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Possibilities for Direct Mail Improvement

Preamble

The Structure

Contents of the letter

1. Form of the letter and envelope

2. The tricks

3. Copy testing

4. Trade-off between cost and effectiveness

5. Measured level of entertainment and fun

6. Follow-up mailing and possible quality improvement (the second attempt)

7. Analysis of ‘purchasing reasons’

8. Mailing lists

9. Mail order and use of media

10. Seasonality

11. Conclusion

Competitors: their services, offers, allies, partnerships and the way they do direct mail

Potential for saving costs

Potential allies and partners for cooperative mailing (increasing efficiency and decreasing costs)

Potential for mailing lists improvement – defining who the ideal customer is and targeting him/her

Analysis of major ratios of the past mailing and statistical prediction

Development and testing of new mailing pieces

Mailing lists’ and copies’ analysis and improvement

EVALUATING A LIST

Analysis of the successes and failures of the project and potential for improvement

Results

Appendix A

Main sources

 

Possibilities for Direct Mail Improvement

A. Preamble: Any successful direct mail campaign starts with an understanding of the universe in which the company is acting. The elements of this universe are:

different segments of current and potential customers

their needs, interests, motivations and psychological characteristics

our product/service, products/services of our competitors

our current and potential allies

allies of our competitors

Although one can (and will, of course) easily speculate about all of the above, only research can give us more or less accurate snapshot of this universe (it will be just a snapshot, because most elements will be changing even during the research.) Research can be conducted at almost no cost and is much more valuable than any expert advice, as no expert can analyze the unexplored circumstances.

Second step is to define what can make our direct mail most successful.

B. The Structure. Here is the list of choices we have to make while creating a mailing piece:

I. OUTER ENVELOPE

1. Format

a). #10 business envelope

b). 9x12 business envelope

c). Oversized #12 or #13 envelope

d). 6x9 "booklet" envelope

e). Monarch "personal" envelope

f). Square "invitation" envelope

g). Poly and other novelty envelopes

h). Closed face vs. window

i). Literature code

2. Postage

a). "Live" stamp (First Class or pre-cancelled Third Class)

b). Meter

c). Printed indicia

3. Mail Classification

a). First class

b). Third class bulk ["With regard to postage, a "live" (pre-cancelled) 3rd class stamp can help make Third Class Mail look like First Class, unless you plan to have illustrations and teasers all over the envelope."]

c). Special (certified, express, FedEx, etc.)

4. Corner card

a). Company name and address vs. none

b). Writer's name (hand written or "typed" above company name)

c). Product name vs. company name

d). Logo conflict ("If the… logo is an elaborate piece of work, it's best to use some simpler version on the envelope so it won't conflict and draw attention away from the teaser or other message. The same holds true for the letterhead vis-a-vis any headline of Johnson box that may be used at the top of the letter. I sometimes move the company logo or letterhead to the end of the letter where it won't distract from the headline message. Presumably, you're not selling your logo.")

5. Addressing

a). Direct computer-addressed

b). Cheshire label

c). Hand addressed

d). Personalization vs. none

6. Teaser

a). Teaser vs. none

b). Offer teaser

c). Benefit teaser

d). Curiosity or "hook" teaser

e). Ancillary notations

7. Envelope "look and feel"

a). Straight business (white wove)

b). Official or monetary value (brown or gray craft)

c). Big Event (four-color, display type, illustrations, etc.)

d). Invitation/upscale

e). Others (Also see I above).

II. LETTER

1. Look and Feel

a). Length

b). Correspondence style vs. illustrated

c). Letter/brochure

d). Stock (white wove vs. ivory vellum, etc.)

e). Personalization

f). Headline vs. none

g). Company letterhead vs. product vs. personal; top of letter vs. end of letter

h). Single sheets vs. 11x17 folded

i). Typeface(s)

j). Handwritten notations

k). P.S.

III. BROCHURE

1. Test with and without

2. Look and Feel

a). Size and folds

b). Four-color vs. two-color

c). Stock (matte/gloss/semi or dull-gloss)

d). Illustrations (drawings vs. photos)

e). Second order form

f). Testimonials

g). Offer

h). Guarantee

i). Call to action

j). Company I.D. and contact information

k). Literature code

IV. REPLY DEVICE

1. Look and Feel

a). Certificate/check design

b). Four-color vs. two-color

c). Illustrations vs. none

d). Offer boilerplate copy ("Yes!...")

e). Qualification questions (lead generation)

f). Signature/phone #

g). Detachable stub

h). Action device

2. Billing

a). Payment enclosed (hard offer)

b). Credit cards

c). Toll Free #/fax

d). P.O.#

e). Deadline date

f). Name correction

g). Key and literature codes

V. LIFT LETTER

1. Test with and without

2. Look and feel

a). Size

b). Stock

c). Letter vs. memo vs. other

d). Offer

e). Signature

VI. PREMIUM INSERT

1. Test with and without

2. Look and feel

a). Buckslip vs. folded

b). Attached to reply device vs. loose

VII. ALTERNATIVES

1. Sweepstakes

2. Proprietary "Telegram" package (The Western Union (http://www.wucs.com/) claims that its (available) Mailgram, Priority Letter and Custom Letter show opening rates up to 93%.)

3. Proprietary "Express" package (Mega Direct (1-800-826-2869) and Response Mail Express (1-800-795-2773) market high impact takes on USPS’ Express and Priority Mail packages.)

4. Self-mailer. B&W Press in Massachusetts boasts an impressive production of more than 8 million orders/envelopes per day for 2,500 customers. On the one hand, this economy of scale allows them to offer unbeatable prices, on the other hand, we would have to place an order (especially for our small quantities) in advance. (http://www.bwpress.com/electronicprepress.html)

5. Other "tricks"

C. Contents of the letter

We will have to define, research and create the following:

Form of the letter and envelope. The task is to create not just another typical piece of junk mail most likely to be thrown in the garbage and probably not even open (roughly 44% of mail "goes straight to the landfill, unopened"), but an appealing and persuasive, tested product. A winning product can’t possibly be created without testing, doesn’t matter how professional, experienced and confident the copywriter is. (In fact, just as people love "their own corny jokes, copywriters are especially prone to falling in love with their own pet phrase" – not necessarily a winning phrase for every situation.) Unless different pieces of mail are tested, there is no way of defining whether or not they will be successful – what might work with one audience, will fail with other public. This testing can be very cheap. Four most efficient ways to test the new pieces would be:

informal focus-groups given a choice between the different mailing pieces

mailing different versions in the same campaign using the same mailing list

asking those, who did become our customers about what was really appealing for them in a certain format, as well as what turned them off (the questions should be easy, interesting, personal, may be even profitable (little extra discounts for a few dollars or a nice offer from our strategic ally) and sounding very important – that is, giving the addressees the sense that so much depends on their choice or decision, letting a person feel important and chose between imaginary agencies which prepared different copies) including a card with a few questions for the customers, who decided not to accept that fantastic offer. There should be a sufficient incentive for them to answer the questions (in a very simple format) and to tell us why they didn’t want to accept the offer and what should we do to persuade them – was it price, service, inconvenience, or anything else that was not appealing enough for them.

