Over the past 50 years, American businesses have sent billions of pieces of mail with an eye towards growing sales. Everything from simple letters and postcards,to CD’s, three dimensional brochures and boxes of cereal have found their way into mailboxes across the country. Needless to say, billions of dollars are riding on the success or failure of these mailings.
What’s the key to success? Talk to them! The best way to guarantee the success of your direct mail campaign is to personalize it with a call, make it easy for customers to respond and measure the results. Campaign success is measured as return-on-investment (ROI) – or how many total sales were generated compared to the cost of the marketing campaign.
If you are running a long-term campaign, try testing your mailing on a small-scale first. When conducting a test mailing, decide how many pieces you want to send. Make sure you send out enough responses to accurately determine your response rate and the effectiveness of your message. A good rule of thumb is to test between 1,000 and 5,000 pieces to start. Your response rate will vary depending on your product, industry, target market and other factors. To increase the response of your mailing, you will want to pay attention to these factors:
Of course, the results produced by any campaign are dependant on the general economic environment, the market, the product, the list, the offer, and other factors. However, the following chart identifies the types of returns that are possible when implementing a solid direct mail campaign:
|Standard||With Toll-Free #||With Follow Up Call & Toll-Free #|
|Number of pieces you will mail||1,000||e||1,000||e||1,000|
|% of response you expect||a||2%||4%||8%|
|% of respondents you expect will purchase||40%||40%||40%|
|Average sale size||$50||$50||$50|
|Profit per sale||b||$25||$25||$25|
|Lifetime Customer Value||$900||$900||$900|
|Targeted mailing list||f||$65||$65||$65|
|Design, creative, & coordination||d||$60||d||$60||d||$60|
|Production & mailing cost (per piece)||$0.49||$0.49||$0.49|
|Teleservices (inbound or outbound)||$0||$89||g||$277|
|Total mailing campaign cost||$615||$704||$892|
|Number of responses||20||40||80|
|Number of sales||8||16||32|
|Total immediate sales||$400||$800||$1,600|
|Total (LCV) campaign revenue||$4,920||$11,264||$28,544|
|Return on Investment (RoI)||700%||1500%||3100%|
(a) traditional rule of thumb is 2% — actual response will depend on factors such as product, market, list, & offer
(b) calculated as sales price less direct cost of product sold
(c) usually 24-36 months depending on product cycle
(d) one hour assumed at $60/hour
(e) assumes 100 minutes/1,000 pieces
(f) assumes business lists, consumer lists will be less expensive
(g) assumes business lists, consumer calls will require DNC compliance at additional cost
Source: Lauchpoint Inc.
So, if you have a product or service you’d like to sell, direct mail, combined with personalized services such as a toll-free number or follow up call, may be just the marketing tool you need to take your business to the next level.
Wilson Zehr is CEO of Cendix the leading provider of Web-to-print solutions that automate on-demand one-to-one marketing campaigns and increase sales both online and offline. Cendix offers hosted Internet application software (Software as a Service – SaaS) for print shops, commercial printers, and enterprise marketing. Cendix supplies all the print on-demand and marketing software, hosted systems, and technical talent; Cendix creates and customizes the online application; and Cendix manages all the operations and maintenance required. Cendix is the only application service provider that truly provides “Technology that Delivers”. More information about Cendix is available at www.cendix.com; or call toll-free 888.898.0066; or email firstname.lastname@example.org.