The product or service your business is offering has passed the test of consumer acceptance. You’ve found a niche. The customer base is growing by word-of-mouth and expanding. Obviously, you are offering something that consumers want and now it’s time to surge, get the word out, and let the outside world know that what you’re offering is worth considering and, ultimately, buying. You’ve decided to give advertising by Direct Mail a shot.
The first thing you have to learn about with Direct Mail is the 40/40/20 Rule. This is the concept of breaking down any Direct Mail campaign into three key components: The Target Market, The Offer and The Creative Design of your mailer.
WHAT IS THE TARGET MARKET?
The Target Market is the group of consumers whom you are trying to reach with your particular offer. Once you identify them, either by income or location or profession or a myriad of other criteria based upon your product offering, you need to go to professional mailing list provider and work with that supplier to find the right list of direct mail recipients for your product or service. About 40% of the success of your new business campaign will depend upon the efficacy of this list, which is what the first ‘40’ of the 40/40/20 Rule denotes. That’s why most direct marketers allocate about 40% of their budget to procuring this list.
The list of consumers and their mailing addresses that you end up buying will probably not be a perfect fit for your campaign. Direct mailing lists rarely are. As a matter of fact, it might only satisfy a small part of the criteria that you originally desired. That is not uncommon because, obviously, the world outside your nascent business’ narrow customer base is a huge, diverse, unpredictable zone. But that’s part of the beauty of a Direct Mail campaign – you are expanding into the unknown. These are all new customers with different needs and wants and your company’s offer is being placed right smack dab in front of them at their mailbox. Who knows what might happen? There could be a gigantic customer base just waiting to be mined somewhere outside your experience or environs that you never even dreamed of finding.
WHAT IS THE OFFER?
The Offer is a request for your potential customers to consider changing what they have been buying, or to try something completely new. It is a call to action for mail recipients to eschew what they’re used to and to break new ground. Your offer could be anything from a discount coupon to an invitation to a grand opening to a logo’d t-shirt to a chance to win a new car. It is the reward a consumer gets for just walking into your store. But the more exciting The Offer is, the more likely your direct mail solicitation will yield results, which brings us to the second ‘40’ of the 40/40/20 Rule. You should allocate at least 40% of your campaign budget to The Offer. It will add to the Return on Investment (ROI) of this Direct Marketing campaign more than any other single component, so you should think long and hard as to exactly what this enticement is going to be.
WHAT IS THE BEST CREATIVE DESIGN?
The actual Direct Mail card or letter that ends up in the consumer’s mailbox is the ‘20’ in the 40/40/20 Rule and, thus, should be around 20% of your marketing budget. This is the one-time, brief contact a potentially new customer has with your company so it must be dynamic, colorful and attention grabbing. If your solicitation takes the form of a letter, with coupon and bonus inserts, you’re going to need personalized envelopes with some eye-catching graphics to make sure that envelope gets opened and to keep it from hitting the trash can, unopened. The rest of the graphics in your mailer should support a single theme and drive it home with forceful, single-minded purpose – get the customer engaged and entice him or her to follow through on your offer.
WHAT SHOULD YOU EXPECT FROM YOUR CAMPAIGN?
The typical response rate to a Direct Mail campaign usually ranges from about 1% to 5%. There are a lot of factors affecting this rate. If you have a ‘warm’ list, that is, a list that you’ve direct mailed before, meaning that this solicitation would be the second time a consumer has seen your announcement, you should be in the upper extent of that range. ‘Cold’ (first time) list will probably be less. To help you decide how much you should allocate for your first campaign, there are Direct Mail Online Calculators that will demonstrate how much you can expect to gain.