 |
| A
SCORE COUNSELOR'S ADVICE |
|
Direct
Marketing 101, page 2/3
Steve Lember, SCORE 513 Counselor
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| 5.
Test and keep testing. |
| One
of the neat things about direct marketing is that it is measurable
and projectable. That means that you can test things like concept,
price, offers, lists, copy and design, etc. on a small sample
of a larger total market. Then you can analyze the results
from that sample and make some fairly accurate projections
on the total. Once you have satisfied yourself that all the
components are working and you are making money, you keep testing
to see if you can tweak the components to make you even more
profit. I won’t get into sample size and “multi-variant” testing
here but you can learn the basics from books on direct marketing
or by attending local or national direct marketing conferences. |
| 6.
Ask for the order. |
| Once
you have made all of your points to the right audience, you
want to be sure that provide an easy way for the prospect to
take you up on your offer. Keep it simple. Don’t give the prospect
too many choices. Give them an 800# or a “click here to order” button.
If you use a coupon make it easy complete and the blanks should
large enough to write in. Some folks say that you should start
with the order form, then figure out what you have to do and
say to get the prospect to use it. |
|
What
represents good results?
The basic
key to the success of a direct marketing program: Did it
make money? It doesn’t make any difference whether you received
a 10% response rate or a .01% response. Each one could be
successful if the bottom-line is PROFIT. You also have to
understand something called LTV. That stands for Life
Time Value of a customer. If you’re only looking for
a one-time sale with no hope of selling that person anything
else, you’re customer has a very, very short LTV (not very
good). However, if you sell them something that they keep
re-ordering, or renewing, or subscribing to, or you have
a whole line of other products or services you can sell them,
then you have a business. Let’s look at some very simple
examples:
Scenario
1. I’m selling a book called “101 Ways To Cook Liver” The
book costs $1.25 to produce and ship. I have developed a
pretty good direct mail package that offers the book for
$5.00+$1 for postage and handling ($6.00 total sale). I’m
offering a 30-day money-back guarantee if the customer is
dissatisfied and a free coupon for a pound of calves’ liver
(I made a deal with the Liver Producer’s Association so the
coupon costs me $0). I have 5 lists I will be testing. My
mailing cost including the cost of lists, postage, printing,
etc. is $1 each. The only variable is the list. In reality
there could be multiple variables, which makes things too
complicated for the space I have here. |
| |
List
A |
List
B |
List
C |
List
D |
List
E |
| Quantity
Mailed |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
| Response
(%) |
10
(1%) |
20
(2%) |
50
(5%) |
100
(10%) |
200
(20%) |
| Revenue |
$60.00 |
$120.00 |
$300.00 |
$600.00 |
$1200.00 |
| Cost
of Sale |
$12.50 |
$25.00 |
$62.50 |
$125.00 |
$250.00 |
| Gross
Profit |
$47.50 |
$95.00 |
$237.50 |
$475.00 |
$950.00 |
| Promotion
Cost |
$1000.00 |
$1000.00 |
$1000.00 |
$1000.00 |
$1000.00 |
| Profit/(Loss) |
($952.50) |
($950.00) |
($762.50) |
($525.00) |
($50.00) |
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