Direct Mail Advertising
 
Definition 
 Advantages
Disadvantages 
Budgeting 
Lists
Cost-effective Design
Tips for Success
Postal Rates
Post Evaluation
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Definition

One of the most powerful forms of marketing is direct mail advertising, through which personally addressed advertising about a product or service is sent through the mail to homes or businesses. Direct mail extends beyond mail order to also include announcements, information about store openings and events, recalls, coupon books, brochures, samplings and general information to increase awareness (United States Postal Service 1998).  It does not include door to door drops, magazine ads or newspaper ads (Allen 1997).  Next to newspaper and television advertising, direct mail is the third largest advertising medium in the United States, generating $37.4 billion in 1997 (Wientzen 1998).  These impressive earnings are making an astounding impact on the U.S. economy.  Some of this impact is being made by small businesses, who are reaping the benefits of direct mail.  For most small businesses that cannot afford television commercials, direct mail provides a more personal and targetted advertising medium than newspaper ads.

References
Allen, Margaret. (1997). Direct Marketing. London, England: Kogan Page Ltd.

Wientzen, R. H.  (1998). Postal Rate Case Update. The Direct Marketing Association,
conducted by The WEFA Group,

United States Postal Service.  (1998). Direct Mail Advertising.  United States Government.   [Online], Available: http://www.usps.gov/vbc/admail/
 

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Advantages

Direct mail is a marketing powerhouse for any size business, because it has several main advantages over other advertising strategies (Surmanek 1993; Vögele 1992).

Selectivity:  It can be sent to a specific list of people, cost-effectively targeting specific
markets.  If the mail is sent to the right people, little money is wasted.
Personalization:  Letters, envelopes and other mail can be personalized to the specific addressee.
Flexibility:  Direct mail campaigns can be large or small, simple or elaborate, with various colors and shapes, restricted only by postal regulations.
Response rates:  Because direct mail generates responses, advertising effectiveness can easily be monitored.  The number of responses can not only indicate success of the current campaign but also success relative to other mail packages.  The target markets and lists can easily be refined by recording who does not respond.
Timing:  Direct mail can be delivered quickly, and it can be sent at specific times during the year.
Information:  It can include more detailed information, explanations and stories than a quick television commercial or newspaper ad.
Location:  Direct mail can reach people who live far away.
Comfort/Convenience:  People can receive the information in their homes or businesses, where they can read it at their leisure and refer back to the written information.  Also, people do not have to take time to see salespeople.  People generally do not like to talk to strangers, so direct mail is less threatening than dealing with salespeople or telemarketers..

 
References
Surmanek, Jim. (1993). Introduction to Advertising Media. NTC Books. [Online], Available: http://www.smartbiz.com/sbs/arts/iam6.htm

Vögele. Siegfried. (1992). Handbook of Direct Mail. New York, NY: Prentice Hall
 International Ltd.

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Disadvantages

Despite all the obvious advantages, direct mail advertising must overcome two main obstacles.  First, people might not read the mail.  Some people may just see “junk mail” and throw away the envelope before even opening it (Katzenstein et al. 1992).  The trick is to get people to at least open the mail package.  Second, direct mail can be the most costly form of direct marketing, with high costs for printing and mailing (Surmanek 1993).  If the mail is sent to the wrong market or target list, money will lost on wasted advertising.

 
References
Katzenstein, Herbert and Sachs, William S. (1992). Direct Marketing. 2nd Ed.
New York, NY: Macmillan Publishing Company.

Surmanek, Jim. (1993). Introduction to Advertising Media. NTC Books. [Online], Available:
http://www.smartbiz.com/sbs/arts/iam6.htm
 

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Budgeting

Although direct mail can be one of the most expensive marketing forms, it does not have to be so costly.  Most small businesses lack huge budgets to spend on extravagant direct mail, but by planning and prioritizing costs, any small business can have a successful direct mail campaign.  One format for success suggests putting 20% of the budget into the actual format and creation of the direct mail, 40% into the product and business reputation and 40% into selecting the audience (Jutkins 1994).  With 40% of the budget into researching and targeting the right customers, the direct mail will not be wasted on uninterested people.  Simple direct mail sent to interested customers is much more cost-effective than fancy mail sent to unresponsive addresses (Kaydo 1998).