Use of all the tricks in the book to get the readers’ attention and favor and to make sure they will reply:

the optimal structure of the letter usually consists of the following (with examples in parentheses):

news: (‘Now you can be a good guy, do not do anything and… get paid for it!’)

how/what/why/who: (‘We are offering this much lower rates at the same time helping the environment together with you. Here is how much less you would pay compared to what other companies charge.’)

command: (‘Do not let insurance companies charge you more than they should!’)

question: (‘Now, you wouldn’t just sit there losing your money and not contacting us, would you?’) The trick is to promise benefits in your question and to make sure it will be compelling to answer it affirmatively

more concise success formula is A.I.D.A. – Get Attention – Arouse Interest – Stimulate Desire – Ask for Action. Therefore, good check for a successful direct mail letter is to see if every sentence of it a) inform, b) entertain, c) intrigue the reader or d) emotionally reinforces the message

it is OK "to tease, tantalize, or help the reader preview the letter," to have handwritten notations in the margins, to use color to underline major ideas."

Get reader’s attention. "Reader eye-movement studies of standard letter layout reveal that attention is first briefly focused on the salutation. For non-personalized letter this is the area reserved for the headline.. The typical reader then scans the signature, the P.S., and finally looks back up at the salutation area again and begins reading the lead paragraph." "Once you have your reader's attention, the only way you're going to keep it, is by quickly and emphatically telling him what your product will do for him."

The letter should be quickly and easily scannable, so that the reader would be able to get all major points in a few seconds just by reading the headlines or notes on the margins

Make sure the reply card can stand alone, providing sufficient incentive for contacting the company, as most people "presort" their junk mail (or, at least, the letters they don’t throw in the garbage right away), leaving only the pieces they might consider taking action upon in the future (understandably so, as an adult receives 41 lb. of unsolicited mail every year.) It is also important to "make sure the order card doesn’t… become "lost" in the overall package design."

Amusing and/or dramatic graphics (like a dramatic picture of a cute little animal seen partly through the window of the envelope!) – and graphics can be really inexpensive, like a one-color stylish sketch. Imagine this: three different people on the envelope and a line: which one is the EIA customer? (To check if your answer is right, open the envelope.) In any case, "graphics should not be used as artistic touches, or to create an atmosphere. Any illustrations with your ad should compliment the selling of your product, and prove or substantiate specific points in your copy." (Some authors actually advise against illustrations as preventing mail pieces from "looking important," yet, numerous researches show that appropriate illustrations a) create good will, b) help to remember the offer, c) make it easier to scan the letter, and d) enforce the message.)

a get-a-friend offer, providing reward for securing new customers

a discount for a strategic ally’s product or a product other company is trying to promote anyway – and may even be welling to share some costs with you (thus, actually, paying you for the mailing)

a story or a sentence unfinished on the envelope and making one open it to read the end

graphics provoking significant eye-movement (which contributes to both interest and positive attitude)

"Please, don’t say no – say maybe!" appeal – probably even a little prize (a coupon for a free or deeply discounted ice-cream?) in exchange for answering a few questions in a no obligation response card

Complete the Picture, Scrape off a Coating, Lift a Flap, Scratch a surface, Pull a Strip, Look for a Lucky Number, Find 5 Differences, or Place the Sticker games (especially YES or NO stickers – as most people psychologically tend to be nice and/or acquiescent, so saying NO is harder than saying YES). One company even used a jigsaw puzzle that the recipient had to put together. The San Francisco Music Box Company even equipped its 50,000 catalogues with a concealed microchip playing "Jingle Bells." Corny? Pretty much. But it’s all used widely in direct mail because it works well. According to Bob Stone, arguably the highest authority on direct mail, "historically, more favorable responses are received with this offer [YES or NO stickers] than when no rejection option is provided."

Naming your target audience causes them to be more interested in what's inside. Example: "FOR ELEMENTARY TEACHERS ONLY ..."

Sweepstakes. ("Even direct marketers who personally dislike them admit that they work.") Everybody loves prizes. And such respectable organizations as Citibank and American Express widely use sweepstakes in their mailings. It does not necessarily have to be huge cash prize. Research shows that customers’ response grows substantially even if they are promised just a chance to win a vacation, a CD player, even a T-shirt. This is highly recognized in all industries. According to Marketing Tools, "premium incentives accounted for 29 percent of all expenditures on promotions or $20.5 billion in 1996."

Color definitely makes a difference, yet "usually the cost of adding a second color to a black-and-white page does not return the added costs" Also, "the two-color look is more intellectual, generally, than 4-color." Besides, "if the copy is right, the words will do their job without getting an appreciable lift from having headline set in red or blue or green." And also, "the misuse of color in brochures can decrease their effectiveness.)

"Calculated crudity" – "the more finished the ad, the more permanent it looks – and, therefore, the less immediate". Which is why it is a great idea to set the headlines in a typewriter face or in crayoned hand lettering, especially with distinct child handwriting

A few special rules about headlines (John Caples' 29 Formulas for Writing Successful Headlines):

1. Begin your headline with the word "announcing."

2. Use words that have an announcement quality.

3. Begin your headline with the word "New."

4. Begin your headline with the world "Now."

5. Begin your headline with the words "At last."

6. Put a date into your headline.

7. Write your headline in news style.

8. Feature the price in your headline.

9. Feature a reduced price.

10. Feature a special merchandising offer.

11. Feature an easy payment plan.

12. Feature a free offer.

13. Offer information of value.

14. Tell a story.

15. Begin your headline with the words "How to."

16. Begin your headline with the word "How."

17. Begin your headline with the word "Why."

18. Begin your headline with the word "Which."

19. Begin your headline with the words Who else."

20. Begin your headline with the word "Wanted."

21. Begin your headline with the word "This."

22. Begin your headline with the word "Advice."

23. Use a testimonial-style headline.

24. Offer the reader a test.

25. Use a one-word headline.

26. Use a two-word headline.

27. Warn the reader to delay buying.

28. Let the advertiser speak directly to the reader.

29. Address your headline to a specific person or group.

Conciseness – nobody has time for reading long letters and long sentences – "Make it quick, I don’t have time to waste."

Urgency – very often potential customers tend to procrastinate (don’t we all?) and postpone the decision until they totally forget about it, therefore, setting a deadline is usually a good idea

"Personalize, and be specific!"

Testimonials - "there is nothing like an honest face and the signature of someone in a nearby part of the country to add believability," – especially results of that great survey of the Plymouth Rock customers quoted in the gray book! (The superlative terms used about PRAC can be used as a little rim around a letter or as little quotes in the text of the letter.)

