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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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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).

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The challenge in business-to-business direct mail is knowing where to look for new business. You need a source of potential new clients that is reliable and affordable. A source that will give you the contact information you need to send a direct mail package to prospective customers who need, want and can afford what you offer.

At a minimum, any source of names should supply the following for each lead:

First name, last name
Job title
Company name
Address (sometimes on two lines)
City
Province or state
Postal code or zip code

Other details that are nice to know:
SIC Code (Standard Industry Classification)
Industry by name
Size of company (in number of employees or sales volume)
Telephone number
Email address
Business type (manufacturing, services, consulting)
Job function (engineer, owner, purchasing, management)
Purchasing authority
Budget
Geographic region (international region, country, state)

Where to find names of potential customers:

Associations
There is an Association of Legal Administrators. There is an association for social workers who specialize in helping people with cancer (Association of Oncology Social Work). There is an association for manufacturers of fasteners in the mid-west of the United States (The Mid-West Fastener Association).

If your target audiences is a niche market, the first place to look for potential customers is trade associations. These associations (local, regional, national, international) often rent lists of names of their members.

Trade publications
Most industries have a trade journal. You are familiar, of course, with Frozen Food Age, Industrial Hygiene News, Eyecare Business and Waste News. These trade publications and most others also rent the names of their subscribers.

Trade directories
You could look in the phone book. Or you could look in the Organic Export Directory, a compilation of contact names for companies that export organic food products. The more narrow the field, the more likely it is to have its own directory of companies in the industry. Some of these directories are in print, and some are online as well.

Trade shows and conferences
Another excellent source of names is industry events. These are usually hosted by trade publications and associations, but independent events also exist. Event organizers rent or sell the names of event attendees and exhibitors.

List brokers
List brokers are specialists who help one company use the list of another company. Their services include research, selection and recommendation of lists. A list broker, for example, would search on your behalf for lists that meet your unique criteria. There is a Hospitality/Travel Professionals list. And a Firefighters Bookstore list (people who have purchased from Firefighters Bookstore). And a Federal Student Aid Schools list (28,994 schools that provide federally financed aid to their attendees).

House list
Your best source of new business is your database of current and lapsed customers, otherwise known as your house list. Getting business from a current customer is always less expensive than getting business from a new customer.

Government
For some products and services, another excellent source of potential clients is the government. I have a number of clients who buy mailing lists from their state governments and use them to mail offers to businesses that are in their target audience. One client buys the names of dentists and dental hygienists whose licenses are about to expire, and mails those prospects a direct mail piece that promotes the client’s continuing education courses (which prospects need to take and pass to renew their licenses). Another client buys the names of garages in his state who conduct state-mandated vehicle safety inspections. He mails them direct mail pieces that promote his software product, which is designed specifically for these inspection stations.

Keep in mind that the most important part of any business-to-business direct mail lead generation campaign is the list. You can have a great product, a terrific offer and the best timing, but if you mail to the wrong people, well, you know what happens. So make sure you get the best list you can.

Alan Sharpe is a business-to-business direct mail copywriter, lead generation specialist and publisher of “Sharpe & Direct: The B2B direct mail marketing e-newsletter.” Receive a free report when you sign up at http://www.sharpecopy.com

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