Dear Friend,
I received a question recently and wanted to share it with you.
Is direct mail dead? It seems like since the cost of postage and printing keeps going up, it’s getting more and more expensive to get customers with direct mail. Why do you still recommend it?
I LOVE direct mail and I’ve been pretty successful with it.
But I’ve been most successful using it to sell back end products to my in-house customer list. Click here for an article explaining my epiphany about that when my back was against the wall. I figured out by NOT using direct mail over a period of 5 years I had cheated myself out of a small fortune.
In most cases, my customer is generated online and then marketed to via direct mail offline.
As I’ve seen e-mail response declining quite a bit over the past year and all kinds of e-mail deliverability issues… direct mail to my customer list is responsible for about 50% of my back end sales. If I relied solely on e-mail, I’d be in trouble.
I’ve found that I get double the response to a promotion sent by direct mail than the exact same promotion sent by e-mail.
I also discovered that an OFFLINE customer newsletter doubled the amount of time customers stayed in my continuity program. Online newsletters and e-mail newsletters had absolutely no effect at all. It seems there is much higher perceived value in offline newsletters.
Companies like Phillips, Agora and Healthy Directions still use direct mail pretty heavily for customer acquisition but they have the deep pockets to do it. Most of the time they actually go negative (it costs more to get the customer than the selling price of the product) in acquiring a customer. But they know their lifetime customer value and can make back the negative acquisition cost in back end sales.
You really have to know your numbers to make direct mail work for customer acquisition. I’ve done it (and am still doing it) but it takes a lot more “skull sweat” than quickly whipping out a “half-assed” online campaign. You can get away with a lot more transgressions with your online promotions and still make it work. Not so much with direct mail for customer acquisition.
I highly recommend you generate the sale online and then use direct mail to market to them after the initial sale.
Hope that helps!
All the best,
Doberman Dan
{ 7 comments… read them below or add one }
Dan,
Two things:
1) you didn’t address direct mail lead gen for brick and mortar businesses, like a service business. In my experience, direct mail lead generator (sales letters) has been massively successful.
For example, a few years back we decided to test a 3-step lead-gen and sent out 800 letters at a cost of about $450 dollars for my personal training business. The smallest-priced personal training service package available was $500, and the average package sold with that 3-step letter sequence was $2,500.
We did $47,000 of personal training sales in one month. With the success of the test, we then moved that letter to our second facility and did an $86,000 month, and finally at our third location that letter sequence brought in $103,000 in a single month.
2) And while I won’t disagree with your suggestion to use the internet for your initial sale, don’t you think that when a direct mail piece lands in your prospects mail box, it at least gives you the advantage over the internet when a customer may not know about a product or service?
You know the old adage, “If I own 6 swiss watches, and you own one, who is the most likely person to buy the next swiss watch?”
So, if the list is hot, and I want to sell to a person who I know has just purchased what I’m selling … it seems to me that they may not go to the internet looking for another “watch” … but if they get a letter in the mail, you may just convert them in mass. Or at least in enough numbers to build your list substantially.
Anyway, thanks for the thought provoking post.
A
Hi Aaron,
Very good example of a highly successful lead gen campaign. Thanks for sharing that.
Here’s an article I did about a lead gen campaign that generated a $36,000.00 annual income from a $240 investment.
I LOVE direct mail for lead generation.
But I actually left out part of the question in the article. The reason I suggested using the internet to generate the 1st sale was because the person answering the question had an INTERNET biz.
As I stated in the article, I DO use direct mail for customer acquisition quite successfully… and that includes lead gen campaigns.
If anybody wants to learn how to use direct mail for customer acquisition, I’ll gladly share it. Not many people are teaching it nowadays.
Best,
Dan
50% of back end. That’s great. It’s so refreshing to see some actual figures… something that could really be used in developing a campaign or business model.
(As opposed to a lot of nebulous “value” talk out there. Not naming names… just sayin’.)
Cheers everyone!
Great post Dan,
I actually have a horror story about lead generation via direct mail!
You see, I did everything wrong.
This was two years ago. I wanted to get writing clients so I targeted tiny business owners (my first mistake) then I wrote a lazy ass paragraph of a sales letter with no incentive to respond and mailed out a lazy 100 letters. Haha.
No response!
Back then I was surprised…
However, it’s no real surprise to me now that I received ZERO response. I laugh at how silly I was back then but I haven’t tried getting clients this way again since I’m doing pretty well with my two step Twitter plus Blogging system and I’ve grown in giant leaps as a copywriter.
I love reading and learning about this though because I know it works wonders when you do it right. The ol’ Gary Halbert and Doberman Dan way.
Courtney James A.K.A. ObviousWriter on Twitter
Hey Courtney,
I’ve learned a whole lot more from my failures than my successes. Just consider the money you invested in that direct mail campaign part of your marketing education.
Thanks for having the guts to share that.
Dan
Hey Dan,
It would really be great if you did reveal some of the leads generation tips you’ve acquired over the years.
Shaun
I guess the proper term is customer acquisition through direct mail