MSI GUIDE TO DIRECT MAIL MARkETInG

Transcription

1 MSI GUIDE TO DIRECT MAIL Marketing

2

3 MSI GUIDE TO DIRECT MAIL MARKETING Table of Contents Introduction...3 The Art of Direct Mail...4 The Math of Direct Mail...5 The Science of Direct Mail...6 What is Variable Data...8 Powerful Words Grab Attention...10 Direct Mail Layout Tips...11 Worksheet: Questions To Ask Before You Start...12

4 A ONE-STOP SHOP: DESIGN PRINT MAIL Design: Strategic Planning, Marketing Services, Graphic Design MSI Capabilities: A ONE-STOP SHOP Print: Digital B&W and Color, Offset, Booklets, Bindery Mail: Data Management, Mail Shop, Inkjet Addressing, Tabbing, Poly-bagging, Inserting and Sealing, Labeling, Postage Metering, Live Stamp Application, Fulfillment Services, Delivery and Pickup

5 INTRODUCTion MSI has been in the mailing equipment and mailing services business for three generations, partnering with clients in their Direct Mail Marketing campaigns. We have experienced the revolution in direct mail technology, methods and equipment, that now allow organizations to precisely target their customers. Our Mission Statement, Passionately obsessed with our Customers Success, embodies one of MSI s core principles: Apply the highest standards of excellence to all aspects of customer service, and design, print and mailing services used in the production of all projects. We are much more than simply a design, print and mail house. We are a team of professionals who are absolutely committed to working beside you at every step of the process from strategy and creative through execution and delivery in order to ensure your successful campaigns. We offer a comprehensive set of services that many customers utilize as a turnkey solution. This Guide to Direct Mail Marketing represents the first time we have formally gathered our 65 years of accumulated direct mail knowledge into one place. We publish this guide so that our customers and future customers may gain a greater understanding of the power and possibilities offered by today s direct mail advertising. Mickey Lebeck President, MSI 3

6 The ART Of Direct Mail MARKETING The Mailing List The most important part of a direct mail campaign is The List. n The right list will help you reach your target audience. n The wrong list will spell disaster for your direct mail campaign. The Message (the benefit) Our message is Keep it simple make it clear. Your message to your prospect must get the point across in a bold, yet concise, manner. The message must contain what s in it for the customer. The Offer The power of direct mail lies in the offer or the enticement. It s the thing that will compel the customer to respond. It s what you re giving them a discount, a complimentary consultation something beyond your normal product or service offerings. The offer usually contains a call-to-action trigger such as act now, or call today. Response Mechanism The best direct mailing campaigns have built-in response mechanisms to encourage prospects to respond immediately, such as: website, business reply mail, phone number, discount coupon, fax back sheet or a reply envelope. Delivery System USPS The U.S. Post Office claims a 27% nondelivery factor in Standard-A bulk mail. Postage is one of the greatest costs in a direct mail program. Using sophisticated mailing software assures 100% deliverability. It is important to consult with experienced professionals when making decisions regarding the delivery of your mail program. 4 Instant Mathematical Brilliance: = + x Raw Cost Per Response = Cost Per Package Response Rate Loaded Cost Per Response = (Cost Per Package Response Rate) + Fulfillment + Telemarketing Cost Per Sale = Cost Per Lead Closing Rate Response Rate = Cost Per Package Cost Per Response Package Cost = Cost Per Response x Response Rate Mathematica Total Cost = Set Up Cost + (CPM x [Quantity 1,000])

7 The math Of Direct Mail MARKETING Raw Cost Per Response If you have a package that costs $0.489 per unit and a response rate of 2.78%, what s the cost per response? The formula is Cost Per Response = Cost Per Package Response Rate. In this example $ = $17.59 cost per response. Loaded Cost Per Response Using the example above, let s assume that fulfillment cost is $3.75 and telemarketing averages $4.50 per call. To figure your loaded cost use the formula Cost Per Response = (Cost Per Package Response Rate) + Fulfillment + Telemarketing. The loaded cost in this example would be ($17.59) + $ $4.50, or $ Cost Per Sale In a one-step sale, the loaded cost per sale in this example would be $ But if this was a two-step sale, $25.84 would be the loaded cost per lead. With a closing rate of 22%, the cost per sale would be $ or $ since Cost Per Sale = Cost Per Lead Closing Rate. Hitting Breakeven There are times when you need to know what response rate you need to hit breakeven. Let s assume that a package cost $.654 each and the raw cost per response was $25. The response rate required to hit this target is calculated Response Rate = Cost Per Package Cost Per Response. In this case, $0.654 $25 = 2.82%. Hitting The Cost Per Response Target Let s assume the consensus is that a specific offer will generate a response rate of 1.5% to 2%; and that the cost per response is $48. Using the worst case (1.5%) the most you can afford to spend on the package (in the mail) is $48 x = $0.72 each, based on the formula Package Cost = Cost Per Response x Response Rate. 5

