Ten FAQs on direct mail.
- What can I realistically expect a mailshot to do for me?
- Is direct mail more effective in business or consumer markets?
- What comes first - who to send to or what to send?
- Will a personalised mailing always get a better response?
- Who do I send my mailshots to?
- What should I look for in a mailing list?
- How much does a mailshot cost?
- What response can I expect?
- How soon will I know if the mailshot has worked?
- What must I do to comply with the Data Protection Act?
1. What can I realistically expect a mailshot to do for me?
A mailshot can be sent to specific customers and prospects. With less competition on the doormat, direct mail is now less likely to be seen as junk mail than email and with a strong targeted message it can bring in a good response rate. You can limit direct mailing to small numbers until you get the recipe right; you can also adjust the message to suit the recipient.
Direct mail is commonly used to introduce new businesses to a local audience, as a way to raise your business profile, to encourage sales and to flag up events and special offers.
When and how often you use direct mail depends upon the nature of your business (for example - seasonality), your marketing strategy (intentions), and the results you obtain from each batch of mailings (effectiveness).
2. Is direct mail more effective in business or consumer markets?
Well-planned direct mail can be equally effective in both business and consumer markets. But these two markets are quite different and need different approaches.
In general, the list of prospects in a business market will be shorter than in a consumer market, but the value of each item sold may be greater. This means that you may be justified in spending more time and money personalising business mailshots. The language has to be more formal and the message might best appeal to logic rather than emotion. The recipient of a business mailshot can rarely act without first consulting relevant colleagues - so include benefits and evidence.
In consumer markets the recipient is usually the buyer and can respond immediately. Moreover, the message can be aimed at broader emotional appeal since this plays a strong role in influencing personal buying, though benefits are still very important.
3. What comes first - who to send to or what to send?
Look at the mailing list first. Start off by spending most of your time and resources in either compiling your own list or carefully sourcing the right list from a list broker. A stunning message delivered to the wrong audience is a complete waste of money. Only when you are happy that a good list is available should you move on to thinking about what to send.
Send to your identified, targeted prospects. And remember to mailshot your existing customers as well - they need to be told about new offers and reminded to make seasonal purchases. You will make more profit selling to your existing customers than spending money looking for more names.
4. Will a personalised mailing always get a better response?
Personalised mailings will always get a better response than bland "To whom it may concern" letters. The latter fall into the realms of junk mail, and we all know what happens to that. The more individual you make the message, the more chance you have of building a relationship and making a sale.
Digitally-produced letters are capable of a high level of personalisation.
5. Who do I send my mailshots to?
Ideally, you want to mail people who meet the same criteria as your best customers. So think about the characteristics of these very carefully and see if you can build up a picture of them. Knowing who you are looking for makes it much easier to compile mailing lists and tailor the most effective messages.
In consumer markets, ask yourself if your best customers share the same age group, sex, marital status, income bracket, occupation, geographical location, lifestyle or hobbies. Also consider if your best customers are likely to be of the same mindset, work in the same industry, have the same delivery requirements or all rely on seasonal demand. Always tailor to the needs and expectations of your targets.
6. What should I look for in a mailing list?
There are firms that specialise in all aspects of direct mail - including those running campaigns (agencies), those that compile and sell lists (list brokers) and those that design, print, stuff and dispatch envelopes (mailing houses). A small business will probably do best by contacting list brokers (sourced via the Direct Marketing Association at www.dma.org.uk).
Bought-in lists should always be treated with care. You need to ask:
- Is the list for rent or for sale? Most are to rent on a one-use only basis, though follow-up mailings within a certain period are allowed on payment of a reduced fee.
- Does the cost per thousand include job titles and individuals' names, and essential extras like printing out the addresses on sticky labels?
- How was the list compiled? Lists are often gathered from membership lists of magazines or trade bodies and associations and the electoral roll. Lists built from 'box tickers' are less valuable than those based on real orders to buy.
- What is the minimum order? Many brokers will try to sell you 5,000 names as a minimum. Do not be bullied into this. It does not take 5,000 names to know whether the list, or your offer, is going to generate a response. A list of 1,000 should be enough.
- What is the total number available? Some lists may simply be too small to reach the minimum quantity, making them rather expensive per head.
7. How much does a mailshot cost?
The cost of a mailshot includes:
- postage or delivery charges;
- the contents of the mailshot including any insertions;
- printing costs of the contents;
- cost of renting or compiling lists;
- any administrative costs involved.
Savings are possible if you tackle each of these individual elements of cost.
For example, small firms can print and stuff their own envelopes.You may also be able to get a discount on postage with the Royal Mail. Limiting the size of the mailshot is an obvious saving. The weight can be reduced by removing all unnecessary contents, or using thinner paper for your letter and the envelope. Print costs can also be reduced by having optimum print runs or using fewer colours. Try to balance savings against loss of quality - avoid looking cheap.
8. What response can I expect?
Response varies enormously, though you can usually rely on better returns when you mail your own customer base - those who already know and love you. According to the DMA, the average response rate for direct mail is 4% but that entirely depends on the nature of your business and the quality of both your mailing and your mailing list.
You must distinguish between responses and conversions. Many prospects may send for a brochure, but how many actually buy? Record all your responses and take steps to improve on your results.
9. How soon will I know if the mailshot has worked?
The extent of the response will be known within a week or two, often less than that. If the response is poor, you may not immediately know whether it is because you have mailed to the wrong list or whether the offer was poorly communicated or simply fell on stony ground. Contact some of the targets and try to find out why it did not appeal. Without this direct analysis, you will not learn where you went wrong. Where possible it is better to test your campaign in advance on a small sample group before deploying it fully. This will help reduce the risk of poor performance.
10. What must I do to comply with the Data Protection Act?
All businesses using personal data must comply with the Data Protection Act. To comply with the Act, you must observe the eight data protection principles - enforceable rules for handling information - and ensure that your staff are also aware of them. Under the principles you must make sure that any personal information you hold is:
- fairly and lawfully processed;
- processed for limited purposes;
- adequate, relevant and not excessive;
- accurate and up-to-date;
- not kept for longer than is necessary;
- processed in line with your rights;
- not transferred to other countries without adequate protection.
If your core business activity involves processing personal details, for example you sell mailing lists, you will also have to notify the Information Commissioner that you are a data controller (unless you are exempt). To find out more about your obligations under the Data Protection Act, visit the Information Commissioner's Office website.