In Direct Marketing, Size Matters
January 3rd, 2005 by Bob Bly
Who knows more about marketing ? big marketers or small marketers?
The answer may surprise you, but in direct marketing, it?s the big clients, more often that not.
The simple reason: they mail millions of pieces of mail, compared to a SoHo that might mail only a few thousand pieces of mail a year.
Therefore, the large marketer is able to do more testing ? testing of mailing formats, teasers, copy, sales themes, lists, premiums, offers, terms, guarantees, and pricing.
These variables make a huge difference. For instance, the same DM piece sent to the best mailing list can generate up to 10 times the response you?d get mailing it to the worst list.
But here?s the thing ? you don?t know which is the best or worst list until you test.
The more testing you do, the more you learn about what works in the marketplace ? and the better your chances of lasting success.
How can a small marketer regain the edge?
I tell everyone who asks me for marketing advice, ?Look at what the major direct marketers are doing, and do what they do. They know more because they test more.?
Do more testing. Many small marketers don?t test, and they should.
Joseph Sugarman, famous for BluBlocker sunglasses, once said that he would typically test 10 new ads at a time.
Nine would be failures, but one would be a hit ? and that hit more than paid the cost of the other 9 test ads.
Testing is easier and faster online, which takes away your excuse for not doing it.
Did you know that in e-mail marketing A/B split tests, just changing the subject line has increased response 25% to 100% or more?
Or that in direct mail, you can double response by changing the outer envelope teaser and lead ? or even the format and design?
So what are you waiting for? Test it for yourself.
This entry was posted on Monday, January 3rd, 2005 at 8:48 am and is filed under Direct Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
January 3rd, 2005 at 11:24 am
Bob, What great insight about testing. I appreciated your effort on this one. Keep up the good work. I’ve added your blog to my Yahoo page so I can keep up with it. Terry The Writing Life
January 3rd, 2005 at 3:00 pm
Anyone who doesn’t know that testing is crucial…is too naive to be allowed out. The problem is…small businesses can’t do a lot of testing. If we want to do a direct mailing, how can we accomplish anything unless we break our list down to really small sections? If I can afford a list of 100,000 names, to pick a figure, how can I make it useful by breaking it into three or more mailings, to really test my campaign? Is a mailing of 25,000 or less worth it? Your esteemed advice is welcomed.
January 3rd, 2005 at 5:46 pm
Great advice as always, Bob. A few additional thoughts if I may …
1. Be careful about which large companies to follow. If you’re trying to generate leads, study direct mail from a company that is using lead generation, not a mail-order business. The difference between lead generation and mail-order direct marketing is night and day.
2. Mail-order companies are more likely to test. Companies that sell direct – companies like Dell, Fidelity, L.L. Bean, Time-Life — are usually big testers because the mail is their life blood. However, many large companies that use the mail for lead generation or general awareness (not the best use of direct mail, by the way) test very little, if at all. They could test more, they should test more — but most of them don’t because the mail is just a small part of their sales process.
3. Small companies can still test – it just may take longer. If, for example, you are only mailing 1,000 pieces a month, try mailing 500 pieces to one test cell (a list, offer, headline, etc) and another 500 pieces to a second test cell. It may take a year before you see any meaningful results, but it’s better than no testing at all.
4. Since most of us know very little about statistical analysis, one rule of thumb to follow for determining quantity is to mail whatever it takes to generate 100 responses. So for a mailing that typically produces 2% response rate, 5,000 pieces would be needed. At 1%, we are looking at 10,000 pieces. I spoke with a company the other day that makes one sale (albeit a large sale) per 1,000 pieces mailed. They would need to mail 100,000 to get a meaningful test result.
Testing is not perfect, of course. Even if you have used a reliable testing quantity, it is probably a good idea to roll out slowly – that is, to increase your quantity gradually if only to confirm the results.
Bob McCarthy
McCarthy & King Marketing
Milford, MA 01757
508-473-8643
bob@mccarthyandking.com
January 4th, 2005 at 3:43 pm
Happy New Year, Bob!
Thanks for sharing your hard-earned DM wisdom.
I think you will find your traffic increasing steadily as people discover that they can learn something from visiting your site.
The blogosphere has a wealth of distributed knowledge. It is the currency of exchange which causes us to become more connected, rather than less.
May this new year see you being connected to more business opportunities and gaining new insights through the experience of blogging.
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