CONTENTS
I LIKE JUNK MAIL
IF AT FIRST YOU
DON'T SUCCEED
THE MATHEMATICS
OF DIRECT MARKETING
COST AND VALUE
OF A CUSTOMER
YOUR FIRST STEP
BUILD A MAILING LIST
THE OPENING OFFER
THE IRRESISTIBLE OFFER
THE DISCOUNT
THE FREE GIFT
THE FREE AFTER-SALES SERVICE
THE PACKAGING
THE FIRST STEP
(CONTINUED)
YOUR COMPUTER
ADVERTISING
WRITING YOUR AD
PLACING YOUR ADS
DEALING WITH INQUIRIES
THE FIRST STEP
(CONTINUED YET AGAIN)
MAILING LISTS
FINDING MAILING LISTS
PROTECTING YOUR INVESTMENT
GET TO KNOW YOUR
CUSTOMERS
TAILOR YOUR
OFFERS
DON'T LET THEM FORGET YOU
THE IMPORTANCE OF TESTING
THE REAL SECRET
OF MAIL ORDER SUCCESS
MARKETING YOUR
ADDRESS LISTS
THE BLUEPRINT
I LIKE JUNK MAIL
Now
not many people will admit to that, will they?
It's trendy to
complain
about the vast quantity of rubbish which floods through
the
letterboxes of Britain every day. In the
same way, I've yet
to
discover anyone who will admit to watching Coronation Street
(where
do those eighteen million viewers all come from, I wonder?)
So
here's my confession. I like Coronation
Street. And I like
junk
mail.
I
like it so much, in fact, that I will go to quite extraordinary
lengths
to receive it. I am an inveterate filler
in of coupons in
newspapers. If I need something - a pair of shoes, an
insurance
policy,
a camera - then I'll buy it mail order, just to get my
name
on another address list. I act as a
"sleeper" for various
friends
in the direct mail business, letting them know if a person
has
used their mailing list illicitly.
Am
I a madman? Well, maybe. But not because I like getting junk
mail. In that respect I don't differ greatly from
the majority of
the
population. Amazingly, most people
actually like receiving
sales
material through the post. Survey after
survey has proved
this. Most people in the U.K. get only one or two
letters a week.
Mostly
it's a bill. A nicely put together mail
shot is welcome by
comparison. It's usually interesting to read. There's no
obligation
to buy. It's much nicer than a door to
door salesman,
where
you have to be rude to get rid of him.
With a mailshot, you
say
"no" by not replying. No-one
bothers you. There's no
pressure. No hassle.
Few people actually object to "junk mail".
But
nobody will admit that. Not on your
life. One has one's
image
to maintain, after all.
I
have a special reason for liking "junk" mail. I make my living
from
it. It's a very good living, too. Junk mail is the stuff of
life
to me: it feeds me and my family, puts a roof over our heads,
provides
us with comfortable transportation and not a few
luxuries. To me it is definitely not
"junk". It is a real life
golden
goose, depositing its golden eggs regularly and according
to
plan.
In
this manual I will tell you how you can create your own golden
goose. How you can harness and control the
incredible power of
direct
mail to generate an income which could last for a lifetime.
If
you are already in business - any kind of business - you'll be
able
to exploit this miracle technique to multiply your profits.
If
you're not a business person, then, this manual will tell you
how
to become a very successful one, in a way which minimises the
risk.
But
first things first. Let me tell you how
I started in this
business.
IF AT FIRST YOU
DON'T SUCCEED
I'd
always been fascinated with the world of mail order. When I
was
a kid of eight or nine, I'd get a real kick out of seeing the
postman
walk up to our door with a parcel.
Usually it was
something
like a pair of trousers or some boots for Dad (my mother
bought
most of our clothes from a mail order catalogue, because
you
could pay in small amounts each week), but it still gave me a
thrill
to unwrap the package. When I got my
first paper round I
joined
a childrens' book club. I could have
bought the same books
at
the newsagents I worked for, or borrowed them from the library
-
but that way I would have missed the excitement associated with
knowing
that a parcel was on the way, eagerly watching for the
postman
to bring it, the glittering colour of the cover when the
book
was pulled from its brown envelope, the smell of newness
about
it ...
Like
I say, I was hooked on buying through the post.
So
it was natural that I would consider mail order when I was
looking
for ways to make some extra money a few years ago. By
that
time I had acquired a wife and family, a mortgage and hire
purchased
car. Apart from the mortgage I loved
them all, but
found
them more than a little expensive to maintain.
After
feeding
them respectively with food, money and petrol, there was
precious
little left for the finer things in life, like pints of
beer
and Saturday outings to ... well, no, I won't tell you which
football
team I support!
I
decided on clothes as my route to affluence.
I bought 100 nylon
anoraks
dirt cheap at an auction. I think they
cost me about $120
-
this was in the days when you would expect to pay about $6 for
the
same product in a shop. Cheap they might
have been, but that
$120
represented more than half the wealth my wife and I had
accumulated
after ten years of marriage!
I
placed an advertisement for the anoraks in a well known paper.
It
cost an arm and a leg, but their art department provided a
sketch
of a smiling gent wearing an anorak to illustrate the ad.
I
decided to charge $5 plus post and packing for the coat, so it
would
cost my customers about the same to buy from me as it would
to
buy from their local market.
I
sold two. One was promptly returned for
a refund. In the
pocket
was the remnants of a half sucked boiled sweet and a bus
ticket.
Not
to be deterred, I decided to shift them by direct mail. I had
a
rudimentary grasp of the business, even in those days. After
all,
I'd been a compulsive postal buyer for years, and was on
dozens
of mailing lists. I'd even got
sophisticated enough to
make
slight changes in my name and address when ordering goods by
mail,
so that I could see how many times the company rented out
its
list. When a letter came addressed to
Michael Z. Farrell, I
knew
exactly who had made money by renting my address.
I
even had a pretty good idea of the kind of list I'd need to
attract
buyers for my anoraks. You see, when I
bought a dozen
rose
bushes from a nursery which sold by mail, it wasn't long
before
I started getting literature about greenhouses, lawn mowers
and
tools. Shortly after ordering a set of
loose covers for our
three
piece suite, we were getting information about soft
furnishings
for the bedroom, carpets, and so on.
It
seemed pretty clear to me that the experts in direct mail
always
looked for prospective customers among people who had
already
bought a related product. That's what I would do.
I
wrote to several companies who were currently advertising
clothing
in the press, asking if I could rent their mailing list
for
a mailshot. Most of them didn't
reply. two actually gave me
what
looked like a professional quote for their lists and I opted
for
the cheapest. The list eventually came:
2000 names put on to
labels
using some kind of spirit duplicator (this was before the
days
of computerised mailing services).
I
then gave some thought to the "literature" which would promote
the
coats. Even in those days there was some
pretty sophisticated
direct
mail material around: the lavish brochures promoting
Readers'
Digest books for example. I couldn't
hope to compete
with
those. In the end I decided to adopt a
"Market Stall" image.
When
you buy goods from a street market you don't expect fitted
carpets
and air conditioning. You just want good
value for money.
My
sales material would be the mail order equivalent of the street
market. A cheap and cheerful way of displaying value
for money
merchandise.
I
eventually produced a folded leaflet extolling the virtues of my
anoraks:
showerproof, crease resistant, range of colours and
sizes,
etc. The leaflet reproduced the sketch
which had been made
for
the newspaper ad. The leaflet was
accompanied by a "personal"
letter
from me, emphasising the excellence of the coats and
pointing
out that they would cost at least $2 more to buy in the
shops. The letter promised a money back guarantee if
the customer
was
not satisfied. Finally, I devised a
little certificate
entitling
the prospect to $1 reduction if the order was made
within
10 days.
Though
I say it myself, it was a neat little sales package. The
brochure
was simple but appealing. The price of
the product was
reasonable
- a bargain, in fact, if the $1 voucher was used. I
mailed
2000 sets of this literature with a degree of confidence.
I
didn't sell a single anorak.
In
the end I rented a market stall and sold the entire stock cheap
over
two Saturdays. I made a nice little profit
out of it, too!
If
I'd been a sensible man I'd have set up my stall permanently.
But
as I've already mentioned, I'm hooked on mail order. I was
determined
to make a success of selling through the post.
