This guide is for local businesses that want to increase their business using good old fashion snail mail. After reading, you will know if direct mail is right for your business, how to create and send direct mail that sells, how much direct mail marketing costs, and how to track your success.
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Table of Contents:
Does Direct Mail Work?
According to a recent study by the United States Postal Service, 79% of households either read or scan advertising mail sent to their household.
The response rate on direct mail is also multiple times that of online and email marketing. According to the direct marketing association, the response rate of direct mail when sent to a house list (one where you have captured the info from prospects yourself) is 3.94%. When sent to a list that you have not capture the info yourself, the response rate is 1.28%. That compares to a response rate of around .04% for banner ads and .12% for email.
Every year there is also 10’s of billions of dollars spent on direct mail marketing. Ironically, even Google, the king of online advertising, uses direct mail to try and attract clients for it’s Adwords online advertising program.
Will direct mail work for your business?
At the end of the day, the answer is going to depend on two things:
- Can you offer something that is interesting enough to elicit a response?
- Do the sales that you make from your direct mail campaign generate enough revenue to cover the costs of your direct mail campaign, with profit to spare?
We are going to go into greater detail on the costs of a direct mail campaign below. For the sake of this example, let’s say that it is going to cost you $600 to create and send 1000 emails, and you get a 1.28% response rate. That means around 13 people respond to your add. That also means that you need to earn $46.15 ($600/13) per responder to break even on your campaign.
Keep in mind that what is important when deciding whether or not direct mail is worth it for your business, it is the Lifetime Value of your customer that matter’s. You don’t necessarily need to cover the cost of your mailer via the first sale you make to responders. If you are a restaurant where you expect people to come back in the future, then you are earning more from acquiring that new client than just the first sale.
You can learn more about how to calculate the lifetime value of one of your customers here.
What Should You Send?
- Sales letters
- Physical Items (also referred to as dimensional mail)
Which is right for you is going to depend on the nature of your product or service, and who you are selling to.
In general, the less the recipient knows about you and your product or service, the more elaborate your mailer is going to need to be. If you are selling vacations to an exotic country, to people that have never travelled with you before, then a lengthy brochure is likely to convert better than a postcard.
If you are a restaurant targeting existing customers however, then a long brochure is likely to be overkill. In this instance a short post card with a coupon is more likely to accomplish your goal.
If you need some inspiration here are 13 creative examples of direct mail from Sourcelink.
What Should It Say?
You want to have a single purpose for your direct mail piece. Often times the goal of a direct mail campaign is to get the recipient to buy a product or use a service. You can however also send direct mail for other reasons.
As we discuss in our article on real estate postcard marketing, realtors often send out postcards to everyone in a neighborhood where they have recently sold a house. In this instance the goal of the realtor might not be to make a sale from the mailer directly, but rather to get prospective sellers and buyers to join their email list for market updates.
While it is important to have a singular goal for your piece, you should also keep in mind that your potential customer doesn’t care about your goal. They care about their own goals and interests, which is what your piece needs to speak to.
Once you have a handle on what people want, it’s time to write directly to that desire. We call that persuasive content “copy.” If you’re writing your own copy, it’s a good idea to follow a time-tested principle: AIDA.
AIDA stands for Attention, Interest, Desire, Action. Let’s break it down:
The very first thing you must do in your copy is grab a person’s attention. This is your headline. It’s where you announce what’s so special and important about this particular mail. You can make a promise, pique curiosity, affect someone emotionally, or introduce a benefit.
For more on how to write a great headline see this article by Russ Henneberry on the Crazy Egg Blog.
This comes next and it’s where you discuss your customer’s problem and then present your business as the solution. Don’t get too wordy, but take a general approach on how your business can help that person.
If you’ve captured the reader’s attention this far, now is the time for some serious selling. Be careful not to simply list features. You want to share the benefits of your product or service. For example, a feature of your carpet cleaning service is that you have state of the art vacuums. Yawn. A benefit is that your vacuums can deep clean years’ worth of dirt and soil without the use of harmful cleaners. Now I’m interested because I like the idea of being environmentally responsible.
Once you’ve given your customer’s a reason (or many reasons) to consider you, it’s time to drive them to action. What would you like for them to do? Maybe you’d like for them to stop by soon or on a specific date, or set up an appointment? Lead them to the very next step that needs to happen as soon as they stop reading your mail.
For some great examples of effective calls to action, see this article from Kathryn Aragon.
For a great list of words that you should consider using throughout your copy see this article from John Schulte.
Other things to keep in mind when writing your sales copy:
- If you are looking for the recipient to get in touch with you then make sure you provide several different ways for them to respond, including phone, email, website, and location.
- Keep paragraphs short
- Use bullet points that make it easy to skim.
- Keep repeating the main point in different ways.
