How Effective Is Direct Mail?
Direct mail can be a highly effective way to elicit leads and pull orders. It is also cheaper than TV advertising and more measurable. It is used by small retailers as well as large corporations. Specific demographic groups or zip codes can be targeted. A direct mailing can be sent as a single offer or as part of a cooperative mailing (i.e. Harte Hanks, Val Pak). It must draw attention and prompt the recipient to read and respond to the offer.
Other People Are Reading
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Mailing Lists
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The mailing list is the most important part of a successful direct mail campaign. It is one of the main reasons why direct mail is so effective. Suppliers of mailing lists will divvy names up by category, types of products they buy or zip code. If a company wants to target households with incomes above $75,000, they can buy a list and mail to these families. If someone wants to purchase a list of people who buy vitamins, they can use it to market their own vitamins and supplements. Companies such as Columbia House have been using direct mail for years for their DVD and CD offers. They would not send these mailings out if they were not highly profitable.
Generating Leads and Orders
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Retailers such as beauty parlors can use direct mail to drive traffic to their store(s). They can offer coupons and count the number of people who redeem them. Based on the dollar volume generated by the mailing, a company can determine if the mailing had a positive impact on sales. Some of these customers may have come to the store even without the mailing, and that aspect can be tested with marketing research. Repeating direct mail campaigns can be a highly effective way to build a business. But a company needs to have a grasp on its primary target audience.
Direct response mailings ask for money. The order form on these mailings can be keyed to indicate the date of a specific mailing. That way when orders come in a company can compare sales versus expenses for that specific week and know the profitability of each mailing.
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Direct Mail Campaigns Can Be Tested
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A company can send out 3,000 pieces of mail to a specific target audience. If that mailing proves successful, they can expand the mailing and build sales. There is usually a direct correlation between advertising dollars spent and sales for effective mailings. Direct mail advertisers also use key measures such as cost per inquiry and cost per sale to measure the effectiveness of a campaign.
Database Marketing
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Once the customers garnered from a mailing patronize a store they can be added to a database. Some companies such as Kroger use this information effectively to market additional items to them. They also offer incentives based on the dollar volume these customers spend. The ability to use database marketing makes direct mail one of the most effective advertising tools available.
Junk Mail
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Some of the latest available data indicates that more than 40 percent of all mail is "junk" mail. These are the direct mail pieces that are used by myriad companies to market their wares. If direct mail was not highly profitable, these companies would not be using this method to promote their business.
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References
Resources
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