For
the next year or so I didn't attempt to sell anything by mail
order. Instead, I studied the subject. And when I say "studied",
I
really mean it. I spent every spare
moment reading books on
Direct
Marketing. It wasn't easy to get hold of
them, either.
Many
were out of print, even more were American.
However, with
the
help of my local public library and by dint of frequent
bankers
drafts in dollars to publishers in the U.S.A., I gradually
built
up a comprehensive library on mail order.
It
would be nice to say that the secret of direct mail success hit
me
like a blinding light o opening the first of my books. But it
wasn't
like that. In fact, for a long time, I
couldn't see where
I'd
gone wrong in my attempts to sell via newspaper ads or by
direct
mail. All the books were much of the
quality of the
mailing
list, for example. Well I was pretty
sure that my mailing
list
contained genuine buyers of clothes. It
was difficult to see
how
the company would have had any other list, in fact. (I
discounted
the possibility that they had been simply copied from
a
phone book. A shady list broker might do
that, but surely not a
manufacturer). Again, my books told me that you should offer
an
incentive
to encourage the prospect to order. I'd
seen that, but
still
no orders had come in. At first sight it
seemed that I'd
done
all the right things. Surely, only
monumental bad luck could
explain
the failure.
Gradually
little clues started appearing in the pages I was
reading. Don't misunderstand me. The clues weren't planted
deliberately
by the authors. They were footnotes or
"asides":
often
case histories of famous direct mail campaigns which had
succeeded. I decided to concentrate my attention on
these
aspects,
listing anything which struck a cord in my mind and
making
outline notes on the features of the successful campaigns
used
as "case studies".
Eventually
I had filled a couple of note books with these
jottings. One evening I sat down and asked myself the
following
question:
"Is it possible to abstract from these notes a game plan
which
ensures that any direct mail campaign will succeed? Is it
possible
to map out a blueprint for success?"
I
think the answer to this question is "yes". As a result of my
researches,
I devised a set of rules to direct the operation of
any
mail order campaign. I rarely deviated
from it. I can hardly
say
that all major newspaper and direct mail campaigns have
succeeded
when I have stuck rigidly to this blueprint.
I'm
going to tell you about my blueprint in this manual. You
might
think it strange that I'm so ready to part with such a hard
won
secret. But, of course, it isn't really
a secret. It's used
by
all successful professional direct marketeers.
Passing it on
to
you won't diminish in any way my own profits.
And I sincerely
hope
that it will do a lot to increase yours!
However,
a few words of warning. You won't like
all of what
follows. If you follow the blueprint to the letter,
you'll need
to
make some sacrifices. For example, it
will demand time.
You're
going to have to find several hours a week to work at your
direct
marketing programme.
You're
also going to need money. I'm not going
to pretend that
this
is a business which you can start without investment. You're
going
to have to advertise, rent mailing lists, buy stationery and
so
on. If you haven't any money to spare at
the moment, then
shelve
this project until you've managed to save some.
I can't
give
you precise figures, since you may be reading this after a
period
of inflation, but you should have saved up the equivalent
of
a month's wages before starting.
You
must be aware of the possibility of failure, too. The
blueprint,
if followed to the letter, should succeed.
But there
are
aspects of the blueprint where individual judgements have to
be
made, and only you can take the responsibility for those.
THE
MATHEMATICS OF DIRECT MARKETING
The
object of my blueprint is to teach you how to ensure that all
your
mailings and profitable. You won't be
able to assess whether
or
not a mailing is making or losing money unless you keep
meticulous
account of every penny you spend and every penny you
receive.
This
statement should be obvious - but, sadly, it isn't to most
people
who embark on a business venture. You've
probably heard
that
most small businesses fail in the first year or so. What you
may
not have known is that the most frequent cause of failure is
the
inability to keep proper records. This
means that the
proprietor
is unable to see if he's making a profit or a loss -
until
it's too late. It also means that he
can't spot trouble
before
it comes, and take steps to avoid it.
My
method of making money from direct mail hinges on the ability
to
predict the result of any mailing. This
can only be done if
detailed
and accurate records of all expenses and takings are
kept.
Incidentally,
I'm not just talking about book keeping.
This is
obviously
very important and something which you have to do. But
you
must also make a separate account of each campaign you run,
whether
it's a direct mailing to a bought list or a series of
advertisements
run in a newspaper.
Once
you have the "raw" figures, you have to operate on them in a
way
which is peculiar to the mail order industry.
I'll show you
how
to do that in a minute or two. First
let's make sure that you
know
exactly how to keep a record of your expenses and takings.
First
the expenses. It's vital to allow for
every expense. Here
are
the expenses I allow for when I do a mailshot:
(a)
The cost of printing the promotional literature.
(b)
The cost of the envelopes.
(c)
The cost of the postage.
(d)
The wages of the people who "stuff" the envelopes.
(e)
The cost of the mailing list. (I don't
include this if I'm
sending
a mailshot to my own list of customers.)
(f)
The cost of the product (cost to me, that is).
This will
obviously
depend on the number of sales.
(g)
The cost of mailing out the product - postage, cost of packing
and
so on.
(h)
The cost of dealing with refunds.
(Postage, cost of damaged
goods,
and so on).
The
takings are much easier to record. They
are simply the money
you
receive for orders - less any money you have to pay out in
refunds.
The
profit of a mailshot can then be found by subtracting the
expenses
from the takings.
I
can almost hear you saying, "But that's obvious". OK. so
it
is. But the fact remains that out of every 100
new entrants to
the
direct marketing business, more than 90 will not even bother
to
keep the simple records mentioned above.
And only one out of
ten
thousand will use the blueprint described in this manual,
which
virtually guarantees success.
Another
objection you might raise is that you don't know how many
sales
you're going to make until you've actually made them! A
very
valid point, and one which I will be devoting some time to
shortly. First, however, let's see how a guessing game
can give
some
very valuable information to the direct marketeer.
WHAT IF ...?
All
successful businessmen spend a lot of time playing "What
If
..." games. In fact, these games
are so important that many
businesses
shell out large quantities of money on computer systems
which
allow them to play such games more quickly and efficiently.
We
won't be using a computer for our game.
The back of an old
envelope
will be quite adequate.
Take
another look at the list of expenses above.
You'll see that
most
of them can be listed accurately even before you attempt to
do
a mailshot. Postage, for example. Printing, envelopes, wages,
mailing
list - we know what they're going to cost in advance.
They
are fixed costs, which do not depend on the number of sales
made. The other costs do depend on the number of
sales, and it's
with
these that we play our what if games.
The
best way to show you how it works is to give you an actual
example. A few months ago I decided to try a mailshot
to my own
list
of customers. The product was a book
costing the customer
$18. I had bought the books in quantity and the
unit cost to me
was
$3. It would have cost me $2 to pack and
post each book.
Here's
the list of fixed costs I made, per thousand names:
(a)
Postage: $150.00
(b)
Printing: $ 90.00
(c)
Envelopes: $ 14.00
(d)
Wages: $ 12.00
I've
rounded these fixed costs off to the nearest pound to make
the
calculations easier. They add up to $266.
Now
we play "What If ...". I
didn't know what sort of sales rate
I'd
get, so I made a few guesses. What if it
were 1 per cent?
That
means I'd get 10 sales out of every thousand letters posted.
The
goods would cost me $30, and it would cost me $20 to pack and
despatch. My total costs would therefore be $316.
Ten
sales would bring in $180. So on a one
per cent conversion
rate,
I'd make a loss of $136. But wait. I haven't yet allowed
for
returns. I'd decided to offer a money
back guarantee with
this
book, and some customers would be sure to take me up on it.
Past
experience shows that around one in twenty returned their
goods:
that's "half a return" in every ten.
This would bring my
takings
down from $180 to $171. My expenses
would be reduced by
$1.50
(the cost of "half" a book to me), provided it was in good
enough
condition to sell again. So my likely
loss on a one per
cent
conversion rate would be $314.50 - $171 = $143.50.
What
if I got a 2 per cent return? Fixed
expenses would still be
$266.00. I'd have to despatch 20 books per thousand
mailings now:
this
would cost me $100. I could expect one
return, giving me a
$3
reduction on expenses, so my total expenses would be $266 + $97
=
$363. Takings would be sales on nineteen
books (allowing for
the
return) = $342. We're still making a
loss, but this time only
a
small one of $21.