8 The SCIENCE Of Direct Mail MARKETING CONTROL AND TEST Your job is to create the direct mail package that sets the new standard for your company, in other words to beat the control. The following are rules we have found to be highly effective for valid and accurate control and testing: 1. Start by carefully reviewing the control package. Make a list of all the key elements: offer, format, copy, and graphic presentation. Consider your target audience and offer. Which elements would benefit from new or added emphasis? 2. Test creative elements that are most likely to increase response significantly. In most cases, this means waiting to test such elements as the color of the signature on the letter. Instead, start with the biggies of offer, format, copy, layout and design. 3. Don t test on personal whim; have a good reason for testing. For example, a company selling checks by mail had successfully used a cost-effective self-mailer to prospect for new buyers. The company wanted to try a solo mailing for effect because the outer envelope allowed the company to insert check samples for prospective customers to inspect before buying. Even though an inserted solo mailing cost more, the increase in response more than paid for the added cost. 6

9 4. Keep in mind that just because a test offer, format or creative presentation costs more, that doesn t mean it shouldn t be tested. As with the check solo in No. 3, increased response can more than pay for the added cost. 5. However, once you have a control package, it pays to test cutting production cost without reducing the effectiveness of the package. You may find the reduced production costs more than justify any decrease in response created by a change in format. 6. While It s a good idea to brainstorm by looking at the control package or what works, don t limit yourself to testing only what s safe. Test a two-way postcard against a traditional solo lead-generation package. Try a blackand-white ad against a four-color ad. Test headlines that focus on dramatically different benefits. Don t be afraid to test any idea as long as you have a reason for doing it. 7. Most companies aren t looking for new approaches that outperform the control by one or two percent. They want a significant increase of 10% or better. If you re responsible for creating a potential control-beater, make sure you understand the response target before developing your creative strategy. And, remember where this discussion started: How you promote your offer and the format you select often provide the most potential for increasing response. 7

10 What is variable Stephanie, We miss you! One-to-one Marketing. One mail piece with relevant personalization. front Ralph, We miss you! Data Fields needed for this personalized Postcard FIRST LAST TYPE OFFER GENDER/AGE PHOTO Ralph Simmons Single 25% M 50 male50.tif Rhonda Stein Single 25% F 65+ fema65.tif Stephanie Bryant Family 50% F fema26.tif 8 In addition to the variables listed here, there are many other things that can be done: multiple versions for different club locations; variable backgrounds, text colors; market new memberships based on gender, age, income.

11 data printing? With today s database and digital printing technology it is now possible to deliver highly personalized mail pieces based on an unlimited number of criteria. What s so important about this? Studies of consumer behavior have repeatedly shown advertising that is relevant to people s lives is considerably more effective than generic advertising. Quite simply, we allow you to match your offers with your customer s likely buying preferences. Our revolutionary technology customizes messages, names, images, products the possibilities are endless. Below is just one example of variable data technology in action: Fitness 4U Sunrise Gold Circle Rancho Cordova, CA Ralph, We haven t seen you since last April and want to help you stay fit. Please call Jackie by September 31, 2005, to renew your membership and get 25% off your 2005 dues. T1 P1 **********AUTO**3 DIGIT 957 Ralph Simmons 1133 First Ave. Rancho Cordova, CA PRESORTED STANDARD U.S. POSTAGE PAID MSI Come in and check out our Executive Fitness & Fun program. back MESSAGE REP CANCEL ADDRESS CSZ male50.txt Jackie September 1133 First Ave. Rancho Cordova, CA fema65.tif Sharon November 349 Simpson St. Sacramento, CA family.txt Derrick December 4401 Jackson St. Rancho Cordova, CA The customized, targeted list that contains relevant information is the major ingredient for a successful one-to-one marketing campaign. 9