Hierarchy of offers. According to Roy Ljungren, the value adding offers mentioned above can be put in the following hierarchy (in descending order of effectiveness):

Gifts

Sweepstakes, contests

Reprints of articles

Information packets

Free trials and samples

"Balance is dull" – just as in any art form, balance in a mail bores the reader and does not attract him. The bigger and bolder the headline, the more important it seems to be. Huge headlines never hurt respectability – look at The Wall Street Journal or Times. Compare FREE! and WE OFFER FREE RIDE! to a few lower case lines occupying the same space – like BALANCE IS DULL! to the three lower case sentences above! Thus, the most important parts of the text should be disproportionately enlarged.

Captions and call-outs get high readership.

The opening line. "Most letters are won or lost in the first sentence. The surest way to lose is to begin talking about yourself and your organization." On the other hand, continuous emphasize on "what’s in it for you" always brings the best results, therefore it’s a good idea "to lead sentences and phrases with benefits."

Fighting monotony. If everything in a direct mail package looks alike, the reader can make the mistake that he's already seen one of your messages. Make both sides of a 2-sided piece look different.

Handwritten messages get noticed. It's an effective way of highlighting special thoughts or as a way of teasing a reader into a long letter. I think a kid’s handwriting is especially effective with people, who like kids. But "don't overuse it" is every expert’s advise.

Make things move. Don't let anything be static. This can be dangerous though. Too much movement on the page or in the wrong direction can hurt readability. On the other hand, the humdrum typical of many "professional" letters is even worse than too much movement.

Break up large areas into smaller visual ones. These smaller chunks are easier to digest and add noticeability. Large massive block of copy looks like a lot of work to the reader. Make it easy for readers. "It’s a Law of the Universe… that any energy expended to understand copy will leave the reader with less energy for retention."

Make different sections look different. The reader gets bored easily and if they see something with the same style throughout, it will look like a lot of reading to do, which means work.

There is a danger, though: offer should not be too good. Therefore, the best way to check which offer works best is to test different offers.

The whole outline and message should be tailored to a targeted customer – versus the one for everybody. For example, older people tend to read more carefully, analyzing numbers and studying scientific (or scientifically looking) charts. Younger people prefer pictures. Professionals love bullet points (it’s enough to look at this page to see how true it is!)

Beware of the reader’s perception! Even people with low intellectual abilities are actively participating in the perception process. One of the worst mistakes of most direct mailers consists of sending long boring letters believing that the addressees are going to read every word. Meanwhile, numerous studies show that in the process called "sharpening" readers "more frequently delete all or parts of messages they receive, subtracting meanings that are not acceptable to them." In other words, as the research shows, "the sender may design a message and deliver it, but the intended recipient in effect decides, consciously or unconsciously, whether or not to receive the message… he or she can distort it, take pieces of it out of context, discredit the spokesperson or the source… or interlace it with aspects of his or her own experience and attitudes." "Don’t assume that the person you’re writing to is as literate as you are. Even if he is, he’s distracted, and he’s trying to quickly extract the key information he needs, often by just scanning your letter… [therefore] write like you talk, assuming you can talk like a successful salesman. In direct mail, Clarity is more important than literary merit and the ability to sell is more important than the ability to write."

Reply device needs to "summarize and synthesize the offer and benefits, and sell them at the same time… This is the document in your package that brings home the bacon."

A typical "reading path." "Studies show that normal eyeflow goes from the (1) headline and address to (2) the salutation to (3) the signature block to (4) the P.S. to (5) the first paragraph of the letter."

Copy testing

The tightness test: deleting anything in the letter that does not directly relate to the selling point

The glance test: does the letter (especially the envelope or the beginning of the letter) convince you at a quick glance to read on?

the 2-2.5 seconds test: studies show that people spend not more than 2-2.5 seconds looking at an envelope before they decide to open it to throw away (some researchers argue that it takes 5 seconds, but most agree on 2-2.5, George Duncan believes it’s 3 seconds)

Going through the checklist. Finally, the following checklists should be used while testing the effectiveness of the direct mail. The letter should appeal to:

the desire to gain: make money, save time, avoid effort, achieve comfort, be healthier, be popular, be a good person, enjoy life, be praised, gratify curiosity, take advantage of opportunities, and

the desire to avoid loss: avoid criticism, regrets, loss of money, loss of good name, loss of property – in a word, to avoid trouble

in other words: tell the reader what s/he will lose if the offer would not be accepted, show how his or her time and efforts would be saved and you will get maximum possible response.

Trade-off between cost and effectiveness – is there any trade-off at all? (Surprisingly, sometimes a cheaper piece could be much more effective than a more expensive one.) It is only through an experiment that one can check if there is a correlation between cost and effectiveness. (Most often between the "amplifiers of perceived value"- prizes, free offers (even "just for contacting us!"), coupons, cash-back offers, etc. – and the response rates.) "Everyone wants to get something for nothing." Bob Stone advocates greater use of the FREE offers, estimating more than a tenfold increase of net profits when gifts are used widely and generously. George Duncan suggests using certificate/check design – "not so much because people think they are checks, but because the check-like verisimilitude projects value." On the other hand, one should be aware of the Freeloaders tribe and be very careful giving out offers that cost the company money and cost nothing to the customers (especially if there is not even a symbolic payment involved – such as a stamp or an envelope.) Also,"the generally accepted rule among direct marketers is that the gift should be related to the product being sold." Well, may be a free Ben & Jerry ice-cream offered by Plymouth Rock should be played as "a low fat ice-cream, protecting your health and, thus, lowering an accident probability." (Or does it sound too silly?) Free gift can also be used as a lure for customer to contact the company – "call us for your quote and we will send you your free ice-cream coupon just for asking."

Measured level of entertainment and fun – sufficient to make potential customer keep reading and considering contacting us (fun also creates good will, trust, desire to deal with a pleasant company, while dull mail cries: "Throw me away!") A good example could be a quiz – "Are you using every opportunity to save on your auto insurance?" Lately "’Interactive’ has become a buzzword", but the most successful direct mail must have "a hard-to-match ability to engage recipient, giving him/her many engaging options (e.g., tokens, puzzles, contests, etc.)"

Follow-up mailing and possible quality improvement (the second attempt) – "We are sure you are still considering our offer, so, here is an extra discount for you if you join in the next two weeks." This is a typical "second attempt mail." All sales people know that most customers are helpless against even a small discount in a moment of indecision. Besides, if the targeted audience was selected correctly and the mailing list used was rather good, it could be that a different message (combined with a slightly different offer) can persuade a customer who has already said no.

Persuasiveness of the offer nobody believes unsubstantiated claims (i.e., tell the story about how exactly the environment will be helped, what exactly makes this offer terrific, how much money will be saved for the consumer). In fact, "if the message is too trivial, it may be screened out. Unsupported claims of "good service"… "good taste"… or "cleaning ability"… fall under this general heading."

People LOVE importantly looking graphs and numbers, comparative analysis and openness (to the extend of giving the competitors’ contact numbers to check what they offer – usually, this is an especially impressive technique – even if in fact the competitors’ offers are rather attractive.) One of the great ideas would be to offer simple statistics describing the profile of our most typical customers. Then, if we are right about them, the message behind this profile description would be: "how come you are still not among them!?"