Now
let's push up the conversion rate in our imaginations by just
half
a percent. We now anticipate 25 sales
per thousand mailings.
Fixed
costs are still $266. Cost of supplying
25 books would be
$125. The five per cent return rate would reduce
this to $121.25.
Sales,
allowing for returns, would amount to $427.50.
Total
expenses
are $387.25. A profit of $40.25 per
thousand letters.
I
hope this has illustrated two points very clearly. First, the
importance
of considering EVERY expense. Secondly,
and more
fundamentally,
the vital difference even half a percent can make.
In
this case, the difference between making money and losing it.
You
may well be thinking that $40.25 profit for mailing a thousand
letters
is no big deal, considering the work involved.
I don't
agree. It took me about half an hour to decide to
order the books
and
send off the order. The main sales
brochure was included as
part
of the deal (it was an American publication).
I wrote a
covering
letter for British customers: this took about an hour. I
spent
another hour driving to the printers and arranging for the
printing
to be done. Then I had to collect the
printed circulars
a
week later and drive to the people who stick things in envelopes
for
me - another hour. It took me half an
hour to take the filled
envelopes
to the post office and arrange for them to be franked.
A
total investment in time of four hours, spread over several
weeks.
With
a two and a half percent take-up, I'd have made $40.25 per
thousand,
as calculated above. With a list of over
ten thousand
customers,
total profits would have been just over $400.
I make
this
an hourly rate of $100. If you're
already earning in excess
of
$100 an hour, O.K. This isn't any big
deal. But it does me
very
nicely, thank you!
In
actual fact I got a five per cent conversation rate on that
particular
mailing, but that's another story.
The
main point of all this is that you must be ready to think in
terms
of FRACTIONS OF A PERCENT, if you really want to succeed in
mail
order. You can't do this unless you keep
meticulous records.
COST AND VALUE
OF A CUSTOMER
The
example I've just given concerns a direct mail shot to my own
customer
list. If I'd bought in a mailing from
somewhere else,
I'd
have made the same kind of calculations but this time the cost
of
the mailing list would have been added to the expenses. My
blueprint
also requires me to work out the cost of obtaining a
customer
when using someone else's list or when advertising in the
press. Again I'll illustrate this with a real
example.
I
once ran the same advertisement in two well known Sunday
newspapers. After a year I analysed the results of those
ads. I
got
my computer to abstract the following data:
The
number of people who had answered each advertisement.
The
number who had bought from me.
The
cost of the advertisement over the year.
The
value of the sales generated.
Here
are the actual results:
Paper A Paper B
Number
of replies: 583 299
Number
of buyers: 112 82
Cost
of ad: 1447 749
Total
Sales Value: 2513 2348
Which
is the best ad? Before we can answer
that question, we must
work
out exactly how much it cost to receive a reply, and how much
it
cost to get a new customer.
Before
we can do this, there are two more expenses which have to
be
taken account of: the cost of sending out circulars to everyone
who
answered the ad and the cost of fulfilling orders. Obviously
this
will depend on the number of replies and sales.
I calculated
it
as follows:
Paper A Paper B
Circular
cost + post: 189 97
Cost
of fulfilling orders: 448 328
So,
the total cost per reply is found by dividing the total cost
(advertising
and circular cost and post and fulfilment costs) by
the
number of replies. Similarly, the cost
per customer is found
by
dividing the total costs by the numbers of customers.
This
gives:
Paper A Paper B
Cost
per reply: 3.57 3.93
Cost
per customer: 18.61 14.32
We
can use the total sales value to give us some idea of the value
of
a customer and of a reply. By dividing
the turnover by the
number
of relies we get the "turnover per reply". By dividing the
turnover
by the number of customers we get the "turnover per
customer". This gives:
Paper A Paper B
Turnover
per reply: 4.31 7.85
Turnover
per customer: 22.43 28.63
All
right. You can relax. That's the end of the mathematical
analysis
for the time being. What information can
we derive from
this.
First
of all, both ads were making a profit.
Although I was
spending
$3 or $4 to get someone to send me a stamped addressed
envelope,
each one I received was worth more than this.
In this
respect
Paper B outperformed Paper A.
Secondly,
and more significantly, I was paying a lot of money JUST
TO
GET A BUYER. If you've dabbled in mail
order before, you may
have
thought in terms of paying 10p for an address label, or $10
for
an ad which brings in 100 replies.
Forget it. That's cloud
cuckoo
land. The $14 or $18 I was paying for a
customer is
actually
peanuts compared to what the really big operators will
spend. But it's well worth it. One good customer can be worth
several
hundred pounds to you. I have people on
my mailing list
who
have each brought me thousands.
The
few pounds I spent to get hold of them is trifling in
comparison.
However,
this is a matter for the next chapter.
YOUR FIRST STEP
We
now come to your first step in your journey to direct marketing
success. And here is the first instruction in your
blueprint:
BUILD A MAILING
LIST.
What's
that you say? You've heard it all
before? Sure you have.
It's
standard advice, isn't it? Every
instructional manual on
mail
order (and there are plenty of them) tells you to do just
that. So how is this one different?
It's
different not because of the instruction, but because of the
manner
in which you will carry out the instruction.
Most manuals
tell
you that you can leap into instant profit in mail order.
Sling
a few letters out, and rake in the dosh.
Sorry lads and
lasses. It work VERY occasionally. But I want to show you a much
surer
route to mail order wealth. One which is
just about as
certain
as anything can be in the uncertain world of business.
And
because it's more certain, it's also slower.
You
will not expect to make money while you are building a mailing
list. You might even have to "lose"
money. Actually "lose" is a
bad
word. When I started out on the
scientific mail order trail,
I
liked to think that when I spent a pound getting more addresses
to
put on my list, it was rather like putting a pound in the
building
society. The difference being that my
mailing list would
bring
me a better rate of interest. Or so I
fondly hoped. So far
I've
been proved right. I'd much rather put $100
into an
advertisement
than in a savings account. Of course,
like a high
interest
savings account, you have to be prepared to wait a bit
before
you can get your hands on your money!
First
then, you must realise that for the first few months to a
year,
any money you spend on your mail order venture is
INVESTMENT. You just NOT expect a return straight
away. As I
said
in the first chapter, you're not going to like everything I
say. I also said you're going to need some
money. Now you can
see
why. It should also be clear to you that
you must not leave
your
job to go into full time direct marketing just yet. ALL
millionaires
had to eat while they were digging the foundations
for
their fortunes. Most of them did this by
having a "day job".
Now
let me sugar the pill a little for you.
It MAY be possible,
if
you are VERY lucky, to get enough money back in the short term
to
cover your costs. If you are even more
lucky, you might make a
small
profit. Take another look at the figures
I quoted for my
advertising
in the previous chapter.
Those
ads were designed to build up my mailing list.
I wasn't too
bothered
about making money from the sales. I was
after NAMES.
Each
name I could salt away on my computer database was money in
the
bank; not this year, perhaps; but certainly next. However, as
you
can see, I DID make some initial sales.
In fact, although I
spent
around $2,500 on advertising and mailing, the return on
these
two ads in the first year was nearly $5,000!
So not only
did
I get my names, I also doubled my money - or very nearly.
You
might actually make some money right away.
I hope you do.
But
I don't expect you to. I certainly
didn't when I started
working
in a "scientific" way. I get a
fast return these days
mainly
because of the experience I've built up over the years, and
because
the first mailing piece is a real winner.
But it took
years
to get it that way.
So
you must build up a mailing list. And
you must do it in the
knowledge
that it will make money for you in the future, but not
right
away. How do you set about it.
THE OPENING
OFFER
You
need an opening offer. I say
"opening" offer, because you
intend
to sell to every customer not once, not twice, but many
times
over. I make no apologies for stating
what should be a self
evident
truth. I am constantly amazed at the
number of newcomers
to
the mail order business who make no attempt to follow up the
first
sale. I even met a self styled postal
trader recently who
didn't
keep the names and addresses of the people who answered his
ad! So I repeat.
Your money will be made on follow up sales to
the
customers who buy your opening offer.
What
will you sell them? That's up to you, of
course. This
manual
is not intended to tell you what to sell: rather, how to
maximise
your chances of making money by selling.
