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.
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
- 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
- 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Be sure it is not outdated or been replaced by a new and improved version offered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.
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
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.
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.
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.
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 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
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 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 social and economic characteristics
of a group of people, such as sex,
age, education, income, type of residence and family size.
Characteristics relating to the geographic region that a group
of people live in and the demographics of that group.
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.
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
- 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.
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
Basic Elements of a Marketing
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.
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.
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.
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.
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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