Great Expectations -- Or Not -- For Direct Mail & E-Mail

My column about direct e-mail drew enough interest and response to require some elaboration and clarification. First, clarification. I casually wrote, "In direct mail, a standard rule of thumb is that a 1-2% response rate is what to expect." One reader, Nik Cecere, wrote, saying "The one- to two-percent figure is what is called a ‘good response,' it is not ‘what to expect.' If the offer, the list and the creative are all in good shape, you might get a 1-2 [percent], and you might get more (or less)."

Cecere is right, and he ought to be. He "spent 15 years in direct mail with multi-national agencies such as Ogilvy & Mather and Foote, Cone & Belding, testing and retesting and refining direct mail techniques for clients with big budgets." So remember, 1-2% is a good response, not something to expect as an automatic pay off.

Speaking of expectations, in launching a direct e-mail campaign, you can expect to have to work much harder than in direct mail to get an effective mailing list. Laurie Beasely, from Beasely Direct Marketing, points out that while direct mail is a mature marketing vehicle, direct e-mail is in its infancy. Direct mail companies have been compiling and selling all manner of mailing lists for decades now, and if you work with a reputable firm, you'll know what you're getting.

Buying an opt-in list is much more difficult. For one thing, far fewer opt-in lists are for sale. So anyone wanting to acquire a list will have to shop much harder to get a good list. And it's important to pay attention to the terms of use of that list, too. Lastly, remember that as true for direct mail, direct e-mail becomes much more effective through repeated mailings.

What about the cost? Think in terms of thousands of dollars, or tens of thousands, depending on the required length and complexity of the campaign and the target market involved. If you have the resources and the time, it may be most effective to build your own opt-in list, but many organizations can't wait that long to reach a target market(s) or can't build the list needed.

In theory, one way to reduce the out-of-pocket cost of your direct e-mail campaign is to manage the actual mailing yourself by using your own outgoing e-mail account rather than paying a firm to send out your direct e-mail for you. One weakness of that approach, however, is that you will probably not know which recipients should be sent a text message and which should be sent html. Another problem is that you may discover that your ISP or your Web hosting firm, or both, limit the quantity of e-mails you can send out and may have rigid definitions of what they call spam. Most ISPs and Web hosting firms will not let you spam people. That means that you have to be scrupulous about maintaining a truly opt-in mailing list or your ISP or Web host may cancel your service. You can always build your own Web/mail server, but that's another topic.

Now reconsider the elements Cicere identified in his statement about direct mail, "the offer, the list and the creative." Of course your offer, for example, "Reduce the Aging of Your Accounts Receiveables by 60 days," must be appropriate for and attractive to your target audience. And your list (including the technology required to deliver the offer) must be effective -- you have to reach the right people. Lastly, your "creative" -- the words and pictures you use to communicate the offer -- must get attention, maintain interest, create credibility, build desire and call for action.

Note that each of these three – the right offer, the right list and the right creative actually involve different competencies and talents. Great offers come from the minds of great creative and marketing people. The same is true of the execution of the offer -- the creative work. Getting a great list, however, may require as much research ability as it does marketing know-how.

Now, if you feel you've scored big-time on the offer, the list and the creative, then you may have a tough time not "expecting" a 1-2% response -- or better. Some clients we have worked with have had that expectation, regardless of our input. It's safe to say, however, that you'll only know you've got all three right when you actually get a 1-2% response. Until then, put your energy into making your effort great, not your expectations.

This article first appeared as a column written by Dave Tedlock, NetOutcomes' president, for the Inside Tucson Business, The New Mexico Business Weekly and the Idaho Business Review.

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