Before beginning, small businesses should calculate the break-even point, the number of responses or sales needed to equal the cost of the direct mail campaign.  A sample sheet to figure costs is found at http://www.usps.gov/vbc/admail/

Budgeting can be made easy by knowing the quantity to be mailed, using popular formats, anticipating inflation and testing the direct mail campaign with small quantities before sending them all.
 

References
Kaydo, Chad. (1998). Planting the seeds of marketing success. Sales and Marketing Management, 150(8),
73-74, [Online], Available:http://proquest.umi.com/pqdweb

Jutkins, R. (1994). Power Direct Marketing. Lincolnwood, IL: NTC Business Books.
 

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Lists

The list is the most important part of the mailing, since “it is your market” (Dobkin 1998).  About 40% of the success depends on the right list, since a good list wastes no advertising money (Paterson 1998).   Lists can be individually customized to reach a specific audience.  For example, a ski shop could send brochures to people who have gone skiing in the past year or are members of ski organizations.

Lists include names, addresses and general details about the target market. Two main types of lists exist.  The first is the in-house list, which includes people who are already customers or have previously contacted a businesses.  When people are already familiar with a business, they are much more willing to read and respond to direct mail (Goldsmith 1998).  Small businesses benefit from this type of list, because they do not have to pay other companies for external lists.  External lists can be bought from list brokers, list managers and other organizations, such as magazines for magazine subscribers.  Any bought list is meant for only one time use, unless otherwise stated.  Lists should comply with the Direct Marketing Association and include information on how the facts were obtained, in order to be sure they are accurate.  A sample list sheet is available at http://www.usps.gov/vbc/admail/

Lists should be cleaned.  Even the best list contains 5-6% error, so lists should be refined as addresses are identified as undeliverable (Allen 1997).  Both in-house and external lists quickly become outdated, since about 1/5 of the population moves each year.  Also, lists should be checked for duplicate names, using a merge/purge system.  A merge/purge company or simple computer software can run lists through programs to check for double entries, which waste money.  The Direct Marketing Association has an MPS (Mail Preference Service) system, in which people can say they do not want certain types of direct mail.  This information can help refine lists.  Also, checking the National Change of Address system (NCOA) can prevent mailing to the wrong address (McCray 1996).

A list with almost any specific demographic or psychographic can be found.  Lists can be found in the local yellow pages under “mailing lists,” on the internet under “mailing lists,” or by contacting the Direct Marketing Association.
 

References
Allen, Margaret.  (1997).  Direct Marketing.  London, England: Kogan Page Ltd.

Dobkin, Jeffrey. (1998). Lists: The most important element in any mailing. Direct Marketing, 61(3), 34-38, [Online], Available: http://proquest.umi.com/pqdweb

Goldsmith, Dick. (1998). Direct Mail Doesn’t Have to Clog Landfills. The Horah Group. [Online], Available: http://www.horah.com/cgi-bin/Horah/weight/landfills.html

McCray, Sandy. (1996). List Opportunities Through Databases. The Direct Marketing Association. [Online] Available: http://www.smartbiz.com/sbs/arts/dma64.htm

Paterson, Kimberly. (1998). Managing direct mail for maximum results. Rough Notes, 141(8), 78-80,
[Online], Available: http://proquest.umi.com/pqdweb
 

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Cost-Effective Design
 
The design of the direct mail package significantly impacts the total cost of production.  Standard paper sizes like 8.5" x 11" or 11" x 17" inches are cheaper to print and easier to send through the mail.  Any design should include “gripper room,” which is about a quarter inch blank space around all edges of the paper (American List Counsel 1996).  Printers cannot print to the very edge of the paper.  If no “gripper room” exists, the printer will have to use a larger size paper and then trim the edges to meet the text or pictures, and that will cost extra.  Color use will also affect the price.  Four colors is aesthetically pleasing, but two colors is cheaper and can be very effective, since the colors can be shaded or mixed to create a variety of effects.  Small businesses should be sure to get at least 3 price quotes before choosing a printer. The printer will be able to suggest ways to cut costs.  Working with printers is one of the easiest and most efficient ways to cut costs, since each printer will have individual printing abilities and styles (Paterson 1998).
 
