How you can Maximize Direct Mail profits by Spending

Wednesday, January 26, 2011

How you can Maximize Direct Mail profits by Spending

12:51 AM

Admin

No comments

((•)) Hear This Text

They reason that if the organization can bring in the same revenue with a cheaper mailing package, direct mail profits will increase. It's a reasonable thought but it seldom works.

Typically, you'll realize a greater profit by adding to your direct mail package rather than subtracting from it.

You can, however, reduce your package cost without hurting the mailing's profitability. For example, you can trim the size of your package components to make them run more efficiently on the printing press, test smaller formats, use a less expensive paper, eliminate the insert or drop the premium offer.

All these steps are worthy of testing but don't jump on the budget-cut bandwagon too quickly. But before doing anything, it's important to remember the mailing's objective. And for most of us that's to make money—not to save money.

This is a huge distinction. Cutting costs and making money aren't the same things. If you can do both at the same time, more power to you but focus on increasing net revenue.

Here are a few ways to increase your mailing's profit even as you increase its cost:

Include an involvement technique.
A survey, membership card, petition, name stickers, a certificate-anything that gets the reader involved with the package can serve as your involvement technique. You can't, however, just add the involvement device to the package and expect it to work its magic. You must interweave it into the copy and give the involvement device a reason for being part of the package.
Promote the premium with a separate insert.
I'm a strong believer in premium offers and need a reason not to include one in the package. You don't need to spend lots of money on the premium—it can be as simple as a decal, white paper, or a paper bookmark. It does need to have a perceived value to the reader, however.

Test larger formats.
A larger format is going to increase your production cost and perhaps even your postage cost. Yet because fewer groups are mailing the larger formats, they are virtually certain to stand out in the mailbox clutter and help you achieve a higher response. In past tests, when nothing other than the format size was changed; I've increased response by 100% when using an oversize format.
Draw attention to your guarantee with a separate insert.
The mailing's recipient has plenty of reasons—real or perceived—not to respond to your offer and the guarantee helps remove any reluctance that might otherwise jeopardize the sale. And by featuring your guarantee with a separate insert, you're focusing attention to your promise of a good customer experience.
Include a lift note.
The lift note has many uses and should be signed by someone other than the letter signer and printed on a paper stock different from what's used for the letter. You can use it to add credibility, present a testimonial or endorsement, emphasize your risk-free offer, expand upon the offer, tell a story, customize the offer to particular list segments and provide an added "push" to get the reader to respond.
Invest in list segmentation.
Every good list includes bad names and every bad list includes good names. And since the mailing list is the most important component of your mailing, there's no better place to spend money than to refine your list segmentation. List modeling/profiling isn't cheap but with improved segmentation you can maximize your response and even minimize your total costs by mailing fewer, but better targeted, mailing pieces.