But maybe a few
guidelines
may be in order.
Really
successful direct mailers don't care what they sell.
They'll
deal in anything. Drayton Bird, a
director of one of the
largest
direct marketing advertising agencies in the world, tells,
in
his excellent book "Commonsense Direct Marketing", how he
started
in mail order selling hairpieces through a newspaper ad.
He
then got involved with the famous "Bullworker", a device for
building
up muscles. Later he sold books, a
newsletter, medals...
the
techniques of direct marketing change hardly at all with the
product.
Always
keep in mind that the sole object of the first sale is to
obtain
a customer who you will make follow up sales to. This will
influence
your selection of product. Ideally, you
need a product
which
can be duplicated in a slightly different form, or given a
different
twist, so that the same customers will be interested.
Examples
are: book clubs, where a lavish loss making opening offer
leads
to continual repeat book sales over a period of years;
newsletters
where the customer subscribes to receive a fresh
edition
each month; a series of specially minted medals, where the
customer
buys the first of a series and is then persuaded to
complete
the set; consumable goods (perfume, foodstuffs) or goods
which
wear out eventually (shoes, clothing).
Another
good general rule to follow when selecting a mail order
product
is to try to select something a little bit out of the
ordinary. Something that you couldn't find in the local
shops.
If
you browse through papers which carry classified advertising,
you'll
see that it's often the unusual, even bizarre, products
which
are being advertised.
However,
the selection of a product is very much a matter you must
decide
on, so I'll say no more. As I mentioned
before, this
manual
is designed to teach you a set of techniques which can be
applied
to any product.
THE
IRRESISTIBLE OFFER
Whatever
product you choose to sell, there's one rule you must
follow
every time you do a promotion. This rule
applies to your
opening
offer as it does to all subsequent offers you make. You
MUST
MAKE THE CUSTOMER AN OFFER HE CANNOT RESIST.
If
you accept this simple rule and follow it exactly, you really
cannot
lose in the mail order game.
Unfortunately, nearly all
novices
stumble at this first hurdle. Which, of
course, is good
news
for you and me, since the field is left open for us.
A
typical mailshot arriving in my office contains just one sheet
of
white paper. It's usually been photocopied.
The text has been
set
out on a typewriter or a word processor with a dot matrix
printer. It tries to sell me a business book for $12. Now, I'm a
sucker
for direct mail, as I've already mentioned.
But, my
friend,
there is no way I will ever part with $12 on the strength
of
a single sheet of badly typed copy.
Now
imagine another mailshot arriving, promoting the same book.
The
circular has been well laid out and typeset.
It's been
professionally
printed. There's a letter with the
circular,
addressing
me as if I were a valued customer. The
letter
pinpoints
one or two benefits in the book which I might find
useful. It mentions that the book is not yet on sale
in
bookshops,
and goes on to offer me a substantial pre-publication
discount.
A
couple of slips of coloured paper are also included in the
mailshot. One of them attracts my attention by the bold
headline:
FREE
GIFT! it cries. I can't chuck it away
without reading it -
who
could. Apparently I'll get not just one
book but TWO if I
order
within ten days. Another popular title
by the same author
is
briefly described on the slip. TURN OVER
says the slip, AND
SEE
WHAT OTHER CUSTOMERS THING. On the back
I see a selection of
testimonials
in which people describe how the book has changed
their
lives.
The
second slip is a special order form to use in order to claim
the
discount and the free gift. It also
includes a guarantee. If
I
don't like the book, I'll get my money back.
In
this mailshot, the promoter has worked hard to make his offer
impossible
to refuse. I'll probably buy.
In
order to remove any misconceptions you may have, an offer which
is
"impossible to refuse" will, in fact, be refused by most people
who
see it! A really superb offer which, you
would think, must
make
the world and his wife form a queue outside your door within
three
minutes of reading it, will persuade, if you're lucky, about
five
people in a hundred to buy. A poor offer
will persuade
nobody! However, we've seen what a difference just
HALF A PERCENT
can
make to your profits. Even if your
irresistible offer only
did
this, it would be worth spending time and trouble on.
So
how can YOU make an irresistible offer?
There are two things
to
consider. First the actual offer
itself. Next the packaging.
Your
offer must always contain something in addition to the main
product. You MUST have a sweetener, an incentive. The more
incentives
you have, the more likely you are to make a sale.
Incentives
fall into one of the following classes.
Select the
ones
which apply in your case.
THE DISCOUNT
Offering
your product at a cut price is the best incentive of all.
But
it must be a real bargain, particularly if you're selling goods
which
are readily available in shops. If your
product is novel,
then
you only have to make your price compete with the other mail
order
companies selling it. You might even
have a totally unique
product,
in which case you will be in the happy position of having
only
yourself to compete with.
Never
forget that your first offer has, as its primary aim, the
building
of a mailing list. This means that you
can be a bit more
generous
with your discounts than later on, when you'll be pulling
out
all the stops to make money. You can
select a price which
makes
you break even, or, perhaps, sustain a small loss. It's the
names
you want.
A
discount should always be geared to prompt ordering. Tell your
customer
he has to order in the next 7 to 10 days, or by the end
of
the month. If you can date stamp the
material, so much the
better. (Be careful, here, though. If you date stamp your
material
and there's a hold up at the printers, you could be stuck
with
a load of unusable circulars).
THE FREE GIFT
The
free gift is a very popular mail order ploy.
Obviously it
costs
money to make such an offer. But as
you're after names
rather
than profit, you can afford to do it.
The
free gift should be relevant to the product.
If you're
marketing
hand crafted shoes, how about throwing in a pair of
socks. No, make the offer irresistible. Make it THREE free pairs
of
socks, and a tin of polish. Selling a
camera? How about
throwing
in a free film, an extra lens and a book on photography?
Sounds
a lot? That's right. That's why you'll get the orders.
THE FREE
AFTER-SALES SERVICE
This
works very well when selling pricy technical items like
computers. The offer of free on-site maintenance for a
year could
swing
the sale. However, I do appreciate that
few of my readers
will
be marketing these types of goods. But
the "after sales"
idea
can work well in other sections of the market.
For
example. Suppose you're recruiting
members for your favourite
MLM
plan. Plenty of other people will be in
the same programme,
using
the same literature to promote it. Your
offer of personal
assistance
to help your members build their own "downlines" would
make
your mailshot stand out. Or maybe you're
marketing a
financial
newsletter. How about a free "helpline" service, whereby
subscribers
could consult you on financial problems?
If
you think that the examples given above are crazy, that such
wild
extravagance would bankrupt anyone within months, then mail
order
is not for you. It's the seemingly
extravagant, flamboyant
offer
which characterises the really successful mail order
entrepreneur.
THE PACKAGING
By
"packaging" I mean not the wrapping up of the product, but the
mailshot.
Some
companies go to extravagant lengths with their mailshots,
including
cassettes, computer discs, lavishly illustrated multi
page
colour brochures and some complex examples of paper
engineering. Why do they spend so much money? To add to their
mailing
list, of course.
Your
own mailshots will, no doubt, be more modest in appearance.
But
this shouldn't mean that they are shoddy and unattractive in
appearance.
First,
the product must be made to sound exciting - really
exciting. To ensure this, get a professional to write
the sales
material
for you. It will cost you money. The outlay will be
more
than compensated for by the business generated.
Let me give
you
a practical example. In 1984 I wrote a
one page circular,
incorporating
an order form which promoted a book I'd just
acquired
the distribution rights to. That
circular has been in
continual
use since then, and it's now 1990. If
I'd paid to have
it
written, I would have parted with, I'd guess, about $50 - $100
in
those days. The circular brings in more
profit than that each
week.
Yes,
I know. I don't practise what I
preach. I didn't go to the
professionals
for my own sales material. I wrote it
myself. But
writing
is a skill which takes time and practise to acquire. In
some
ways it's a gift, and not everyone has it.
In fact most of
my
friends in the direct mail business don't write their own
material. The pay to have it done. And unless you enjoy working
with
words, I suggest you do the same.
How
do you find a professional copywriter?
Your local yellow page
directory
will have the advertising agencies in your area listed,
and
they should all employ copywriters. But
do be careful here.
You
need an agency which is well experienced in direct marketing.
