June

Direct Mail Myths

Posted In: Marketing by Gregor Anton

Direct Mail is a very common, very effective way to market products and services. Unfortunately, many myths surround Direct Mail results. Don’t get trapped by these myths.

Brought to you by: Rod Stokes
Sr. Business Development Consultant, InfoCANADA
1-800-565-7224 ext 37156 or 604-253-1111 ext 37156

Myth #1 – Less Than 1% Response Means The Mailing Was Bad

Response Rate alone does not reveal the whole picture.

The most important criteria is money. Did the mailing make money? Measure the financial impact with Return On Investment.

A simple Return On Investment example illustrates (US $):

Average Customer Order	$1,000
Avg Gross Profit Per Order	$300 or 30%

Mail Cost Per Piece	$.40 (includes all printing and postage costs)
You Mailed 1,000 Pieces	$400 Cost

4 New Customer Orders	$4,000
Gross Profit	$1,200
Response Rate	.4% – 4 responses out of 1,000.
Return On Investment	3.0 – $1,200 Gross Profit divided by $400 Mailing Cost.

Although the Response Rate is below the mythical 1% target, this mailing still made money and covered the mailing cost three times over.

Was this mailing a success? Yes. The goal of business is to make money. This mailing made money.

Myth #2 – Undeliverable Mail Means The List Is Bad

Undeliverable mail can be frustrating. But, it is a fact of life because mailing lists are not perfect.

Undeliverable Rates do not tell the whole story: focus on the mailing results.

Look at the underlying causes of undeliverable mail:

The business world is changing at an ever-increasing rate – companies sprout up, companies move, companies merge or get acquired.

All of this change makes it simply impossible to maintain 100% deliverability on any business list.

In short, judge a list and mailing by results.

Did you get sales?
Did you get phone calls?
Did customers stop by?

Look at the whole picture and don’t let undeliverable mail sidetrack you from the real issues.

Myth #3 – My Mailing Did Not Work

This is more of a misperception than a myth.

Why? Because before considering the mailing results, you need to focus on the purpose of the mailing. Every mailing must have a purpose. A goal.

Goal	Mailing Might Include
Generate Sales Now	Mailing includes 20% off coupon that expires in 2 weeks.
Generate Foot Traffic	Mailing includes photos of new product lines available in store.
Generate Brand Awareness	Mailing contains copy and images reinforcing your brand name.

In sum, you cannot evaluate a mailing and describe it as “good” or “bad” without considering the overall mailing goal. Some direct mail pieces are designed for short term, fast results; others are designed to improve your business over the long term.

An important side lesson to be learned here – before you spend any money on your next direct mail program, decide what you want the program to achieve.

Set a goal.

Summary

Response Rates AND Return on Investment are necessary to thoroughly evaluate direct mail results.
Undeliverable mail is a fact of life that should not distract you from direct mail results.
Every mailing has a purpose. Make sure that the purpose is considered while evaluating results.

Questions Or Advice?

Feel free to contact me.

Rod Stokes
Team Leader
Sr. Business Development Consultant
infoCANADATM
300 – 422 Richards St                 **Direct Marketing Works**
Vancouver, BC V6B 2Z4             5000 records w/2% min. ROI
Phone: 800-565-7224 x 37156    =100 new clients worth $1,000
604-253-1111 x 37156   =$100,000 ROI at a cost of $1,650
Fax: 800 973-7331
E-Mail: rod.stokes@infocanada.ca
Web: www.infocanada.ca