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Project Planning

The Product | The Offer | The Mailing List | Creativity | Marketing Plan


The strategies used in planning a direct mail project are different than the ones used for general advertising. In general advertising the focus is on the average reader or viewer and trying to reach as many of them as possible. Direct mail advertising focuses on a targeted group of people that are most likely to purchase a product or service. All efforts in the planning process are directed towards getting the targeted audience to respond to the offer that is being presented.

Some of the key components in planning the direct mail project are the product, offer, mailing list and creativity. They will all be part of the marketing plan that you develop. All need equal attention in the planning process. Each component is discussed below.

The Product

To begin planning your product strategy you must first have the right product, one that will appeal to your audience. Sometimes the company doesn't have a product to begin with but they see a need and develop a product to fit it.

When a product is not selling to expectations, it may not be that the product is not right, it may be the way in which it is presented. There are ways to make the same product be more attractive to the prospects. You can revise the product, without actually changing it, by changing the direct mail strategy that you are using. Some strategy options are shown below:

  • Try selling the product to a different targeted group.
  • Give the product an entirely different creative image.
  • Take one piece of the original set and break it away from the rest and offer it as a free item that is received with each set purchased.
  • If selling individual items, try selling as a complete set.
  • Look for a feature that has not been thoroughly described and then highlight that feature.
  • Describe the entire product in a more dramatic fashion.

The product must be one that appeals to your audience. Be sure it is not outdated or been replaced by a new and improved version offered by your competition. Be sure the product is suitable for the group you are targeting.


The Offer

Changing the offer of your project can have an enormous effect on your response rates. There are many ways in which the offer can be changed. Some of the ways in which you can vary your offer are shown below.

Price

Lowering the price of the product will always result in improved response, but won't do much for profit margins. If the product is overpriced, then lowering the price may be necessary. Before lowering the price, look at ways of restating the price of the product or service that may be more attractive to the customer.

Each offer will produce a different response depending on the level of customer attraction.

Additional Costs

Stating that additional costs, such as shipping and handling, are included in the offer price may appear to the customer as if some unnecessary costs have been added to the price. It has been shown in testing that stating the price plus shipping and handling as a separate cost is more acceptable to the customer. You should keep this in mind when planning on how you will present the price of your product.

Change the Offer

You can test several different offers for your product or service by changing the offer for each test package. Changing the offer can have a dramatic effect on your response rate and your return on investment. You need to look at total profit of each offer that is tested. One may have a high profit per item but a low response rate. Another may have a lower profit per item but may have had a much higher response. Because of the high response rate, the lower profit item could show a higher total profit. See the example below.


Price Break

When determining the sell price, consider where the price break point falls. In some cases, lowering the price slightly may have a positive effect on the response rate. For example: $1.95 will get a better response than $2.20, $9.95 will do much better than $10.95 and 18.95 better than $20.00. 

The break points can also work in a more positive direction. Instead of lowering the price on an item that you determine should be at $13.95, could probably go up to $14.95 with minimum effect on the response rate. Testing the break points will be the best way for you to determine what will work for your company.

Free Items

Including a "Free" offer in your direct mail package is a good way of increasing responses. It gets the attention of the prospect. Some examples of how the "Free" offer can be used are shown below.

  • Trial size product
  • Complimentary gift
  • Subscription to a newsletter
  • Free information
  • Free first issue to a series of publications

Keep in mind that the "Free" offer should not result in additional costs that the respondent is unaware of. The offer must comply with the Federal Trade Commission, Better Business Bureau and Audit Bureau of Circulation standards.

Offering Credit

Offering a product on credit is a good response builder. Response time will be shortened if a "Bill me later" option is included. What you have to determine is if it is worth setting up credit relationships, sending out billings and risking some bad debt. All of this should be taken into consideration when figuring total cost of the project.
 

Whatever strategy you use, do not overlook the time factor when evaluating your offer. It may take a period of several years before you can truly evaluate the effectiveness of your direct mail project. Generally, an advertiser has made some type of investment to obtain a customer. It is normal for a company to just break even on its investment in the customer after a twelve month period. They hope to cover their original investment in the next twelve months and gain a satisfactory return in the subsequent years. A satisfactory return is accomplished through renewals, up-grades, repeat orders and list rentals.

