What I wrote to a Client (after meeting with them face to face) Whose Direct Mail campaign Suffered Low Response Rate Syndrome (LRRS).

I am truly passionate about my business and I know we can make the response of the mailer you are doing improve greatly but we need to dig deeper into the psychology of what message we are sending out.  I want you to read this outline for a book that one of my contractors recommended. 

 

I thought of your business when reading this and remembering our meeting this morning.  We need to come up with some new mail pieces that really speak to the heart of the situation that these people are facing.

 

http://bookoutlines.pbwiki.com/Predictably-Irrational

 

Particularly interesting was the ideas of how businesses and people make decisions…  The expecations of the direct mail campaign and the success or failure of a marketing initiative is tied to the assumptions and the matrix of data sets and mail pieces used.  In this situation, we only tried one combination and our failure is tied directly to not taking the time to learn the right combination that will work for your business.  There is an equilibrium within this that we must find and we can do so by using copywriters and designers more than just muscling out a mail piece and going ‘big’ without getting ‘going’ first. 

 

Remember that a good mailer will pay dividends in future mailers because you pay for it one time and it’s worth spending money and time *your time* brainstorming, collecting and becoming experts at the direct mail market you are doing.  Everything from color to word choice to hook and offer all are important factors in the return on investment.  We sell data at my firm but we have to give the big picture perspective, otherwise we lose the client and reputation if a mailer fails, even it’s not our fault.  We do not take failed campaigns at Black Book lightly and will do everything in our power to make sure you have a successful direct marketing experience. 

 

As per our discussion, we will offer 10K free of charge database of fresh data which can be broken down into 10, 1000 record test files for different mailers and data sets.  I recommend we do the optimal scenario here in order to ensure the future going concern of the business. 

 

5 different mail pieces (preferrably sufficiently design and look and feel)

 

2 databases (set A – XXXX) (set B – XXXXX)

 

= 10, 1000 record tests.  We then assign a unique code for each of the 5 mail pieces and a different 800 number for the 2 databases (each has a different pitch…).

 

We drop the 1000 pieces once every 4 or 5 days until the entire 10 segment test is complete. 

 

Once complete, we look at a matrix of responses and our next mailer is 2000 records per segment and we drop the bottom 4 performers, gradually increasing our mailers on successful target mailer/data combinations in the results matrix.  Rinse, Repeat. 

 

The trick to real success is to introduce new mail pieces and even altered list criteria to continually look for new and better ways to get response.  Eventually we will have an arsenal of proven pieces that we can rotate and even string together to form a cohesive brand message.

Saturation in Direct Marketing by Channel

An interesting phenomenon in direct marketing is a concept known as response saturation.    The reason I bring this up is several of my clients are experiencing saturation in their direct marketing efforts and it’s not for the offer but by medium. 

They have done extremely well in direct mail and have steadily ramped up their purchase but during October/November, the saturation hit a peak and response started to drop.   Simultaneously, the radio advertising they were doing was just ramping up and is now producing much better.

This combination was interesting to analyze and considering holiday mail and the general mood of the economy, there is no wonder my client is doing well with radio… which brings me to another point, certain mediums have a great saturation when the offer is applicable to a large part of the population  (like mortgage, mattress, and auto)…  The more mainstream the offer, the better TV and radio become and the less effective direct mail, telemarketing, sms and email become.  

Direct mail works well for things like walk in bath tubs and debt settlement (when the market is not saturated with debtors).  Reason being is that these are small segments of the population that are buying medium ticket items infrequently.  The only reason cars do well on TV and radio is their price and the fact that everyone needs them (see mattresses)…

It’s interesting to see a product go from niche to main stream during a recession or major shift in consumer spending… this can lead to new better methods of marketing and that is why we always recommend keeping multiple channels open in case the levers of consumption change and the marketing mix must also change.

Qualifying Leads means Disqualifying some.

Recently I have been speaking with my contractors and other business owners in my industry on the need to qualify customers.  Now qualifying a customer is as important as trying to close them and I can’t emphasize this for any industry for 2 reasons.  First, your time spent as a professional.  If you are spending time with unqualified customers, you are asking wasting your time and energy.  Secondly and more importantly – you will have the upper hand on any sales situation once you have truly qualified a client. 

