Why Your Business Should Invest Into Direct Mail

Like any good entrepreneur, I’m always thinking of ways that I can develop and grow our businesses and brands. One of the best marketing strategies does not occur in the digital world. Each week, one of my companies sends out over 1,000 pieces of direct mail. We have an excellent response rate, even with a younger demographic target audience.

Think about it; people are deluged with emails, social media posts and instant messaging. In the digital world, it’s a novelty to receive a great piece of direct response material in the mail. However, there are a few differences in what we do in our direct mail than what was done in the old school days.

  • We experiment with all types of colorful pieces.
  • We rarely send any letter.
  • The pieces are always vibrant with images and very little copy.

There are a couple of reasons why your business should consider direct response to prospect and grow your business.

  • Response Rate: Last year, Compu-mail noted, “Direct mail household response rate is 5.1% (compared to.6% email,.6% paid search,.2 online display,.4% social media). This is the highest response rate the DMA has ever reported, since coming out with the Response Rate Report in 2003.
  • Personalization: When your prospects receive mail (not including bills), particularly those who are of Generation X or older, there is a familiar feeling. The older generations still like to receive something in the mail with their names on it. They can touch the piece, and there’s something novel about it in today’s world.
  • Generational Myth: Believe it or not, a sizable portion of Millennials also like direct response because it’s something they too can touch and hold. According to a Forbes article, 36 percent of people under the age of 30 like to check their mailboxes, and 95 percent of those between the ages of 18 and 29 have a favorable view of mail, such as personalized cards.
  • QR Codes and PURLs: Companies have been experimenting with testing QR and PURLs (personal URLs), which redirects a person who receives a piece of mail back into the digital age. Since most people now have a smartphone, these codes can be scanned by the target audience for more information.
  • Messaging: If you’re doing a particular project or sale, consider using direct mail to bolster the urgency. My team and I have gotten high response rates to direct mail pieces that have had a deadline to partner with our companies. One of the key reasons we have seen this work is because with all of the emails people receive, lots of times they are dismissing this form of communication quickly just to get through their email box.
  • Multi-channel Marketing: Direct response is an excellent way to support your digital marketing efforts. We know that people have to see your brand and logo multiple times for it to begin to “stick” in their minds. Direct mail helps reinforce your brand’s digital efforts. Prospects not only see you in the digital world but also in the “real world.”
  • Testing: Direct mail provides your business with an opportunity to test another method for reaching out to your prospects. We’ve tested direct response with high-level prospects in our target audience, and the new accounts we’ve obtained has paid for the mailing expenses
  • Easy Analytics: Direct mail results are straightforward to understand. You don’t need to have anyone on your team sign-into a digital platform to pull a report for you. Direct response provides you an easy way to see how much you spent against the amount of new business you achieved.
  • Credibility: Direct mail, because it’s familiar and tactile, gives the recipients an automatic sense of your credibility. We live in a world of “fake news” and raging social media debates about content in the digital space that is authentic and real. Direct response cuts through the noise and instantly gives credibility because of the investment and its familiarity.
  • Creativity: Direct response is an excellent way to experiment with color, size, shape and different packaging for your pieces. Sophisticated marketers are experimenting with many different types of mailings to stand out from a regular sized and traditional letter and envelope, which encourages people to look at the piece.

The Data & Marketing Association (DMA) has reported that direct mail has declined. However, in a digital world where people are inundated with massive amounts of content, direct mail stands out as a creative way to cut through the noise. At the very least, direct mail is an excellent complement your digital efforts, and at best, it’s a great way to obtain new business.

The Complete List of Things to Evaluate Before You Open or Invest in a New Venture

Do you have an innovative idea you wish to market? Are you planning on opening a new business? Are you investing on somebody else’s idea?

If you said “yes” to any of these questions, don’t do it just yet!

Starting or investing on a new venture can be an emotional process full of anticipation and excitement. You need to keep a cool head and treat the process with the utmost objectivity.

To help with that, I’ve put together a complete list of questions you NEED to answer before you even think about putting a business plan together. This will help you make sure that no overlooked variable makes you incorrectly go forward or not. Make sure you don’t skip any part of the process and end the exercise with a very honest yes or no decision based on the answers.

You will find it difficult if not impossible to answer some of the questions. It is very important to understand the sureness of each response and the risk that each unanswered question implies. Handle this risk by analyzing scenarios with the different possible answers.

Write down a simple comment to each question, doing this formalizes your analysis. You can also think about each question in a SWOT analysis context identifying each one as a Strength, Weakness, Opportunity or Threat.

