Focus Your Direct Response Marketing for Lower Costs and Higher Response

Aug 25, 2006 11:59 PM  By

The complaint is a common one among companies that depend on direct mail and direct response marketing: “I’m sick of spending a fortune to send out thousands of full-color catalogs and mail pieces only to get a measly 1% response rate. How can I cut costs and find a more practical way to get my target market to respond to my direct mail and catalogs?”

My clients have found that the best place to start revamping their direct response marketing is by determining who their best customers are, then trying to target their database marketing efforts at companies and individuals who are similar in nature. If you want to do the same, the first step is to rank your current customers by three criteria:

  • How much revenue each custoner represent for your company
  • How profitable each customer is to your company.
  • How well their needs “fit” what your company offers.

The companies that appear at the top of all three lists are your best customers. The next step is to determine the unique attributes of these top customers and look for trends. What industries are they in? What applications do they share for your products? Are they large, midsize, or small companies? Where are they located? Who are the key decision-makers, and what are their titles?

Armed with this information, you then analyze your database to find which companies are similar in nature to your best customers and start targeting your direct response marketing efforts at them.

You can also supplement your database by purchasing some outside lists of these kinds of companies and contacts to add to your database.

Another group of contacts to consider targeting are customers who bought in the past but haven’t bought recently. Sometimes all it takes is a little nudge to get these inactive customers to buy again.

Try thanking them for their previous business; acknowledging that you are aware they haven’t bought recently; asking them to let you know if there was a problem so that you can take corrective action. Also consider making them a special “preferred customer only” offer such as a substantial discount on their next purchase to get them buying again.

The next group to focus direct response marketing on consists of prospective clients who have inquired about your products or services in the past but have not purchased yet. Research shows that three out of four inquirers have longer-term needs, and by keeping in touch with them as they move through the buying cycle you can build a sales-winning relationship with them.

Your direct mail to inquirers doesn’t have to be expensive either. One software company I know simply mails inexpensive, two-color postcards to all inquirers once a month to keep in touch with their prospective customers. The postcards elicit a response from a large percentage of these inquirers when they are ready to take the next buying step.

Focus your direct response marketing with these direct marketing strategies and you’ll improve the overall quality of your campaigns.

M. H. “Mac” McIntosh is president of North Kingstown, RI-based b-to-b marketing consultancy Mac McIntosh.