Cost Per Response Is Key for DMers, Speaker Says

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ORLANDO, FL - Sheri Martin told attendees at her session Saturday something they certainly are aware of.


"Marketing budgets have been dramatically cut," said Martin, a business development specialist at Heidelberg USA. "I am in the print business so I also know that print is usually the first thing to get cut as well as other types of media."


Her comments were part of the "Direct Mail - A New Revolution - Print Less and Double Your Response Rates" session at the Direct Marketing Association's annual conference here.


"What we're going to focus in on is cost per response or cost per sale," she said. "Instead of buying a list of 100,000 people, why don't we focus in on your existing customers - the people that love you? If they're buying from you already, let's increase that sale."


The talk then turned to obsolescence and waste. She asked the audience whether they knew the average cycle of a document before it becomes obsolete. Nobody tried to provide the answer, which Martin said was less than 180 days.


"If you guys are running a catalog, how come you guys run 500,000 or 200,000 of them when you really only need 20,000 of them?" she asked. "Because your printer tells you you're going to get a better deal.


"If you buy a list of 100,000 people and you do a spread mailing, you think, 'My business is going to grow.' Well, 78 percent of all your direct mail pieces are opened up over the trash. If you think I have time to look through all of my direct mail pieces, you're nuts, because I don't."


That's when Martin stressed the importance of personalization.


"If you're addressing it to me, or you're personalizing it to me, I'm going to stop and take a look at it," she said.


Martin then asked attendees how many used CRM. When she estimated that one-fourth of those in the room indicated that they did so, she asked, "You have all this data on me, how come you're not selling to me? Why not create a campaign toward me, the individual? Use your CRM effectively. Create customer loyalty programs."


Then came her easiest question: What's the average response rate of a mass direct mail piece? The answer: 1 percent to 2 percent.


She told attendees of an average response rate of 23 percent when personalizing and using CRM tools effectively.


"Guys, I don't know what else to tell you," she said. "If you still want to buy lists of 100,000 people and mail these things out … go ahead and get your 1 to 2 percent response rate. But if you want to mail effectively and get a 23 percent response rate … you're going to look like a hero to your boss."


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