Many small business owners have gravitated towards digital marketing because, during recent years, it has completely leveled the playing field for them. This is a great advantage for those who’ve had to compete against larger businesses to market their product or service. However, there is one traditional marketing strategy that is still being used by the larger companies in conjunction with their digital marketing efforts that is very effective, which is direct mail. The thing that’s very interesting about using a mixture of digital and traditional marketing tactics is that larger companies are aware that the traditional marketing tactics never lost their effectiveness. It’s just that the digital strategies are available on a different platform. They understand that combining the two is twice as effective than just relying on digital strategies alone. Like larger companies, below are the top 10 reasons that small businesses should be using direct mail to market their business.
- Historically Proven – The use of direct mail is a historically proven marketing strategy that the larger companies have been using for decades. They never abandoned this tactic even when the digital platforms came on the scene, they continued because they are still very results driven. In fact, there is still a large demographic that is accustomed to receiving direct mail pieces from businesses with a solid foundation.
- Enhance Brand Awareness – With the overload of online marketing and advertising tactics, direct mail allows you to expose your brand to more customers. You can increase the frequency of your direct mail campaigns to further build brand awareness. For example, you could send out a direct mail piece that is consistent with each holiday, during the months that people normally graduate, get married and so forth. That way you will allow your brand to gain more exposure by your targeted audience with the intent of building customer loyalty.
- Focus Resources to Generate Best Results – When you carefully plan which potential customers will likely respond to your direct mail campaign, you can use your resources more wisely and focus your efforts on those market segments that will provide you with the best results. They can be designed and crafted to speak directly to this particular audience.
- Improve Geographic Reach– Using direct mail to attract more customers within your geographic location is very effective as most customers still make purchases locally and need to know what type of businesses are in their local area. This is a great way to let customers know that you are in the neighborhood and a great way to generate more leads on a local level.
- Reward Local Customers by Offering Coupons and Discounts – There’s no better way to drive in local customers than by offering sales, discounts, and rewards. You can also use this strategy to build relationships with buyers within your local market. Direct mail pieces with sales, discounts, rewards, and call to action items are very effective ways to drive foot traffic right into your door.
- Capture Specific Market Segments and Demographics – Direct mail allows you to create mail pieces tailored specifically for targeted demographics. Such as those with incomes over $100,000, those with certain medical conditions or those who like to travel. This obviously will be based on the products and services that you offer. But none-the-less, it will allow you to increase sales by capturing a targeted group of customers by sending direct mail pieces to carefully targeted lists. To that end, your marketing messages could capture the attention of each demographic based on their area of interest or need, which also enhances your chances of building brand and customer loyalty.
- Test, Track, and Measure – Direct mail allows you to test your marketing campaigns to determine which campaign are more effective than others. You can do this by tracking the outcomes of each campaign and use that information to measure outcomes in key areas, more particularly areas that result in generating sales and repeat sales.
In order to implement this marketing tactic effectively, you must first set goals and measure the outcomes periodically (but on a regularly scheduled basis) to be certain you make the progress you intended to make. For example, you could measure key identifiers such as:
- How many responses you're getting by phone
- How many additional visitors you're getting to your website?
- How many additional click-throughs you're receiving?
- Are you receiving more inquiries through email?
- How many more visitors are coming to your physical location?
In order to truly perform the best test, a large enough list needs to be mailed so that you receive the response you need to best assess what your response rate is. The typical rule of thumb is to initially test on average between 1,000 – 5,000 direct mail pieces to get a significant enough response. Keep in mind however that the response rate may vary from industry to industry and from product to product. For example, response rates resulting in a sub–0.2% is typical associated with the credit card industry, however, the nonprofit industry experiences a much higher response rate - often as high as 50%. And remember if each one of these responses converts into a sale, you can simply multiply the sales price by the number of customers who purchased your product or service to determine the total sales increase.
You never want to go at this in the blind, however, where you’re not tracking your campaign. If you take this approach, you’ll never know if the campaign is a success or a failure - if you’re making money or losing money. For those campaigns that are not successful, sometimes all it takes is some tweaking and more testing to get the results you want.
- Work Within Your Budget – If you are concerned that you may not have the budget to launch a professional direct mail campaign, then simply start small and test a few small campaigns at a time. Then only expand the campaign once you see favorable results and evidence that there will be a return on your investment.
Thankfully there are many low to no-cost ways in which you can create the type of mail piece you desire. There are free online templates that you can use that are very cost effective. There is also digital postage equipment that could save a lot of time and effort with respect to mailing out your campaign pieces as well. If you’re not getting the results you want, you can always make minor changes to your design, color scheme, marketing messages or other tactics that’s more suitable for your campaign. Overall, the goal is to develop the best strategy that allows you to reach more customers and increase overall sales.
- Determine ROI – Unless you can generate an ROI or a return on your investment from your direct mail campaign it is useless. The ROI is the telltale sign that your campaign is actually working. One of the best ways to determine what your ROI is for each direct mail campaign is to perform the following:
- Determine the total number of mail pieces that will be mailed
- Determine the total cost of the mailing (for each separate campaign)
- Determine the percentage of the response rate you expect to receive
- Determine the percentage of customers you anticipate will purchase your product or service
- Determine how much each customer will likely spend on your product or service Once this information is determined, use it to determine other key areas by performing the additional steps:
- Take total cost of the mail pieces
- Divide it by the total number of responses
- Use it to determine the cost per response
- Take the total cost of the mail pieces
- Divide it by the total number of buyers or donors
- Use it to determine the cost per buyer or donor
- Take the total cost of the mail pieces
- Divide it by the number of pieces mailed
- Use it to determine the cost per piece mailed
- Take the amount each buyer or donor will spend
- Multiply it by the number of buyers and donors
- Use it to determine the total revenue
- Take the total revenue
- Divide it by the total cost of the mailing
- Use it to determine the ROI for each campaign
You can also use this data to determine the revenue based on repeat customers and the customers that you may have for a lifetime.
- Gain an Edge – Like the larger, more established companies, you as small businesses can gain an edge over your competitors and increase sales if you develop a well-thought out direct mail campaign that is also a mixture of digital marketing techniques.
The name of the game with respect to direct marketing, is to model some of the larger companies and not abandon the digital marketing techniques – keeping in mind that some of the traditional marketing efforts will also send potential customers to your online social media platforms as well. Direct mail is just another way to get them there and another way for you to gain exposure.