Direct Mail: The Devil Is in the Data

Direct mail accounts for 50 percent of marketing dollars spent yearly.

A recent Pitney Bowes direct mail survey, in conjunction with Peppers and Rodgers Group, confirms direct mail’s value as the most effective marketing vehicle for companies to establish customer relationships.

In the survey, 34 percent of respondents said “direct mail contributes most to establishing a relationship with them,” compared with print (30 percent), television (25 percent), radio (5 percent), e-mail (4 percent), Internet (2 percent) or telemarketing (zero).

U.S. Postal Service data further strengthen the case for direct mail’s effectiveness. The USPS says that 50 percent of direct mail recipients read the message immediately and that 40 percent of those think it provides useful information.

The bottom line from the Pitney Bowes research is that 22 percent of respondents said they would buy the product described by a direct mail piece. However, if your mail piece never reaches the intended recipient or is mailed to someone who already asked to be removed from your mailing list, then your company is wasting money.

For companies trying to convert marketing dollars into revenue, high data quality is the most crucial component for direct mail success. Companies that disregard data quality and fail to update their customer and prospect databases risk wasting company resources and missing revenue-generation opportunities.

There are many reasons to invest money and resources to develop a quality database for direct marketing. Here are a few key ones:

· Generate sales. The goal is to sell your product or service. High quality data, over time, increases sales.

· Build awareness. The purpose of your direct marketing may be simply to generate awareness and visibility for your company. Higher quality data lets you reach more customers or prospects and build corporate brand awareness.

· Track customer behavior. A well-maintained database can track customers’ buying behavior and give insight on what to market to a particular audience and when to market it. Example: A company markets tax software and has a list of customers who bought the product last year. Before the next tax season, the company can orchestrate a direct mail campaign to those customers informing them of the latest software and encouraging them to buy again.

· Upsell. Buying behavior also can be used to upsell a customer on a more advanced product. Example: A company sells virus protection software for computers. A customer database can be used to send notices of new versions and new features.

A precisely defined target audience is key to a direct mail campaign, but using your database to generate sales, build awareness and track customer behavior requires gathering as much information on your target market as possible.

Basic information such as current addresses and phone numbers is essential. But getting as much detail as possible proportionally raises the marketing value of a database and, therefore, improves a direct mail campaign’s potential for success. The challenge lies in finding the customer and prospect details that turn a database into a generator of qualified sales leads.

A few places to begin a search: Purchasing magazine subscriber lists; reviewing public records, such as property listings to find new homeowners, at city and county government offices; or browsing the Web site for a chamber of commerce where a member directory may contain contact names, phone numbers and e-mail addresses. Often, businesses can fill in prospect details from internal resources, including:

· Company records. Internal records should be the starting point for any database. Gather all sales leads, current customers, past customers, etc., and start a list. Don’t forget your Web site. It can be a great source of information.

· Credit card transactions. The point of sale, when a transaction is already occurring, provides an important chance to capture names and addresses.

· Retail information. Lists can be built from product registrations or surveys.

· Self-reported data. Information filled out by the customer on warranty cards or on contest entry forms.

The type of information to include in a database depends on the product or service being marketed. Remember, the more comprehensive the information, the better the database. Here are some things to have: age, gender, household income, occupation, educational level, geographic location and hobbies.

Criteria will differ for a business-to-business campaign and may include number of employees, revenue and Standard Industrial Classification codes.

According to the U.S. Census Bureau, the average American moves 11 times in a lifetime and 17 percent of Americans change addresses each year. Getting data is important; updating data is critical.

While list brokers may be able to provide detailed information based on certain criteria, they do not interact with individual customers and cannot track a customer’s buying history. Data management becomes vital in order to progress from simple tasks such as updating names, addresses and phone numbers to more complex activities such as building customer profiles.

Once a company has a customer name and some basic details in a database, it can begin adding more information to refine the customer profile, which can lead to generating additional business.

Here are a few basic tips for managing and maintaining a database:

· Update addresses. Updating files before mailing through one of the postal processes produces solid results, to the tune of 6 billion addresses corrected through National Change of Address in 2000. For the same time, the delivery cost savings derived from using FastForward, another USPS mover update service, exceeded $56 million. Mailers who effectively update their database prior to mailing almost always see an immediate benefit.

· Duplications. Check for duplications, cross-check addresses and delete duplicates. A person may be in a database several different ways, such as Thomas Smith, Tom Smith or Tommy Smith.

· Deceased screening. This is especially important if a company’s campaign is targeting the elderly.

· Requests to be removed from list. Always honor these requests.

A targeted, quality database is one of the best marketing assets a company has. It should be reviewed periodically to find trends, used frequently to communicate with customers and updated regularly with customer feedback. A detailed, targeted database will make a direct mail campaign more successful.

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