People say that direct-mail campaigns no longer deliver the lead results contractors need. And it's true that you'll fall flat on your face if you don't do direct mail right. But the fact that many companies have moved away from direct mail means this is actually a great time to ramp up your effort or to return to it. If you're willing to push the envelope a bit, direct mail works. The trick is to do it differently and to do it right.
WINNING STRATEGIES Successful direct mail is about strategy. Five elements together make it work: creative, offer, list, postage, and tracking. Let's begin with tracking. Tracking starts on day one with recording every expense of the program. Costs include graphic design, printing, purchase of a mailing list, postage, return postage on business-reply mail, and any calling costs. Postage is the most expensive item on this list.
A good report would include total cost, total quantity mailed, cost per piece, responses, response rate, cost per response, issued leads, demos, number of sales, sales revenue, net revenue, and cost effectiveness. Anything less than this makes you a high-stakes gambler.
Now let's talk mailing list. The first place to look is your previous customers. It's essential to have all your previous customers logged into the computer — it's amazing how many companies don't. At one of the first companies I consulted with, I hired a telemarketer to stay late and enter previous customer information into the computer system. A few weeks later we'd generated more than $200,000 from that list. Every home improvement company in the U.S. should be mailing its customers at least twice a year.
The second list to mail to is your database of leads, i.e., those prospects who contacted you but didn't buy. And finally, you should be mailing around jobsites or buying lists based on income or ZIP code. There are also simple ways to use your previous customer list to find other homeowners who demographically “look” like your customers.
MANAGING COSTS Next, consider postage. Postage for a #10 envelope should always be around 20 to 25 cents using bulk rate. If you're hand-addressing envelopes, or if you want to use stamps, you can still get the bulk rate. It's a matter of quantity: If you mail more than 200 of an identical piece, you qualify for the bulk rate.
Hand-addressing the envelope, by the way, can be very effective. I recently mailed previous customers using hand-addressed plain white #10 envelopes with no return address and bulk-rate stamps. When someone gets a hand-addressed envelope with no return address, it gets opened. Result: We generated $500,000 in net business at a cost of 3.7%.
If you don't have an in-house creative person, don't panic. You can still keep costs down by using a direct-mail house. Often the mail house charges little or nothing to use its creative department, especially if you're a regular customer.
While the offer itself has a lot to do with the direct-mail piece's success, many companies spend too little time on strategy and offers. Coming up with a good offer takes time. Paying for demos (“We'll pay you $30 for taking a look at our new window!”) is one of the most effective. Don't be afraid to make a good offer. This is marketing.
Direct mail has been working since long before Elvis sang “Return to Sender.” It still works — if you have a good strategy.
—Ed Antle has worked as president and/or marketing manager for a number of large home improvement companies. Reach him at [email protected].
Does your company have a business practice or installation technique to share with the industry? Call Jim Cory at 215.923.9810 or e-mail [email protected].