By the same rationale, people HATE long sentences almost as much as long letters from strangers and suspicious secrecy

Power of the word FREE (as in "buy 1(or 2 or 3) – get one free" or "1 (2-3) free months", etc.) or guarantee to beat any competitor’s price by certain % or "free 10 claim filing tips you might wish you have had read if… continued inside", etc. Or may be just a post card (instead of the whole envelope) saying "send me your wonderful FREE brochure outlining the 10 claim filing tips I need to know and an information about your unbeatable offer together with the contact numbers of all your competitors, so that I could see for myself." In any case, proper incentives can make a huge difference. "A 1993 study by Southern Methodist University showed that customers who received promotional products reordered sooner than either coupon recipients or those who received only a sales letter. They also ordered 139 percent more than those who received only the letter. A 1991 study of trade shows by Exhibit Surveys Inc. found that promotional gifts increased booth traffic, raised responses to invitations, boosted the memorability of the occasion, and increased goodwill toward the company."

Why the best offer is not always the best offer. Some consumers, especially older people, are suspicious of prices "too good to be true." In fact, "many mature consumers associate low-budget prices with products of dubious quality." This is why the selling proposition should be written extremely persuasively (that is, showing how the company manages to cut costs so deeply). Otherwise, some of attractiveness of any "no obligation" deal will be lost.

People prefer to listen to how their needs will be satisfied, rather than reading a long story about how good the company is (just like the companies usually love talking about how wonderful they are forgetting to tell the customer what s/he gets out of it all!)

An option to fill a questionnaire online and get a quote immediately may be very important – some people are so in love with the Internet and think it is so convenient that they would only reply online.

Membership card is another extremely useful technique (most successfully exploited by the AAA), especially if the membership card looks very attractive and/or original.

Concise and clear appealing message right on the envelope. One of the most famous copywriters, Bill Jane, believes that the message on the envelope is extremely important: "What works for us… is the outer envelope...that instantly waylays the prospect, captures his attention, engages him, intrigues him, grabs his curiosity. The outer envelope that wastes not a moment in commencing to make the sale. The outer envelope that orients the prospect immediately to the product, and very often to the offer, even before he gets inside." Here is the conclusion of a direct mail expert, Phil Dresden, after watching the "open – throw away" behavior of a number of focus groups: the way to get them to open that envelope "is to have a simple message clearly stated with effective graphics… keep it simple… you only have a few seconds to make an impact. [The letter will be thrown away] "if the offer appears to be too much trouble, if it appears that the message is going to take some time and effort to get at." – "A plain white envelope with "The White House" in the upper left corner, for example, doesn't need any further teaser except, perhaps, ‘RSVP.’"

Double- and triple- impact technique: series of mailings directed at the same customers – each offering increasingly better deals.

Analysis of the primary reason for our customers to buy our service. (In the case of EIA: is it the price, the service or the environmental reasons. Speculations, though inevitable, would not suffice here, and the best way to answer that question would be an accurate analysis of those, who did contact the agency and did become our customers.) Analysis of who the ideal customer is should include psychographic considerations (culture, self-image, temperament and personality type) are sometimes much more important than the demographic ones. The tool and result of such analysis could be a positioning grid, elements of which should be used in planning mailing strategy and editing the copy. It may look like this (just an example):

Segmentation can be a very challenging task, even its first stage – defining the segments. But once discovered, defined and proved to exist, segments represent a powerful tool for accurate targeting and effective consequent message construction.

Mailing lists

According to most sources, mailing lists account for 40% of campaign effectiveness, which is why at least the following basic questions should be asked (and answered) while dealing with mailing lists:

how good are the lists that are used now and what kinds of lists and sources we should use in the future

how do we group the lists and pilot-test them (mailing testing does not mean any additional cost – it simply means mailing a thousand letters to each of five lists’ addressees instead of five thousand letters to those on one of the lists)

analysis of the mailing lists’ quality:

when updated last,

the source,

and how close are the addressees to the ideal targeted customers and to the customers who did call and did buy the policy.

Brokers and other mailing list sources:

www.targetonline.com

www.dmnews.com

www.mediacentral.com/direct

www.srds.com

www.amlist.com

www.directmedia.com

www.databaseamerica.com

Metromail offers lists at 4 cents a name for small lists and cheaper for larger lists. You can even get a list of mail-order buyers of insurance from Metromail at cheaper than 20 cents per name. It can also perform a multibuyer match – matching a car owner list against a mail-insurance buyers list.

Mail order and use of media (in case we decide to put response cards in a magazine – which is usually less persuasive, but more cost-effective.) Some newspapers (The New York Times) give discounts to retail stores, which makes some companies have stores just to save money on advertising.) There are also volume and frequency and advertising agency discounts (usually about 15%), low "remnant rates" – for an unsold space or flexible date ads (50% discount in The New York Times and 35% discount in Time magazine.) Remarkably, the closer to the front of the magazine a card is placed, the better is the response rate. And "decades of measured direct response advertising tell the same story over and over again."

Seasonality study should define, when are the customers more likely to treat our offer favorably, as studies are showing significant seasonal fluctuations in mail order shopping and positive responses to all sorts of offers. Our story is different (as timing is based on the old policies’ expiration dates), but if we want to start more persuasive "retaining mailing" to the existing customers, seasonality is very important.

Conclusion: Errors in each of those areas could be absolutely detrimental for the whole direct mail campaign. But especially harmful could be to follow very general recommendations of experts, who know how to create a decent, professional copy and format, without the analysis of the current situation, with which Plymouth Rock has to deal. (That is, without the knowledge of how to get a dramatic increase in sales.) On the other hand, of course, only professionals can spot some serious weaknesses and flaws, as well as come up with really priceless advises. Professionals, on the other hand, are also known to charge premium price for their services not necessarily justified by the value added. And the product they typically design looks sleek and professional (an industry standard piece of direct mail)… – and most of the time goes right into the garbage of an addressee together with other emotionally tarnished pieces of the true junk mail. Therefore, it seems advisable to use their consultations on most stages of the project instead of hiring an outside company to do the whole project.

Competitors: their services, offers, allies, partnerships and the way they do direct mail

"Not counting merchandise sales of huge mail order companies…, insurance companies lead the pack in sales via direct marketing methods." For many years total sales of insurance via mail never dropped below a few billion dollars a year. Leading mail order insurance companies are United Services Automobile Association, GEICO, Capital Holding, American Automobile Association, Colonial Penn, National Liberty, Physicians Mutual, and Old American Insurance Company. In 1986 4 insurance companies were among the top ten US direct marketers and three of them among the top ten mail order companies in the world. USAA, with 2.5 million members (and 2.6% of market share in Massachusetts), including 95 percent of all U.S. active-duty military officers, is "the fourth-largest homeowners' insurance provider and fifth-largest auto insurer in the United States. It is also the largest mail-order company in the U.S." The mail communications with the current customers of USAA are so effective that the company retains 96.4 percent of its property and casualty insurance customers, compared with an industry average of 85 percent. Its retention rate for life insurance customers is even better--96.8 percent, compared with the industry rate of 89 percent.