Although the cost of obtaining new customers can eat into the profits from the established ones, it is important to have the proper mix of both. If you do not add new customers, you do not have any way of increasing the number of established customers that are providing the majority of your profit. You will also loose some of your current established customers throughout time, so it is important that you are continually gaining new customers that will eventually replace them.

Note: Any offer strategy used must comply with the standards of the Federal Trade Commission (FTC), the Better Business Bureau (BBB), and the Audit Bureau of Circulation (ABC) - for magazines. For more information, see the following Web sites:
FTC at www.ftc.gov
BBB at www.bbb.org
ABC at www.accessabc.com.

 
The Mailing List

The mailing list is the direct response medium used for direct mail. Selecting the most appropriate lists for your project can have a major effect on the success of your campaign. An advertiser can use several core lists when targeting prospects. 

Core Lists

Core lists consists of the most logical buyers of the related product.

  • Past buyers of the product
  • Respondents of past mailings
  • People with related interests
  • People that fit the demographic criteria of the product
  • People with geodemographic characteristics related to the product

Demographics:
The social and economic characteristics
of a group of people, such as sex,
age, education, income, type of residence and family size.

Geodemographics:
Characteristics relating to the geographic region that a group of people live in and the demographics of that group.


List Information

The lists are categorized according to potential markets for a product or service. The type of information that they contain is unlimited. Some examples are listed below.

  • The gender of the buyer
  • Demographic and geographic information
  • The buyer
  • Type of products purchased
  • The price range of products purchased
  • Special interests
  • Business interes

The objective is to select the lists that will give you the best response to your particular product or service. Choosing different mailing lists may be the only difference between two test cells. Different mailing lists can have a dramatic effect on the response rate of your test cells and can be a big benefit to you when selecting the final mailing lists for the rollout of your direct mail product or service.

 
Creativity

The creative strategy of a direct mail project is usually one of the last areas to be decided. The creative strategy decision is delayed because the decisions made in the other planning areas will effect the creative strategy used. There may be several different creative strategies that you will want to test. 

Factors that will have an effect on the creative strategies:

  • The type of product being promoted
  • The value of the product
  • The type of offer being made
  • The characteristics of the targeted group
  • The number of elements in the direct mail package
  • The size of the elements

The main message, the copy length and the illustrations used to create the mail pieces are all affected by the above factors. For example, if you were trying to promote the sale of a insulated beverage mug, you wouldn't want to emphasize how well the mug will keep coffee hot and then find out that the targeted group consists of people living in a tropical region.

Creating a strategy that affects the personal characteristics of the prospect needs to be used in both the illustrations and the message of the project. This is necessary to attract the attention of the recipient and maintain it long enough to result in a positive response.

 
Marketing Plan

When deciding on your marketing plan, all of the components listed below need to be considered. They all interact with each other. Changing a method in one area may affect the type of method you would use in another area. You can use a combination of different methods to send out different test cells. It is your responsibility in planning your project to select the methods that will be most effective in presenting your product offer. Sending out test cells will help you achieve your marketing goals.

Be sure that you have a written marketing plan so that everyone is clear about what the objectives are for your direct mail project. Your marketing plan should include the elements shown in the table below.

Basic Elements of a Marketing Plan

Product
Description

Write a clear description of the product or service. Be sure to include all physical and technical attributes. Explain the practical and emotional benefits the product or service provides. Include any research results that show how the product is perceived by the people.

Marketing
Environment

Include all the information you can find on what your competition is doing. Explain how they are presenting their promotion and who they seem to be targeting. Order their product and record how they respond to your response. Note any government regulations that need to be brought to everyone's attention. Record any known problems that might occur.

Marketing
Possibilities

Indicate the characteristics of the targeted prospects. Record any potential changes in the product or offer. If testing has been completed, record all of the results. Include any available geographic or demographic information.

Strategies

What are the goals of the plan? Record the type of results you are trying to get and in what amount of time. Indicate any alternative strategies you have discussed. Indicate which strategy produced the best test results.

Implementation
Plans

Indicate what offer and creative strategies will be used for the project. Make list recommendations for targeted prospects. Include the budget for the project. What is the timetable for getting the mailing out and how long before the results can be determined.

Make sure that your marketing plan has all the related background material included with it. The person evaluating the plan should have all the information in the plan that they need to do their evaluation. They should not have to access any outside data.
 


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