Explore the Strategy of Direct Mail Marketing
Companies want to reach their customers using the most efficient and cost-effective ways possible. They don’t want to waste money advertising products and services to those who aren’t in their target market. They want to be sure they’re reaching the demographic that’s interested in what they do, say, or sell.
While perhaps not as splashy as other forms of marketing, direct mail marketing is one of the most cost-effective, minimally intrusive form of advertising. By using the proper research tools, companies can send their messages directly to specific demographics, targeting the most likely customers. Using creative strategies, direct mail companies can grab the attention of their ideal consumers and entice them to do purchase goods or services.
What is direct mail marketing?
Anyone with a mailbox receives some type of direct mail marketing—be it a 15-percent-off coupon for Kohl’s or Macy’s sent exclusively to store credit-card holders, or a mailing from a local real-estate broker informing you of the current market value of your home.
Some other direct mail marketing strategies include postcards, coupons, special offers, advertising circulars, free newspapers, free trial CDs, catalogs, and pre-approved credit card applications.
Email marketing is now a very popular offshoot of direct mail marketing. However, it’s worth bearing in mind that 37 states now have laws regarding “spam,” or unwanted junk email. Therefore, companies that wish to maintain a positive reputation use an “opt-in” policy for marketing email, targeting only interested customers.
Who employs direct mail marketing?
A wide variety of organizations and companies employ some form of direct mail marketing. For example, you might already receive an envelope from ValPak, a direct mail company that sells space in its envelopes to a variety of local businesses offering coupons and discounts. Additionally, they entice consumers to look through these coupons by promising that $100 has been inserted into 10 random envelopes.
Some companies give away (potential) money outright in their direct mail campaigns. Department stores send $10 coupons, knowing most customers will spend more than $10 once inside. Banks send offers promising a free $50-150 if customers open a checking account with a direct deposit.
Politicians and special-interest groups use direct mail to appeal for donations or votes. It might come in the form of a “personal” letter; or as a postcard with an appeal for or against a candidate, an additional tax, or new legislation.
Charities and non-profit groups also use direct mail marketing to fundraise. One common method for charities is to send free return address labels to potential donors—accompanied by a giving slip and return envelope. The March of Dimes has had phenomenal success with this method; representatives there have added that the secret to direct mail contributions is to contact people often.
For what kinds of customers is direct mail marketing effective?
Though consumers can become ad-blind, there is a significant return on direct mail marketing. The key is to target the correct demographic. Lists of names and addresses can be purchased from third-party companies, which are able to narrow down potential consumers by income, gender, credit limit, purchasing history, parental status and age of children, marital status, education, and geography.
From there, the offers are tailored to their respective potential consumers:
- A person who has a credit card at Nordstrom’s is likely to stop at the store again if he or she receives a mailer with a 20-percent discount.
- A person with poor credit could be motivated to accept a pre-approved credit card offer.
- A previous donor to a political party could be convinced to give again.
- Homeowners might accept a free quote and/or discount from fencing contractors, painters, landscape architects, heating and air-conditioning installers, security systems, and housekeepers—which in turn could be converted into future business.
How is a direct mail marketing campaign developed?
Marketers must first determine whether the goal is to retain customers or attract new ones, who their target audience is, and what they’re looking for. They then look to their budgets to determine which direct marketing strategy would work best for them, whether that be catalog, postcard, or email campaigns. Once they know the answers to these questions, they begin to build a strategic implementation plan.
The corporate image must be conveyed through the direct mail pieces, meaning strong design and direction are required. Corporate image is vital, and seemingly small details such as paper quality and the resolution of the graphics used will make an impression. Some companies may hire a third-party direct mail company to handle list creation, design, and printing. Larger companies may handle list creation, design, writing, and possibly even printing in-house. (See also Art Director)
To build a maling list, marketers collect information about clients and potential customers through in-house research. Many stores offer a substantial percentage off a first purchase when consumers apply for a credit card in the store, or when they opt-in to an email list. Other organizations and companies might set up a booth at a fair or conference, offering a chance to win an iPad when customers sign up for their newsletters and mailings.
Third-party companies also compile and sell contact information to companies and organizations. Customer surveys, public records, retail reports, and data software can all be used to collect demographic trends; other companies use only permission-based lists. These companies can usually narrow their mailing lists by demographic—for instance, to only working mothers who have children under three, with at least a bachelor’s degree, who own their own homes, have at least one credit card, a credit score of more than 560, and make $50,000 or more a year. Companies purchase these demographic lisst, and send their direct mail offers to this very targeted market.
Once the direct mail campaign has gone out, and customers have responded, companies track results to determine the campaign’s effect. Measuring the number of responses, increased traffic, and profit margin gives marketers important information about whether the direct mail piece produced the desired results, and what else (or instead) should be targeted in future campaigns.