Some
agencies have little experience in this field, having spent
their
time devising lavish ads for cars to fill the pages of the
colour
supplements, or inventing memorable slogans for brands of
lager. Make sure you choose an agency where they
have at least
one
writer experienced in writing "long copy". Ask to see
examples
of their work.
If
all else, write to me, care of the publisher of this manual,
and
I will forward you the addresses of a couple of freelance
copywriters.
Incidentally,
if you do use an advertising agency, you could also
get
expert advice from them on the construction of the mailshot:
envelope
messages, discounts, free offers and so on.
They'll also
be
able to suggest suitable mailing lists for you.
Which
brings me to the next chapter.
THE FIRST STEP
(CONTINUED)
It
may seem that we haven't got very far.
You've spent a fair bit
of
money by now, getting your product and your sales material
organised. Yet you still haven't fulfilled your first
objective.
Which,
in case you had forgotten, is to build a mailing list.
As
with most worthwhile enterprises, it's the initial groundwork
that
takes the time. Like decorating a room -
you spend more time
stripping
off old wallpaper, filling cracks and cleaning down
surfaces
than you do papering and painting. Or,
if you don't, the
decoration
job looks shoddy and doesn't last. Or,
maybe, like me,
you've
watched the building of a new house.
Nothing seems to
happen
for weeks and weeks. Then, suddenly, the
walls are roof
height
within a few days. Of course, the
builders have been
digging
foundations, laying drains and pouring footings during the
time
that nothing seems to be happening.
Treat
your mail order business like a house, or a room that needs
decorating. Spend plenty of time on the
preparations. If you do,
your
business will almost run itself eventually.
Enough
of these analogies. You want that
mailing list. Here's
the
next thing you must do to get it. Buy a
computer.
YOUR COMPUTER
I'm
quite serious. It's almost impossible to
operate my blueprint
without
a computer - you'll see why later.
You
may already possess a computer, of course.
In which case it
will
probably do for the purpose. A simple
home computer which
the
kids have used for playing games will serve quite well, for
the
time being at least. But you will need a
disc drive rather
than
a tape recorder to attach your computer.
You'll also need a
piece
of software - a database manager. There
are database
manager
programs available for all popular computers, and you'll
probably
find something suitable in your local hi-fi shop.
I
have no intention of giving you a detailed account of the
operation
of a computer system in this manual. Get
a computer, a
disc
drive, a printer and a database manager, and learn how to use
them. Again, you're investing time and money. Just think of
those
foundations.
The
computer system will do three jobs for you.
First, it will
store
the names and addresses which go to make up your mailing
list. Secondly, it will abstract vital information
for you.
Thirdly,
it will print out address labels.
Of
course, you can also use the computer for typing business
letters,
keeping your accounts and so on. These
are bonuses.
It's
primary aim is to process information for you.
It's ability
to
do this quickly and accurately is the whole basis of my
blueprint
for direct mail success.
You
are now in a position to begin the construction of your
mailing
list. You have an opening offer - one
which is pretty
well
irresistible. You have a nicely produced
set of literature
promoting
your offer. You have a machine to store
information.
Not
it's time to meet the world.
ADVERTISING
Your
first method of obtaining customers will undoubtably be via
advertisements
in the press.
Please
keep in mind the essential purpose of this first stage. It
is
to build a mailing list. Therefore you
won't be placing the
kind
of advertisement which invites readers to send money direct.
You
won't be "selling off the page".
Your
strategy is more subtle. You're going to
invite readers to
send
for your literature. Hopefully some of
them will buy. But
if
they don't - you'll still have their names and addresses neatly
tucked
away on your database.
First,
you must select the papers in which you intend to
advertise. The selection will, of course, be determined
partly by
the
nature of the goods you are selling. My
own experience
suggests
that it's best to use papers where there are other
advertisers
selling the same kind of goods. A few
pounds spent at
a
large newsagents will steer you in the right direction, but I'm
going
to make a few suggestions anyway.
For
just about any kind of goods, the Exchange and Mart is a good
bet. If you live in or close to London, there's a
similar paper
called
"Loot" which also carries ads for a wide range of goods.
The
daily newspapers often carry small classified ads, e.g. the
Daily
Mail on Saturdays. Sunday papers are
also excellent media
to
advertise most kind of goods.
A
number of magazines carry a good range of classified ads - The
Lady,
The Countryman, Country Life, This England, are examples.
Many
specialist magazines also have good classified section: for
example,
the gardening and angling press (good targets for outdoor
wear),
computer journals, DIY magazines, practical health and
psychology
papers, magazines catering for retired people,
religious
organs, etc., etc.
As
you can see, there's no shortage of places to advertise.
WRITING YOUR AD
The
construction of your advertisement deserves time and thought.
It's
a good general rule to be guided by other advertisers'
successful
efforts.
So
you should be constantly studying the advertisement sections in
the
papers you decide to place advertisements.
Identify those
which
appear week after week, wording unchanged.
They are the
ones
which are working. Model your own ads on
those. But please
don't
copy. Your message must be
original. Readers will soon
spot
that you're attempting to use someone else's efforts to
feather
your own nest. You might also get into
some awkward
copyright
tangle with the owner of the original ad!
The
AIDCA formula has been used for years in the advertising
industry,
and you might find it useful if you're going to write
your
own ads. AIdCA is an acronym for
ATTENTION, INTEREST,
DESIRE,
CONVICTION and ACTION. Your
advertisement must first
ATTRACT
the reader's attention - by a compelling headline,
usually. So interested, in fact, that they begin to
DESIRE what
you
have to offer. A good ad will build on
this desire and turn
it
into a CONVICTION that you're really offering a fantastic deal.
The
reader is then compelled to take ACTION: either by sending
money
for the product or by writing to request further details.
This
might sound like a tall order for a three line ad in Exchange
and
Mart - but if you look at the regulars, you'll see that the
formula
is there. A snappy opening, a few words
extolling the
product,
creating interest and desire, then an invitation to act -
write
for details, etc.
If
you have opted to use an advertising agency to write your
promotional
literature, you can also get them to construct a few
advertisements
for you. Another source of help is the
paper or
magazine
which will be publishing your ad. They
are often
prepared
to give advice on the composition of an advertisement.
One
thing which your advertisement MUST contain is a key. When
you
get a reply from a potential customer, you must know which
paper
he saw the ad in. Since he will rarely
bother to mention it
in
his letter (often all you'll get is a stamped, addressed
envelope),
you should incorporate some feature in your address
which
identifies the medium.
A
popular method is to use a department code after your name:
"Smith's
Mail Supplies, Dept Z", for example.
But many reader's
won't
bother to write the department on their envelope, correctly
reasoning
that "smith's Mail Supplies" by itself will still reach
you. So it's better to make some alteration in the
actual wording
of
the address. For example, in one paper
you could put "Smith's
Mail
Supplies", in another "Smith's Supplies", in another
"S.M.S."
and
so on.
You
need the key for two reasons. First you
need to analyse the
pulling
power of an ad by the method I described earlier.
Secondly,
it's a powerful piece of information about your customer
which
my blueprint makes much use of. See the
next section for
details
of this.
PLACING YOUR ADS
It
should be easy. Just send the ad off to
the selected
periodical
and leave them to get on with it. In
practice, there
are
several hurdles you need to clear before your advertisement is
exposed
to the world.
Some
papers will want you to fill in a form.
It's a very long
form,
and asks all sorts of questions which you will probably feel
are
intrusive: how much money have you put into your business, how
long
have you been trading at that address, have you ever been
declared
bankrupt and so on. If you want to
advertise in those
papers,
you must fill the form in. And I must
warn you now that
there's
a good change that your ad will be rejected.
In the same
way
that banks will only readily loan money to people who have
already
got money, these papers will only accept ads from
companies
which don't need to advertise; i.e. companies which have
already
built up an extensive mailing list.
This
is unfair, I know. But it's the way the
advertising world
works. When your company is a household name, those
same papers
will
be eager to accept your ads.
Fortunately,
there are plenty of papers which do not operate such
tight
restrictions. Often your ad will be
placed without
question. Sometimes you might have to submit the sales
material
for
approval, perhaps even a sample of the product.
Eventually,
your advertisements will appear and you will have made
a
start with the construction of your mailing list: a treasure
infinitely
more valuable than gold!
