Marketing 101:
How to Win with Direct Mail

Whether you own the biggest company in town or started a business just last week, the probability is that direct mail can help you generate additional sales, revenues and growth.

America's best marketing medium is universal, inexpensive, effective and efficient.

You don't need a massive advertising budget, hundreds of outlets nationwide or a big-city address to become involved in direct mail marketing.

You can start small and have your program grow as your business expands. And if you already have an established business, direct mail can be used to enhance an existing marketing plan.

A direct mail program begins with a thorough analysis of the product or service being sold. For example, a company -- we'll call it Tonertronics -- that sells small copiers for home offices is really marketing more than a device to make copies. Other values can be stressed to potential buyers, such as:

• Convenience -- With your own machine, there is no need to run down to a copy center at 8 pm just for one or two copies.

• Expense -- The cost per copy is lower than a commercial copier might charge.

• Efficiency -- If you have your own copier, you don't have to wait for other people or worry that someone else will break the machine.

• Productivity -- Instead of leaving home to make a copy, an individual can devote his or her time to income-generating activities.

• Warranty -- A service agreement with an automatic loaner feature can assure that buyers will always have a machine available. Given a variety of values, the next step is to write and design an appropriate brochure.

Businesses, especially small or new organizations, can sometimes generate effective advertising material in-house, but organizations of all sizes commonly use direct response firms for such work. These companies can write copy, select paper and provide graphic design services to produce the look, tone and pitch most in tune with a potential market.

Once the brochure has been developed, the next step is to target the proper market.

You want to find that group of people who not only are most likely to have an interest in your product but also have the financial capacity to buy it.

To find the most likely buyers, Tonertronics can rent a list of home office workers from a specialized company with access to thousands of lists. List brokers have lists that can pinpoint home-based computer users, free-lance writers, public relations specialists and artists. Before renting such lists, however, the copier firm will want to make sure it is getting the best deal.

• Cost -- Lists are generally rented on the basis of a charge per 1,000 names. The better the list, the higher the cost per name.

• Restrictions -- Many lists are restricted so they cannot be used by those who compete with their owners, or by organizations and individuals offering items inconsistent with the goals of the list owner. A health magazine, for example, would be unlikely to rent its list to a firm that wants to market chewing tobacco by mail.

• Terms -- Since lists are rented for limited periods of time and for a given number of mailings, it's important to know how long and how often a list can be used.

Once a list has been acquired, the next step is to work with data processors who specialize in mailing list organization.

A data processor can take a basic mailing list and compare it against a national change-of-address database, a ZIP+4 directory, demographic information and other lists until the basic list is honed and perfected.

The list development process is crucially important to direct mailers. Every time a duplicate name is removed, or an unlikely contact is eliminated, the mailer pays less for printing, postage and handling.

To this point, there is a product, a mailer and a list. Now it's time to insert materials into an envelope, label each envelope, and then apply the proper postage.

For small jobs, say several hundred to a thousand names, the work can often be done by hand through a small firm or a non-profit, sheltered workshop.

Inserting by hand is often impractical, however, especially when large volumes of mail are involved or a quick turn-around is important. Jobs of all sizes can be handled by full-service direct mail firms and direct response organizations that use automated equipment.

In addition to automation, larger firms sometimes offer another advantage as well: a full-time postal representative on site. In such cases, by having a postal employee at the mailer's facility the Postal Service saves money and speeds processing because the delivery of millions of letters is streamlined.

Not all mailing firms are full-service operations, however. Some limit their activities to insertions, labeling and postage and in such cases customers will often hire a lettershop.

A lettershop is a specialized company that navigates through the postal system to find the best possible rates for clients. As an example, a lettershop might arrange direct transportation from a printer to the particular post office which offers the best rate. Direct delivery to an individual post office can eliminate many distribution layers as well as excess postal costs.

Once the mail goes out and orders come in, the mailer -- in this case the copier company -- must begin the delivery process. Mailers can fill their own orders, but many prefer a fulfillment service which takes the orders, assembles the ordered goods for shipment and then sends the merchandise to the customer.

Fulfillment services are so effective that a company can sell by mail and never handle its own products. Instead, products are sometimes sent from manufacturers directly to fulfillment firms and then from fulfillment companies to individual consumers. At the end of the direct-mail process, the copier company should have orders, hopefully at a lower cost per sale than otherwise might be available with alternative media.

And if the company is really savvy, it will realize that it may have a new asset as well. The individuals who bought copiers might also want other products and services, information that a list manager may be able to market to other firms with an interest in home-office sales.