Customers want to be qualified.  They want to be checked out and sized up.  Any truly big ‘whale’ client will respond well to qualifying questions mainly because they can empathize with someone that is time restricted and needs to make sure that they are not wasting anyone’s time.

For example, in my industry, I often ask how people have experienced lead companies.  If a customer tells me they have had horrible experiences with every lead company they have worked with I tell them straight up that I wouldn’t want to work with them for fear of not performing to a level of their satisfaction and thus potentially affecting my company’s reputation.  If a client tells me they have never bought leads before then I take on a defensive role and explain the potential failure of a first time marketing and make sure they are OK with losing before allowing them to purchase data.

Sometimes clients will purchase data with minimum issues as to accuracy and expect it to work within a wide range of results.  These, for me, are qualified beyond measure and reinforce the fact that over time, I tend to make 99% of my money from these types of clients verses the teeth pulling kinds of clients. 

Every industry has these types of clients and the best thing is to turn them over to your competitors.  This will give you more time to focus on qualified clients and give you confidence to say NO instead of just hearing it from those that you might wish to sell.  Being picky about your customer is not about whether you like them or not – it comes down to how easy it is going to be to develop a long term, profitable relationship with this person.

Over time pricing will have to come down as loyalty sets in.  So make sure you do not price clients down too much too early or you will lose long term business and clients will leave you for a cheaper price when you could have come down more by holding firm earlier.

Not all Qualified leads are the same – and some are barely qualified.  However, you can be sure that from a raw lead point of view and from a cold calling point of view, 1/3 of all leads are not qualified for a number of reasons including:

1.  Budget issues

2.  Timing of request (information only)

3.  Shoppers

4.  Trust

5.  Unreasonable requests

… and many more.

Qualifying a lead means asking questions, engaging, and controlling the flow of the conversation so that the buyer feels as though he or she is there for a purpose. 

Qualifying a lead can be creative – it can just be a tone of voice or nature of topic of conversation or line of questioning.  The thing to know is that once you qualify or disqualify a prospect, what is the next step?

A qualified customer should be treated like a potential job interview – you are there at that point to try to service the client’s needs.  This means running reports, calling whoever the client wants you to call, emailing, presenting, etc…  Realize that qualified customers are just 1 step away from a closed deal. 

A disqualified prospect should not be treated with disrespect.  Rather, a disqualified customer should be redirected or let go with dignity and with tact.  If you are uncomfortable with a client, simply tell them you’re not sure if there would be a good fit.  If a client is requesting a product or service you can’t do or provide, simply let them know it’s not in your range of services.  It’s OK to be direct and forthright if a disqualified prospect persist and becomes an annoyance.

Bottom line is that qualifying leads involves tough questions, quick decisions, and follow-through.  By focusing on the qualified leads and quickly dismissing the disqualified leads, you will make more money with less effort and with more focus on the prospects and clients that matter.

Mailing List Broker Checklist

Top 10 things you that you should look for when trying to find the perfect mailing, emailing, or telemarketing list… by Aaron Smith of www.BlackBookData.com.

 

Finding a great mailing list can be a bit like searching for a needle in a haystack.  There are many thousands (over 75,000) privately owned and managed lists.  In addition to this cornucopia of databases, there are over 5,000 list brokers spread throughout the Country.  The vast majority of these are 1-2 person shops with the owner brokers coming from a big list company or ad agency background.  Interviewing 3-10 list brokers for every purchase can become tedious and so much of what the decision comes down to is price and what you ‘believe’ from the list owner/broker. 

These 10 tips are intended to take the “guess work” out of finding a good list consultant and will help you determine within the first 30 seconds the mindset and capabilities of the person you are working with to acquire marketing data.  List consulting comes down to 10 major issues and accompanying questions to consider:

1. How experienced and knowledgeable is the List Broker.
   1. What list ideas do they have?
   2. What experience marketing to my target do they have?
2. What is the nature of the questions from the List Consultant?
   1. Are they ‘closing’ questions from a sophisticated script? (BAD)
   2. What am I learning that I don’t already know from this consultant?
3. What type of list is this: Compiled, Response, or Transaction?
   1. Does the list consultant know the difference and nature of why one will work better over the other?
   2. Are these priced accordingly (usually there will be a big price difference between lists and sources)?
   3. Can price difference be explained logically?
4. How is the file updated?
   1. Does the broker disclose which parts of the database are updated when?
   2. Are you getting a ‘blanket’ answer for this question or diversion?
5. Are their less expensive alternative lists options? 
   1. Why would the alternatives be as good a choice? (“No alternative” is never a good answer.)
   2. What makes this list unique and why can’t we find a cost effective alternate (make sure this answer has teeth and can be backed up if this is the case)?
6. Does it take more than 1 day to get a specific count request back from the consultant? 
7. Does the list broker take all forms of payment easily without asking for alternative methods (i.e. PayPal or Google checkout… a bank backed merchant account means they are in good standing with their bank with regards to credit card purchases, if not this can be a red flag.)
8. Does the consultant make the list sound too good to be true or price it way below what others are selling it for? (This is a red flag warning you that the consultant isn’t busy enough and therefore may have a product that cuts corners or is not fresh).
9. Do you feel pressured to get the list OR are assured the list is going to be delivered according to YOUR schedule?  (Pressure from a list broker means they are inexperienced with the process of direct marketing and therefore may not have your interests at heart).
10. What else can you see your list consultant helping you with (make sure that you have enough rapport established to know you are working with someone that you can bounce ideas off of or someone that can give you ideas for other projects you are planning.)
    1. The best list brokers are great marketers first and foremost and thus their emphasis should be on more than just finding a good list though this is their #1 task obviously.

 

Most of these tips come down to the integrity and strategic thinking of the list broker.  In a sense you are buying into the data brokers confidence and their intent on building a real relationship.  If you can detect those that are genuine and good at establishing these ties then you will evolve a very close relationship with your list broker and run most of your needs through this person.

Of course the goal for any broker is to have close repeating relationship with their clients but few actually get that this takes work and effort and that most advertisers are willing to look at a new broker at the first sign of disloyalty because there are so many of us out there and so few that actually know the right way to produce data that responds cost effectively. 

So what about budget?  99% of new list buyers are concerned about the cost of data.  If you have experience buying data you know that a good list is worth way more than you paid for it.  New list buyers are a different breed so this is very important information if you are new to buying databases for marketing.  DO NOT GET FOOLED BY CHEAP DATA.  If you really click with a list broker that has a passing grade for all 10 tips I mentioned above, then you should be OK with the price of the file you are considering.  The key is not to negotiate the price of the list down but the minimum test quantity instead. 

Most list brokers can bend on this rule of quantity before they can on a rule of price.  The reason is that given the opportunity, most list brokers and managers will want to let a good offer try the list especially if their issue is the quantity mailed and not the price of the data.  In otherwords, the cost to mail is much higher than just the price of the data itself obviously. 

Myself and my contractor team get calls everyday from buyers and the first thing they do is try to beat us down on price.  My common response is simply “how can you beat me up on price if you don’t even know how the list performs.  Let’s try a small test (toe in the water) and go from there.”  This tactic works well because the price relative to response determines the quality of a list and not an assumed price break before any testing.  This can only put you in an antagonistic relationship with the list broker from day one.  Smart, resourceful clients know this and these are the clients that any list broker would be honored to work for. 

To further this, every list broker is out to earn money from selling data.  If they can drop the price in half or create some kind of amazing discount out of nowhere, realize they may not care about what they are providing and instead give you an ‘in-house’ all profit file while telling you it’s a great file from YZ publication. 

Just remember that buying a list is a lot like buying the services of a CPA or financial planner or a lawyer.  The knowledge of the person you are dealing with is far more important than the statistics thrown out about the ‘quality’ of any given file – list brokers should have a large porfolio of data products with sources and pricing as well as criteria options and quantity discounts available upon requeset.  Accuracy rates should also be well known as well as Usage (who is using it), especially if the broker is claiming the file to be a ‘managed’ or ‘exclusive’ database.

Good luck and have a great 4th of July!!

Targeted Direct Marketing FAILS without Testing

I had a call this weekend for a cell phone database.  We have access to millions of cell records and this client wanted a price for ALL of them.  It struck me odd though when I told him I like to start small that he chastised me for not wanting to sell the whole thing. 

He even asked me if I thought the file was not good enough as to not sell it.  I had to stop him dead in his tracks.  “we are not selling a pot of gold at the end of the rainbow sir”  I said bluntly.  It’s funny to think that although so many people buy data these days, there are still people willing to buy blindly without testing a marketing mailing list or telemarketing list. 

