Most
of us have been at the customer end of Direct Mail. Who
hasn't
had a mailshot from Reader's Digest, sumptuously
illustrated
in colour, temptingly written ... who has been
able
to resist ordering, on approval, one of their excellent
publications?
Reader's
Digest is, of course, at the top end of the Direct
Mail
market. There are many more of us who
make money from
Direct
Mail by posting out much less extravagant brochures.
One of
my own most successful mailings consist of just one
sheet
of white paper printed on both sides!
So how
can the small operator take £1,000,000 using Direct
Mail?
First let me say that he won't do it in a week.
He
won't
even do it in a year. This is not, after
all, Cloud
Cuckoo
Land. But I reckon that with a
combination of luck
and
skill it could be possible to turn over this sum before
you go
off to the Bahamas for a well-earned retirement. And
if you
think that's too long to wait, work out how much your
present
job will bring you in that time.
To
show you that it is possible, let's do a little thought
experiment. Let's imagine that you go into the Direct
Mail
business
and let's further imagine that you are selling, let
us
say, a book with a retail price of £20.00.
A
really good mail shot will bring a five per cent response.
This
means that out of every hundred letters you post, five
people
will actually order the goods you're promoting.
Note
I said
really good. Most mail shots don't
achieve this
figure. I only get it myself very occasionally. So let's
say
that you'll average two per cent during your Direct Mail
career.
If you
get a two per cent conversion rate, you'll take £40
for
each hundred letters you post. How many
letters could
you
post a day? Well, the big firms think nothing of mailing
out
10,000 pieces, but they've got all kinds of sophisticated
machines
specially designed to print circulars, fold them,
put
them in envelopes, stick on address labels and frank them
with
the correct postage. I assume that you
don't have one
of
these machines tucked away in your garden shed, but have
to
rely on your own hands. Shall we say
three hundred
letters
a day? It would take two or three hours
to do this,
so
it's certainly achievable.
Three
hundred pieces of mail and a two per cent return. That
means
£120 turnover per day. Do this for six
days a week,
forty
eight weeks a year (you deserve a holiday) and you're
taking
£34,560 a year. At this rate you'd have
turned over
one
million pounds in about twenty nine years - which is less
than
the average working lifetime.
Yes,
yes I agree. That £120 a day isn't all
yours. In fact,
most
of it isn't. It's going to cost you (at
the time of
writing)
around £60 to print the circulars and post letters
to
three hundred customers. Then you've got
to buy the books
to
fulfil orders. If you buy them for a
fiver each,
wholesale,
your total expenditure per day is £90, leaving you
with
£30 a day for yourself.
Doesn't
sound much, does it? But with only a
couple of hours
work a
day, it's a part time income. And if you
can pocket
£180
extra a week by dabbling with Direct Mail part-time,
think
what you could do if you made it a full time
occupation!
This
is all an oversimplification, of course.
We've assumed
the
addresses are free, and that the customer is paying post
and
packing on top. But it does serve to
give you some idea
of the
eventual possibilities.
The
Direct Mail Formula can be stated as follows:
1. Find something to sell which you can buy at a
suitable
wholesale
price.
2. Obtain some tempting promotional literature
for your
chosen
goods.
3. Get the addresses of people likely to be
interested in
your
goods.
4. Post a lot of letters.
5. Keep on mailing your buyers with details of
new offers.
6. Rent out your own list to other dealers.
We'll
consider each of those points in turn. First, however,
a word
on the subject of investment.
Anyone
starting a business has to invest both time and money.
There's
no escaping this. A person opening a
shop, for
example,
will have to spend quite horrendous sums of
premises,
shopfitting, stock, advertising, etc.
If you
move into the Direct Mail business, you're also going
to
have to invest your time and your money.
Fortunately you
won't
have to find large sums for premises and shopfitting.
The
money you invest will be quite small sums spread over a
period
of time. It will be money spent on
posting letters to
people
who don't want to buy - or on goods which have no
appeal. The money will be spent, in short, on testing.
Testing
different address lists, testing different products,
testing
different sales circulars. This means
that you
shouldn't,
under any circumstances, give up your job to go
into
Direct Mail. You're going to lose money
to start with.
This
money won't be lost for ever. Eventually
you should get
it
back many times over. But in the early
stages of your
Direct
Mail business, you'll need money to live.
CHOOSING
A PRODUCT
Most
of the readers of this manual will be in the Business
Opportunities
section of mail-order and will be interested in
selling
books, manuals, cassettes, newsletters - anything on
which
information is recorded. We'll therefore
assume that
you're
going to sell an information guide. The
general
principles
outlined here, however, are relevant to selling
all
goods by mail-order.
Obviously
your product must appeal to the market you're
aiming
at. The only sure way of knowing that
your
information
guide will appeal to the market is to try it.
Here's
your first investment of "test money". However, your
own
feelings will give you some guide, and the longer you
spend
in the business, the better you will become at
selecting
a winner.
One
thing you can make sure of, however, is that the price is
right. You saw from the example above that even with
buying
a book
for £5 and selling it for £20, most of the takings
were
swallowed up in expenses. You're going
to need this
sort
of mark-up to succeed.
SALES
LITERATURE
The
best product in the world won't sell by mail-order unless
the
literature which promotes it is both well written and
attractively
presented.
