Is direct mail losing it's effectiveness?
The Economist magazine seems to think so*
A recent article began with, "As much as people hate it, junk mail works — otherwise they would not send you the stuff.
"Unlike television or newspaper ads, the return on investment from a direct mail campaign can be accurately measured.
"Even though only a small percentage of people may read the materials, the response rate has been high enough to make junk mail one of the most effective forms of marketing."
But the article went on to say that "That could be changing...response rates have fallen dramatically."
And that's why I am appealing to you.
My newsletter goes out to direct marketing people in 32 different countries, and in dozens if not hundreds, of different industries. That's why I'd love to know what is happening with you. Are you experiencing a drop in response rates? Do you have any theories about why?
I'd love to get some feedback from you — and I'll report back to you whatever we learn.
All The Best, Alan
* It's worth noting that The Economist continues to use direct mail as their main way to generate subscriptions.
The Economist believes that response has been declining because of overkill.
They wrote. "The problem seems to be too many envelopes cluttering too many mail boxes, leading many consumers to discard the blizzard of solicitations they receive."
I agree that this is one of the key issues. Many companies overcompensate for falling response rates by simply sending out more of the same — especially the financial services companies.
I have always believed the answer is: Mail fewer, but Mail better.
Take the budget from two "ordinary" mailings, and then use that to create one "extraordinary" mailing that will really stand out in the mail. Or spend that money on developing a really powerful and persuasive offer.
Have you seen any of the new Volkswagen TV commercials?
They were created by Crispin Porter + Bogusky, described by BusinessWeek as "The Craziest Ad Guys in America."
Let me describe one of the spots:
A group of young adults are riding in a Volkswagen Jetta. They are chatting about a movie they've just seen when all of a sudden...BAM! A huge SUV comes out of nowhere and smashes into the side of the car. The window shatters, the airbag bursts open, and the screen goes black.
You see that a lot in the movies, but when have you ever seen that in a car commercial?
We then see the passengers standing outside the car — which has been badly damaged. They are fine, but still in shock. We hear a police siren. And then the super of the commercial comes on, which reads "Safety Happens."
We then learn that the Jetta has the highest government side-impact safety ratings.
It is quite literally, a smashing commercial, and one you will never forget. But will it work? VW's US division has lost more than $1 billion in sales in each of the past two years — so it's worth a gamble.
Crispin Porter + Bogusky's employee handbook says that, "Advertising is anything that makes our client's famous." And these ads have certainly achieved that.
You can download the VW commercials — including a remarkable one that was banned in Germany — at www.youtube.com.
In April, I did a presentation for the Joint Advertising Market Research & Studies group for the U.S. Military.
I was proud to talk to them about improving the results of their direct mail — and I also learned about some of the unique challenges they have in recruiting.
Their agency Mullen, who did an excellent job of running the conference, gave every attendee a list of "Great Marketing Websites" which I want to share with you. They wrote:
"The Web sites range in style, subject, and content. Some display interesting design. Some feature the latest Interactive technology. Some include exceptional writing. Some are simply helpful resources. But, what all of these sites have in common is that they have made distinct impressions on those who work in the Interactive realm, every single day."
There's a new tool that businesses are using to reach and motivate customers — and that's Generational-Targeted Marketing. And nobody does it better than Ann Fishman.
Ann has received 4 U.S. Senate Fellowships to study generational trends, and her clients include Time Warner Cable, Allstate Financial, Reader's Digest, Volvo, and several universities — so she knows her stuff.
Ann observes that there are 6 American generations alive today and that there are critical differences among them. They are: The G.I. Generation, The Silent Generation, The Baby Boomers, Generation X, Generation Y and Generation 9/11.
These aren't new descriptions — but Ann takes it one step further. She describes how advertisers have used these differences to do more effective advertising and direct marketing.
For example, Saturn cars tried to appeal to Generation X (people born between the years 1961-1981.) This generation comes from less-stable family backgrounds than the Baby Boomers, and yearn for a sense of belonging.
So Saturn ran a TV commercial where a young woman buys her first car, and everyone at the dealership gathers round and applauds and congratulates her. This helps position buying a Saturn as "belonging" to something.
Ann points out that in previous generations, it would have been the young woman's family to congratulate her and be with her at that special moment.
But many Generation X'ers just didn't grow up with that strong family connection.
Ann is an amazingly generous and giving person, and her website reflects that. Just go to www.annfishman.com and you can download 5 different articles about her work and how to apply it.
There's one thing that seems to interest people across all generations — and that's money.
I recently did a seminar for Corner Bank in Lugano, Switzerland, where I gave a presentation on Financial Services Direct Marketing. As part of the presentation, I included 5 techniques for improving a direct mail program, which I would like to share with you.
Keeping it Simple is hard to do in financial services — but nothing is more important. Too many financial services packages have special "intro" rates, then "go to" rates, then balance transfer rates, and half a dozen other messages that they are trying to convey.