After speaking with him for about 45 minutes, I realized he had been duped by a couple of mailing list suppliers that were more than happy to do a multi-million record transaction.  His pride was damaged but he eventually saw the wisdom in testing small.  The thing he finalized was that even though the price per record was going to be close to double on a small order, his cost to test and find out how and if the file would work is more important in the short term than a real ‘deal’ on the database over the long term.

So many people forget this simple fact and then they end up wasting valuable marketing dollars – TEST, TEST, and MORE TEST.  Any marketing service/product vendor that says otherwise is simply giving you bad advice!

 

Maximizing Lead Value

What I love about marketing and specifically direct marketing is that one man’s old lead or prospect or past customer is another man’s shiny new lead.  It’s like recycling.  You didn’t know it but recycling is one of the most profitable niches in direct marketing.  Why would I admit this?  Well it’s simple.  Marketers want to maximize lead value, plain and simple.  When I speak with advertisers, agencies and list brokers, they always talk about getting more profit or justifying more profit from a deal.  This is difficult as advertisers can only pay so much in order to meet their side of the win-win equation that is required for long term successful business. 

That is where lead recycling comes in.  This can take many forms, up selling, cross selling, card on file, confirmation code questions, free offers, etc…  Some companies will simply sell their leads to a competitor and take a % of the profit they do.  It really all comes down to the old saying:

“He who controls the lead, controls the business”

You know this intrinsically.  It’s why they train mortgage brokers and real estate agents to ’steer’ prospective buyers to their preferred group of appraisers, attorneys/title, inspection, etc…  Many businesses lack a big marketing campaign but are very good at recycling and referring leads to congruent businesses and as a result they reap referrals in return.  Why am I saying this? 

Well I’m really speaking to the ad agency or marketing campaign director that is looking to earn an extra % from this real time data they are creating.  Imagine if you have an offer to help people quit smoking and you are doing well selling this product over the phone or internet.  Now all of these product buyers are trying to quit smoking so what about all of the other services they may decide to purchase as a result. 

The key to successful repurposing of leads is to make sure that you are putting the right congruent offer.  So let’s think – what would go well with a person that is quitting smoking… perhaps a system to deodorize your car/home?  How about a diet or eating plan geared towards the quitting smoker – how about a set of motivational books or inspirational stories… the list goes on.  My point is that for every purchase, there are additional ways to enter the mentality of the buyer.  Finding people in a moment is the key to successfully re-marketing them to another, parallel, business.

 

Specialty Mailing List Update

So the client calls back to finalize the count and unfortunately the cost on this ‘cross’ list is pretty expensive. That seems to be the biggest problem with direct mail is the cost on a test. Reason being is that direct mail gets a lot cheaper as you do more whereas for other mediums that compete for eyeballs (broadcast model) typically get more expensive or have a ‘holding point’ where additional media costs too much. Direct mail seems to be the opposite. This is why I believe direct mail will not go away any time soon. There is no competitive media for direct mail – whereas there are only so many tv and radio spots to put your offer in front of that compete with other media. This competition is what drives big search engines like google and other media stocks through the roof.

For example – I can mail to anyone anywhere no matter how targeted for under 30 cents a letter in bulk. TV, internet, and radio can’t do this – not even with targeted traffic. The problem with direct mail though is finding the right targeted traffic. Which brings us back to the project in the previous email… Is it too expensive to cross both lists together and retail the file for 18 cents per record or 180/M? I think so – why? Because the end user is going to pay double what they should for a list and it may spoil the quality and return on the first results which means the whole project is cancelled even if there is a 3 part mailer to be sent. Most advertisers will fold if the first mailer doesn’t explode with ROI out of the starting gate (all the more reason high ticket items do well with direct mail).

Target Marketing by Creating Unique Mailing Lists

I recently did some research on mailing lists for a direct mail marketing campaign for a client looking to do target marketing to a combination of people with ailments and a poor credit history…  Through modeling response data, we correlated ailment responders and credit/debt responders to come up with over 81,000 records that matched.   Interestingly enough, there was over half a million in each of these files so the correlation ratio of less than 20% induced the client to test the file.  Stay tuned to find out how the response data performed.

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