When postal rates went up again a year ago, it was a final wake-up call to anyone who markets through direct mail. No longer can you afford to work the mail like a slot-machine jockey hoping to get lucky. You have to mail smarter. Half the battle is building your list. List brokers are helping there, supplying more highly customized lists and making new inroads into cleaning up outdated addresses and names. What's more, smart companies are building their own proprietary customer lists. But without a well-written piece of direct mail, those efforts could all be for naught. Michael Lillig, vice-president of sales and marketing for Quantum Laboratories, a clinical lab in Renton, Wash., learned that lesson early.
Lillig was a pro at selling laboratory services, but a new Quantum offering, Intelimed -- a computer system to automate doctors' offices -- proved to be a tougher sell. To solve the problem, Lillig developed a sales pitch that tied the computer system to the clinical-laboratory-services sale: Buy this computer system, and have status reports on your Quantum lab work at your fingertips.
Then Lillig decided face-to-face sales calls -- which can amount to more than $250 per call -- were not the most productive way to sell the product. After attending a direct-response seminar, he settled on a more frugal direct-mail campaign. He sent postcards to 750 prospects, culled from a list of 3,500 physicians' office managers that had been purchased for 5¢ a name from a local list broker. The total cost for printing, postage, and the list? Five hundred dollars.
Lillig had decided to send postcards after consulting an informal focus group of potential customers. Wouldn't an accordion-pleated, four-color brochure taking the soft-sell approach have been better suited to instilling confidence in skeptical customers? No, says Lillig. "For busy doctors and nurses, a postcard is very time-efficient. I had 30 seconds of a prospect's time to give him or her a good reason to call us," he says.
"Under those conditions, you have to figure out the one thing that makes your product different from everything else on the market -- and sell it."
When writing the copy, Lillig concentrated on how Intelimed could save office managers money and make their work easier. Instead of offering "just another" hardware and software system, he presented his prospects with a unique selling proposition: "a special service innovation" and free software.
The results? "The phone started ringing two or three times a day, for a solid week," says Lillig, who received a total of 28 inquiries. After further qualifying those by phone, he came up with 17 bona fide leads. Six months later, 6 of those leads were converted to new customers worth about $300,000 a year to Quantum. And Lillig is still working on the other 11.
To test the response, Lillig mailed out two other versions of his card -- each with different headlines -- at one-month intervals, then tracked the results. He also queried a handful of target customers about what features of each sales pitch appealed to them most.
In times past, Lillig might have measured the success of the campaign by response rates -- this postcard's was 4%. But as direct mail has become more sophisticated, direct mailers are beginning to rely on a more telling statistic: return on investment. For Lillig's postcard, the ROI thus far has been nearly 60,000% (and could easily double), giving Quantum Laboratories a nuclear blast for its marketing buck.
Lillig's forays into direct mail have helped Quantum's sales grow by more than 50%, to $2.5 million in 1991. "With a powerful database, you can maximize the power of salespeople, because direct-response marketing can take over the time-consuming lead-generation work," he says. On the following pages, Lillig uses the most successful of his three postcards to walk you through his direct-marketing approach.
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What Does Your Customer Want? "Before mailing the postcard, I consulted with a few likely customers to figure out what type of direct mail would appeal to them most. Letter? Brochure? Postcard? After mailing it, I queried respondents to find out what made them pick up the phone. For one customer, it was the collection feature of the program. If I put that in a headline, maybe the response rate would go up another 10%. Originally, I believed that offering free software would be a powerful drawing card. Still, doctors would ask, 'Where's the support?' I realized that could be more important to the customer than the fact that the software was free. So I'm developing a new direct-mail campaign around the concept of software support customers can count on, saying, 'We will take care of you.' "