Direct Mail Marketing

      Pros consider the costs and benefits of mass mailings to attract business. December 20, 2005

Question
Does anyone have any experiences with direct mail? I just received a solicitation to direct mail 1500 people within a certain home price range for about $0.61ea. This price includes design and mailing of 5" x 8.5" two-sided full color postcards.

Forum Responses
(Business and Management Forum)
From contributor A:
First I would ask this question: Is the mailing list a compiled list or a response list? A compiled list is done strictly on demographics which are sorted and refined from a bigger list of names and address that were collected. These names could come from any type of private list or one already available to the public such as the "sold" real estate listing at your local town hall. In this case your postcard may get mailed to high priced properties which are rental units where the owner doesn't live, so that's something to consider.

A response list is made up from people who actually responded to some sort of survey, therefore the information is usually better than a compiled list because the person responding took the time to complete the survey with his specific information. From this type of list you can expect a 2 to 5 percent response (30 to 75 responses out of 1500 cards mailed) so plan on 30 and be very happy if you get more! By the way, the cost per lead if you get 30 responses is $30.50 each.

Secondly, how big is your current customer list? If it's a good size then spend the $900 plus dollars marketing to someone that already knows you, trusts you and has bought from you. You'll find your return on your investment is much greater.



From the original questioner:
2-5% is actually pretty good. If I am paying $30 for each qualified lead, it sounds reasonable. What about other advertising? I've just always avoided it all together after I spent money on the phone book ad. Lately I have been thinking that we need to build a presence - local advertising in the design magazines, sponsoring local events, etc. We're on the AIA homes tour this year and I'm spending $750 on that. We are donating cabinets to a local university's solar home project. Is there anyone who advertises that way or does it work only with commodity items?


From contributor B:
I don't know where you are at in building your business, but direct marketing is the way to go. You can track your costs and profits down to the penny. If you can figure out how to make it work for you it's like a cash cow. Milk it any time you need money. Here's an example. I recently did a flyer campaign: 3 hours to compose the flyer (5.5" X 8"), 1 hour to print, 2 hours to deliver. Actual cost (less my labor) was $10.00. Return on investment: $1,100 plus a bid going out tomorrow for about $5000 for a dining room set. I'm still working out the kinks in the system but can't wait until I can do it all the time.


From the original questioner :
Don't discount your time. I have about a dozen people to keep busy, so if I'm hand delivering flyers, that's money. I can design my own post cards, in fact I have already done it, but I need to broadcast them over a wide area and hit the right demographic. I was thinking that I would incorporate my business card into the postcard. My thought on it is that you tend not to keep the flyer, and they get thrown out. But if someone is interested and likes the pictures, they will keep the card and call on me when they are ready. Has anyone done anything like this?

What about some sort of coupon offering a discount on kitchen design? I don't discount my design time, but if I am still getting compensated for it (I usually charge $1000-1500) on a lower level I can still offer to incorporate the design fee into the cost of the cabinets. It's a numbers game at that point.



From contributor B:
I actually only handed out two thirds of the flyers - time: 1hr. The other third were handed out by my kid sister for free. Keep trying hard but don't discount the ability to track your marketing dollars. I don't think the business card on the post card is a good idea.


From contributor A:
It's my belief that it's not where you run or place your ad that will give you the best return on your investment - it's knowing what audience you appeal to and how you go about targeting that audience that counts. Your marketing message should focus on the benefits to the customer. It should not be about you, your abilities or your workshop. Your message should only be concerned with what the customer will get out of doing business with you, as opposed to all the other choices they have. When you can speak directly to the customer through your advertisement, and relay all the benefits and why you are the best solution for them, then you have a marketing campaign which will continually give you a great return.

It doesn't matter if that message is on a flyer, a postcard on in a phone book ad, as long as it speaks directly to your target audience, and they get to see it. In my humble opinion, until you figure that out, you're shooting in the dark.

Direct Marketing is the way to go! You should be planning marketing campaigns and tracking every marketing dollar you spend so you can clearly see where your ROI comes from, rather than just throwing money at something your not sure of and can't really track. Once you figure out what works for you, you can redirect your marketing dollars to the options that work best and abandon the ones that don't.



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