Coupons & On-Sale purchases at record highs

According to a recent Nielsen survey “On-Sale” Items and “Coupon” purchases are at record highs.

Retailers are seeing this trend across the country. It’s having a noticeable effect on virtually every category and size of retailer.

70% consumers are buying items “On Sale”

59% consumers are using “coupons”

37% consumers are shopping at “value retailers” such as dollar stores & super centers

35% are purchasing Value packs

25% are shopping closer to home or work

18% are switching to cheaper health & beauty products

17% are purchasing smaller packages with a lower unit price

However, this is actually good new for retailers who understand direct marketing. The climate is ripe for great direct mail response.

In this economy customers welcome relevant and timely direct mail offers. They will respond to credible offers and incentives that have true value.

Just make sure you offer real incentives and real value.

In direct marketing, incentives have always worked well, but they work only when they are “real” incentives. Plus make sure that your “offer” is exclusive to the promotion and custom to the media. When you offer the same incentive on TV, Radio &/or Newspaper the offer can be diluted and your project will under perform.

When a customer feels that their particular “coupon” is really not necessary to actually receive the advertised offer, they will perceive it as worthless. Remember don’t use direct mail advertising as “branding”. Use it correctly as a sales tool and it will bring in much needed revenue.

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What will my Response Rate be?

This is one of the most common questions I hear when working with someone new to direct mail.

But it’s comparable to asking me “How much weight will I lose if I go on a diet?”

Here are some guidelines that you should remember.

1-     Success of a direct mail project is not always dependent on and should not be judged by response rates alone.

2-     The most often quoted response rates throughout the industry suggest a possible 1% – 2% response. This of course is assuming you have a good list and a good offer. And this may vary depending on others factors as well including industry, timing & competition. I’ve had projects that were considered successful that received everywhere from .03% to 60% response rates.

Here are 2 points to consider when figuring out the projected results needed for your retail direct marketing program.

1-How much does your product or service sell for?

2-What is the life time value of a new customer?

If your item is a $20.00 pizza, a $1,000.00 service contract or a $273,000.00 Aston Martins DBS the response rates on each will be vastly different.

Here’s an example:

What if you mailed 10,000 direct mail pieces to a targeted list for each?

Let’s just say that this mailing cost you $4,000.00

  1. $20.00 pizza

You will need a little over a 2% response to break even. But even a somewhat smaller response may still be financially beneficial when factoring in the customer life time value.

  1. $1,000 service contract

If you get .5% response (just 1/2 of 1 percent response) this will result in $50,000.00 in revenue.

  1. $273,000 Aston Martin

If you only get a .003% (3 tenths of 1 percent) response rate into the showroom for a test drive, it will most likely be considered a success. Even if they don’t initially sell a car they will have 3 qualified and interested individuals to start a relationship with and odds are they will eventually sell one.

So when I here this question;

“What will my response rate be?”

I respond by saying

“That depends on many factors. Let’s talk about your list and what your offer is first.”

Wedding Invitations by email?

Would I send my wedding invitations by email?

Even though email wasn’t really around when I got married I will answer this question as if I was getting married in this day and age.

No I would not send wedding invitations by email.

Here’s why

A wedding invitation is not just an announcement; it’s a personal invitation to close friends and family.

I want everyone to receive it

#1 (List)

I don’t have everyone’s current email address. Many are outdated email addresses plus many have multiple email addresses. Even if I get in contact with everyone and get the correct emails, I know some of my older relatives don’t even have a computer. I also know that some of my friends never or rarely look at their email.

I want this wonderful moment to be shared and hope everyone attends

#2 (Offer)

It’s a celebration of one of the most personal moments and event in my life. It’s the first statement of our new life together. Close friends and family will want to know about this. Most will enjoy coming out to the wedding and reception as it’s a happy event and time for any family. Even if they won’t or can’t come to the wedding, I want them to know that we took the time to let them know about the wedding and personally invite them.

