Direct Mail

Direct mail is a type of advertising medium in which messages are sent to target customers through the mail. The terms "direct mail" and "mail order" are often used interchangeably. The best way to distinguish these similar, yet different, terms is to remember that direct mail is simply an advertising medium, like print or broadcast media. Print media messages are delivered through the printed word, usually in newspapers or magazines, while broadcast media messages are delivered through the airwaves, on television or radio. In direct mail, advertising and other types of messages are delivered through the mail.

Mail order is a particular way of doing business, like retail or personal selling. A mail order business delivers its products through the mail. It may also use direct mail to send out advertising messages or catalogs. Direct mail is simply one advertising medium that direct marketers employ, although it is among the most frequently used.

Direct mail is a particularly attractive option for small business owners, as it can communicate complete information about a product or service and reach almost any conceivable target group, all for a relatively low cost. Direct mail can provide the basis for a business, or it can be used to supplement a company's traditional sales efforts. For example, a small business could use direct mail to inform potential customers about its offerings, then follow up with a phone call or a visit from a salesperson. Owners of start-up businesses may find direct mail an effective method of creating awareness and interest in a new product, while owners of existing companies may find it useful in generating new business outside of their usual customers or geographic area. Another advantage of direct mail is that it is testable, so that entrepreneurs can try out different sales messages on various audiences in order to find the most profitable market for a new product or service.

USES OF DIRECT MAIL

Direct mail is the most heavily used direct marketing medium, and its popularity continues to grow despite postage increases. While most advertisers use third class mail, a significant number of mailings are sent first class, making it difficult to arrive at accurate statistics about the volume of advertising mail being sent.

The primary application of direct mail is to reach consumers with offers of traditional goods and services. Some of the earliest examples of direct mail were seed catalogs sent to American colonists before the Revolutionary War. More recently, direct mail has been used to offer consumers a range of financial services, coupons for discounts on packaged goods, and requests for donations to a variety of nonprofit organizations.

Direct mail is also an effective medium in business-to-business marketing. Since business orders are usually of larger value than consumer purchases, it often takes more than one mailing to make a sale. Imaginative packages are often used to get through to hard-to-reach executives whose mail is screened by their secretaries. In addition to making sales, business-to-business direct mail can be used to generate sales leads and reinforce the personal selling effort.

ELEMENTS OF DIRECT MAIL

The Offer

There are three key elements of successful direct mail: making an offer, selecting the target audience among customer lists and databases, and creating the direct mail package. Making an offer is one element that distinguishes direct marketing from general advertising and other types of marketing. Offers are designed to motivate the reader to take action: place an order, request more information, etc. Writing in Successful Direct Marketing Methods, Bob Stone gave the following example of how the same offer could be presented in three different ways: 1) Half-price! 2) Buy one—get one free! 3) 50% off! All three convey the same offer, but statement number two pulled a 40 percent higher response than statements one or three because consumers perceived it to be the most attractive offer.

In direct mail the offer can be tailored to fit the characteristics of the individual recipients. Direct mail allows marketers to target individuals with known purchase histories or particular psychographic or demographic characteristics, all of which affect how an offer should be made. Some basic types of offers include: optional features; a special introductory price or quantity discount; free trial or bill me later; order by mail, phone, or fax; premiums or sweepstakes; and special conditions of sale and types of guarantees.

Mailing Lists and Databases

Mailing lists and databases offer direct mail marketers the opportunity for more selectivity and personalization than any other advertising medium. The two basic types of lists are in-house lists and external lists. In-house lists—sometimes called response lists—are those compiled by the company based on responses to its previous mailings or to its advertising in other media. These lists, which represent prime repeat business opportunities, are among a small business's most important assets. They are usually not available to competitors for rental, though they are sometimes exchanged with other companies that offer similar products. In contrast, external lists are typically compiled for rental by sources outside the company. There are thousands of different lists available that classify consumers according to a variety of demographic criteria. External lists may be rented by competitors as well.

Depending on the product being sold through direct mail, lists may consist of the names of consumers or businesses. Some examples of compiled consumer lists available for rental include: buyers of certain vehicle models, collectors of different items, subscribers to various periodicals, organic gardeners, or golf enthusiasts. Business lists are typically categorized according to the North American Industry Classification System (NAICS), which assigns code numbers to different types of businesses.

In direct mail, lists are often rented from a list source for one-time use. When multiple lists are rented, a technique known as merge/purge is used to eliminate duplications. The transaction between a direct mailer hoping to obtain a list and a compiler hoping to rent a list may be facilitated by a list broker or list manager. The list broker's job is to match the list buyer with the most appropriate list for its offerings. Although brokers technically represent both the list buyer and the list owner, they are usually paid by the list owner. Whereas a list broker helps a direct mailer find the right list, a list manager is more like an agent who represents one or more specific lists. List managers handle the rental and billing procedures for the list owners, and also work with list brokers and list compilers as well as with direct mailers to arrange usage for the list.

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