DEALING WITH
ENQUIRIES
As
soon as you get letters from interested readers, enter the
customer
details on your computer database.
Double check that
you've
entered the name and address correctly.
This might be
difficult
in some cases: you'll soon learn that the word
"handwriting"
is interpreted in the wildest possible sense by a
large
number of people!
Of
course, it's not only the name and address you'll be entering
on
your computer. When you set up your
database file, you should
also
allow space for such items as: the paper in which the ad
appeared,
the date you received the reply, the goods which you've
promoted
to the customer, the goods he actually bought, the amount
of
money he's spent with you, and so on.
You should also leave
plenty
of space for additional comments which might occur to you
later.
Send off the promotional leaflet as soon as you receive the
enquiry. And if you get an order, despatch the goods
immediately.
You're
trying to build a profile of yourself in the mind of the
customer. An image of reliability and efficiency. This image
will
be the basis of the relationship which you will attempt to
build
with each customer in time.
THE FIRST STEP
(CONTINUED YET AGAIN)
We're
spending a lot of time on this first step.
That's because
it's
the most important. Nothing is more
essential to the success
of
your direct marketing enterprise than to create a database of
customers.
MAILING LISTS
The
second method of building your mailing list is by the use of
other
people's lists.
Let
me say at the outset that using "bought in" lists is a very
risky
business. Risky, that is, if you are
intending to make a
profit
from your mailshot. Conversion rates of
one per cent are
actually
excellent when you use a rented list.
More often it's
half
a percent, or even less.
Why
should this be? People are extremely
reluctant to part with
money
to someone they've never heard of.
Someone who writes to
them,
without invitation, asking for money. It
has to be an
extremely
powerful message to sell on a "cold" mailshot. So why
am
I even suggesting the possibility?
Look
at it from a different angle. Suppose somebody
DOES buy from
your
unsolicited mailshot. What a prospect to
add to your list.
You
have the address of a person who is so keen to buy goods
through
the post that he's sending off a cheque to a company HE'S
NEVER
HEAD OF AND NEVER HAD DEALINGS WITH! A
prime target if ever
there
was one.
Let's
do some more sums. Suppose you do only
get half a per cent
conversion
on a "cold" mailshot. That
means you must send 200
pieces
of mail to get one customer. That will
cost you $30 for
the
stamps, $2 or more for the envelopes, $16 to $20 for the
circulars,
and, let us say, $16 for the rental of the address
list:
a total of about $65 to $70. The one
sale you make brings
in
- let's say - $15. So you've made a loss
of about $50 on those
200
mailings.
Putting
it another way, the customer has cost you $50.
Sounds
like
a lot of money just to add one name to your mailing list,
doesn't
it? But, as I've just pointed out,
you've got yourself a
real
quality name. And again I'll illustrate
with a simple
example
from my own experience.
While
drafting this chapter, I got my computer to run the results
of
a cold mailshot I did four years ago.
I'd bought 1000 names
for
$60 - names of book buyers. I mailed
them all with a simple
circular
and letter shot - the printing cost me about $35 as I
recall,
postage was $130, envelopes $8 and "stuffing" cost was $10
-
a total of $243. I got 11 customers for
that expenditure. I've
just
checked the sales recorders of those customers.
One of them
has
spent getting on for a thousand pounds with me.
A couple more
have
also spent three figure sums.
So
that investment of $243 has paid off tenfold!
Yet what if I'd
taken
the short term view, and merely totted up the money received
from
that first mailing. It amounted to just
over $100. So I'd
made
a loss of $140.
Now
do you see the value of the long term view?
The need to
regard
your first mailings as investments.
Once
again I stress that you're not angling for money, at first.
You're
angling for PEOPLE.
FINDING MAILING
LISTS
Where
do you get your mailing lists from?
There are various
companies
who specialise in the supply of lists.
They are list
brokers:
they rent a list from the list owner, then sublet it at a
higher
fee to the ultimate user.
List
brokers are particularly useful if your resources are
limited. You will often find that the list owner will
only rent
out,
say, a minimum of 5000 names at a time.
This will cost you
getting
of for $500 and is a major expenditure if you're starting
out. A list broker may have several customers
requiring the same
list'
he could rent 5000 names, then split them into groups of
1000.
Incidentally,
note that I say "rent" rather than "buy". When you
obtain
a mailing list, it will be for just ONE use.
The names
will
be supplied on self adhesive labels, so you just stick the
label
directly on to your envelope. You are
not supposed to
record
the names of the people on the list so you can use it over
and
over again. If you do this, the list
owner will find out and
will
sue you.
Besides,
most of the names on a bought list are no good to you.
You're
only interested in those prime customers who will continue
to
patronise you for years to come - and their names will go on
your
list when they send in orders.
How
do you contact a list owner directly?
The simplest way is to
do
what I did - write to the companies marketing products which
are
related to the goods you intend to sell.
Many of them will be
reluctant
to allow anyone else into their particular spot on the
market,
but some will be quite happy to let you have their
customer
list. They will have already built up a
strong
relationship
with their customers and will know that a little
competition
won't hurt them. They will be very happy
to make some
almost
pure profit out of the provision of a few thousand address
labels.
Don't
expect lists to be cheap. Or, if they
are cheap, avoid
them. There are no free lunches. If you want a quality list -
one
which will bring you a 1% response - you have to pay for it.
Expect
to pay $70 - $120 per thousand.
When
your advertisements have been running for some time, you'll
find
that list owners will approach you.
Finding lists is always
difficult
when you're new to the game. In a
remarkably short time
it's
more a question of which one to use.
You
now have the nucleus of your mailing list.
You will have
noticed
that it contains two types of person.
The names obtained
from
rented lists will be made up entirely on people who have
bought. The names obtained from advertisements will
be made up of
people
who have bought plus people who have merely replied to the
ads. However, both types of customer have one
thing in common.
They've
both gone to some degree of trouble to contact you. The
more
trouble they've gone to, the better their potential. If
they've
gone as far as writing you a cheque, they are your
"bankers. They're the ones who will make you
wealthy. But even
if
they've just gone to the extent of sending you an SAE, they've
still
shown some interest in you. There's a
good chance that the
enquirers
can be converted to buyers.
Your
mailing list will take you about a year to build up to a
reasonable
size. You need to aim for several
thousand mixed
buyers
and enquirers. As you will have
appreciated, it's been
demanding
of time, more importantly of money. Is
there any way
you
can reduce the demands it makes on your pocket?
If
you have a really good offer, it may be that you receive enough
return
from advertising to cover your costs.
You might even make
a
profit! If your resources are limited,
it's probably best to
stick
to just advertising in the first instance, and move on to
the
mailing list method when you're more established. It is
actually
possible to build up a good mailing list free of charge.
But
I can't guarantee that this will be the case.
You must be
prepared
to suffer technical losses in the first instance. If you
can't
afford to do this - forget about mail order for the time
being. Put a little money away each week until
you've built up
some
capital.
The
other way of subsidising your outlay is to rent out your list
to
other businesses. You can do this once
your list has built up
to
around 1000 names (this won't take long).
A little later in
this
manual I will deal briefly with the marketing of your mailing
list. However, if you decide to do this, you should
consult a
specialist
text.
PROTECTING YOUR
INVESTMENT
If
you have a precious possession, you look after it. You keep it
in
a safe place, you insure it, you check it every now and again
to
make sure it's in one piece.
Your
most precious possession is now your mailing list. So you
must
protect it. The worst thing that can
happen to a mailing
list
is for it to disappear. And the trouble
with storing a list
on
computer is that it is liable to suddenly disappear into -
well,
not thin air, but certainly to vanish.
Computer discs are
usually
reliable. Occasionally, however, a disc
gets "corrupted"
in
some way. If this happens, you won't be
able to access the
information
it contains. Your precious list will
have gone
forever. Just think: it might be worth hundreds of
thousands of
pounds. All gone because of an electronic gremlin.
Another
damage is that you might instruct the computer to erase
the
file containing your mailing list.
Obviously you won't do
this
deliberately; it's surprisingly easy to type in the wrong
commands,
though. Just one mistyped key could do
it.
The
point is, you must keep a back up copy of each disc storing
vital
information. All computers have a
facility for making back
up
copies, and it's quick and easy to do.
