Using Direct Marketing to Boost

Revenue
 What is Direct Marketing?

 Direct Marketing is both marketing and sales.

Direct Marketing is the translation of one-on-
one, face-to-face selling into broad reach media.
 Always be Selling

 Product / Service / Next Step

 Response
 Continued Engagement
General Advertising and Direct Mail –
A Simple Comparison

Advertising Direct Marketing

Mass Targeted
Competitive Attention Selective Attention
Breadth Depth
Remember Respond
Impression Decision
Pay for Everyone Pay for Targets
 The Two Most Important Factors in DM

 Pre-selection
 Refining the target based on pre-existing level
of interest

 The Offer
 What does it take to provoke response?
 The Relative Power of Media

Face-to-Face
Strengths Weaknesses
 Sight  Likeability
 Sound  Demands Time
 Eye Contact  Expensive
 Body Language
 Interaction
 Demo Ability
 One-to-One
 Provides Time
 Pre-selection
 No Attention Competition
 Chemistry
 The Relative Power of Media

Direct Mail
Strengths Weaknesses
 Sight  Easy not to engage
 Pre-selection  4 seconds to involve
 Low attention competition  Postal system dependent
 List dependent
 The Relative Power of Media

Telephone (Outbound)
Strengths Weaknesses

 Sound  Interruptive
 Some Chemistry  Requires Time
 Interaction  Annoying
 One-to-One
 Pre-selection
 Low Attention Competition
 Some Unfortunate Truths About Direct
Marketing

 The more we need people to read (listen, watch), the less

willing they are to do so.
 The more resistant the universe, the more expensive the
cost of buying sales time (choice of medium, and devices
within each medium; offer)
Cost of persuasion power is inversely proportional to the
level of pre-existing interest within a prospect universe
 The more it costs to acquire a customer, the less valuable
the customer.
 Sales Support – The Sales Sequence

 The sales sequence is the set of decision steps

necessary to close a sale matched with a set of
communications designed to provoke each step.

 Direct Marketing tools are typically used to narrow

the universe to “qualified prospects” .

 DM sells the next step in the sequence.

 The cost of acquisition is the total cost of all the
contacts at each step necessary to provoke a
single decision to the next step.
 The Cost of Acquisition in a
Sales Sequence
Step1: Step 2: Step 3:
Lead Generation Qualification Sales Call
Vehicle: Direct Mail Vehicle: Telephone Vehicle: LPS

Universe: 10,000 Universe: 500 Universe: 50

Cost/Contact: $1.00 Cost/Contact: $10.00 Cost/Contact: $200.00

Response Rate: Conversion to Appt. : Conversion to Sale:

5% 10% 25%

Cost/Conversion: Cost/Appointment: Cost/Sale:

$10,000/500 = 500 x 10 = 5,000/50 = 50 x $200 = $10,000/13
$20 $100 = $770

Total Cost of Acquisition = $20 + $100 + 770 = $890

 Common Sales Sequences
Mail/Ad Phone Mail/Email Phone LPS
 Generate Qualify  Provide  Set  See
Interest Decision information appt. rep
Authority or quote
Determine
who is involved

Phone Mail/Email Phone LPS

Generate  Provide Info Answer  Demo
and Qualify  Confirm Call Questions  Close
 Id decision Back Set appt.
process

Sell the next step.

 Qualified leads are based on need –
not interest

Ad Generated Interest Need Generated Interest

Ad Ad
 Selection Factors

 Consumer Lists  Business Lists

 Age  SIC (Standard Industrial
Classification)
 Income
 Employee Size
 Gender  Annual Sales/Revenue
 Marital Status  Title
 Homeowner  Any other information
 Dwelling Type (home or captured on
apartment) subscription form
(publications)
 Mail order buying (by
product type)
 Corporate linkage
information
 Interests  # of years in business
 Presence of children  Geographical (zip, SCF,
 Geographical (zip, SCF, county, state)
county, state, carrier  Credit information
route)
 Outer Envelope Formats

 Window Envelopes
 Plastic Card
 Invoice
 Personal
 Odd Size (9x12; 6x9)
 Offer Disclosing
 Lumpy
 Certified
 Outer Envelope Formats

 See Through
 Dimensional
 Tactile Devices
 Teasers
 1st Class vs. Third
 Stamp vs. Meter
 Handwritten
 Invitation
Letter Planning and Structure

The Opening

The Body

The Close

The Signature

The P.S.
 Writing Leads for Letters – How to Start

 A strong, startling fact, research result, something

true of their industry
 Establish a connection
 referral
 similar occupation
 status as a customer, etc.
 recognition of status as a donor/contributor
 Tell a story
 A quote
 Reference a competitor

Drop Paragraph One

 Post-Call Follow-Up

 Letters/email from the rep

 New information (pricing, research, etc.)
 Discount
 Appeal rotation
 Decision cycles
The Three Phases in the Lifetime
of a Customer

Phase Phase Phase

1 2 3
Relationship Relationship Relationship
Formation Cultivation Management
Reinforce Decision Personalize Cross-Sell
Key to Source Build Trust Fit Value Proposition
and Channel Quantify Potential to Customer Needs
 The Second Transaction is Critical

 Customers are converted or lost in the first 30 – 120

days

 Create positive early experiences that cement the

relationship
 Fast shipping, delivery

 Project LTV from early behavior

 Provide opportunities for additional transactions while
interest is high

 Use communication to drive behavior and the relationship

FAS Management – Retaining/Growing the
Relationship at the Lowest Cost

Customers Mailings

A 12x

B 8x

C 7x

D 6x
 The Issues in the Management of FAS

 Relationship retention
 Relationship growth
 Matching cost of retention and growth stimulation
to LTV

 Retention and growth are accomplished by

frequency of contact and power of contact

 It is easier to convert ‘B’ customers to ‘A’s’ than

D’s to C’s
 FAS in a Sales Support Situation

Customers Face-to- Phone Mail/ Annual

Face E-Mail Cost $

A ($1MM+/yr.) 12 12 12 $3,744
($3,600) ($120) ($24)

B ($500 - 1MM/yr.) 6 18 14 $2,008

($1,800) ($180) ($28)

C ($250 - $500/yr.) 4 12 16 $1,352

($1,200) ($120) ($32)

D ($250/yr.) 2 8 16 $712
($,1,600) ($80) ($32)
 The Last Premise

Focus on Them

“You can make more friends in 2

months by becoming interested in
other people than you can in 2
years by trying to get people
interested in you.”

Dale Carnegie
Thank You
 Recipients of Direct Mail

 Customers
 Have pre-existing interest
 Will read more copy
 Require less costly mail
 Mailing to customers generates $ and improves retention
 Frequency tolerance
 Prospects
 Pre-existing interest is “likely”
 Requires more expensive mail to buy readership
 Resistant to reading (looking for a reason to stop)
 Relevance is key
 Influencers
 Gatekeepers/Saboteurs
 Mail Room
 Administrative Assistant
 Spouse
 Post Office
 More Unfortunate Truths - Direct Mail

 People read direct mail, looking for a reason to stop

 The margin of error on direct mail is greater than in any other
medium.
 Special interest offerings tend to do best in direct mail, but the
more specialized the interest, the more limited the growth
potential (requires product proliferation – old/new/same).
 There is an inverse relationship between degree of pre-existing
interest and cost per response.
 There is a direct relationship between readership and response.
 People are not dying to hear from you.
 Very little body copy is ever actually re-read.