Lower Cost — Higher Response!
Direct mail is an ideal vehicle for reaching new prospects and creating customers.
It’s also a personal medium, designed so you can select your specific audience, and communicate personally— and far more effectively.
In the past, saturation mailing and a “shotgun” approach worked pretty well for most advertisers. Today, if you don’t focus, you’re wasting money. We live in a world of information, where precise information is more abundant, easier to collect, and can be used in many new ways. A precisely-targeted list allows you to increase your range, cut your costs, and ultimately end up with more solid prospects.
A targeted list can increase the number of prospects from each dollar spent, by NOT sending a mailing to those who don’t fit your demographic.
Double your response rate by mailing less.
Impossible? Let’s do the numbers:
Mail a non-targeted, “saturation” mailing to 5,000 geographically-selected addresses. Each mailing costs 75¢, and your total cost would be $3,750.
You get a 0.3% response rate— 15 sales— at a cost of $250 per successful sale. That’s a pretty steep cost for each new customer! If you’re selling houses or another big-ticket item, it might work. But if you work on tighter margins (i.e. $40/sale profit), you’ll need six, seven, or more purchases from every customer you close, just to break even!
The Power of Precision Targeting
Instead, do a targeted mailing to the same geographical area. Focus your mailing to ONLY the most responsive market demographic, and lower your mailing to 2,000 pieces. The cost per piece will be a bit higher (since you are using a targeted list, at a slightly higher cost) at about 85¢ per piece, but your total mailing cost is now only $1,700.
Do the math. LESS IS MORE!
You are covering the same area, so your targeted list creates the same 15 customers as the untargeted list. But only 3,000 mailings, your response rate jumps to 0.5%, and, more importantly, each customer only costs $113 to acquire — half — now only about two or three sales need to be made to recoup the cost of the mailing.
What’s more, respondents to direct mail generally have a strong interest in the services offered, so loyal customers creating those repeat sales are far more likely than with other advertising methods.
(Response rates and prices in the example are typical, but not representative. Your actual costs and response rate may vary based upon your list selection, offer, and the mailpiece itself.)