The Netpreneur Blog

Today I am attending Australia Post’s Direct Mail seminar, delivered by David Barratt at Adelaide’s Old Lion Hotel.  I thought I would distil the key points into this blog post.

Direct mail is a fantastic option for small business and netpreneurs, because it is relatively cheap and,if used correctly, can be highly targeted.  With marketing budgets being rationalised as a result of the global financial crisis, direct marketing is one strategy that can work really well during tough economic times.

I have dabbled in direct marketing with my various business ventures, but not in any coordinated fashion and, accordingly, the results have been mixed.  Hence, my attendance at the seminar – to learn how to get more out of my future direct marketing efforts.

Some stats about direct marketing from the collateral provided by Australia Post:

• 10% of consumers aren’t interested in receiving any type of marketing – direct marketing allows you to advertise directly to the 90% who are
• 1% of consumers only want to hear from advertisers once a year
• 70% of consumers don’t mind who sends them information, as long as it’s relevant
• 62% of consumers open and read direct mail
• 67% of consumers preferred to receive advertising and promo messages by direct mail or catalogues
• The vast majority of consumers prefer to receive direct mail messages rather than email
• Believe it or not, 66% of consumers want to be contacted at least monthly – this stat surprised me.

All of these stats suggest that direct mail is a good way of getting your marketing message out there.  People do read direct mail if they perceive it to be of value to them.  The challenge is get the marketing right.

So what are the four critical success factors for effective direct mail marketing?  Here they are:

• Timing (that which you can control) – when your mail is received.  For example, there are optimum times for sending catalogues for Christmas shopping.
• Offer – The offer is the ‘inertia breaker’ and provides the impetus for the potential customer to take action/respond.  It needs to achieve what they call ‘cut through’ in the advertising industry to compel the recipient to act.
• Creative – the ‘message’ and the look and feel of the physical item, whether it be a flyer, letter or merchandise.
• Database/ Target audience – David’s message in the intro to the seminar was to ‘build your database, build your database, build your database’.  The other message was to segment your database and market to individuals where possible.  For example, if a customer prefers fiction books, then that customer should receive information about new fiction books, rather than non-fiction books.

David went on to speak about the Ladder of Loyalty and Pareto’s 80-20 rule.  The ladder of loyalty consists of five levels of a consumer’s orientation towards your business – the levels are: suspects, prospects, customers, clients and advocates.  Clearly, businesses want to progress their customers up the ladder of loyalty to become clients and advocates (or what Seth Godin calls ’sneezers’).  Pareto’s law suggests that 80% of business activity occurs with 20% of customers.  It’s important that businesses know exactly who those 20% are and all marketing efforts should be focused on repeat business with (and referred business from) these clients and advocates.

So, we’ve established that there is some value in undertaking direct marketing.  What’s the next step? The next step is to create a direct marketing plan, which should contain the following elements:

• Executive Summary – what, how, when, why, where
• SWOT analysis – strengths, weaknesses, opportunities and threats of the campaign – this serves to validate (or invalidate) your campaign
• Market research and analysis – primary (qualitative and quantitative research) and secondary sources (ABS data, online databases)
• Target audience
• Objectives, strategies and tactics
• Campaign measurement
• Timelines
• Evaluation

I suspect that this step gets glossed over by most small businesses, but it’s important to go through the process to validate your campaign.

Time for morning tea – more later…