It's been my experience that when people are confused — they won't make a decision, and they certainly won't respond.
And by the way, that's why I always recommend putting a Q&A in every financial services mailing. This allows you to anticipate questions they may have, and answer them.
2. Make it easy to scan your package
Financial services are complicated — and people aren't just going to dive in and devour your letter, unless they know there's something in it for them. American Express's best practices include bulleting the key benefits in the right hand margin of the letter, so people can scan down and get it instantly.
Many MBNA packages use a "Status Box" at the top of the letter that does the same job. It gives you a quick read of what they are offering and what are the benefits.
3. Create urgency...even if there is none.
You want people to act immediately, and not shop around for the best deal. This will only confuse them and may make them decide not to act at all.
You can avoid this by using a dated offer. For example, many of the direct mail packages we have created say something like, "We cannot hold a rate this low for longer than June 15th. I urge you to contact us before that to lock in this low rate."
You can also create a sense of urgency. For example, "You never know when interest rates will go up again. I urge you to contact us immediately to lock in your low rate."
4. Vary your format
The minute I can recognize your direct mail as something I have received before...there's no reason for me to open it.
I recommend that you never send the exact same package twice in a row. Instead, take your best "inside" of your direct mail and put it into a different outer envelope. It could be a different color, size or have a slightly different message.
The Discover Card calls this technique "Rotation" and it has been very successful for them.
5. Make it look serious
There are more divorces over money than any other area...not love — money. And people take it very, very seriously.
That's why I always recommend that your direct mail has to be straightforward and clear. And also that creative approaches usually don't work as well.
There are exceptions, of course. Co-branded credit cards like Harley Davidson have been able to do very creative letters that tap into the brand's image and positioning.
Their problem is that it's easy to get someone to accept the card — it's a lot tougher to get them to actually use it.
And the Egg credit card in the UK has done some terrifically funny direct mail. But once you get past the humor — they aggressively sell the rate and the terms, just like every other card.
They're not new — but they are being used more often and more effectively.
PURLS are Personalized URLs. So you might get a mailing package that says, "Dear <Your Name,> Simply go to www.<yourname.>com which will lead you to an individualized web page.
The web page doesn't just say, "Welcome <Your Name> - it can also be dynamically personalized to reflect what they know about you as a customer.
For example, Royal Caribbean Cruises did an innovative postcard program to their past passengers.
When the past passenger went to their individual web page, the content was personalized with different copy, images, itineraries and offers — all based on when and where the customer had traveled before!
If you want more information on this concept and how to apply it to your business — you might want to go to www.Psynchronous.com.
I wish I could have said — go to www.<yourname.>com!
Bill Jaymee, who passed away five years ago, was a legendary copywriter. Target Marketing magazine named him "Copywriter of the Century."
His direct mail packages launched over a dozen successful magazines. He invented Mother Jones magazine. He invented American Health magazine. And his letters have been mailed over 286 million times by the Smithsonian magazine alone.
Bill was a master psychologist. He knew exactly what would make people open an envelope and read a letter. He is most famous for his outer-envelope teaser for Psychology Today.
"Do you close the bathroom door even when you're the only one at home?"
Bill was an inspiration for a generation of writers. But he never wrote a book about direct marketing. That's why I want to share some of his wisdom and experience with you.
* * * * *
" I never write down to people. Quite the reverse. All people need to think of themselves as generous, better than somebody else, paragons. I try to appeal to that.
I haven't any qualms about using a word like "peregrinations." If the context is right, the reader will understand and feel flattered."
* * * * *
"I believe that a letter should be long — each additional page lifts the response rate by as much as half a percentage point. There should always be key words sprinkled throughout — like "sex", "death" or "Free" — to force the eye to stop."
* * * * *
"Graphics are terribly important in direct mail. The envelope we did for American Health had three orange slices spread across it and the
"It got a 3.1% response — remarkable for a new magazine nobody had ever heard of. The real trick of both the graphics and the copy are to be interesting."
* * * * *
"It takes me three weeks to craft a package for a magazine. I never look at readership profiles or surveys because "that tells us what they have, not what they want or who they want to be."
"For example, when I launched the magazine American Health, I knew intuitively that existing health magazines worshipped death. This one should worship life.
"The publisher asked me, "Do you want to hear any of my story ideas?" I replied — I'll make them up."
At my last seminar in Chicago, a group of attendees got together over dinner and talked about how much they enjoyed sharing feedback and ideas.
They started a blog to keep in touch with each other, ask questions and get feedback.
I think it's a terrific idea (I wish I had thought of it first!) and I'd like to know what you think.
If you might be interested in joining an informal "Direct Marketing Collaborative," please e-mail me at Arosenspan@aol.com. If there's enough interest, we'll set up the blog and link it to my site.
There will be no costs to you — and no obligation — but please let me know before June 9th.
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