In today’s day in age, it’s become more and more important to know exactly what kind of ROI you’re getting back on your advertising efforts.
That’s not hard in the digital world of advertising, but how measurable is it in traditional mediums?
Maybe you’ve run billboard placements or radio spots or even direct mail. The problem is, do you really know what kind of return you’re getting on that?
Is your increase in sales due to your billboard placement or your media buy, or is it merely circumstantial? Will that media buy still have the same effect on your sales 6 months from now?
The fact of the matter is you never really know with most traditional methods of advertising unless there is a true way to track it.
Then, there’s direct mail, the trackable, traditional advertising medium that has proven to deliver measurable, consistent results, good and bad.
But, before we can move forward we have to think about a couple things to really understand what a cost effective direct mail marketing strategy is and how it can be executed.
The Cost of Direct Mail
I’m sure the first question right off the bat is, “How much is a successful campaign going to cost me?”
Well slow down cowboy, we have a few things we need to think about first…
First off, direct mail comes in all shapes and sizes, especially postcards. But that’s not just it, does the postcard need perforations, lamination, gift card pop-outs?
In some cases, a thick stock 4.25” x 5.65” laminated postcard with 1 or 2 offers and one or two pics will probably get the job done without too much text.
Our clients are seeing consistent 8-20% response rates with that range, taking into account a range of different types and concepts of businesses, strength of brand reputation and how strong of an offer you are willing to put out.
Need more room for text, pics, offers, an entry form or to promote multiple locations? For this, an over sized 6” x 11” thicker stock paper postcard with perforations for offers (Don’t make your customers cut a coupon out) or a 5.5” x 8.5” over sized laminated postcard with gift card pop-outs are your best options.
In our experience, the larger paper cards will typically bring in 2-3%, maybe as high as a 6% response rate with very aggressive offers whereas with the laminate option, you can expect 10-25% plus.
Pricing can range from $0.30 to over $1.00 per piece depending on the specific piece type, postage, and target list.
Selecting the Right Postcard & Offer
Now that you know a little more about the many kinds of postcards and you’re super excited about life, it’s time to figure out which one is going to work best for you and your campaign to make sure this becomes a wise investment vs. a costly expense.
First things first. What kind of promotion are you running? Don’t just pick the cheapest or most expensive option without first pondering a few questions.
Think about your campaign from your SPECIFIC end goal and work it backwards from there. Think about how the customer interacts with your postcard. Start from inside the (mail)box!
1. What type of an offer would you like to extend? HINT: Be as aggressive as you can be. Is it a short-term event (1 day-2 weeks) or a longer campaign (3-8 weeks)?
2. What is your initial acquisition cost per customer? How about Lifetime Value of that customer?
3. Based on the timeframe and offer, how many customers do you need to get in the door to get a good or great return on investment?
4. How quickly do you need it in mailboxes?
5. What does my current customer look like? How do I attract more like them? What is the most cost-effective list strategy?
Target Audience – Fish where the fish are frenzying!
Are you getting a big enough piece of your market on a consistent basis? How do you know?
(More on this to come)
Start with your core market. A saturation list allows you to focus on specific carrier routes or neighborhoods with the ability to select by demographic information such as average income, age, home values, % of homes in route with children present, etc.
This will help you keep your postcard costs down by not having additional list and postage expenses.
If you have a business with a niche customer, there are limitless list possibilities to directly target them.
Have a past customer list? The right vendor can do a deep dive into that data to identify the highest concentration areas of current customers which enables you to target their neighbors and neighborhoods.
Once you feel good about your game-plan, launch it with confidence into your immediate market with an offer that would be aggressive enough that it would get YOU to respond.
TIMING – WHEN DO I NEED TO MAKE THE BIGGEST SPLASH?
Planning ahead will make your life easier. There will always be peaks and valleys in business but we can offset the big dips.
Consider looking at the maximum quantity you would like to mail and breaking it up into a few drops. Make sure not to send too few per drop as you still want to create a noticeable buzz in your store.
Save $ – By signing up for a larger quantity, you can take advantage of considerable print savings. It’s also important that your vendor gives the flexibility to spread the total quantity over multiple drops.
When are you the busiest currently? Beginning, middle or, end of the quarter?
• Beginning – Schedule your mail to hit the 3rd week of the 1st month of the quarter to keep the momentum going.
• Middle – Schedule your mail to hit the 3rd week of the 2nd month.
• End – You guessed it!!!! Schedule your mail to hit the 3rd week of the 3rd month.
• Not sure? Take your total quantity and divide into 3 drops hitting in consecutive quarters, one hitting in each of the time-frames mentioned above.