Many
Business Books which you can buy wholesale already have
tried
and tested sales brochures to accompany them, and it's
often
possible to have your own name and address added to
these. Check with your suppliers.
If
your product doesn't come complete with sales literature,
you'll
have to get some done for you. This is
very much a
job or
the specialist and you'll need to get in touch with an
author
skilled in the art of copywriting. See
the end of
this
book for useful names and addresses.
The
sales literature doesn't need to be lavish.
There's no
need
for expensive colour printing, for example - you can
often
achieve a very attractive effect with tinted paper. A
typical
mail-shot will consist of the following items: a
circular
describing the book (or other goods); a letter
underlining
the advantages of the book and urging immediate
action;
and an order form. The mail shot may
also include
other
bits and pieces - a reply envelope or some additional
incentive
for prompt ordering such as a discount or a free
gift. The value of including these extras can only
be
assessed
by testing.
FINDING
A MAILING LIST
This
is the hardest job of all. Finding a
mailing list which
will
give you that necessary two per cent - or whatever
percentage
conversion you need.
Many
professional mail-order operators build their own
mailing
lists by advertising in the press and recording the
names
of people who respond to the ads. Since
the whole
business
of classified advertising is discussed later in this
book,
we'll assume for the purpose of this book that you are
going
to rent other dealers' lists initially.
You'll
need a list of people who have already bought a
product
similar to the one you're selling. With
business
information
guides there's no problem. There are
many lists
available
of "Business Book Buyers".
It's
not too difficult finding a mailing list to rent. Many
list
owners advertise in the business pages of the national
papers,
or in Exchange and Mart, and when you've been in
mailing
order for a few months, you'll get plenty of mail
shots
from companies wanting to rent you their address lists.
See
also useful addresses at the back of the book.
Unfortunately
only a very small fraction of the lists
available
are good ones. What do we mean by a
"good" list?
A good
mailing list has two characteristics.
It's clean and
it's
fresh. Most rented lists are neither.
A
clean list will contain less than five per cent "gone
aways"
or "not known at this addresses".
A fresh list will
have
been compiled in the last six months.
One
way to ensure that you get a clean, fresh list is to buy
several
enquiries from other dealers. Several
mail-traders
use
this approach - they write to small mail-order firms
advertising
in the Business Opportunity press offering to buy
the
actual letters which enquirers have sent, provided they
are
not more than, say, three months old. if
you do this,
you'll
have to pay around 10 - 12p for each name, but the
date
on the envelope should ensure that it's fresh.
The only
snag
is, most advertisers now record the names of their
enquirers
on computer, then throw away the letter, so you
might
not get too many addresses using this method.
How
much should you pay for a mailing list?
They are
currently
on offer at prices ranging from £20 to £100 per
thousand,
with the addresses on self-adhesive labels.
And,
note,
this is just a rental charge in some cases.
That's
what
you pay for just one use. In point of
fact, one use is
all
you'll want, since it's buyers you're interested in.
Those
people who buy from you will become part of your own
list,
of course, and you can (and should) remail them as
often
as you wish.
If you
try to use a rented list twice, or, worse still, try
to
sell it to someone else, you'll be found out in no time.
You
see, the person who rents you the list will have
"planted"
it with the names of a couple of trusty friends in
different
parts of the country. If they get more
than one
mailing
from you - or a mailing from someone else who hasn't
rented
the list, they'll inform the list owner.
He will have
cleverly
coded these addresses in such a way that you are
immediately
spotted as the culprit. I mention this
because,
as I'm
sure you will already guessed, one day you will be
renting
out your own list (clean and fresh, let us hope) and
you'll
be using the same techniques to prevent cheating.
O.K. You've obtained some mailing lists. Start posting your
300
letters a day - or as many as you can afford anyway. I
emphasise
again that you are making an investment here - if
you
break even right away you're doing well.
The object of
the
exercise is to build up your own list of buyers.
Let's
assume that you don't get your desired two per cent
return. Let's assume that you only get, in fact, a
one per
cent
conversion. You can work out how much
money you're
losing
yourself (I repeat, this is your investment).
My aim
here
is to show you how your own list of buyers will grow.
With
one person out of every hundred buying and with a
mailing
of nearly three hundred per day, after one year
you'll
have nearly 1000 names on your own list.
This list
will
be worth far more than it's weight in gold to you. It
will
be a list of PRIME, FRESH, BUYERS. They
will be people
who
like to buy by mail and they will be people to KNOW YOU.
You'll
now have a list which will give you a much better than
two
per cent return on your future mailings.
You'll have a
list
which other dealers will be eager to rent.
And if you
keep
it nice and clean they'll be eager to rent more off you
later.
With
your own list you'll now be in a position to get free
mailing
lists by simply swapping your list with another
trader. You can do this as often as you like. You're now
spending
much less money on your own mailings, so your second
thousand
buyers won't take as long to build up.
The
actual management of a mailing list is a complex subject,
and
there's certainly no room in this short manual to
consider
it properly. Your usual supplier should
be able to
suggest
a readable guide on the management of mailing lists.
You
will now be aware that you only make money from Direct
Mail
when you have a list of your own.
Mailing to lists
rented
from other firms may not make you a profit, may even
make a
loss. The purpose is to construct your
own list. It
takes
time, it takes money. But once you have
your own list
- the
£1,000,000 Direct Mail Formula will work for you.
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