More Articles by Kay Pegram

Dollars & Sense

Direct Mail Does It Best

Here are some tips for gaining new customers and increasing sales through a successful marketing campaign.

by Kay Pegram

In D&WC's millennium marketing survey, home fashion retailers, managers and designer/decorators were asked about retail advertising. You and your peers were asked, "If you could double your ad budget, where would you spend the money?" (See D&WC, December 1998.) Seventy percent of those responding said they would make more direct mail offers. The reason why: experienced business owners know that direct mail works in generating sales and creating new customers. And, indeed, direct mail is one of the most often used tools to generate custom and in-home window fashions leads. Because most of us, unfortunately, don't have enough cash available to double our advertising budgets, it's important to make sure the advertising money we do spend on direct mail is spent wisely and with the maximum possibility of generating new sales. Here are some ways you can make your direct mail dollars work more effectively. MAKE A LIST AND CHECK IT TWICE There are two ways to create lists for mailing your advertising message: one is to buy a list and the other is to construct your own list. Either way, for every name you include on your list, you will spend money on postage and printing, whether the name is a good lead or not. Therefore, the quality of the names—and how well they match your ideal customer profile—is critical in keeping costs down and response rates up. (For help on targeting your ideal customer, see D&WC, November 1999.) If you can buy a "good" list for 10 to 20 cents per name, and a "not so good" list that includes a lot of non-interested consumers for seven cents per name, it's well worth paying the extra few cents per name to get a better list. A better list means you won't throw away additional money—probably at least 30 cents to $1—on postage, mailing and printing for every one of those "not so good" leads on the cheaper priced list. If you decide to purchase your mailing list (rather than creating your own), contact list brokers you find in your local telephone directory. Then find out how the lists can be sorted so prospects best match your ideal customer. Typically, lists can be sorted by ZIP code, home ownership, hobbies and interests, home value, annual income and more. Often, using a home-grown list can create far higher response rates than mailing to a purchased list. When you create your own list, you can select the names to more closely match the ideal customer profile you want. To get names for your own list, look to these sources: • your own existing customers • prospects who have not yet purchased • people who visited an open house at your store • consumers who provided their names and address at a home show where you exhibited • new home buyers (from a local realtor) • home remodelers (from a local general contractor) • members of your networking group or chamber of commerce There are many more sources. Be creative in constructing your list and be willing to partner with other local businesses to share leads. MAKE THEM AN OFFER THEY CAN'T REFUSE To generate a truly great response rate, a direct mail piece must include an offer that gets the attention of your reader and motivates him or her to want to buy now. The first step is to make sure your mail piece includes an offer, and is not just a beautiful brochure about the merits of your business without a reason to buy now. Some of the words that attract attention in advertising (that you may or may not choose to use, depending on the image of your business) are "free," "now," "two-for-one," and "save." The most obvious offer to make to attract attention is a reduced price or large discount, but you may not want to do this, depending on the image of your business. Other ways to make an offer your prospects can't refuse—without lowering your price—include free measuring and installation, complimentary design consultation, fabric and material upgrades and free accessories.   Direct mail is one of the most popular forms of promotion because it works when well planned and carefully executed.   SET AN EXPIRATION DATE Have you ever cut out an ad or saved a direct mail piece that offers a great deal but does not impose a time limitation? Like many consumers, when these promotions catch my eye, I save the ad or mail piece with the best intentions to take action, but I don't take action immediately because there is no deadline. Eventually I find the piece stuffed in a drawer or hidden under a stack of papers on my desk months later, and I have never taken action to buy. That's why it's critical to set a deadline if you want your direct mail to attract immediate sales—and make your deadline four to six weeks or less after your mail piece will hit consumers' homes. Use terms like, "Call now, offer expires January 31," or "Don't delay. Special offer is available only until November 30." FOCUS ON THE LOOK TO CATCH THEIR EYE In today's hectic marketplace filled with constant advertising messages, recent research suggests that consumers throw away almost half of the direct mail they receive at home unopened without even a look. The message: make sure the look of your mail piece is memorable and eye-catching at first glance. This can be achieved by the beauty and color of your graphics and photography; a shocking, amusing or compelling headline; or an unusual shape or format. Some unique ideas to get your prospects attention include: • Send a four-color postcard instead of a mailing in an envelope. First, a postcard gets attention because, at first glance, it appears to be a personal message from a friend on vacation. Second, your prospect doesn't even have to open your mail before he or she can see the beauty of your work and the impact of your offer. • Send a mailing that looks like an invitation in an invitation-sized envelope that's personally addressed. Include your return address without your company name—just your street address, city, state and ZIP code. This attracts attention because, chances are, your prospect won't recognize the street address without a company name and might think he or she is receiving an invitation to a party or open house. • Include a bulky item in your package such as a penny, balloon or paper clip. Because the item gives your package an unusual look and feel, it adds interest and inspires prospects to open your mail. Then, be creative in writing your message to tie in with the item you've included. SEND MAIL TO YOUR EXISTING CUSTOMERS Most businesses spend countless advertising dollars pursuing the mythical new customer. At the same time, we tend to ignore our existing client base and neglect to market to these consumers. Existing customers are your best prospects for new business. A general rule says it costs nine times as much to attract a new customer as to continue to do business with an existing one. Keep a database of your existing customers and send them mail too. Offer a special sale for them, keep them informed about new products, remind them that it has been a while since their last purchase, ask them for referrals and invite them to open houses at your store. EVALUATE YOUR SUCCESS Once you've completed a direct mail campaign, and have taken your extra money (we hope) to the bank, it's critical that you evaluate the success of your efforts. First, evaluate the cost of your promotion: How much money did you spend to print and mail the promotional piece? Then evaluate the benefit of your promotion: How much new revenue did you generate? How much profit? How many new customers did you attract? Are they the kind of consumers you wanted to attract? Do you think these new buyers will become loyal customers who will purchase again and refer you to their friends, family and business colleagues? Also, look at the effect your direct mail promotion had on your profitability. If your direct mail campaign involved giving customers a deeper discount, how much money did you sacrifice in reduced profit margins on the products you sold? For example, let's say you normally would sell $5,000 worth of the product you promoted (without the direct mail campaign) and make a 30 percent profit ($1,500). During the sale you sold $8,000, but made only a 22 percent margin because of a sale price. Your profit during the sale was $1,760. The net profit result of your sale (and all your additional hard work) was an additional $260. Was it worth the effort? Of course, you may have generated other benefits too, including sales of other products and customer loyalty, which will translate to future sales. Lastly, compare the net profit result of your sale—and your subjective feelings about customer loyalty and add-on business—to the cost of the direct mail campaign. Direct mail is one of the most popular forms of promotion across many industries and for all size companies from the largest to the smallest in our marketplace. The reason why: because it works when it is well planned and carefully executed. Use the tips in this article to help you make your direct mail a big success. Kay Pegram is founder of Kaymar Communications, a Playa del Ray, CA-based independent marketing services firm for companies in window fashions and other industries. Pegram's previous window coverings industry experience includes serving eight years at LouverDrape and as director of marketing for the Tempo companies.