When any of my clients tell me they've tried direct mail and it didn't work for them, I always ask, "What exactly was that campaign?"

The response I usually get: "We mailed to our top 25 prospects, and none of them bought anything! They were our best prospects, too."

I then make a left turn in the conversation and ask, "How many in-person sales calls does it take you to make a sale to a new customer?" The answers vary, but usually the number of sales calls ranges from two to five personal visits. Given that figure, here's what always amazes me: Why an otherwise intelligent person expects a sale will result faster or sooner from sending their prospect a sheet of paper in the mail.

Face it. Like it or not, the easiest and most persuasive way to sell a product or service to a customer is face to face. You can get immediate feedback. You can shift gears and change your pitch. Apply pressure -- or back off, according to their immediate response. And when you see a closing signal, you can secure the sale right then and there with a smile and a handshake -- and, or course, a goodwill deposit.

In direct mail, you not only have to convince someone that (1) you have what they want, (2) they should buy it, (3) they should buy it from you, (4) yours is a reputable company, and (5) you will send the customer what he orders in a timely fashion, but you have to do it in a way that will entice them to buy right off the bat. Further, you have to do it in such a way that they don't lose interest at any point in the sales process. On top of that, you have to convince them to put money in an envelope and wave to it as they drop it in the mailbox. Ugh. Very tough. But very possible.

The Direct Mail Advantage
In person, you can see five or six people in the day. In direct mail, you can reach thousands every day. Even hundreds of thousands. Mmmmmm. Hundreds of thousands in one day? There's the advantage of using direct mail. Just ask Publishers' Clearing House.

Direct mail is a game of numbers. Test small numbers. When you hit on a winner, mail large numbers of your successful packages. If you initiate a direct mail campaign with this knowledge from the get-go, you can create a realistic campaign where the odds definitely work in your favor. Direct mailers do it all the time, some with incredible profits. You can, too.M/p>

If you send out 25 letters and call it a direct mail campaign, we have different definitions. A one-time mailing of 25 pieces isn\'d5t a direct mail campaign. A mailing to 25 people? Sure, it's a mailing, but not a campaign.

A direct mail campaign needs to have more mail sent at one time, or sent with greater frequency if it's to a smaller list. If you need one sale (or one qualified inquiry) from every 100 pieces you send -- a 1% response -- the one person in 100 who was going to respond may not be in the first 25 pieces you mail. He may be the 99th person in your list of 100.

What does a successful campaign look like? Let's take a look. A client of mine spent $1,000 for a short direct response campaign selling boxes of taffy. He mailed to 2,000 mail order candy buyers at a final cost of 50 cents for each mailpiece ($1,000 total) which included everything, even postage. He received a little under 2% response: 38 people ordered at $45 + $4 shipping or $49, totaling $1,862. He shipped the candy at an all-inclusive cost of $12 a box, or $456, so he made $406 in profit.

"Whew," he said. "That was a lot of work, and I only made $406 dollars." And he left the direct mail business, saying it didn't work for him.

When he told me about his efforts in direct mail, I had only one question: "How long was the list of mail order buyers?" It was from a big direct mail merchant, he replied, and the list was a couple of million records.

I was excited! You see, once you have a winning package in direct mail, if you just keep mailing it (seasonal offers excepted), it should just keep on bringing in the same response. His chances are better than 95% that his mailing would draw a response between 1.37% and 2.63% if we sent additional mailings.

I then told him I'd be his partner and we'd test the list further -- we'd buy 20,000 names and mail to them. We'd mail the exact same package and, figuring the same response rate, we'd make $4,060. With this large of a mailing, the probability chart narrows its prediction on further mailings with greater accuracy: the response rate (95% accuracy) would be between 1.72% and 2.28% if we mailed to the rest of the list. If our response fell within these figures, then we'd mail to 200,000 names, and clear $40,600 profit. Then we'd mail to all 2 million names, and clear $406,000. And that's what we're doing now. With the economies of scale in buying candy and printing, we'll do even better next year.

That's how you make money, and how you make direct mail work for you. Test small but reasonable quantities -- 100 to 200 at the minimum. Then 500. Then 1,000 and 2,000. When you find a product, an offer, and a creative direct response package that works, figure out what it will earn if you increase your mailing size to run the entire list. Then go to dinner and celebrate.

Credit:
Jeffrey Dobkin, author of the powerful marketing tools How To Market A Product For Under $500! and Uncommon Marketing Techniques, is a direct response and web content writer and marketing consultant. He can be reached at 610-642-1000.

National Business News Jul/Aug 1999
Vol. 12, No. 4, Pg 10