Most serious direct mailers do a series of tests to determine the optimal response rate based on the list, offer and creative strategy. They want to be 95% confident in the results and they have the deep resources and time to get there. On the other hand, most small businesses don’t have the time or the resources. Most small business owners want to know if direct mail is going to work at all. So the question is how do you do a down and dirty test that will tell you if direct mail is viable. Here are 5 tips:
Target, Target, Target.
The mailing list is typically the most important driver of response. The offer is 2nd and the design is 3rd. List vendors can provide a wide range of demographics and interests to help you target more effectively. You want to test your mailing with a list that is as targeted as possible. Start by looking at your current customer base. Typically your instinct is going to be as correct as any marketing research. Do you appeal more to women than men? Then target women. Is your customer base primarily younger? Then target younger ages. Do your customers primarily live around your location? Then target the closest homes. Don’t use your test to reach out to new demographics or different parts of the city. First prove that direct mail can work with targeting those most likely to respond. You can always reach out later once you know that direct mail can be viable.
If you don’t mail enough pieces, the results won’t be statistically valid. For example, if you mail 100 pieces and get 1 response (1% response rate), how sure are you that your actual response rate will be 1% give or take .5% when you do 10,000 pieces? A sample size calculator will tell you that you are less than 50% sure. That means that your results are likely to be more wrong than right or, “you have less than a 50% chance that you will get a similar result when you mail 10,000.” So here are some simple, safe guidelines:
Expected Response Rate:
Give or Take:
How Many do I Need to Mail:
Don’t Be Cheap.
Now is not the time to be cheap. If you are a dentist looking for new patients, you may be tempted to save money by limiting the offer, “10% of your first cleaning, X-rays not included.” Now, if no one calls, did the mailing fail, or was your offer just not good enough? On the other hand, if you sweeten the offer: “Your First Appointment Absolutely FREE! Includes cleaning, x-rays, and consultation” Then, if you get no responses, you know it’s not the offer and direct mail is not a good strategy. But, if you get a reasonable response rate, then you know that direct mail can work and it’s just a matter of fine-tuning the offer to produce a positive return or investment. Note: FREE is the most important and powerful word in direct mail.
Larger mailers like a 5.5” x 11” jumbo postcard stand out in the mail box and typically get higher response rates. The same rationale for offers applies to size. Start with the larger size to see if you can get the response you want. Once you prove that direct mail can work, you can test other sizes to improve your return on investment. Overall, the more a customer is familiar with your product, the smaller you can be. So, if you’re mailing to current customers then typically you can get away with a smaller size. But if you’re prospecting for new customers, go big!
Design to Surprise.
A typical person opening mail scans each piece to see if it matters. Typically, if it’s a letter in an envelope, then they look to see who it’s from and if it has a First Class stamp. First class is important; Standard Class is junk. Most junk is recycled. If it’s a postcard without an envelope, they look to see who it’s from and what the offer is. The more you can design a card to surprise and stop the instant recycling, the higher your response rate is going to be. Again, “FREE” is surprising. Puppies and cute kids work. The rules of thumb are: 1.) Use graphics and headline to surprise and stop the recycling process, 2.) Have enough relevant information so that it’s clear what the product or service is, 3.) Include a powerful offer(s) with an expiration date to create a sense of urgency, and 4.) Include information on how to respond. This is where you need to get creative. The Holy Grail for all small business owners and marketers is to find a marketing process that they can use over and over again to generate new leads and business. For many, direct mail is a viable marketing process. The first step for the owner or marketer is to determine if direct mail is viable at all. To do this you will need to do a viable test: target those customers most likely to respond, mail enough cards to be at least 80% certain of the response, put out the best offer you can afford, mail the right size to get a customer’s attention, and design to surprise. Once you find that direct mail is viable, you can begin the process of fine tuning.
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