Never Stop Prospecting: Direct Mail and finding the right mailing list
According to the Direct Marketing Association, on average, direct mail returns ten dollars for every dollar invested. However, as noted earlier, the most pivotal element to direct marketing Success is having the right list. What does it look like? Where does it come from? Where do you start? If you are prospecting for new customers you will probably not have their names. But, names of qualified prospects are available through list compilers and brokers. However, to buy mailing lists it is essential to know what your best prospective customers look like. That’s where your house list comes in handy. Scanning through your house list you can identify the traits that are common among your best customers. For example, you may find that your best customers live within five miles of your business and have incomes of more than $75,000. This demographic information will help you purchase a list of customers that will buy. There are two main types of lists that can be purchased: compiled lists and response lists. Compiled mailing lists are comprised of information from public records and sources such as the phone book, courthouse records, bankruptcy filings, mortgage deed records and more. On the other hand, response mailing lists consist of individuals who have responded to an offer either through the mail, phone, television, or through other means of mass communication (e.g. a magazine subscription list, a catalog mailing list, etc.).
These types of lists must be understood – each has a set of unique characteristics that enables it to achieve specific and distinct objectives. The key to success is to understand when it is most appropriate to use each kind.
Compiled list are ideal for those businesses that need special demographic selectivity to target a well-defined market, for instance targeting auditing companies specializing in bookkeeping, manufacturers with 50 or more employees, or families with household incomes of $50,000 who live within 10 miles of your store. All of these examples are likely to do better with a compiled list than a response list. This is good news if you understand the demographic profile of your customers since compiled lists are generally less expensive than response lists – costing between $40 and $70 per thousand versus $90 to $125 per thousand for response lists. Response lists are the best choice if you need to cover an entire market of prospects with similar characteristics. For example, if you are selling a specialized software engineering tool, or to every Certified Public Accountant in the State, there are lists available from publications that serve these markets. Often information is even available on how frequently these prospects typically respond to offers they receive.
Response lists, especially among those who are shown to respond, can produce higher response rates – thus justifying the higher price. Both types of lists are not always available for all audiences. So a little research may be required to determine what is available for your target market. Once the correct type of list is determined the next step is to decide how many names are required. This comes back to your direct mail marketing plan. First, decide how many customers you are trying to acquire. The answer is not as simple as “as many as possible”. Consider how many responses you can handle. If the goal is to have customers call you, and you only have one person to answer the phones, then you probably don’t want 10,000 prospects calling you at once. It is a simple rule of marketing that the further you get from the initial point of contact with your prospects the less likely they are to buy. Thus, you only want as many prospects as you can service at any given moment in time. Similarly, if you have a restaurant that only has seats for 100; it doesn’t make sense to attract 1,000 new customers to your doorstep on any given day. If you have the chance to acquire a new customer you may only have one chance. Another simple rule of marketing is that it is ten times easier to get a new customer to try your business the first time, then it is to get them to try it again if they have a bad experience; plan to acquire only as many customers as you can service – and serve them well. In the long-run this is a far more powerful plan. With your target in mind just work backwards. For example, if you are trying to attract 100 new customers, and you believe that 2% will respond to the promotion, of those 50% will buy, then you will need 10,000 names (10,000 * 2% * 50% = 100). Response rates will vary depending upon the accuracy of the list and attractiveness of the offer. Direct mail professionals often use a 2% response rate as the benchmark for a successful campaign. However, much higher response rates are possible with a targeted and attractive offer When using a response list the vendor can often provide you with target counts. These may or may not be enough to meet your goals. You may need to combine several response lists to get the list counts that are required. With compiled lists the trick is to configure the demographic selects appropriately to produce the size list required. For example, if you need 10,000 names, and you request all females within ten miles of your business, and the initial list count is 100,000 names, then you may have to tighten your search criteria – possibly by adding another select (e.g. income level). In a similar fashion, the demographic criteria can be relaxed slightly if the name count is not high enough.
In addition, this is not a strictly compiled or response list decision. You may select criteria from compiled data and add selects that are from response data all in one list. Check out www.jwallmarketing.com for exactly the list you need. Good Selling!