So do it - daily if
possible,
certainly weekly.
So
now you have several thousands of names on your customer
database. It's now time to move on to the second stage
of your
blueprint.
GET TO KNOW YOUR
CUSTOMERS
Before
I tell you how to do this, let me make one thing very
clear. Just because you have moved on to stage 2 of
the
blueprint,
it doesn't mean that you should abandon stage 1.
In
fact, it's a bit misleading dividing the blueprint up as a set
of
separate steps. Rather it should be
regarded as a series of
integrated
activities, all of which are carried out at the same
time. Of course, at first, you can only do one
thing: start to
build
your mailing list. Once you've made a
start with that, all
the
other activities of the blueprint should be carried out in
concert. And you should still carry on extending your
mailing
list
in the manner I have described in the preceding chapters.
With
this in mind, let's see how you can get to know your
customers.
There
was a time, before the multiple chain stores and the
supermarkets
arrived on the High streets, where all shops were run
by
their owners. The proprietor would often
live over the shop,
an
important member of the community he served.
In those days,
all
shops had a counter dividing the customer from the goods. the
shop
keeper would stand behind the counter and fetch anything you
required
from the shelves behind him, or from some mysterious
store
room, hidden from your view.
Despite
the disadvantages of this system (it's slowness, for
example),
it had its points. One advantage, from
the shop
keeper's
point of view, was that it enabled him to get to know
about
his customers. He got to know what brand
of tea you drank,
which
paper you read, how many children you had.
He was able to
form
a fairly accurate idea of your financial status.
A
shrewd tradesman could use this information to increase his
profits. His windows would be filled with goods which
he knew
would
appeal to his customers. If he had a new
line in which he
knew
would appeal to your tastes, he would tell you, show it to
you. He'd make you think he'd got it in specially
for you.
The
old style shop keeper would make you feel special. He'd greet
you
by name, enquire about the health of your mother in law,
recognise
your children when they came in for a lolly.
You would
use
his shop because you KNEW him.
Few
such stores remain. Even the corner
shops and the village
stores
have moved over to self service. Instead
of a man or woman
who
takes a keen interest in your needs, you get a bored assistant
prodding
at the till buttons while carrying on a desultory
conversation
with a colleague.
However,
you are now going to bring back those halcyon days of
personal
service. You are going to develop a
personal
relationship
with the customers stored away on your database.
Like
the old time shop keeper, you're going to get to know your
customers,
then exploit the knowledge you obtain to make money.
Your
computer is an essential tool in this process.
Indeed, it
already
contains much vital information. You
know, for example,
what
goods, if any, the customers have bought.
If a person has
spent
$10 buying a book through the post, he'll be ready to spend
$10
on another book quite soon. If he's
bought a garden plant,
he'll
buy another plant. Or a greenhouse, or a
lawnmower. This
much
should be obvious.
Another
piece of information you already have on your database is
the
paper carrying the advertisement which the customer replied
to. This gives you a picture of your customer and
tells you a
little
about his or her interests. Obviously if
it was the Church
Times
or the Angling World you have an immediate picture of the
customer's
interests. However, even a general
magazine can give
you
valuable information. A glance at the
magazine can tell you
that
it's "down or up market", whether it appeals to men or women,
highly
literate people or otherwise.
With
this one piece of knowledge, you can already think in terms
of
tailoring your next mailshot to appeal to a particular type of
customer. However, I'm anticipating the subject matter
of the
next
chapter.
How
can you find out more about your customers?
And what
information
should you obtain?
The
easiest way to find out about your customers is to write and
ask. However, it's unlikely that you'd get many
replies if you
sent
out a circular saying "tell me about yourself". You'd also
be
neglecting a fundamental axiom of the mail order professional,
which
is that every communication with a customer should carry the
potential
of a sale.
So
you'll gather your information by selling something.
You
can do this right away with the customers who place orders
with
you as a result of your first mailshot.
Tucked in with the
goods
will be another sales circular, promoting a related product.
Naturally,
this new circular will have been prepared with the same
care
that you took over the first one. It
will have been
professionally
written, neatly typeset, and attractively
presented.
There
are two key differences between this mailshot and the last
one,
though. This one is post free - you were
going to send him
the
goods anyway. And the chances of making
a sale are many, many
times
greater now. You're selling a buyer, not
an enquirer. that
1%
return you hoped to get from the cold direct mailing will leap
to,
perhaps, 10% or more.
The
fact that a customer buys again is, in itself, valuable
information.
However,
you can gain a lot more information than this by
including
a questionnaire with the goods. This will
contain a
list
of questions designed to give you more information about the
customer. Here's a list of items of information you
could obtain
from
such a questionnaire:
Age.
Sex. Marital Status. Number of Children. Occupation.
Income.
Hobbies. Subjects on which the customer would like further
information.
Questionnaires
like this are now often included with the guarantee
which
accompanies many types of goods. The
customer is invited to
fill
in the questionnaire when returning the guarantee card.
When
devising the questionnaire, make it as easy as possible to
complete. Let the customer tick boxes wherever
possible. For
example,
when answering questions on age or salary, give a range
for
them to select from. The final section
mentioned, "Subjects
on
which the customer would like further information", should also
include
a selection of items to tick. Include a
wide range of
items
sold by mail order: clothes, DIY products, books, videos,
records,
correspondence courses, gardening items, etc.
Don't just
limit
yourself to the items you plan to sell yourself. Always
keep
in mind the possibility that you'll be renting out your list
to
a wide range of other businesses.
You'll
need an incentive to make the customer return the
questionnaire. The usual one is to make the returned
questionnaire
qualify for entry in a prize draw. You
could even
promise
a free gift to everyone who returns it.
You're still
building
your mailing list when you add all this extra information
to
your customer records, and you must still regard this as an
investment.
The
questionnaire is only going out to buyers, not enquirers. So
now
you must get more buyers. Prepare a
second mailshot, this
time
for the people on your list.
All
the advice given in an earlier chapter about selecting a
product
and producing a high quality sales circular still applies.
This
time the computer is mailed to every address on your own list
(your
computer will print out address labels for you). Orders are
despatched
as received, each containing a questionnaire, together
with
a circular promoting another product - this could easily be
your
original product if the customer hasn't already bought it.
Update
your computer files when orders come in.
Do the same when
questionnaires
are returned.
Gradually
you'll build up a picture of your customers which will
enable
you to "work your list" to maximum effect.
TAILOR YOUR
OFFERS
You've
spent a long time digging the foundations of your mail
order
business. It might have taken you a year
or two to build up
a
top quality mailing list packed with information about your
customers. As I have mentioned more than once in this
manual, the
blueprint
doesn't come cheap, in terms of both time and money.
But
now you are ready to start making money.
With luck you should
be
making it for many years to come. The
investment is about to
pay
you dividends.
DON'T LET THEM
FORGET YOU
You
must never let your customers forget you.
To make sure of
this,
you must mail them no less than six times a year.
I'm
not suggesting that you have six brand new offers every year
(although
some firms seem to manage this). There's
no reason why
you
shouldn't repeat an offer that's gone out before. My own
practice
is to mail each offer THREE times. The
second one goes
ut
abut six weeks after the first, and is sent to all those
customers
who didn't buy the first time. The
mailing is identical
in
every respect to the first one. I get
about half the
conversion
rate I did with the first mailing.
About
four months later I do the third mailing.
This time it's
slightly
different. I send the original sales
circular, but I
also
include, if possible, a testimonial or two.
This shot
usually
brings in another two or three sales per hundred - enough
to
make a small profit. Any kind of profit
is fine by me.
Using
this technique, you can keep in regular touch with your
customers
by having just three offers a year.
Here's the sort of
timetable
you could follow in your first year of "working" the
list.
January:
Mail out Offer A to the entire list.
March: Mail out Offer B to those who bought Offer A
in January.
D
the second mailing of Offer A to those who didn't buy.
April: Mail Offer B to those who didn't receive it
in March. Do
a
second mailing of B to those who had it in March but didn't buy.
June:
Send out the third mailing of Offer A.
Complete the second
mailing
of Offer B.
September: Mail out Offer C.
October: Second mailing of C. Third mailing of B.
