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All You Need to Know about Direct Mail by The Advertopedia Staff
Direct mail is the most common form of direct marketing, advertising that conveys its messages straight to the consumer or another business rather than using an intervening medium such as television or print advertising. To the average consumer, the term may be considered synonymous with junk mail, but for advertisers it is an inexpensive and, when properly targeted, effective means of getting its message to consumers. Direct mail includes any marketing material that can be mailed in order to encourage the recipient to buy a product, accept an offer, or support an organization: postcards, letters, brochures, circulars, catalogues, newsletters, or statement stuffers. It may include product samples, coupons, or special offers not available through other means.
Money spent on direct mail has increased by 155 percent in the last 12 years, showing that, even with the growing popularity of email advertising and other options such as telemarketing, it remains a prevalent and useful tool for advertisers. Direct mail can be particularly effective for nonprofit organizations, working both as a means to raise funds and a way to update supporters about the work an organization is doing, building name recognition and loyalty. Larger nonprofits may mail to their supporters as often as once a month each year, working under the theory that even when the supporter does not respond to a particular piece, he or she is being reminded of the organization and primed to respond at a later date.
The first step of any direct mail campaign is identifying a specific goal and constructing a comprehensive plan to achieve that goal. Typical goals include the following: acquiring new customers, building customer loyalty, or increasing awareness of a business, product, or organization. Next the advertiser must decide the budget for the campaign. To maximize the budget, it may be useful to partner with another business or group of businesses. A shared (or co-op) mailing includes two or more offers in a single mailing, with two or more advertisers sharing mailing costs. And advertiser can participate in a shared mailing with other businesses in the same industry or within a common geographic area, or it may have nothing in common with fellow advertisers besides the desire to cut mailing costs.
The next step is to select the list of recipients. Mailing lists for direct mail campaigns may be borrowed or traded directly with another organization or bought or rented from a list broker. In some cases, the broker has compiled the list, but usually they are acting as a seller's agent. According to the Direct Marketing Association, 47 percent of the companies in the United States make their lists of customers and subscribers available, thereby creating a significant source of revenue. Lists can also be compiled from magazine subscription lists, associations and organizations, and public, easily accessible records.
Ordinarily, lists are rented from a list broker for a specific period of time (usually a year), with a limited number of uses. Depending on whether an advertiser’s needs to reach the widest possible audience or to reach a narrowly targeted one, the broker usually can supply lists that significantly affect the level of response. More highly targeted lists tend to have a higher cost per thousand names.
According to experts, the quality of the list accounts for at least 40 percent of the success of a direct mail campaign. Undelivered mail can be a huge waste of money and time for everyone, so lists should be kept up-to-date by running the names and addresses through the National Change of Address (NCOA) file. Of all of the various list-hygiene methods, this is the most crucial, because it will eliminate most of the undeliverable mail from the list. Obviously, the more recent the NCOA check, the more accurate the list.
Next the mail piece must be designed. With the sophistication of current desktop publishing software, it’s possible for almost anyone to construct a mail piece, but most advertisers defer to experienced direct mail professionals. While some full-service advertising agencies and even some larger corporations have in-house direct mail departments, the work is usually done by firms specializing exclusively in direct mail campaigns. Many of these firms specialize further by working only with a particular type of client, offering intimate knowledge of a specific market that improves their ability to target consumers.
The average rate of return on direct mail is one to three percent. While this return seems low, the relatively small price of direct mail means that the advertiser still gets a good bang for the buck. The low expense also allows for repeated mailings throughout the period of a particular campaign, which improves overall results. According to the U.S. Postal Service, Americans currently spend $528 billion in response to direct mail advertising, which dwarfs the approximately $30 billion spent by advertisers on campaigns. So, clearly, consumers are getting the message.
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