The Dos and Don’ts to keep in mind:

Do this all the time

  • Be methodic, analyze completely. Understand the need, competition and constrains, then tailor and differentiate.
  • Be on the lookout all the time for the fatal flaw that will make this fail.
  • Lots of questions can’t be answered or are too vague, check the risk of not knowing them.

Don’t Do This

  • Don´t follow the classic idea method: “I have an idea, let me think how to shove it to the channel or customer”.
  • Don’t focus on the features of the product, focus on the need you are trying to fulfill.
  • Don’t get tempted to skip a full analysis.
  • The most frequent mistake is to think everybody in the market is like you. If you like the product, everybody else will.
  • It is common to confuse a good idea with a good business opportunity, they are not the same.
  • Thinking “We have no competition” is only for naive entrepreneurs.
  • Don´t obsess with first mover´s advantage, most of the time funds prefer second movers because the idea is already validated.

The questions you need to answer:

Product or Service

  • Can you describe the business idea in 25 words or less?
  • Is the idea scalable? Is it limited to your time or something else?
  • Can your offering later change / adapt?
  • Risk of not being able to develop / manufacture the product?

Market or Customer

  • Can you do formal market analysis or only informal? (Interviews, observations, focus groups, surveys, market experiments, etc.)
  • Who is the customer? How precisely can he be defined? Location, profile, etc.?
  • What problem are you solving? Why would the customer buy? Does he want to?
  • Commercial risk, no willingness to buy?
  • How big is the market? Growing or shrinking?
  • How penetrated is the market by the industry? What share can you get fast? Later?
  • What price is he willing to pay? Based on what? How important is it?
  • How price-conscious is your customer?
  • Risk of change in consumer behavior?
  • Can the target market later be changed? Can you later attack other levels in the value chain?

Industry

  • Can you do formal analysis or only informal?
  • Is it thriving? Shrinking?
  • Do suppliers have power? Risk of supply shortage? Change in price?
  • Barriers to entry:
  • . Contractual? Patent or trademark?
  • . Lead time in tech development? Innovation?
  • . Management? People?
  • . Location?
  • . Regulations and government?
  • . Other barriers?
  • Can barriers change easily?
  • Do you have relations in place?
  • . Customers?
  • . Suppliers?
  • . Partners? Talent? Investors?
  • Experience in industry? Yours? Other management?
  • Risk of regulatory or other government related changes or intervention?
  • Technology risk of obsolescence?

Competition

  • Can you do formal competition analysis? If not, what informal analysis can you do? Is it good?
  • Who else is attacking the market? How? Successfully?
  • What is your competition´s pricing strategy?
  • What is the closest thing in the target market to your product? Are you a first mover? Second? More than that?
  • Strategic advantages / differentiators. Clearly visible to consumers or only in your mind? Sustainable? True, important and provable?
  • . Function? Design? Quality? Uniqueness? Innovation?
  • . Delivery? Channel? Availability? Location?
  • . Cost? Marketing? Sales?
  • . Ignorance of buyers?
  • . Customer service?
  • . Other?
  • Are you taking advantage of a certain opportunity, situation or advantage?
  • How fast can competition catch up?

Channel

  • Which options do you have?
  • Which one is the ideal? Why?
  • If the first choice does not work, does it make sense to try others?
  • What channels does your target market prefer?
  • Which ones are your competitors using?
  • How much integration do the channels have?
  • Will the channel change with customer habits or tech?
  • Risk of no access to the correct channel or consumer?

Sales and Advertising

  • How will you get customers?
  • How will you retain customers? Is it important?
  • Describe the necessary salesforce?
  • Can a salesperson of ordinary skills sell it?
  • Do you need advertising? Which kind? How much? Is it important?

Economics

  • How clearly can you model the basic economics of the idea? (Costs, sales, margins, required capital, ROI, etc.)
  • Will there be economies of scale? Are they important?
  • Accounts receivable? Can it become a problem?
  • How will you finance initially? Later?

Management

  • Do you have or can get the necessary management team?
  • Do management / leadership / organizational capabilities make a difference? How big a difference?
  • How valuable is intellectual property?
  • Does it make sense to do this solo? It normally doesn’t.

Other

  • Validation:
  • . How fast can you know if the business can work or not?
  • . Can you define the variables to know it? How fast can the data flow?
  • . Do you need product development to know? Dangerous!
  • . Do you need a long selling process or many tries to know? Dangerous!
  • Can you diversify? Not easy on new ventures, but can it be done?
  • Give me the biggest drawback / risk (fatal flaw) of the idea? The one that will make it fail?
  • Enlist the seemingly fatal flaws that can be fixed.
  • Does the idea fit your life objectives? Workload?
  • Do you feel passionate about the idea? Enjoyable? Are you doing it only for the money?
  • Give me the upside / best case scenario?
  • Give me the downside / worst case scenario?
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