References
(1996). How to Get the Best Price From Printers.  The American List Counsel. [Online], Available:
http://www.smartbiz.com/sbs/arts/alc29.htm

Paterson, Kimberly. (1998). Managing direct mail for maximum results. Rough Notes, 141(8), 78-80,
[Online], Available: http://proquest.umi.com/pqdweb
 

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Tips for Success

This list highlights important components in a successful direct mail package. The need for certain components will vary depending on the type of direct mail used, but small businesses can benefit from knowing the following general suggestions.

Outer Envelope: The envelope can determine whether mail is even opened.  Often, quality envelopes and key benefits  printed on the outside will prompt opening, but not always.  Envelope windows are cost-effective, because the name and address must only be printed on the inside letter.  Envelopes should always meet postal standards, so they can be mailed efficiently.
Personalization:  Personalization can increase response rates up to 50%. People are automatically drawn to their own names, although letters should not address a person with a first name, unless the person already knows the business well (Rosenfield 1998).  Usually titles are effective.  Personalization also includes tailoring the mail to the lifestyle, experience and interests of the customer, not just by saying his/her name.  Names can be printed on mail using new computer software for printing labels, or by sending the customer list to a printing company.
KISS:  Keep It Simple and Short.  Direct mail should include simple ideas that are easy to understand.  Lists and bulleted items help quickly explain main points.  The message must be clear, then followed by more details.
Headlines:  Headlines should draw the reader’s attention to the key benefits, promises or reasons for the mailing.  Readers should see the most important parts immediately (Duncan 1996).
Teasers:  Some mailings use teasers or gimmicks to draw the reader’s attention.  Any free gift or inquisitive question should draw the reader to the main point of the mail.  Teasers do not necessarily enhance responses, since people may see the teaser as an overplayed advertising scheme.
Body:  Any description or main text should be honest and direct.  The reader should understand exactly what he/she will get (Jones 1998).
Images:  Color and photographs definitely catch the reader’s eye.  The attraction to the cover design of catalogs can increase sales by 20% (Hitchcock and Rosenfield 1998).  Images can set the tone of the mailing and attract attention to important topics.
Response mechanism:  The direct mail should tell people how to respond (American List Counsel 1996).  It should include some sort of reply card or reply envelope, preferrably with the postage already paid.  Half of the responses will come in the mail, compared to calling phone numbers or emailing addresses (Ferguson 1997).  The mail package must prompt action by including an easy way to reply.
Signature:  Studies show that people often initially focus on the signature or P.S. If the direct mail includes a letter, the signature should look sincere or official, and the P.S. should highlight the most important benefits or prompt a response (Graham 1998).
AIDA:  Overall, direct mail packages should  Get Attention, Arouse Interest, Stimulate Desire and Prompt Action (Duncan 1996).
 

References
(1996). Direct Mail Sins You Need to Avoid. The American List Counsel. [Online], Available:
http://www.smartbiz.com/sbs/arts/alc14.htm

Duncan, George. (1996). Anatomy of a Direct Mail Letter. [Online] Available:
http://www.dmworld.com/library/dec96.html

Ferguson, Ron. (1997). Things to Include . . .If You Can. [Online], Available:
http://www.nlci.com/response/things_to_include.html

Graham, John R. (1998). Don’t Waste Money on Direct Mail - 25 Ways to Do It Better.
 [Online], Available: http://www.smartbiz.com/sbs/arts/jrg11.htm

