More ROI From Direct Mail Investments

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The race to build market share in the technology arena has never been more heated, and the creative explosion in technology marketing is only adding to the excitement. Venture capitalists are paying more heed as to how companies spend their marketing dollars, and in some instances, the VCs are playing a hands-on role in approving creative and brand strategies.


Return on investment is near and dear to the heart of every VC, and of all marketing media, direct marketing is one of the most proven and most quantifiable method of converting buzz into sales. Recent stats from the DMA's Annual State of the Industry Survey support this: On average, each dollar spent on direct marketing in 1999 is expected to result in an $8.69 ROI. Consider, too, the expense-to-yield ratio of various business-to-business media:


• Direct mail - an investment of 8.9 cents will yield $1.


• Magazine space advertising -12.4 cents will yield $1.


• Telephone marketing - 13.8 cents will yield $1.


• Television - 23.0 cents will yield $1.


• "Other" media - 24.8 cents will yield $1.


So if direct mail is such a sure bet, why do many technology marketers - especially those in thinly funded organizations - fail to exploit its advantages? One explanation is the lack of focus caused by short-term mind-set and the pressure to achieve everything in Internet time. Even in the face of these pressures, a happy medium can be achieved, but it requires commitment. Here are some strategies and enabling technologies to help marketers to stay focused and, therefore, reap the most for their investments.


Reactive approaches rarely work. DM campaigns motivated by a knee-jerk reaction to a competitor's inroads or a dip in sales are compromised from the beginning. Often the impetus to "get something out the door" overrides the necessary evaluation and adjustment of a campaign's foundation: strategy, branding, message, lists, offers and fulfillment. As a result, the mailing that was supposed to go out the door "tomorrow" gets delayed because of poor judgment errors.


Think it through. For a direct mail campaign to succeed, it must be approached as a continuum - not as a series of fits and starts. What are your measurable goals in terms of inquiries, qualified leads and revenue? How should you spread resources across media and target audiences to reach goals? Take stock of all the parties that will be involved - ad agency, DM firm, printer, list source, mailer, fulfillment house, Webmaster and so on.


Talk to the experts. Outsource expertise and capabilities that your company lacks inhouse; but remember, even the most stellar resources will have little positive impact on your campaign if they are not brought in at inception.


Integrate, integrate, integrate. Integrate on two levels - conceptual and tactical. First, direct mail should reflect and complement other branding and creative efforts. Then, the mechanics of the campaign should be closely aligned among all players - design, print, mailing and fulfillment - to meet deadlines and achieve greatest economies of scale.


Lists: quality first, quantity second. List evaluation should begin at the time of concept development. Perhaps you're planning to use an inhouse list for a mailing campaign. Here's a common scenario: A marketing team meets to plan out a direct mail effort. For budget purposes estimates will need to be obtained from printing and mailing vendors. The "list" is looked at once: "How many pieces will we need to mail?" A discussion of the list never comes up until later in the production cycle. You've evaluated quantity, but what about quality? How old is that list? How has it performed? Who will take care of the list hygiene - your overworked assistant? A smarter approach is to send your proprietary list to a database management company for basic data hygiene and, possibly, additional data appends and enhancements that can fine-tune the precision of your efforts. Other options include working with a list brokerage to rent or buy a proven performer.


We are still some ways away from perfecting the e-mail list standard. Experiment with e-mail lists and augment, but don't bet your marketing dollars on an e-mail campaign. Response rates among opt-in e-mail lists available for rental vary from 0 percent to 15 percent, with average rates falling between 3 percent and 8 percent. With e-mail lists there is less certainty - is your recipient a buyer or just a surfer?


Make the offer compelling. What will make people respond? If it takes you more than 30 seconds to decide, go straight to the only source that matters: your customers. Ask a few customers what would make them say yes to an offer from you.


Keep the committees small and disengage. At closely held organizations, hands-on involvement from the CEO and other key members of the leadership team is often unavoidable; but in order to move ahead, disengagement is necessary. Too much interference from too many players can be costly (creative changes, production delays).


Consider the possibilities of print on demand. For many campaigns, this offers the ultimate flexibility: real-time print production and affordable mass-customization. Through POD and database management, some marketers are even extending campaign management, production and mailing control to their sales reps. By accessing an extranet hosted by the company's marketing services provider, reps can create their own customized campaigns: First they identify the customers they wish to target and "assemble" kits online by pointing and clicking on the materials to be included in each mailing.


Give options. Not everyone wants to respond to your offer through the Web or be contacted through e-mail. Moreover, if it takes longer for you to respond to my Web-driven request than my telephone inquiry, you've lost me. Add high-touch to hi-tech with mechanisms such as Web callback. By clicking on an icon, a consumer is prompted for a name and phone number. Within a second, the phone rings as the technology automatically connects a CSR with the consumer.


Think the job is done? Think again. Exceed expectations at the end.


Your objective is to build a brand, not destroy it. Fulfillment begins at the first meeting. Failure to map out a tightly integrated, customer-centric fulfillment strategy will sink the most creative and well-executed campaign.
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