I want our personal touch

#3 (Other)

The look of the card, the feel of the paper, the tissue and envelopes will reflect our personality together. It’s the first statement of our life together. Our first communication as a couple should convey quality and sincerity. We want to make it stand out. We will use a first class stamp and even handwrite the addresses so everyone knows they were personally invited.

Really there is not much I’d change about our invitations after all these years, even if we were sending them out today. The only thing I would add is to include a way that they can RSVP online.

Secret to Direct Mail Success – The Right Offer!

The success of your direct mail is so dependent on the actual “Offer” you give your recipients. I’m seeing more direct mail pieces today with lame offers or even no offer at all.

Agencies, brokers & free lancers, please listen.  Many of the direct mail pieces I get today are really great looking pieces but many of these do not contain great offers. Even assuming they are mailing the right list, many of these mailers will not bring in the results needed for the client to continue mailing.

Offers that are “REAL” not contrived or made up are the secret to success. “Great Offers” are the one thing my successful long term clients all have in common. If you are in retail and are considering direct mail, if you don’t spend time coming up a “real” and “best” offer, please do not spend your money.

“The right offer should be so attractive that only a lunatic would say “No.” – Claude Hopkins

2011 MFSA-SW Annual Conference, April 1-3

From the Historical Menger Hotel in San Antonio, TX

Jack Gressett with Advertising Mail Corporation, in Byran, TX is President of MFSA-SW and was host for the conference.

Friday night was the Vendor Reception with food, drink & vendor tables. More or less a meet & greet social event sponsored by various business including the United States Post Office.

Sandy Gaddie with Premier IMS was awarded the Ed Helsley Award during this event. This is the award presented to an individual each year who has demonstrated a long history of significant and outstanding achievement in the mailing services industry. She was surprised and presented with the award from last years recipient Daryl Cutler w/Accord Software.

Nice group. I heard many interesting opinions throughout the evening. The only consistent message I heard though out the evening was that the industry is hurting and membership is down. But this was a room full of bright people and most conversations eventually turned into ideas on how to build membership back up.

The speakers during Saturday’s session were all good.

Self-promotion through technology – Karen Sheehey – InterlinkONE

Karen was a great speaker and showed us why we need to embrace social media (twitter, facebook & youtube) into our marketing efforts. She also shared some great examples and ended with a glimpse into the future – coming fast, the next big thing – mobile marketing.

Non-Profits – Doing more with less – Craig Smith – Wordsmith Consulting

Some great advise on segmentation and presented some great info from surveys by Epsilon & Dunham. He also included “recent” case studies on the effectiveness of fund raising.

Both Karen & Craig showed how social media can work with direct marketing to boost results.

The rest of the day featured an Industry and USPS update from Leo Raymond, MFSA Vice President of Postal Affairs, Bobby Baker from Xerox, Troy Bullock from Tabs Direct, and Leo Clarin from AMS.

The material presented at this conference included real data, real problems and real life solutions to help the industry survive and morph into the next decade.

Topped off the evening with dinner & dancers in the Alamo Hall at the Alamo.

Overall it was a good event with a great group and worth the trip.

Look for next years MFSA-SW in Dallas, Texas

Social Networking is Not Advertising

 I was talking to an owner of a remodeling company recently. He informed me that he wasn’t interested in direct mail advertising.

Well, I asked, “How do you find new prospects and bring them through your door?”

 He said he uses social networking cause it’s basically free. He then explained how he focuses most his attention on Facebook. He told me he also uses search engine optimization.

 “You see, the leads are very hot when I get them. When someone is actually searching on google for a remodeling company they are probably ready to buy at the time”, he said.

 Well, I agreed with him and complemented him on his commitment to social networking and added that everyone should be as involved with this as he is.

But then I told him he still hasn’t answer my question. “How do you find new prospects and bring them through your door?”

He said, “I just told you.”

 “Well, social networking is not advertising and it’s not really free.”

I replied. 

He wanted me to explain.

“Does the social networking that you are doing take some time and commitment?”

“Well yes,” he paused and continued,

“It does take some effort to keep it up, but it’s doesn’t cost me anything.”

