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Is Direct Mail Useless for DMers?

Is direct mail useless at helping direct mail businesses
generate leads?

That’s the question I was asked last week by a
reader of Alan Sharpe’s B2B Direct Mail Tactics
newsletter. Here is her unusual challenge, and my
response.

“My biggest challenge in generating leads from direct
mail is to convince our marketing people that direct
mail should be used. This is a completely ironic
situation given that we are a DIRECT MAIL HOUSE.
Yes, that’s right. I’ve been told that ‘direct mail is
not good for our business.’

“Apparently, direct mail was tried once long ago and
had a bad response rate. Our other lead generation
methods include sales outreach activities
(prospecting, networking, etc.) and community
involvement - charities, boards, councils, etc. Our
word of mouth reputation is excellent - we’ve been in
business for 18 years, our turnaround time is
excellent, our customer service people are top notch,
our team really knows their stuff . . . . However, it
seems to me that a larger outreach should be done
as well . . . am I barking up the wrong tree here?”

Myth #1: Direct mail doesn’t work for us

The only way to convince management to use direct
mail over the long term to generate sales leads is to
prove that direct mail either outperforms other
methods or increases the effectiveness of other
methods. You can only do this through testing and
measuring results.

After all, the telephone, not the letter, is the number
one tactic to generate leads according to the Direct
Marketing Association’s 2005 Response Rate Report.

Your firm sounds like it is content to do business in
your city only. That’s why they rely on “networking,
community involvement - charities, boards, councils,
etc.” These methods of meeting prospective clients
are not sustainable nationally or even regionally.
They are too expensive.

Unless your management wants to grow the business
outside of your city, or grow the business in an
aggressive way in your city, you may have a hard
time convincing them to try DM. This is especially
true if your city is small, since your prospect pool is
so limited.

Myth #2: We tried it once and it didn’t work

You say, “Apparently, direct mail was tried once long
ago and had a bad response rate.” Business-to-
business lead generation using direct mail is a
program, not a campaign. It consists of a plan, a
year-long series of mailings, and a way of testing
methods and measuring results. I would suggest that
if you have not tried direct mail consistently for at
least a couple of years, testing different packages
against each other, testing DM against your other
lead generation methods, and measuring your results
to see which method is most cost-effective, you
have abandoned direct mail prematurely.

Myth #3: Direct mail delivers poor response
rates

You say, “Apparently, direct mail was tried once long
ago and had a bad response rate.” Direct mail
response rates are misleading if you read them
incorrectly. Your response rate only tells you part of
what you need to know. It tells you the percentage
of people on your list who responded and nothing
more.

Your response rate doesn’t tell you how much you
had to spend to generate one lead. Or how much you
had to spend to make one sale. Your direct mail
response rate does not tell you if the sales people
who followed up on the leads closed any sales. Or if
you broke even. Or if you made a profit.

So don’t be fooled by a low response rate. Unless
you measure these other things (cost per lead, cost
per sale, break even, return on investment) and
compare your results with your face-to-face
prospecting, community involvement and other
methods, you will always be relying on feelings and
not facts. One of the things that I like about B2B
direct mail lead generation is that it is empirical. The
numbers never lie. You can bank on it.

Recommendations

1. Show your boss a compelling business case for
   testing direct mail lead generation at your firm.
   Calculate cost per lead, cost per sale, break even
   and ROI. Show your boss the numbers
2. Start with a list of prospects that have been
   unresponsive to your other methods, or people that
   you cannot reach cost-effectively any other way
3. Think niche. Target a narrow group of prospects
   and go after their business with a year-long
   campaign, reaching them more times and in more
   ways than your salespeople ever could in a year

I wish you every success!

About the author

Alan Sharpe is a business-to-business direct mail copywriter and lead generation specialist who helps business owners and marketing managers generate leads, close sales and retain customers using business-to-business direct mail marketing. Learn more about his creative direct mail writing services and sign up for free weekly tips like this at http://www.sharpecopy.com

© 2005 Sharpe Copy Inc. You may reprint this article online and in print provided the links remain live and the content remains unaltered (including the “About the author” message).

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