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Advertising Methods – Spring 2006

In today’s world of electronic, paperless communication, what part does direct mail play, if any, in the overall marketing program? What and who are the targets—existing customer base or search for new customers—and what is the frequency (monthly, quarterly, etc.)? What is considered a good response rate?
– Kirk Kramer, President
                                                                                                             Shelf Master Inc. (Anaheim, CA)

Dave Griffith: A two percent response rate has long been the rule, as has a frequency of once per month for at least four months. While we still use direct mail, we are shifting focus and dollars to the Internet and targeted marketing with all our resources. We work both sides of customers. I would also survey customers in your market to see how they find you and look for information when they need it. This is a great customer call.

John Cosgrove: If you are an established company with a large customer base, direct mail may be a way to keep your customers informed about your company, possibly with a newsletter about your company and employees, or a monthly sales promotion. However, the return is so low (one percent to two percent) on direct mailings to prospects that your dollars would be spent more wisely in another marketing area. Unfortunately, people don’t have time to read all of their mail; they tend to look more to the Internet as a resource for more information. A program with more of a personal touch, such as telemarketing or trade shows, will bring you larger dividends.

Chuck Frank: We use direct mail for monthly e-mails and quarterly newsletters. We keep the subject matter light but useful. We include fun facts, upcoming events and current events specific to what we do. We keep metrics on click-through rates, opened e-mails, etc., but we are more focused on keeping our logo in front of our core and prospective clients. You know the saying, “Out of sight, out of mind.” The direct mail campaign is used to enhance customer touches and setup the opportunity for a face-to-face call. It often acts as an icebreaker for our account managers when contacting a client for the first time. I’m not sure how to quantify “good response” other than to say the process pays for itself through received opportunities and staying in the minds of clients.

Duncan Murphy: Direct mail alone will deliver marginal results. We find it to be effective when specific industries, specific people and specific products are featured. We do not mass mail anything. We also require a personal contact by phone to everyone receiving the mailer. We are able to do this by using a 60-day campaign split into weekly batches. We will measure unit product sales results, but feel we have the added benefit of improved name recognition.

Dave Reder: First understand what your goals are and evaluate the market. If you are interested in increasing general awareness of your brand—dealership name, products represented—and you operate in a condensed geographic area, it may be cost-justified to look at radio ads, cable television or billboards. If you are targeting specific end-user prospects, it is more economical to use direct mail or permission-based e-mail. Always include a “call to action” (e.g., save 10 percent on your next purchase) and give people multiple ways to contact you. Make small “strategic buys” of different types of media to uncover what works best for you. It may seem costly to do initially, but it will greatly improve your return on future advertising dollars.

Stan Sewell: Direct mail without some follow-up from a salesperson or telemarketer is probably a waste of money. We target existing customers in most of our mailers today, but need to move toward qualified prospects and new customers via a CRM database.

Ken Shaw: Direct mail is still an important part of a marketing plan. People still like to hold the information in their hands as they evaluate their needs. The time will come, however, when electronic communication plays the primary role. This is due to the way the younger generation views the world they will be influencing. The primary targets for direct mail should be a combination of existing and prospective customers. It is much more difficult to win a new customer than to retain an existing one. The frequency issue is tricky because the objective is to keep the customer aware of your capabilities without overwhelming them with paper. Depending on the type of information being sent, bimonthly or quarterly seems about right. A response rate of one percent to two percent is good if you are targeting prospects. If you are targeting existing customers, the percentage should be higher.

Jerry Weidmann: We use direct mail for new product introductions, to create market awareness of specific products and services, and to offer specials on equipment and services. The Direct Marketing Association indicates that the response rate on direct mail in the business-to-business space is about 3.3 percent. The actual response rate attained on any given mailer can be enhanced by focusing the mailer on businesses that are known users of your product or service. The use of specials in mailers will also improve results. We’ve decreased the amount of direct mail we use, but by focusing our mailings on target audiences, we enhance its effectiveness.

Material Handling Equipment Distributors Association

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