 I ask him who does this for him. He said e he use to do it himself but since he is out on jobs a lot, he decided to hire a part time student this year to focus on it. He told me her name was Ashley and that she’ll be working through August.

“Does she work for free?” I asked.

“Well no, not really but she doesn’t cost me too much.” He replied.

 We talked a little about Google and specific word searches such as “remodeling” “home improvement” & “renovation”. He admitted that the words do cost money per click but again it’s not all that much.

 Then he smiles and said, “Well, ok I see your point; yes, it’s not really free, yes it does require some investment in money and time.”

 “Ok, now let’s talk about finding new prospects and bringing them in.” I said.

I proceeded to ask him questions about his business and found out that although he will work anywhere in the city, his top customers are from specific neighborhoods.

I said ok; let’s narrow this down to your top neighborhoods.

Let’s say someone in one of those specific neighborhoods decides to remodel his or her kitchen. Most likely they will discuss the idea for a while. They will probably even discuss this with friends or neighbors. They may also get or ask for recommendations.

This may be good for your business or not. It depends on whom they are talking too. If they don’t know of anyone they will most likely will research it online. This is good, as you may now come up as a possibility. But keep in mind that while they search they will be looking at many different companies & websites as well as researching and reading reviews. They will also be comparing your services, capabilities and pricing etc.

If they do review your site and like what they see, you may actually get a phone call or an email.

And when you do;

How many of are actually in your areas or preferred neighborhoods?

How many are asking for services or capabilities you do not provide or want to offer?

How many are actually just getting another “estimate”?

Or in a nutshell, are all the leads qualified?

This is like having a storefront with a flashing sign that say’s “Here I am! I’m open” This is great for potential customers that are ready to buy now.  They are making their decision quickly and will need to be able to find you easily.

But what about creating new prospects and bringing them right to you?

This is what Direct Mail can do for you.

Consider this:

 What if you could talk to the just the right homeowners in your specific top neighborhoods?

What if you knew age of the home, the square footage of home, the homeowner’s income level, or length of residence?

What if you knew whether they were married or single or if they had children and what their ages were?

What if you knew which home had empty nesters or which homes had a young couple expecting their first child? 

With direct mail you can get in touch with and “start a relationship” with the specific prospects that are most likely to use or need your services in the future.

Yes, it’s pretty powerful information and you can make the first connection to them, before they are researching online and price shopping.

What if you suggested a kitchen makeover to selected homes, which featured a testimonial telling the positive and wonderful benefits of a new kitchen? And what if that testimonial was from someone actually in the area? 

What if you followed up with more mailings thought out the year featuring ideas on updating bathrooms, how to fix broken tiles, or the top 10 reasons it might be time to remodel?

Now, when this homeowner does decide to remodel, who do you think he is going to call? A company he found on Facebook or the company who actually initiated his desire to remodel and someone he now feels he knows?

Environmentally Friendly Direct Mail

It’s a given that the direct mail industry must embrace and promote an environmentally friendly position and I can tell you that most of us do. But for some reason the direct mail industry always gets a bad rap.

Many of us in the industry have been actively pursuing an environmentally proactive stance for years. For example: In the winter of 1993 for Holiday Gifts I had a tree planted for each one of my clients. It turned out to be the largest contribution at that time to the US Forest Service.

But here’s the interesting thing. After all these years I still have very few clients asking for, or even interested in recycled stock, soy ink or any green solutions. And when this does happen it’s usually a nonprofit organization.

Having said this however, I do I think the time has finally come. It is coming from the “Retailers”. Yes, retail “advertisers” are now leading the charge for environmentally friendly direct mail. The industry is ready.

Half Price Books, Office Depot, Staples, Macy’s, Crate & Barrel & Dell, to name a few are leading the charge with recycled stock and environmental requirements on all their direct mail pieces and catalogs.

We can educate the public on what we are doing and how direct mail actually excels in environmentally friendly options compared to most other forms of advertising and communication but nothing will change our public perception until the major retailers and advertisers embrace it and use it.