You
should now see why it's so important to keep your mailing
lists
on computer disc. Only a computer can
quickly select for
you
all those customers who have not bought Offer A but who have
bought
Offer C. Or all those customers who have
spent more than
3100
with you, etc.
Please
note that I am not suggesting that you deliberately
restrict
yourself to six mailings a year. That
should be a
minimum
objective. If you can manage one mailing
every month, so
much
the better.
Won't
your customers get fed up with all this bumph dropping
through
their letter boxes. Won't they start
objecting to the
immense
volume of junk mail emanating from your address. Some
will
- but not many. You see, to most of
them, your mail will not
be
junk mail. It will be welcomed and read
with interest. This
is
because you've taken trouble to get to know your customers.
You're
going to use that knowledge to select offers which are
going
to be of immediate interest and appeal to them.
Your
reasons
for doing this are to maximise your profits, of course.
But
it will have the double effect of making your mailshots
welcome
in most of the homes they are delivered to.
You
must make sure that every offer is carefully targeted to the
requirements
of your customers. You have an immense
amount of
information
about them. You know what kind of papers
they read.
You
know what kind of money they are prepared to spend on any one
purchase. You know what they like to buy. You know, from the
questionnaire,
what their main interests are. It should
be a
relatively
straightforward matter now to select offers which they
will
seize on with enthusiasm.
THE IMPORTANCE
OF TESTING
My
blueprint is intended to be a scientific approach to making
money
from direct mail. By selecting offers
which are likely to
appeal
to the recorded needs of the people on your mailing list,
you
are acting in a scientific manner. Using
the jargon of
scientists,
you are setting up a hypothesis - a guess which is
based
on and which fits the available evidence.
But no scientist
will
accept the truth of a hypothesis until it's been tested
exhaustively. And you must test as well.
Perhaps
an example will help. Suppose you get
your computer to
search
for the leisure interest most often ticked on the
questionnaires
you send out. Suppose it turns out to be
gardening. So you decide to select a product which will
appeal to
that
interest.
It
has to be a novel product, something which you couldn't buy in
your
local garden centre. It mustn't cost
more than $15 - you've
discovered
that if you offer goods above this price the response
falls
dramatically.
Some
time later you come across what looks like the perfect
product. A set of video cassettes on various aspects
of
gardening. There's one on planning, one on lawns, one of
herbaceous
borders, one on vegetable growing and so on.
They
failed
to sell in retail outlets and you can buy them as a job
lot,
cheap. You take the plunge and buy them.
You
have sales literature prepared as described in an earlier
chapter. The literature promotes the videos as the
"Complete
Library
of Gardening". Your plan is to get
your customers to sign
up
to take one every month at a cost of $12 each.
You
DON'T immediately send to the entire list.
Not even to all
those
who ticked the gardening box on the questionnaire. Instead
you
test your product on a sample of your list.
Effectively,
you're following the same principle as the companies
who
carry out opinion polls. By careful
sampling, they can
predict
the results of a general election pretty accurately by
taking
the opinions of a few hundred people.
You will select a
representative
sample of your entire list for the test.
There
are several ways of doing this, but the easiest is to take,
say,
every tenth name and print an address label.
So you'll be
mailing
to ten per cent of the list. Unless your
list is very
small
indeed, the test mailing should tell you whether or not it's
worth
carrying on. You will analyse the
results as shown earlier
in
the manual, and check the profit per thousand mailings - you
can
do this even if you only sent two or three hundred pieces in
the
test. Despite what some of the experts
say, I have always
found
that even a mailing of three hundred gives a useful
indicator
of the likely results of a full mail or "roll out".
If
the test proves a flop, think again.
Don't abandon the
product. Rejig the literature. Try to find a different angle.
Maybe
the club idea won't work for the videos.
OK. Then try
listing
the titles in a catalogue and let your customers order as
many
or as few as they like. Test again.
If
the test result is inconclusive - showing only a very small
profit
or a very small loss, then test on another sample.
And
if you get a good result, one which gives you a clear profit:
roll
out.
THE REAL SECRET
OF MAIL ORDER SUCCESS
I
said earlier that all the activities which I have included in my
blueprint
are interactive. They should all be
carried out at the
same
time, and they will all reinforce one another.
This
reinforcement will be the real cause of your ultimate
success.
When
you find, by the testing method outline above, that you have
a
winning mailshot, you'll have a winner not just for one mailing,
but
for many years to come. This is because
you will still be
carrying
out the first two steps of the blueprint: building up a
mailing
list and compiling information about the people on it.
So
you'll always have fresh addresses for your top performing
mailshots. And once you've identified three or four real
winners,
you'll
have a substantial income by just automatically mailing out
to
the new prospects. You'll be able to
predict with almost total
accuracy
the money you will make from each of these "bankers".
After
a couple of years the investment of time and money you made
will
seem trivial. This is the real secret of
mail order success.
MARKETING YOUR
ADDRESS LABELS
You
can make a very substantial extra income by allowing other
mail
order dealers to use your mailing lists.
This gives you a
product
you don't have to go out and buy. It's
on tap at the
touch
of a computer button: you are your own manufacturer.
The
profit is excellent, too. You can buy a
box of 8000 computer
labels
for less than $30 - that's around $3.50 for 1000 labels.
If
you maintain a good database, you can rent out 1000 addresses
for
anything between $70 and $120, depending on the demand!
You
have packed your customer database with information. So you
can
offer your mailing list customers a choice of lists: people
interested
in a variety of leisure and professional goods, people
who
have spent more than a certain amount, people who have replied
to
ads in a particular paper, people living in selected areas of
the
country, etc. Your computer will happily
select on the basis
of
any information you've stored.
Mailing
lists should be marketed in the same way as any other
product. That is, you must have a well written and
well presented
sales
leaflet. You must find a mailing list of
likely customers.
You
must test the pulling power of your leaflet and your list
selection. Then roll out: and maintain the roll out
indefinitely.
Your
mailing list should prove one of your best selling products.
Indeed,
some companies follow the steps of the blueprint with the
sole
object of building up a marketable mailing list!
You
must keep your list clean. The regular
mailings you make to
your
list will do this. Erase all returned
addresses immediately.
Ask
your customers to let you know of any returns they get,
offering
to replace on a 5:1 basis. That way,
you'll get build a
reputation
for a well managed list, and customers will rent from
you
again and again.
To
stop people abusing your list by using more times than they
have
paid for, you must seed your list with "sleepers". These are
the
names and addresses of friends who return all mailshots they
receive
to you. You can then check who is sending
what. When a
customer
orders a list, make sure he signs an agreement specifying
that
it's for one use only.
Actually,
few dealers will want to mail a list twice.
The real
danger
is that an unscrupulous customer may type your addresses
into
his own database and then rent them out as his own. He will
obviously
not type in any identifier you may have added to the
labels
so the only evidence of multiple use will come when your
sleepers
start getting mailshots from companies you haven't rented
your
list to. And there's no proof that their
names might not be
on
someone else's list quite legitimately.
Your
best way out of this problem is to key the sleepers' names or
addresses
individually, each time you rent out a list.
You could
make
slight changes to their initials, put their Christian names
in
full, put a letter after their house number, make a trivial
spelling
change to some part of the name and address - anything.
But
you must keep a record of the changes so that they make be
associated
with the order. I get my printer to buzz
out the
modified
addresses on the back of the order.
If
you do find that customers are re-renting your list, it is a
very
serious matter. Consult a solicitor
immediately. However,
on
a reassuring note, I have had this kind of trouble only ONCE in
the
last decade, and that was sorted out quickly.
THE BLUEPRINT
I
end by giving a brief summary of my blueprint for direct mail
success.
BUILD
A MAILING LIST. Be prepared to spend
time and money on
this!
GET
TO KNOW YOUR CUSTOMERS. Get as much
information as you can,
and
store it on your database.
TAILOR
YOUR OFFERS. Select goods and services
which will satisfy
your
customers' needs and desires, as indicated by the information
on
your database.
TEST
YOUR MAILSHOTS before "rolling out".
MARKET
YOUR MAILING LIST.
And
finally, most importantly,
OPERATE
THE ABOVE ACTIVITIES IN CONCERT. Mail out
your tried and
tested
shots to every name added to the database.
Keep on
gathering
information. NEVER STOP.
No comments:
Post a Comment