Most insurance companies also use direct mail for "upgrading" and "downgrading" their policyholders – for example, Allstate Insurance Co. uses direct mail to upgrade bodily injury coverage for the existing clients. People’s Service Insurance Company – rated by Weiss Ratings Inc. as on of top 10 cheapest auto insurance underwriters in the US, the only one New England company among the 10.

Most large insurance companies use four-color printing more and more in their direct mail: "Sentry Insurance, in Stevens Point, Wis., says that 30 percent of its print jobs are four-color; Fireman's Fund Insurance, in Petaluma, CA, has a 60 percent four-color workload; Prudential, in Novelty, Ohio, says 60 percent of its work is four-color."

Enclosed (as an Appendix) are:

Market Shares Of Massachusetts' Private Passenger Auto Insurers (file ‘Competitors 95-97’, Sheet 1)

Table of Market Shares and Growth (file ‘Competitors 95-97’, Sheet 2)

Market Share (%) chart (file ‘Competitors’, Chart 1)

26 Leading Auto Insurance Companies in Massachusetts (file ‘Competitors’, Sheet 1)

Three Groups of Auto Insurance Companies in MA (by growth rate) (file ‘Growth’, Sheet 1)

Stealing Business (file ‘stealing’, Sheet 3)

Discount Changes by Category (file ‘tendencies among competitors’, Sheet 1)

Discounts (file ‘tendencies among competitors’, Sheet 1)

Group Discounts by Competitors (file ‘tendencies among competitors’, Sheet 1)

Growing, Stagnating and Losing Companies (file ‘tendencies among competitors’, Sheet 1)

Clearly, there are three major groups of auto insurance companies in Massachusetts in terms of growth – Growing, Stagnating and Declining. Analysis of (very scarce) data about the former auto insurance providers for newly acquired clients shows that:

Growing and Declining companies offer much greater group discounts than Stagnating companies.

The later group offers more significant step discounts than the former.

Correlation between a market share controlled by a company and the number of its former clients acquired by PRAC through mailing is insignificant (only 4% of new customers were Arbella (controls 11.6% of the market) policyholders, while 26% were Liberty Mutual (7.2% of the market) clients.

Companies which used to be underwriters of our newly acquired customers’ policies can be ranked by "steal/share ratio" to define, which ones were "easy" to get customers from, and which ones were "tough." (Companies rank from the "easiest" Liberty Mutual (3.61) to the "toughest" Arbella (.34).)

There is a significant correlation between growth in 1996-1997 and steal/share ratio. In other words, (not surprisingly) growing companies are hard to "steal" from, while the declining firms are easy preys.

Evidently, if the tendencies identified above are true, Plymouth Rock should try and go specifically after "Losers."

Potential for saving costs

Experts believe that the direct-marketing industry is experiencing "an influx of newcomers, who bring with them a mixed bag of confusion and misunderstanding." And there are a lot of professionals, who capitalize on this lack of knowledge and experience. Therefore, most experts advise companies to have an in-house expert – somebody, who has had a substantial experience in direct mail and knows the industry well.

"While there may have been a time when a more-is-better philosophy was appropriate, the cost of names, paper, printing, and postage has squeezed the direct marketers into a less-is-better mentality."

Cost-savings can be achieved in each of the following elements of mailing:

Paper

Printing

Binding and collating

Envelope fabrication

Sorting

Mailing

Transporting to the post office According to all experts in the field of direct mail, this is one area that should always be entirely supervised by one professional company – an agency or printer, because Murphy’s Law is the only one applicable to the technical side of direct mail.

In the envelope, size really matters – people are more accustomed to certain sizes associated with bills, checks, invitations, personal and important correspondence – size #10 (4.125 by 9.5 inches). But most direct mailers still use the 6 by 9 envelope (apparently trying to emphasize the importance of the offer), which, according to one of the leading authorities on direct mail, in fact, hurts the mail – "it is a size that says "advertising" and puts people on guard." Surprisingly, again, a cheaper piece may prove to be more successful. "Another way to get attention is to go smaller than a #10 [to give the envelope] a strong personal look and feel."

Almost the same logic is applicable to the size of the letter. 15 years ago people tended to read more and total number of newspapers, magazines and books sold per capita was much higher. Now, nobody reads long letters – people have no time and short attention span. Therefore, the letter should be as short as possible as long as it doesn’t hurt its persuasiveness. (Experts advise against eliminating information just "for the sake of brevity.") Many organizations and groups, such as Consumer Union, Smithsonian and others, support their publications by mailing millions and millions of letters at non-profit rates. And response rate to their mailings is much higher than average. An option for us would be to offer such organization a free brochure on how the environment can be saved by driving less (including a coupon for our low rate insurance.)

Don’t rely on your agency – proofread the copy yourself, control the revisions and everything else. Check if the following points are all satisfied:

Don't "introduce" yourself or your company. Begin immediately writing about the reader and his problem, and how your product will benefit him.

Don't expound on the state of the industry/world, etc. It may come across as preaching, especially to the converted. (If he doesn't already know what you're telling him, he may be too removed from the process to be a good prospect.)

Don't use puns. They rarely translate to the reader's context.

Don't use your product name as a headline by itself (clever as it may be), without appending benefit or offer copy to it.

Do build your teaser/headline around a major benefit.

Do "preview" the offer up front and "merchandise" it throughout your letter.

Do use teasers to target your market.

Do use reader-friendly fonts. "Stick to "Courier," 10-12 pitch, as uncreative as that may seem."

Do quantify claims as much as possible. Percentages of performance, number of dollars saved or earned, minutes and seconds of time, etc. lend credibility.

Costs are a tricky matter. Sometimes marginal increase in costs may result in significant growth of revenues. For example, if Crushbusters carry some snack and coffee for nervous and unhappy customers (strategic partnership with, say, Starbucks or any other of hundreds of coffee shops in town?), the cost would be negligible, but the value added is enormous!

In any case, reckless spending on direct mail does not guarantee great results. (But many companies don’t follow this obvious rule. One New Yorker estimated that through the year the nonprofit organizations spent more money on repetitive solicitations from him than he donated.)

One of the most basic ways to save costs per/M (that is per 1,000 mail pieces) is to increase the volume. Here is a typical estimate (same rule applies to lists):

Potential allies and partners for cooperative mailing (increasing efficiency and decreasing costs)

Of all the applications of different direct marketing methods, for the "insurance companies none is more dramatic than "third-party selling" … upon a recommendation of an affinity group, such as a union, a fraternal organization, an oil company credit card group, an alumni association or a senior citizen organization… The most dramatic application… has been done against the AARP (American Association of Retired People) membership list." One of the reasons for such successes is that "the key to successful direct marketing… is the element of trust." Another one is in accurate targeting and strong appeal.

