www.manuren.com

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).

Share This

Business-to-business lead generation is one of the
few times in life when you should start at the end
and work backwards.

Before you write a single line of copy or design a
single element of your direct mail package, sit down
with the sales people who close the sales. Find out
when and how they get prospects to sign on the line
that is dotted, and work backwards from there to
discover what you need to do to capture the
attention of these prospects in the first place and
get them into your sales funnel.

Here are some questions to ask the sales team:

1. What makes a prospect buy? (Is it price? terms?
   guarantee? after-sales service? quality?)
2. What customer objections will endanger a sale?

How do salespeople overcome these objections?

3. Do prospects need a lot of information before
   making a decision?

I am assuming that your clients’ B2B buying process
(and your sales process) consists of more than a few
steps. Usually, it looks something like this:

• Identify need
• Gather information on solutions
• Establish specifications
• Request proposals or quotations
• Interview top suppliers
• Make short list of suppliers
• Check references
• Test sample or demo product
• Select supplier
• Negotiate terms and price
• Sign contract
• Make first purchase
• Evaluate performance
• Make repeat purchases
• Remain loyal to valued, long-term supplier
• Drop supplier and start over again

Your goal with every direct mail lead generation
mailing is to figure out where prospects are in their
buying cycle and to target them there. The thing to
remember in all of this is that your goal in a multi-
step, complex buying process is not to close the sale
but to move the prospect to the next stage. Here
are some ideas:

If prospects are at the needs-identification stage,
offer them a white paper or similar document that
describes the customer problem that your product or
service solves.

If prospects are gathering information on solutions,
offer them a series of case studies or success stories
that demonstrate why your solution is superior.

If your sale involves many stakeholders, consider
mailing a different direct mail package to each person
who influences the buying decision. In complex high-
tech sales, for example, you can target the CIO
(offer ROI benefits), the CFO (offer cost-cutting
benefits) and the IT manager (offer scalability and
ease of integration benefits).

In many B2B lead generation efforts, you will need to
mail or contact leads more than once before you
generate a response and have a chance to qualify
them. That’s why starting at the end makes such
good sense. You’ll know how many steps you need to
take to reach the sale, and how many times you
need to mail each prospect (and what to mail) to
turn them into a customer.

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).

Share This

1. Personal
Unlike an advertisement in a trade publication, which can be read by anyone, your sales letter arrives at your prospect’s place of business as a piece of personal communication from your mind to his. Also, unlike any other medium, direct mail can be personalized (Dear Mr. Smith) and customized to each reader (”As an IT manager, you know that . . .”), showing your prospect that you know about him by name and understand his business in particular.

2. Cost effective
Advertising by its very nature is expensive. To reach a lot of people, you need to spend a lot of money. Direct mail, on the other hand, only targets the prospects you want to reach. Instead of pitching your product to a huge audience of potential buyers, you aim your sales message only at prospects most likely to buy.

3. Breaks through the clutter
Your ad can easily get lost among dozens of competing ads in a trade newspaper. Your sales message is also easily forgotten on radio or television unless you repeat it many times, which is expensive. But a simple letter, addressed to your prospect by name and arriving on her desk in the morning mail (which she must open), cuts through the media clutter and gets her attention.

4. Measurable ROI
Direct mail is one of the best mediums for measuring the return on your marketing dollar (or pound or yen). Simply code your business reply cards, and count how many return to you in the mail. Then calculate how many of those replies generate a sales meeting or a sale. Now you know immediatelyand exactlyhow effective your mailing has been. Direct mail numbers never lie.

5. Predictable
One advantage of knowing the success rates of your past mailings is that you can predict the success of future mailing. If you mail the same package with the same offer to a similar group of prospects at the same time of year, you can predict how many responses you will receive, and how many of those will translate into sales.

6. Can be improved through testing
Because you can measure your direct mail results, you can also test your mailings. Test one package against another, one list against another, one offer against another, and you’ll discover what works and what fails. That way you’ll spend your marketing dollars where they are most effective (without relying on guess work or hunches).

7. Immediate
General advertising builds brand awareness. Sales brochures inform. But a direct mail letter asks for action now. So if you need to generate sales leads, and don’t have time to wait for your ad to appear in “IT Buyers Quarterly,” send a direct mail letter and wait a week or so for a response.

Alan is a business-to-business direct mail copywriter and lead generation consultant. As President of Sharpe Copy, Inc. (http://www.sharpecopy.com), Alan specializes in helping businesses generate leads, close sales and retain customers, using cost-effective, compelling direct mail and email marketing. Alan also uses his direct mail advertising services to help charities raise funds and raise awareness of their causes, using fundraising letters.

Share This