Ready, Aim, Fire!
your company is about to launch a new direct mail campaign. You’ve exhausted all of your creative energy by designing eye-catching, persuasive mailers to elicit interest from recipients. However, your efforts won’t matter much if you aren’t mailing to the appropriate lists.
“There is a formula well known among the direct marketing specialist. The mailing list provides 40 percent of the success of a campaign, the message provides another 40 percent and finally, the creativity provides the additional 20 percent,” noted Jim Spicuzza, executive vice president of marketing and vendor relations, The Shamrock Companies, Westlake, Ohio.
The average success rate of direct mail is 2 percent for business-to-business, 2 percent for business-to-consumer and 1 percent to 2 percent for non-profit, according to Spicuzza. Therefore, when originating a direct mail campaign, don’t underestimate the role of mailing lists.
Starting from Scratch
There are many opportunities to generate a successful mailing list. Perhaps, the most obvious way for companies to begin the process is to evaluate their current customers. Customers have already purchased products in the past, and if their buying experience was positive, they will likely be repeat customers.
Performing a zip code search on customers provides insight to demographics. If particular zip codes appear more frequently than others during a search, then further investigate that geographic market. The Census Bureau and other data suppliers can offer additional demographic data based on zip codes.
Market research studies, particularly those involving focus groups, are another option businesses can use to better understand their target audience. By having an accurate profile of their intended recipients, businesses can weed out inappropriate mailing lists. Still, it is important to remember that this doesn’t necessarily guarantee success. The success rate can increase when a test mailing to a portion of the list occurs, and the returns are analyzed.
In addition, mailing lists can be rented for a single mailing. For a second mailing, the list must be rented again. However, the names and addresses of the people who answered a business’ original mailing becomes its property and, therefore, becomes a part of its existing in-house list.
Mailing lists can be obtained from the list owner, a list manager or a list broker. Edith Roman Associates, Pearl River, N.Y., gives the following breakdown for these sources:
• List owners: consists of marketers and private organizations that rent their own in-house mailing lists.
• List managers: outside firms that manage and market their lists for their customers. In this case, the list is rented from the firm, not the owner.
• List brokers: third-party agents that act as a liaison between the list owner/manager and the mailing list user. List brokers work primarily for the list user. And, brokers can be more objective when making recommendations.
Spicuzza observed, “Experienced clients often provide mailing lists. They are direct mail-savvy and already have knowledge of expected results. Other times, we provide mailing lists to our clients, which enables us to manage the project from its inception to completion.”
The Shamrock Companies can provide additional services, such as data mining, a process where volumes of data are automatically searched to determine patterns.
Building a Prospect Database
Database processing and database management are surefire ways to build profiles of valuable prospects. Information remains current as it is continuously refined and analyzed. And, with prospect databases, the merge/purge process is even more effectively handled. Instead of renting lists for a single use, customers, or their service bureau, request list rentals from the list owners for a full year, paying them for each use. It is a common misconception that a mailing list can only be used once. But, companies can use the same list again even with a slightly different mailing and still obtain worthy results.
After the names are entered into a database, the customer performs one round of merge/purge at the beginning of the year, instead of on a monthly basis. Minor updates to the prospect database can be made each month as the business acquires new customers. Additions and changes are consolidated within the database, so the file is constantly ready for mailing.
Allbusiness.com gives several tips for building a prospect database, such as making cold calls; joining prominent organizations, chambers of commerce, convention and visitors’ bureaus and charitable groups; interacting with businesses that target similar markets; and providing registration cards at events and conducting periodic surveys.
The Right Stuff
So, how are mailing lists evaluated to ensure a good fit with the direct mail campaign? After all, suppliers can make recommendations, but the client has the ultimate say in which lists to test.
Information about a list traditionally appears on a “data card.” Edith Roman Associates suggests that as clients evaluate each list, they look at several factors including: list size; cost per thousand; list description; average size of order; percentage of the list that is direct-mail generated; the hot line (“hot” customers who have made a mail-order purchase within the last three months); active versus inactive, buyer versus prospect; list usage report (this information might not appear on the data card); selections available (selection criteria by which the list can be divided); and frequency of updating.
Once a list is selected, consider taking advantage of the existing technology to add appeal to the direct mail piece. “Variable information allows us the benefit of communicating to the target audience on a personal level providing individualized text, specific product information and even individual contact information,” Spicuzza explained. Specificially, the HP Indigo and the Igen3 have provided more opportunities for one-to-one direct marketing. Because these printers allow full color and variable printing on mailers, fewer pieces of direct mail can be produced with a higher response rate. “This type of digital equipment enables us to personalize each piece and to print regional-specific information. It even permits us to change product offerings in a single campaign,” he added.
Whether companies rely on their own creativity to find new direct mail markets or the assistance of a list service, they must know their options. When they choose a suitable list for their needs, it’s smooth mailing from that point on.