"As a rule-of-thumb response for individual pieces in a co-op is about one-fourth the response of a solo mailing." Yet, according to the same source, "quoting averages is always dangerous" and often such dramatic decline is a result of bad decisions on whom to cooperative with. It is clear that if the mail list is "right" and the message was chosen correctly, cooperating with another company, provided it is as appealing to the potential customers, can never hurt, but will increase the interest of the customer and the perceived value. Besides, this number (.25 coefficient) is skewed by ValPack and such sending dozens of different companies’ coupons in one envelope. The cost, on the other hand, is also usually lower in coop mailings – also one-fourth. It is interesting that many companies experienced in direct mail have been conducting coop mailing for decades with great success.

It is especially effective to receive any sort of "approved by" seal – even if by some small group. For that purpose companies submit themselves for ratings and examinations of any sort by different groups and organizations.

Inserts could be a cheat solution. The price of an insert offered by such companies as Lee Wards, Nora Nelson and Sessions Records (with more than a million households on their lists) runs under 10 cents. Much more advanced cooperative mailing technique consists of finding a strategic partner rather than just saving money on mailing and sharing costs. For EIA such partners could be environmental groups and agencies, environmental magazines (like National Geographic, etc. – especially those with split runs), sometimes offering their own mailing services at lower costs. Greenpeace USA, for example, sends 25,000,000 pieces of literature each year. Another idea is to sponsor a mailing for a good cause (only for known donors) including just a reply card or a phone number for potential customers.

The "second letter" or "publisher’s letter" [see Exhibit Publisher’s Letter] is a powerful tool, increasing response rate by 10% according to repeated tests. In such letter an editor/president/director of the partner-company talks about a great offer that comes to the clients through the partnership with another company.

The most effective strategy in cooperative mailing is developing "joint sales messages, which point out the combined strengths of your products and companies. The combined sales message should be more compelling than yours or your partner’s message alone."

On some occasions companies save a lot of money just exchanging the mail lists. It could be a great idea provided both companies are equally interested and both lists consist of the customers the companies really want to target.

Potential for mailing lists improvement – defining who the ideal customer is and targeting him/her

Classical "customer flow" in direct marketing is usually defined as Suspect-Prospect-Customer-Client-Advocate. People, selected on a mailing list(-s) because they satisfy certain criteria, are Suspects. When people return a response device asking for more information or a trial they turn into Prospects. Those, who actually contact the company and make a purchase are Customers, some of whom soon drop out, leaving the company with Clients. Once a Client is satisfied with the product and/or service he or she may turn into an Advocate, referring others to the company (possibly through special offers like "subscribe your friend and get one month free" or "… get a prize")

"Trying to sell without knowing the target audience is like buying a birthday gift for someone you don't know."

"The best product, properly priced, packaged superbly, and accompanied by copy that describes it with utmost taste and irresistibility will fail miserably as a direct-mail offer if it is sent to an unqualified or blatantly inappropriate audience. The list selection process is critical to the success (or failure) of any direct-mail project, and is probably the single most important component of the campaign."

"The success of direct marketing and direct selling depends on acquiring knowledge about customers." Studying the internal lists of already existing customers may reveal the profiles of the typical segments of our customers. "We anyway more or less know who they are" is a dangerous attitude when it comes to message targeting.

The key to any successful direct mail program is to test continuously (it is not a one-time shot) those factors, which influence the response rate. It is wise, therefore, "to utilize 10 to 15 percent of each campaign to test new lists, or packages, or offers. If we wish to find out which lists will work best, we must mail the identical package with the same offer to each list. If we wish to find out which "package" will work best, we must test each against the same list. And then we should always run a standard or best performer against any test of a new variable. Tests are extremely important for different copies, as writers tend to think they "know" what works and what doesn’t – yet, this is not what the tests have historically proven! After all, we should "do what works best, not what we like or don’t like."

According to the theory of segmentation, there are well-definable segments of on any list, that have greater sales potential for a particular product or service

Since the lists deteriorate very quickly, it is especially important to find out when they were compiled One of the most important characteristics of an effective mailing list is whether the addressees have a "mail buying tendency", that is, if they buy by mail or even consider answering mailed offers.

Use of externally generated mail lists without tests is discouraged by all direct mail specialists, and trying to save money on testing can cost in a complete failure of the whole undertaking.

A good mailing list has certain characteristics that make it work well for other mailers. To begin with, the source of the names is very important. The names with the highest market value are those of people who responded to a direct mail offer ("proven responders"). Space-sourced names – people who requested more information after seeing an ad in a magazine, for example, are next in quality. Then come lists of individuals who responded to a survey and offered specific information that marked them as targets for certain offers.

There are usually four major types of segmentations:

Geographic

Demographic

Behavioral

Psychographic

Many researchers believe that consumers most likely to be responsive to a direct mail are:

younger

more confident

better educated

have higher income

have higher social status

are more active shoppers than an average customer

According to a recent research, "the most technology-minded households are also the most enthusiastic recipients of targeted direct-mail offers; even though they receive more direct mail that the average household." In fact, when asked a question "Do you enjoy receiving mail solicitations that are targeted to your interests?" 77% of all households said yes, and 92% of this the most technology-minded households said yes. It is the industry standard that a list should come with a data card, reflecting the number of names on the list, type of the list, its source and segmentation options.

To figure out what the customers want, one may just ask customer a question or two. "Asking questions of customers, prospects, and suspects through mail questionnaires has become a useful and relatively inexpensive method." This allows to define what is it exactly that makes the customers contact us. Although the environmental issues are clearly not the most important factor in our customers’ buying behavior, according to Mark Feldman, vice president of the cause-related marketing practice at Cone Communications, a Boston-based marketing firm, "three quarters of consumers say they'll switch brands" to a company involved with a charitable cause, if price and quality are equal.

Shown below are a few of the more popular suppression criteria being used by list processing service bureaus. The degree of difficulty and the costs associated with the particular suppression technique vary from item to item. In some cases, proprietary methods are used to develop the suppression list, making for some interesting competitive advantages among service bureaus.

Existing Customers The elimination of known customers, prospects, suppliers, etc. based on existing house files is one of the most important suppression objectives. In addition to reducing the cost of mailing, suppressing existing customers from promotional mailings will avoid damaging an existing relationship. Financial institutions have difficulty performing suppression matches on existing customers due to the unique and encumbered names of certain accounts (e.g., custodial accounts, IRAs, joint accounts, etc.). This problem has been solved by a number of vendors with very sophisticated parsing routines.

Customer Notified These are individuals or firms who have notified the mailer that they do not want to receive future mailings. The use of customer-notified house suppression files is increasing, especially in response to environmental advocates.

DMA Mail Preference List The Direct Marketing Association (DMA) "pander" list consists of individuals, not firms, who have notified the DMA of their negative mail preference. This popular suppression file is available from the Direct Marketing Association and is updated on a regular basis.

Site Specific In some instances, the mailer is wise to eliminate any mailing to certain addresses such as competitors, parent organizations, subsidiaries, suppliers, business partners, etc. Why waste a mailing on a business partner, or why risk internal criticism from otherwise uninvolved individuals?

