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March 2007 e-Gram

Improving Direct Mail Returns

Some businesses avoid direct mail because it is perceived as “risky.” Sure, running a direct mail promotion can be stressful because many variables that affect your return on investment (ROI) come into play. You have to have a great offer that is sent to the right people, packaged in such a way that the recipients will be compelled to open it. Get one of these variables wrong and you might just say goodbye to your profit.

However, when direct mail works, the ROI can be phenomenal. The Direct Marketing Association and Wharton Economic Forecasting Associates did some research and learned that U.S. advertisers spend $167 per person in direct mail marketing to earn $2,095 per person, which is an ROI of 13 to 1. A survey from the U.S. Postal Service showed that 85% of mail is read or scanned by recipients and 38% found direct mail pieces interesting. So even with the rise in Internet marketing, direct mail certainly isn’t dead.

In fact, if the people getting your direct mail are customers you already do business with, the news is even better. A study by the Rochester Institute of Technology Printing Industry Center indicated that 67% of respondents actually like getting mail from companies they know.(1)

To reap these benefits, you have to approach direct mail systematically. Just as in science class, you need to experiment. Try a promotion on a small scale, see what happens and then tweak it to improve response. Only after you are getting a profitable response should you expand your direct mail program.

Of course before you can begin all this experimentation, you need to put systems in place to track your response. The best response becomes your “control” package. Once you have reliable statistics on the control, experiment with changes to your lists, packaging and offers. Keep track of the lists you use that work well (and those that don’t). Test out different packaging or offers and track which approaches work best. Big direct mailers test everything right down to the punctuation on the lowliest envelope or insert. Remember that if you can measure something, you can improve it.

You can track response in many ways, depending on your budget and staff. It can be as simple as telling your employees to ask your customers where they heard about a promotion or using codes on response cards. Whenever you launch new promotions or contact customers, see if there’s a way to create a feedback loop. The more information you can obtain about who your customers are and what they really want, the more successful your direct mail efforts will be.

1) ©2006, The Print Council, Washington, DC, www.theprintcouncil.org