask the mailing house to supply the list in mailsort order.
• You usually pay postage in advance, but there should be no mark-up on the cost.
• Ask for a copy of the Royal Mail posting docket as proof of mailing.

10.1 The Direct Marketing Association (020 7291 3300) is the direct marketing industry's trade association.

It can answer most questions and direct you to many sources of specialised information.

10.2 Contact the Royal Mail for free advice and information (08457 950950).

10.3 The direct mail industry has set up registration services to let members of the public 'opt out' of receiving direct mail.

• Contact the Mailing Preference Service on 020 7291 3310.
• Contact the Fax Preference Service on 020 7291 3330.
• Visit www.dma.org.uk/information/cps-introduction.asp for details of the Email Preference Service.