ZIP Failures Any address that fails to be coded by CASS-certified software should be suppressed. The Coding Accuracy Support System (CASS) provides a common platform to measure the quality of address-matching software and useful diagnostics to correct address deficiencies. Any mailing claimed at an automation rate must be produced from address lists properly matched and coded with CASS-certified address matching methods. The helpful hands within the Postal Service, who have traditionally moved the errant mail pieces, have been replaced by unforgiving postal automation. ZIP failures at the software level will almost assuredly result in an undeliverable mail piece within the postal system.

Prison File The prison file is a very old and popular list of all prison addresses. The elimination of mail pieces destined for a prison address, addresses close to a prison, or even entire prison towns may be appropriate in certain circumstances.

Missing Mail Stops Mail destined for large government offices, APOs, and military bases without sufficient mail stop designations are not likely to be delivered effectively. Many firms have adopted the policy of not delivering second and third class mail internally if it does not contain a valid mail stop.

Prior Mail Wave Elimination of a name from a current mailing based on inclusion in prior mailings can be a powerful suppression target. This sounds simple but can be very involved if the mailer purchases lists from multiple sources on a regular basis.

Fraud Lists These are lists of individuals, firms, or addresses known to have participated in fraudulent activity in the past or that have been deemed a bad debt.

Trial Offers Lists of those who have accepted more than a prescribed number of trial offers can be assembled. Armed with a new arsenal of suppression ideas, how should the average direct marketer proceed with the process? Is it safe to venture alone, or should a professional service bureau be employed? Can ordinary list processing software be used to perform sophisticated list suppression assignments? In general, whatever means are currently being employed to process mailing lists will likely suffice, provided that CASS- certified software is being used and a merge/purge capability is available. As a general rule, suppression techniques should never be attempted on anything but address-standardized lists and CASS- certified addresses. List processing service bureaus will be very helpful in establishing new suppression files, especially those based on existing house files. The unique parsing and processing needed to create special suppression files may be a candidate for outsourcing.

In terms of strategic targeting there are two possible strategies:

1. "Skimming off" – targeting the most likely prospects from a large audience. Much cheaper per letter, yet producing not as good response rates as the next strategy.

2. "High-penetration" – squeezing every sale out of a smaller target market. Usually much more expensive (over $2,000 CPM and more – more than $2 expenses per letter), yet much more effective.

Analysis of major ratios of the past mailing and statistical prediction

%R (percent response) = Number of Orders/Quantity Mailed

CPM (total cost per thousand mails) = Total Cost/(Quantity Mailed/1,000)

OPM (orders per thousand) = %R*10

CPO (cost per order) = CPM/OPM

ROP (return on promotion) = [(Contribution – CPO)/CPO]*100

CPR (cost per response) = Promotion Cost / Number of Responses

AM (allowable margin per letter, that is, profit after all expenses)

PPR (profit per response = CPR – AM)

CR (conversion rate (or % of converted customers): buyers/inquires = conversion rate (X) / 100. In other words, of 1000 customers called and 200 of them became buyers, CR = 20%)

Segmentation of respondents, estimation of the above ratios for each segment and analysis of who "the ideal customer" was

*Please, see Response Forecasting file for a spreadsheet allowing to predict weekly response based on the previous weeks’ responses.

Development and testing of new mailing pieces

Testing is one of the best ways to save on costs, as "there is no reason to invest a large amount of resources in a direct-mail program unless there is a high probability of success."

Industry standard for a representative and adequate mail sampling size is 5,000. (Also see enclosed Table 16-1 copied from Bob Stone’s classical book.) Statisticians suggest a much more complicated formula:

Thus, for an acceptable sample error (e) of $0.25(in other words, if we are willing to be off by 25 cents on each customer’s acquisition estimate), confidence of 99% (for which the value of Z is 2.6) and standard deviation (sd) equal $1.0 sample size will be equal (6,76)(1)/.0625 = 108.6, or 109 letters.)

It is important to test how the message was perceived and remembered as an audience usually "attends, partially attends, or does not attend to the message and remembers all, part or none of it."

Testing is usually done in the following table:

In short: we have to test lists against copies (and different copies may result in different pull for different lists - or rather fractions of lists in our case). So, we should just create a few rather different copies, divide the list into a few "sublists", and use the cross-testing table above (set ready for convenience in Excel as the "cross-testing table" file.)

In greater details:

"The factors that affect response are just five:

1. Copy - the words you use to create your appeal

2. Package - the "attire" your appeal wears

3. Offer - your appeal

4. Timing - when your appeal arrives

5. List - to whom your appeal is directed

"After you have a reasonably adequate mailing, these factors can be improved, through careful testing, as follows:

Copy--about 20 percent

Package--from 15 to 30 percent

Offer--from 50 to 200 percent

Timing--about 20 percent, except at Christmas

List--from 300 to 1000 percent [! – does it all mean we are concentrating too much on the copy with EIA mailing?]

"This indicates that testing is most productive when offers and lists are varied. If all other factors must be held for budgetary reasons, then you should spend your money testing various list segments."

The incomplete list of things we can test (did I miss anything below?):

product features and benefits

price

discount plans

terms of service

copy approach

postage rate

gift certificates

stuffers for other products

limited-time offer

lists

additional order forms

contests, sweepstakes, drawings

format, layout, design

back-end premiums or gifts

testimonials

men vs. women

age groups

job functions

geography/marketplace

seasons

different steps’ drivers

types of cars (can we get this?)

It seems like there are way too many things on this list, and, as always, I’m probably thinking too much of a long-term project, so, apparently, we can only test a few most important elements – and throw away the rest.

 A separate question is how to test the mailing list (especially if it is true that it could be improved 1000%! – vs. 20% for a copy.) Here is a list of questions to ask (and answer):

1.Where did this list come from—what is its source?

2.Is the sample a truly random sample?

3.Is the Nth* name selection representative of the entire list? Or of a special selection from within the whole?

*(Nth is a term which means a random selection from the total. Such as every 5th or 10th or 22nd name available from the total list.)

4.Is the survey sample large enough to give us meaningful and measurable results? 5.Could the list have been "preheated"? That is, were there any outside factors that might affect our results?

6.Did the list owner/broker have any special reason for the selection method used?

7.Did all the lists included in the test belong in the test?

8.When we measured the results, were all the responses reported and counted?

9.Did we use percents because the raw numbers looked bad?

10.Are the results consistent with previous results?

11.When we evaluated all the results, on what basis did the winner win?

12. Testing mailing lists and offers together is also important for both consumer and business program. So we can determine which lists pull best against which offer.

Mailing lists’ and copies’ analysis and improvement

There are a few ways to "rate" a list broker according to that individual's or company's expertise. Here are a few of the attributes to look for when choosing a list broker:

•A great deal of knowledge and experience in the categorical product group being marketed

• Working knowledge of your competition and the impact your competition might have on the project at hand

• Good negotiating skills and an understanding of your future plans, so the best possible terms can be agreed on for continuations

• A competent support staff, who will be readily available to ensure good tracking and smooth overall production and delivery of lists

• An ability to provide in-depth information regarding lists, including their make-up, future growth, and other facets that have even the smallest bearing on their performance. • Who has used the recommended lists? Which of these mailer-users have come back to re-use the lists?

