Without a doubt, one of the marketing methods most touted for small businesses with very specialized audiences is direct mail. It can be done on a small budget, and, when tightly targeted, is very effective in generating sales and customer loyalty.
"In addition to generating inquiries and sales, direct mail is used to create awareness of a business or product, to build credibility, and to reinforce one's position in the marketplace," say the authors of "Getting Business to Come to You," by Paul and Sarah Edwards, and Laura Clampitt Douglas.
"Database marketing provides vital information to target smaller groups of customers with similar needs, making marketing more efficient and effective. As important, it also offers measurability, and with it, accountability for a business' marketing efforts," says Philip Kotler in his foreword for the book, "TargetSmart! Database Marketing for the Small Business" by Jay Newberg and Claudio Marcus.
Both Steven Peters of Rivers Advertising and Marketing, and Retail Marketing Consultant Dean Skylar agree. Not enough businesses are making good use of their databases in keeping in contact with customers.
The key is a good list
Crucial to an effective direct mail campaign is developing a good mailing list. There are several ways to do so. The ideal way, of course, is to gather your list of previous customers. As the authors of "Getting Business to Come to You" point out, "There are no better prospects than those who have done business with you before."
There are many ways to develop your own list. You can use the names and addresses off of checks customers use to pay their bills. Warranty cards and service tickets should also be entered into the list. "Customers are typically not opposed to giving this information to you," says Skylar. "They are in your store for a reason. And they want to hear from you."
Another way is to hold various drawings and raffles. Customers complete entry forms that capture the demographic information needed for a mailing list. However, in "Getting Business to Come to You," the authors warn to "be sure drawing and contest prizes are something that only your market would want so that you don't get a lot of useless names."
If you have not yet developed a list of customers, it is possible to buy or rent lists from list companies or list brokers until you develop your own. The quality of lists varies quite a bit, so take a look at "The Ideal List" above to see what elements make a good list before calling.
"I recommend renting resident lists versus occupant lists," says Skylar. "Resident lists include demographic information, and can be rented for unlimited one-year usage. Occupant lists provide the mailing address only."
Three list vendors to consider are Americomm in Louisville, KY, AmericaList in Middleburg Heights, OH, and American Business Lists in Omaha, NE.
Be sure to keep lists as "clean" as possible. When mailings are sent first-class, the post office will inform you via returns of people that have moved, incorrect addresses, etc. Be sure to make those changes. "Send out at least one mailing quarterly, purging the names that are not current and adding new names regularly," recommend the authors of "Getting Business to Come to You."
Write often and follow-up
How many times should you use this list? Experts say at least three times a year; five to seven times per year is ideal. According to "Getting Business to Come to You," the rule of thumb in marketing claims it takes seven contacts to produce a sale.
The authors go on to say the statistics for a traditional direct mail piece is not encouraging - but there is a lot you can do to increase your odds for success. "The overall average response rate for direct mail is one-tenth of one percent. But if your product or service is appropriate for direct mail and you have been using the methods recommended for designing a creative promotion piece and finding a perfectly tailored list, you could reach a response rate of 30 percent or higher. But that is the exception, not the rule."