Postcard Campaign Checklist
• Design – Do you need a custom design produced? Choose a vendor that includes these services as part of their turn-key solution.
• If you or your staff will be providing a print ready design file, ask your vendor for a template and design instructions that will give you the correct building blocks for the file including; printable area, bleeds, cuts for space to place offers, colors to use, and so on.
• List – Select a vendor that will be able to provide you with a detailed demographic list and a map overview of the coverage area to help determine the best target audience for your business.
• Offer(s) – How much competition are you up against?
• You and your competitors are fighting for the same customers and the battle begins when the customer opens their mailbox.
• Whose postcard is going to stand out and get them to read more?
• Now for the offer – What would be compelling enough to make you want to save this and redeem it?
• The offer will greatly depend on the type of business or service you offer.
o Examples for Fast Casual Restaurant Postcards and when to use them;
– Free Entré – Mail core market 2-4 weeks after store opens to allow time for initial buzz to die down and for processes to get finely tuned.
– BOGO or $5 gift card – Mail to generally same area 6 months after opening or for established restaurants anytime a boost is needed.
– New or promotional menu items – BOGO on larger ticket items or Free smaller ticket item for purchase of a larger ticket menu item.
• Make sure to plan ahead on these to make sure and hit the market on or shortly after the date of the campaign starting.
Print Deadlines
By planning ahead, you will avoid the headache of missing an important time frame or scrambling to put everything together last minute.
Turn-around times from printed product to mailboxes can range from 5-20 days depending on postage and area of the country you are in.
A good vendor will lay out a clear timeline for these deadlines and coordinate the drop for you.
Tracking Your Results
You have invested valuable time and money promoting your business.
If your vendor wants to become your marketing consultant long-term, they are going to need to be able to show a good ROI and determine your cost per customer acquired.
Tracking Codes – Are you able to program coupon codes into your POS system and run reports to determine # of responses?
If so, great! That will help you quickly determine response rate and cost per customer acquisition.
How can we use this information to learn and grow an even better strategy?
By using a sequential # (unique # on every card) you can tie each coupon code back to the specific address it came from.
From here, you will be able to identify the top producing neighborhoods and map those areas out for future use.
Important – Keep an eye on your overall business volume during the campaign dates and also your website/social media/google review activity to see if there is a jump in measurable and long-term impact!
ACQUISITION COST PER CUSTOMER VS PRICE PER PIECE
If you have run a postcard program in the past were you able to track it? How much did you invest? Time and $? How many customers came in?
If you spent $3000 and got 300 customers through the door, you would be looking at a $10 cost per customer acquired.
If you got 700 customers through the door, you would be looking at $4.28 cost per customer acquired.
Cute math equation or a better way to gain market share over twice as fast?
Using as conservative and fair examples as possible, consider the following…..
You are running a 6-week campaign, using a saturation list and you have the piece narrowed down to an oversized 6”x11” paper postcard with 2 perforated offers (NO SCISSORS REQUIRED,) and a 4.25”x 5.65” laminated postcard with 2 gift card pop-out cards.
Based on a $3000 budget
• 6” x 11” paper postcard – 7,142 pieces @ $.42 per piece turn-key.
You receive a 6% response rate (high end of the averages) or 429 customers.
Cost per customer = $6.99
• 4.25” x 5.65” laminated postcard – 5,000 pieces @ .60 per piece turn-key.
You receive a 14% response rate (realistic and potentially conservative given aggressive enough offer) or 700 customers.
Cost per customer = $4.29
RESIDUAL IMPACT
What is the LV or lifetime value of your average customer?
If you provide your customer with an excellent 1st experience, how many times will they come back over the next 30-90 days, or a year?
How many of them will give you a google review, post their experience on social media, tell friends and family, sign up for a loyalty program and/or dozens of other “Lucky” things that can happen when you deliver the customer with an experience vs a service!
IN SUMMARY
I’m sure, like most business owners, you wake up every morning well before the alarm goes off gleaming with excitement of the idea of spending a few hours of your day being a marketing campaign sub-contractor!
If by chance I am off base and you are one of the few and rare individuals that would rather spend that invaluable time focusing on your team and your customers, then you deserve to have a knowledgeable experienced marketing consultant that will take that off your plate while delivering an exceptional product to your potential customers that you will be proud to have your name on.
Oddly, I can only think of one company off the top of my head that checks all those boxes.
Let’s connect so we can learn about you, your company and your customers and discuss a no obligation recommendation to see if it makes sense to make some noise inside the (mail)box of your most likely new customers.