EVALUATING A LIST

A) The QUALITY of the list

1. RECENCY: How new are the names and addresses? Were they derived/compiled over a span of years or months? How often is the list updated (i.e., new names added and old ones removed)? Can the most recent buyers/subscribers be selected?

2. FREQUENCY: Does this list indicate if the buyers are repeat customers (if applicable)? Are they buyers of different products from the same source?

3. DOLLAR AMOUNT: How much money did the customer spend for this product? Is the price of the product I am offering significantly higher? Lower? Comparable?

4. GENDER: Does the information about this list indicate whether most of the customers are men or women? Can I select men or women only?

5. AGE: Does the nature of this list inform me about the age range of the customers? If so, how does this compare with the usual age range of buyers for my product?

6. MARITAL STATUS/FAMILY INFORMATION: Do the demographics of this list-information indicating whether the customers are married, have children, own or rent their home, use credit cards or have a certain income level- match my knowledge about previous buyers of the product I am offering?

7. GEOGRAPHIC AREA: Can individuals be picked out in certain areas only? 8. TELEPHONE NUMBERS: Although there are only a handful of response lists available with phone numbers, it never hurts to inquire!

9. TYPE OF PURCHASE: Did the product that these customers bought indicate any likelihood that they will be inclined to purchase my product?

B) GROWTH: In addition to knowing how frequently a list is updated, it's also important to know whether or not the product specified on the list is attracting more customers.

C) QUANTITY: Are there enough names for a minimum order in the geographic area to which I am mailing? If my initial mailing works, will there be enough names for subsequent mailings?

"New life" should be given to the control package from time to time, otherwise response results start to sag because you keep mailing it to the same lists over and over again.

Here are some ideas:

Change the envelope paper color.

Change the return address.

Change size and look.

Eliminate company name and leave return address only.

Rework the graphic look. Change teaser typestyle. Increase or decrease type size. If teaser was printed parallel to envelope edge, tilt it. Change the postage look from printed indicia to meter reproduction or stamp it.

Change envelope size. Go from a #10 to a #14 or #6. Maybe even a 6" x 9".

Add or subtract a window.

Change the component insertion order/look.

Change the order of package components.

Change component paper color and ink color.

Tips For Creating Better Envelope Teasers

1. The envelope design and teaser copy should reflect the image of the product and the audience it's being targeted to. Don't shout when you should whisper. Don't be white collar when you should be blue collar. Don't be formal when you should be informal.

2. Don't tell too much with your teaser. If the prospect thinks s/he understands your offer, there's no incentive to go any further... unless it's so appealing that the prospect decides to order from teaser copy alone. To be safe, tell just enough with the teaser to make the reader want to find out more.

3. Teaser copy/graphics should promise a user benefit--expressed or implied--through any number of teaser techniques:

Ask questions you know the prospect can relate to and that imply a benefit.

Write a headline as you would for a publication ad and use it as the teaser.

Use testimonials to express a key benefit.

Announce something NEW or FREE, "appealing to the emotional triggers that make people buy."

Start the first paragraph of your letter on the envelope, stop it at a key point, then refer the reader inside to continue.

Analysis of the successes and failures of the project and potential for improvement

The reasons mailing campaign brings mediocre results are usually a combination of a few of the following:

Bad lists

Bad targeting

Poor (noncompetitive) offer

Unappealing, boring, not persuasive letter (and envelope)

There are dozens of opinions about what is a normal response rate. Some experts believe that "response rates to prospects (non-customers) [usually] average around 1%." Others (most of them) say that normal response is 2%. George Duncan believes it could be any number depending on how attractive the offer is and how well the customers are targeted. Bob Stone quotes as a typical example (not an average number!) 7.25% response rate (RR) to house list based mailing and 3.73 and 4.45% for "proven rented lists."

A few final thoughts (not by me, but by one of the direct mail gurus, Ed Nash):

"Strategic planning is the great essential difference between amateurism and professionalism in direct marketing particularly, and probably in most other fields as well." It is the beginning of the process that makes the difference between a one-shot (usually expensive and ineffective) mail order and a long-term strategy. With the high costs of direct mail (compared to other promotions) its only justification is ability to aim carefully and persuade customers better than any other medium.

"Subtle changes [be it in a copy, in the lists, in targeting, in the offer, or in the follow-up efforts] have the most profound – and sometimes most surprising – impact on your entire business."

 

Appendix A

An Example of Free Brochure rewarding potential customers for reading the letter. (http://www.murray-macdonald.com/auto.htm)

1. Opt For A Stable Insurer - While most insurers provide fair settlements, time is money, too. Be sure the carrier you choose has a reputation for fast claim service.

2. Don't Over-Insure - For example, if your car is over 5 years old, maybe you should consider dropping collision insurance.

3. Don't Under-Insure - Saving a few dollars up front could cost you a significant amount of money at a time of loss.

4. Select The Right Deductible - By "self insuring" what you can afford, deductibles can save you significant premium dollars.

5. Choose The Appropriate Limits - Don't underestimate jury awards- often they are astronomical. Consider liability coverage carefully.

6. Excess Liability - This is economical coverage that picks up where your auto (and homeowners) liabilities leave off. It can save huge amounts in the event of an extremely large judgement against you.

7. The Comprehensive Coverage Question - Without this option, you will not be paid for fire, theft, vandalism or other losses out of your control.

8. Uninsured Motorist Coverage - This is an important dollar saver in the event you are the victim of a "hit and run driver", or one without insurance.

9. Towing and Replacement Vehicles - Following an accident, without this coverage, you might suffer an "out of pocket" expense to mover your auto or rent a replacement car.

10 Collision Coverage - If you have a car load, this insurance is required but you should protect your interests too in the event your car is badly damaged by unknown persons.

11 Ask About Discounts - There are a large number of discounts currently available to Massachusetts Automobile Policyholders.

Main Sources

Blattberg, R.C. Decision Rule and Sample Size Selection for Direct Mail Testing. – Direct Marketing Manual, DMMA. NY, Manual release # 610.1, October 1979

Direct Mail Guide. Name-Finders Lists, Inc.

Direct Mail Marketing Association Publications

Direct Marketing Magazine

Direct Marketing Manual – Consumer Magazine

Duncan, George. Copy Do’s and Don’ts. – Direct Marketing World.

Duncan, George. Anatomy of a Direct Mail Letter. Direct Marketing World, November 1997

Duncan, George. Copy by Design. – Direct Marketing World.

Duncan, George. Direct Mail and the Dynamics of Response. Part III. Direct Marketing World. July 1997

Duncan, George. Do Teasers Work? - And Other Frequently Asked Envelope Questions. Direct Marketing World

Duncan, George. Open This Envelope – (or I’ll Kill You!) – Direct Marketing World. September 1997

Duncan, George. The Direct Mail Package Checklist. Direct Marketing World, January 1998

Entrepreneurial Magazine

Fishman, A. The 1986 Mail Order Guide. – Direct Marketing, July 1987

Forbes Magazine

Haley, R. Developing Effective Communications Strategy. Ronald Press, 1985

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