The 7 Steps to Creating Direct Mail Winners

Many such lists for creating successful direct mail exist out there, but they lack key elements. Perhaps you can suggest additions.

Step 1 - Should direct mail be used for this effort? Review the feasibility.

    ❑    Determine the allowable cost per lead or cost per order. That is, how much can you afford to spend for a lead, or an order to break even and still make an acceptable profit?
    ❑    Is the required response rate achievable? In other words, what kind of response is needed to reach your allowables? If that response rate exceeds what is normally expected for the planned mailing, then it is a waste of time to test it. But if the expected response rate is 1 - 2% and you only need a .5 response rate to break even, then a direct mail test is worth the risk.

Step 2 - Determine the target list universe before embarking on the project. Is the rollout potential large enough to warrant the effort?

    ❑    In addition to the pro forma, you need to evaluate the size of the opportunity before allocating management, financial and supplier resources against any direct mail project. For example, if the product in question will generate $500 annually per customer sold with service costs of 80%, and there are only 100,000 such customers in the entire US, then you might want to apply the brakes and select another effort.

      ❑ Just by doing your homework, you can quickly evaluate any direct marketing opportunity through this approach. It is, after all, all about investing resources wisely.

Step 3 - Make the final list selection.

    ❑    Cover all of the details
1.    For acquisition mail, use a knowledgeable list broker or consultant to assist you in selecting compiled and/or response lists that are likely to work for your product.
2.    For B-to-B files, be very careful. These list compilations are much more involved than consumer lists requiring many hours to select by response factors, SIC codes, levels within the organization and so forth.
3.    For retention and other customer file mailings, be sure not to burn out your best performing segments. Use every available segmentation tool such as Recency/Frequency/Monetary selections, regression analysis (in particular, CHAIDS) and file enhancements from list compilers as well as response list compilers like Abacus.

Step 4 - Consider testing opportunities. Test several things at the same time to increase your breakthrough opportunity.
    ❑     Test at the height of your season to get the best volume discounts on all of your mailings plus better response regardless of the test. This helps to fund your test costs.
    ❑     Test in the following priority at the same time.
1.    Lists
2.    Offers
3.    Formats
4.    Main selling proposition
5.    Creative execution
    ❑     Assuming you have an active direct mail budget, allocate at least 20% of your budget for testing in an attempt to beat out any control package. Do not wait until your package peters out before testing. Creating winners takes time to implement and additional time to evaluate.

Step 5 - Create the concepts and format all of the test packages so that you can get an accurate reading on the mailing costs.

    ❑    Now that you and your management have determined that the selected market is big enough to play in, you need to design your direct mail package so that it will not exceed the budget you created for your pro forma.
    ❑    Use experienced direct response artists and copywriters who know how to create direct mail formats that comply with your budget requirements.
    ❑    Have your creative team create packages using what typically works for your type of product. Such creative people and experienced consultants already know what types of packages will most likely not work when evaluated on a cost per sale or cost per lead basis.
    ❑    Begin with concepts featured on the front of your outer envelope. If needed, create thumbnails of the entire package at the concept stage.

Step 6 - Create and mail the package.

    ❑    During the estimating process, determine whether or not to use a turnkey service that manages all production and lettershop under one roof. You may have the internal staff available to handle printing services, envelope conversions, lettershop, CASS certification and other elements with multiple suppliers to get better pricing.
    ❑    Go to the press checks and proof all personalization for accuracy during the production process at the lettershop stage --- not just the printing.
    ❑    Set up tracking systems to allow deep response evaluation.
    ❑    Your suppliers will most likely require postage in advance of the drops.
    ❑    Request proof of delivery on all mailings from the lettershop by requiring signed Post Office verifications showing quantities and drop dates.
    ❑     Determine if you need to hire a delivery tracking service to show proof of actual delivery dates in various parts of the region mailed.

Step 7 - Now comes the evaluation.

    ❑    Doubling dates for most companies using bulk mail averages about two to three weeks for national mailings. This means that even when response comes in over a long period of time, a given client’s mailings generate 50% of their overall response by the doubling date. So just double the responses that come in by the doubling date to do a rough estimate on how your mailing performed.
    ❑    You will now pull out your pro forma to validate your projections and determine if a continuation of the program is appropriate based on the response rate.

What steps or procedures did I miss? Are there other items you believe will the typical mailing more effective?

Posted on October 23, 2007 and filed under Direct Mail, Direct Marketing Strategy.