Direct Mail MKT 3850 Dr. Don Roy

Direct Marketing Defined “Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order (direct order), a request for further information (lead generation), and/or a visit to a store or other place of business for purchase of a specific product(s) or service(s) (traffic generation).” - Direct Marketing Association

Key Features of Direct Marketing  Interactive  Uses one or more advertising media  Measurable response from audience The development of customer databases is instrumental in making direct marketing possible; it allows for precise segmentation and targeting of customers

Direct Marketing Campaign Components Audience Selection – Who should receive your message Creative – What your message will say and how it will look Offer – What is the incentive for the audience to give the desired response (e.g., discount, free gift, etc.)

Recipe for Direct Marketing Success 50% - Audience Selection 30% - Offer 20% - Creative Source: Steve Collins, “Proper Testing is Central to DM Success” Marketing News, November 1, 2004,

Direct Mail Strengths Audience Selectivity- Select recipients based on desired characteristics Flexibility- Options for varying lengths and formats (letter vs. postcard) Impact- creative options such as colored envelopes, “personalized” appearance, and teaser slogans gain attention Response- Provides means for measurable response (e.g., a coupon)

Direct Mail Weaknesses Delays in delivery - Postal Service can “drop the ball” and miss intended delivery date Low response rate - Where do you place most direct mail pieces you receive? High cost per responsecost List quality assurance - List data that is not current hurts response and creates waste Saturation among audience (i.e., clutter)

Measuring Direct Mail Results Response Rate - What % of customers contacted gave feedback (i.e., responded) to our message to them? # of Responses Response Rate = # of Contacts Made Example: Direct mail campaign in which 500,000 pieces were mailed and 50,000 people responded: 50,000/500,000 =.10 = 10% Response Rate

Cost per Response - How much does it cost for each customer who gives the desired feedback? Total Costs of Campaign Cost per Response = # of Responses Generated Example: A direct mail campaign with total costs of $500,000 (including printing, postage, ad agency fees, etc.) and resulted in 2,500 sales: $500,000/2,500 = $200 per sale Measuring Direct Mail Results (cont’d)