Hitchcock, T. and Ragosin, Y. (1998). Creating power pictures. Target Marketing, 21(6), 54-57, [Online], Available:http://proquest.umi.com/pqdweb

Jones, Susan K. (1998). Elements of a direct mail letter. American Demographics. August, 4-5, [Online],
Available: http://proquest.umi.com/pqdweb

Rosenfield, James R. (1998). Personalization and authenticity. Direct Marketing, 61(3), 40-43, [Online],
Available: http://proquest.umi.com/pqdweb
 

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Postal Rates

First-Class Mail is cost-effective for mailing less than 200 items and when the mail needs to be delivered quickly.  Sometimes First-Class benefits will outweigh the costs of Standard Mail, such as the labor needed to presort mail and costs of bulk rate fees.

Many small businesses send information bulk rate, known as Standard Mail (A), through the post office. The mail is cheaper than items sent first class, with the price depending on size and weight. To send mail bulk rate, a business must first obtain a permit and pay a yearly fee.  The mail must be identical and sorted according to the zip code numbers.  Each zip code must be banded together in a group.  Finally, the mail must be taken to the post office to be counted and sent.  Standard Mail may be cheaper, but the post office will not forward the mail (Behnke 1996). Businesses can pay to have the post office return mail with the forwarding address on it.  To control costs, the addresses from non-delivered mail should be removed from future mailing lists.  Some businesses address the mail to the specific name “or occupant.”  Although this system ensures delivery, it hinders the ability to clean customer lists and keep track of who has moved.

Some small businesses turn to professional mailers or mailing houses to label and/or send mail for them.  A small business may provide the professional mailer with a disk of customer names and specific mailing lists.  The mailer can then inkjet the names directly onto the mail pieces or attach labels with the names.  Mailers can bar-code items to be able to send them even cheaper bulk rate, such as $0.18 instead of $0.21 per piece.  Many printers will also do mailing, which eliminates the need for a small business to pick up the direct mail and take it to the post office or to another mailer.   Many factors will determine whether using a professional mailer will be cheaper than the business mailing the items itself. These factors include the number of items to be sent, the type of labelling, the size of the items, and the use of bar-coding.  To determine whether mailers are a smart choice, small businesses should determine the call various mailers to compare costs.  Such mailers can be found in the phone book under "mail" and on the internet under "mailing houses."

The United States Postal Service (USPS) has a web page with current rates, rules and mailing tips.  Their web page address is http://www.usps.gov
The Mailroom Companion is a free monthly publication by the USPS that includes recent mailing changes, standards, rules, postage payment information,  questions and comments.  It can be obtained at   The Mailroom Companion
      U.S. Postal Service
      6060 Primacy Pky Ste 201
      Memphis, TN  38188-0001

References
Behnke, Don. (1996). The United States Postal Service is Making It Much More Difficult for Small
Mailers to use Bulk Mail Services. [Online] Available:http://www.smartbiz.com/sbs/arts/behn5.htm
 
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Post Evaluation

Direct mail campaigns should be evaluated on a regular basis (American List Counsel 1996).  Small businesses may think they lack the time and budget for evaluation, but such analysis is made easy by the direct mail itself.  Direct mail elicits responses, so monitoring success can be achieved by simply recording information on reply cards and order forms (United States Postal Service 1998).  Information on the response cards can determine the demographics and psychographics of people who respond, helping refine the customer list and target market.  This may also reveal that the mail is not hitting the target market.  Some businesses include coupons in direct mail, so that they can monitor how many customers use the mail.  The use of post evaluation is one of the most important aspects of a successful direct mail campaign.
 

References
(1996). Direct Mail Sins You Need to Avoid. The American List Counsel. [Online], Available:
http://www.smartbiz.com/sbs/arts/alc14.htm

United States Postal Service. 1998. [Online] Available http://www.usps.gov
 

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This page was written by Laura Sams.
Dept. of Park, Recreation & Tourism Resources