12 powerful words grab your target s attention How a mail piece is written has a significant bearing on the piece s overall effectiveness. Today the average consumer s life is cluttered with an overwhelming number of advertising messages. People have become used to this onslaught of media. In order to cut through the clutter and reach your future customers you have to capitalize on the brief opportunity you have to speak to them we have found successful mail pieces speak directly and powerfully. Use words that convey action, carry the promise of your offer or enticement. Use key words that appeal to the consumer s emotional core. 10

13 LAYOUT TIPS for your direct mail letters Here are some proven layout techniques for letters things that help grab the reader s attention and make it easy to understand your main messages. RELEVANCY SUB-HEADS Break up the letter with sub-heads. These are headlines that appear at the top of each new section of copy, making it easier for the reader to follow the key points of your message. OFFER Highlight your offer. You don t want to bury your offer within the text of the letter. Make sure it s prominently featured, so readers immediately know what s in it for them. To make your reader feel singled out, personalize each letter if possible. This means using their name rather than saying Dear Customer. Dear Ms. Bowes, You re one of the Mailtown Outdoor Outfitter store s most loyal customer. As a way of showing our appreciation for your business, we would like to extend you a special offer that a dedicated outdoor fan like yourself would value. Exclusive benefits for true outdoor lovers! Now you can get the best deals on your favorite gear. Become a member of the Mailtown Outdoor Outfitter Frequent Buyer s Club and get the latest news on your favorite equipment, as well as exclusive discount on in-store merchandise. With every purchase you make, you ll earn points towards free gifts. And we ll even grant you the gear of your choice (maximum value $50.00) when you stop in on your birthday! It doesn t cost a penny to join so what are you waiting for? Join today to receive special deals on your favorite outdoor gear! Becoming a member is easy simply complete and return the enclosed membership form by December 31st. Your membership card and first gear newsletter will arrive just 2 weeks later with a special Welcome to the Club gift. Happy trails! Sincerely, Cammie Ingel Manager Mailtown Outdoor Outfitter Here s Something That Will Start Your Trip Off Right! n Join the Mailtown Outdoor Out fitter Frequent Buyer s Club today n Receive our monthly gear news letter, complete with coupons and special offers for featured gear n With every purchase you ll earn points towards FREE gifts n Plus, stop in on your birthday and receive the CD of your choice P.S. This offer expires December 31st, so hurry if you want to take advantage of these membership privileges to day. JOHNSON BOX Almost as widely read as the P.S., the Johnson Box is a rectangle made out of asterisks or other graphic devices. It s located at the top of your letter, near the salutation and includes the offer copy or another key part of your message. SIDE BARS Use sidebars. Your letter will be more easily scanned if you summarize the key points and list them on the front of the letter, alongside the full copy. This gives readers the option to either read a long or short version of your message. P.S. LINE Always use a P.S. line. Research has shown that people usually read the P.S., even if they read nothing else. The P.S. line should reiterate the offer or main benefit. Includes the offer, expiration date and bonus. THE DON TS OF LETTER WRITING n Don t talk about yourself too much. Readers want to know what s in it for them so be sure to use you as often as possible. n Don t use long, rambling sentences or words that sound like they came from a textbook. Keep word, sentences, and grammar at an easy reading level. n Use humor sparingly and avoid being cute. Both approaches can backfire. n Don t bury your benefits in the copy. Lead with them in the headlines and in the first paragraph of your letter or you risk losing your readers interest. n Don t forget to ask for the order You should repeat your call to action at least three times throughout your direct mail package. n Don t make any paragraph over five lines of information. 11

14 A Worksheet: questions to ask before you start Planning is crucial to the successful execution of a direct mail campaign. Here are some of the key questions that need to be answered prior to moving forward with creative development. Not knowing even some of the answers can result in wasting time and costing a great deal of money. Knowing the answers is the first step toward creating an effective mail package. Date: Project: 1. What is the specific objective of this mailing? 2. What measurable result am I seeking? 3. What is the budget? $ 4. Who am I mailing to (the target audience)? 5. What is my deadline (what s the in-home date)? 6. What seasonal factors, competitive activity or inventory needs will affect my production and mailing schedule?? 9. What is the ONE most important benefit to my audience? 7. What is unique or special about my product? 8. How does my product differ from the competition? 10. What is the offer, the enticement? 11. What enticement does my audience have to act NOW??? 12. What is my competition doing? 13. What strategies from my competitors do I need to address? How are my prospects going to respond? (Toll-free call/brc/website)?

15

16 Mailing Systems, Inc Mercantile Dr., Suite A Rancho Cordova, CA Tel Fax info@msimail.net