HOW TO ADD DIRECT MAIL INTO YOUR MARKETING MIX

By William Kendy

(Reprinted with permission from Petersen's SHOT Business, December 1999)

One of the key challenges in any retail operation is to draw the right customers through the door as cost-effectively as possible. While newspapers, radio and other mass media can deliver a lot of exposure for your store, they constitute a "shotgun" approach to advertising. On the other hand, direct mail is a more targeted "rifle" approach allowing you to not only reach current customers, but also efficiently contact potential customers who already have an interest in outdoor and shooting products.

According to the Direct Marketing Association, consumer and business-to-business direct mail expenditures are expected to reach $41.8 billion dollars in 1999. That's more than newspaper and television advertising combined.

Jim Dion, author of Retail Selling Ain't Brain Surgery, It's Twice As Hard, advises retailers to use direct mail, especially if they have an internal database of customers.

"Retailers have a real opportunity to use their data bases and send customers notices and announcements on products they're interested in," says Dion. "If you use an outside mailing list and send something out you might get a 1 to 2 percent response. On the other hand, I've seen targeted mailings to segments of a retailer's database generate responses as high as 30 to 35 percent.

Golden Opportunity

"By all means, we encourage all our retailers to use direct mail," says Paul Pluff, manager of retail services at Smith & Wesson. "If they don't, they're missing out on a golden opportunity to create a good customer base and increase store traffic.

"The bottom line is to get that qualified customer into the store, not just for firearm sales, but for all the related products that go along with it," adds Pluff. "And the direct mail doesn't necessarily have to just promote a sale, it can be to promote your service, expertise and product selection."

Winchester advertising manager Roger Stitt agrees that retailers are missing the boat by not using direct mail.

"Direct mail is essential in creating and building relationships with your customers," says Stitt. "It's perfect for keeping customers thinking about your store and advising them of opportunities that make them feel special. Direct mail allows you to secure long term security for your business and can see you through the good times and the bad."

Direct mail has an image of being expensive and complicated. While it is more expensive than traditional media on a cost per thousand prospects reached, direct mail's targeted nature and higher response rate makes it more effective. You're reaching customers who already have an interest in your products and you control the timing, the message and format. Direct mail can be as simple as sending out a postcard or a personal letter.

Three Components

Direct mail consists of three basic components: the list, the offer, and the presentation. Let's take a look at them.

Step 1: The all-important list

It's commonly accepted in the direct mail industry that 40 percent of the success of your direct mail campaign depends on using the right list (another 40 percent is attributed to the offer and the remaining 20 percent lies in the creative presentation).

There are three basic list categories:

• The In-house list. This is your database of customers and prospects and is one of your greatest assets.
• The Compiled List. These are lists that are compiled by national companies. They offer a number of different "selects" including geography, age, gender, household income, length of residence and other attributes.
• The Specialized List. Over 26,000 lists are available on the market, ranging from magazine subscribers to warranty card returns.

If you are planning on renting a consumer or business-to-business list, use a list broker. For a few dollars, a list broker can save you significant time and hassle in providing a targeted mailing list. Some brokers will "turn-key" a mailing by providing the list, brokering the printing and doing the mailing for you.

Brokers are listed in the Yellow Pages under "mailing lists," "direct mail marketing," or "list brokers".

Step 2: The Offer

How important is the offer in the success of a direct mail campaign? The following example illustrates the difference wording can make in an offer. Which one do you think pulled the best?

Example 1: "Half Price!"

Example 2: "Buy one, get one free!"

Example 3: "50 percent off!"

According to Bob Stone, author of Successful Director Marketing Methods, tests proved that the second offer pulled 40 percent better than the others. Yet all three offers basically say the same thing.

What should an effective offer include? According to Lois Geller, President of Mason & Geller, a New York based direct marketing agency, an offer should be:

• Appealing - Your objective is to get prospective buyers to picture themselves benefiting from your product.
• Believable - You want prospective buyers to consider your offer to be a good deal, not something too good to be true.
• Creative - The idea is to create a great offer, an unusual offer, something called a "unique selling proposition."

Most retail-oriented direct mail focuses on price and product, but direct mail can be used effectively to promote image and services.

"Retailers shouldn't use direct mail only for price point advertising," says Pluff. "Hype up your commitment to customer service, your knowledge, your product selection and tell them why you are a better place to shop."

In his book Direct Mail Copy That Sells, author Herscell Gordon Lewis offers a checklist for copy writers.

1. Have you motivated the buyer? Have you told the buyer what to do?
2. Is each component as strong as you can make it?
3. Is the buyer instantly aware of what you are selling?
4. Has someone unfamiliar with the offer read it and understood it?
5. Is the type as large as it can be within the space allocated?

The key to writing good copy is to stick with the main offer and turn sales features in customer benefits.

Finally, write like you talk and don't write for the sake of writing. Copy should be concise and simple. Write just as much as you need to get the offer across.

Step 3: The Presentation.

One of the strongest attributes of direct mail is its creative flexibility. Just two things restrict a retailer: imagination and budget. Mailings can range from single black and white postcards, brochures, bold out "extravaganzas" or even booklets.

Unless you or an employee has graphic design experience, use a professional designer. That direct mail piece represents you and your company and you only make a first impression once. Many print shops have a staffer who can help you design your mailing piece.

And don't forget that direct mail is often part of a manufacturer's or distributor's co-op advertising program.

"We support direct mail through our co-op program, the same as any print advertising," says Winchester's Stitt. "that includes a design and printing and postage as long as it's documented. We have regular line art available in our books and can provide retailers with four-color art."

A painless way to get ideas for direct mail is to read your own mail, especially third class material. When you see a design or text you like, file it. Imitation is the highest form of flattery.

One of the benefits of direct mail is the ability to test. You can test offers, headlines, graphics and formats to see which ones result in the greatest return. But remember to test only one thing at a time. If you test too many variables at once, you won't know why one mailing did better than another. Test only those things that might make a significant difference in response. Testing whether a light green postcard has a greater response than a dark green postcard is irrelevant.

What do retailers say about direct mail?

"We have about 13,000 names on our mailing list and put out three flyers a year," says Bobby Grimminger, co-owner of Bob's Army and Navy in Clearfield, Pennsylvania. "We do a 24-page fall and winter flyer and an 8-page "Cabin Fever" mailing and an 8-page spring and summer piece.

"Overall, television advertising is our number one source of customers,' notes Grimminger. "Direct mail is number two. It's quite expensive, but we get greater response out of it than anything else."

Tom Ryan, owner of the Oasis Sport Shop in Pequot Lakes, Minnesota, advises retailers to take advantage of distributor services and not try to do it all themselves.

"We mail our data base three times a year," says Ryan. "We get mailers from our distributors and have them customized for us. We know it works because customers come into the store with the flyers in hand."

"We work with manufacturers and distributors getting the flyers together and printed and try to maximize our co-op," says Ryan. "I use a mailing house for the mailing. I supply them the materials and my data base and they do all the work."

"Direct mail is costly, but the results are so much greater than other forms of advertising," says Jim McClain, owner of Jim's firearms in Baton Rouge, Louisiana.

And although it costs more, McClain always sends direct mail out first class. "That way we get address corrections back from the post office to update our mailing list."