- Always write to an audience of 1, use the words you and your.
- Create a sense of urgency with a limited time offer.
Effective sales copy will make or break your campaign, so it may be worth getting a professional to help you. A great place to do that is on the Direct Marketing Associations vendor board. You can hire professional copywriters there as well as any other third party vendor you may need.
Who should I send it to?
For most businesses it is way more cost effective to increase the business that you are doing with existing clients, than it is to gain a completely new client. The fact that your existing customers have already bought from you means that they know who you are, and have already trusted you enough to do business with you.
Sending them direct mail can be a great way to keep your business top of mind, and get them back for repeat sales.
Building Your In House Direct Mail List
In order to send direct mail to your existing clients, you will need their address and a way to store that information so it is easily accessible. If your clients are ordering online, then you will have their address as part of the transaction.
Businesses that deal with people in person need to get a little more creative. Here are some ideas on how to capture the address:
- Ask when they checkout if they would like to leave their address for special deals and coupons.
- Create a loyalty program
- Run a contest
- Request address for things like appointment booking, reservations, and warranties.
- Have an event and request address to attend
Once you have their information you will need a way to store it. We recommend Insightly CRM for this purpose. For more on Insightly read our article comparing the top CRM software.
Target New Customers
The sky is really the limit in terms of how many people you can reach via direct mail. In order for your offer to work however, it has to be relevant to the people that you are sending it too.
The best way to figure out who to send to is to think about the characteristics of your existing clients. If you are a new business what you think your ideal client will look like:
- Where do they live
- What are their interests
- What types of things do they buy
- Income level
- Political leanings
- Religious beliefs
Once you have an understanding of who your customer is then you can look into acquiring a mailing list that includes that type of customer.
How to Acquire a Third Party Mailing List
The easiest way to send direct mail is using the USPS Every Door Direct Mail Service. This allows you to deliver to every address within a target area without having to know the names or addresses of the recipients.
The downside of Every Door Direct Mail Service is that, besides the location of the recipient, you don’t know anything else about them. If you would like to be able to further target the recipients based on other factors, then you will need to rent a third party mailing list. There are many places where you can go to purchase third party list that is tailored to your specific need. Experian, DirectMail, and InfoUSA being some of the more popular options.
How much does Direct Mail Cost?
There are five major costs involved in direct mail. They are design, copy, mailing lists, print, and distribution. You may not need to pay for all of these, but you will have to pay for at least printing and mailing.
Here they are in detail:
Design- You can choose to hire a designer, buy a template, or do your own design from scratch.
If you just need something basic then we recommend finding a freelancer on Elance. You should be able to get something created for around $100.
Remember however that you get what you pay for. If you need something more professional and involved then try the Direct Marketing Association’s Vendor board where you can expect to pay between a few hundred and a few thousand dollars for design.
Buying a template can be done on a variety of print shops and also on Graphic River. They cost around $10 on average.
If you choose to do your own direct mail design, keep in mind that you may need to order stock images or illustrations to spice it up. Popular stock sites include Shutterstock and Dreamstime. You can get 5 images there for around $50.
Copy– You can also do your own copy, but if you’d rather leave it to the professionals, then by all means, farm it out. You’ll need a copywriter with sales skills.
Again here for basic copywriting needs we recommend Elance. You should be able to find someone there for around $100. Remember however that you get what you pay for. For more involved projects try The Direct Marketing Vendor Board, where you can expect to pay anywhere from a few hundred to a few thousand dollars.
Mailing Lists- Regardless of whether you rent or purchase, a mailing list will cost you between .03¢ to .20¢ per record. Generally speaking, the more you request, the less per record you pay.
Printing Costs– A postcard will be a different price than a brochure.
For 5000 one-page brochures, you can expect to pay anywhere between .08¢ to .14¢ per brochure at the same online print shops.
Mailing Costs– The final cost consideration you must remember is mailing costs. The price fluctuates, depending on the current rate of postage, and on the amount of mail you send.
Following the same amount of 5000, your mailing costs will be:
For postcards: The rate is between .25¢ to .34¢.
For brochures and letters under 3.5 oz: The rate is between .38¢ to .44¢.
How do you track success?
If you follow the advice outlined in the rest of this guide, then you will include a clear call to action in your direct mail campaign. Now you just need a way to track those that complete the call to action so you can judge effectiveness.
First off, if you are not currently asking your customers how they found out about you, you should start doing so and recording their responses in your CRM software. This is true whether or not you are running a direct marketing campaign or not.
Methods for trying to catch any people that fall through the cracks using the above method include using a dedicated phone line and/or URL landing page for your campaign, and using a tracking code or specific coupon with your campaign.
Do you have a question about direct mail that we did not answer or a tip that our readers might find useful? Let us know in the comments section below.
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