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Return on investment

Return on invest­ment — it is the lifeblood that dri­ves our indus­try. The sin­gle mea­sure of our suc­cess. The bench­mark for all best prac­tices. Isn’t it? I think so, but then why do most dis­cus­sions of ROI occur before a pro­gram gets under­way, not after it con­cludes? Why is our indus­try hes­i­tant to use ROI as the fun­da­men­tal eval­u­a­tion of the suc­cess or fail­ure of an ini­tia­tive, not just fod­der while gin­ning up?

Let’s face it — direct mar­ket­ing is an indus­try that is rich with the stuff of math and analy­sis. We are able to gath­er and inter­pret data like no oth­er mar­ket­ing enter­prise. And these mea­sure­ments fall all along the spec­trum of pro­gram ele­ments:

Response Rate: the sex­i­est of all DM mea­sures – or most depress­ing. Response rate essen­tial­ly mea­sures the extent to which an appro­pri­ate­ly tar­get­ed audi­ence acts on a com­pelling offer. The high­er the response rate, the more suc­cess­ful these two key ele­ments of list and offer were appro­pri­ate­ly mat­ed. This is a practitioner’s mea­sure. Not sur­pris­ing­ly then, the most fre­quent and brisk dis­cus­sions cen­ter on this met­ric.

Cost Per Lead: now we’re get­ting to prac­ti­cal­i­ties. This met­ric divides the num­ber of dol­lars spent by the num­ber of leads gen­er­at­ed in a pro­gram. It’s a dol­lar mea­sure­ment, not a per­cent­age mea­sure­ment like response rate. This is a project manager’s mea­sure.

Con­ver­sion Rate: This mea­sure often has more to do with the abil­i­ty of a sales team or call cen­ter to cause some­one to part with their green­backs. How­ev­er, it is also an impor­tant mea­sure of the DM practitioner’s art. It’s one thing to get lots of leads. It’s quite anoth­er to get qual­i­ty leads. Con­ver­sion rate is as much a practitioner’s mea­sure as a sales manager’s mea­sure.

Cost Per Sale/New Cus­tomer Acquired: the mea­sure most wide­ly used to eval­u­ate pro­gram suc­cess or fail­ure. It’s very use­ful because it’s a direct link between the mea­sured results of a project, how­ev­er accu­rate and com­plete, and the bud­get objec­tives set at the begin­ning. It is essen­tial­ly a mea­sure of how effec­tive a man­ag­er was at spend­ing bud­get­ed dol­lars. It is an expense mea­sure­ment. It is the per­fect end­ing point in most eval­u­a­tive set­tings because most think­ing and plan­ning occurs around how much “we can afford to spend” to get a sale, or how much we have bud­get­ed. But it sim­ply isn’t enough. For DM efforts to be ful­ly eval­u­at­ed, ROI must be includ­ed.

Return on Invest­ment: ROI is a mea­sure for those up the chain. It is an asset mea­sure­ment, not a bud­get or expense met­ric. It mea­sures the val­ue and pro­duc­tiv­i­ty of mon­ey as it comes back onto the bot­tom line and then into the bal­ance sheet, not as it goes out as bud­get­ed or expend­ed. Set­ting aside life­time val­ue, ROI is the essen­tial mea­sure of real val­ue in an enter­prise. It is the mea­sure of the shareholder’s well being, not the job secu­ri­ty of a prac­ti­tion­er or the longevi­ty of a con­tract for a ven­dor. The lit­tle secret? I won’t tell you what it is, or else it wouldn’t be a secret, now would it?

I will give you this hint: next time a new project is dis­cussed or a new ven­dor inter­viewed or a new ini­tia­tive con­tem­plat­ed, count the num­ber of times you hear or see ROI as a part of the dis­cus­sion. Write down that num­ber in a safe place. Then, at the con­clu­sion of the project or ven­dor con­tract, be sure to count the num­ber of times you hear or see ROI as a part of the wrap up. If pre-project and post-project counts don’t quite match, you’ve dis­cov­ered the secret.

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Why Direct Mail Is So Powerful?

Direct mail is per­haps, one of the most pow­er­ful mar­ket­ing medi­ums in use today. Few oth­er mar­ket­ing tools can deliv­er your mes­sage with exact pre­ci­sion at such a low cost. The amount of mail in your mail­box every­day attests to the effec­tive­ness of this medi­um (If it didn’t work, your mail­box would be emp­ty!).

Rea­son # 1: It works when you’re not
Like the old say­ing goes, “In rain, sleet, or snow” the mail arrives. Whether you’re sleep­ing, vaca­tion­ing, work­ing, or walk­ing, your direct mail is work­ing for you. It gives your best sales pre­sen­ta­tion over and over again with­out you hav­ing to be present.

Rea­son # 2: It lever­ages your efforts
Do you want to know how to waste your time? Give your best sales pre­sen­ta­tion to one per­son at a time. If you do this, you’ll only sell one wid­get at a time. Send out thou­sands of let­ters and your best sales pitch is being pre­sent­ed to thou­sands of peo­ple simul­ta­ne­ous­ly. That’s called “lever­age!”

Rea­son # 3: Allows you to tar­get with pre­ci­sion
Instead of “spray­ing and pray­ing” your mes­sage to peo­ple who may or may not be inter­est­ed or even qual­i­fied to take advan­tage of your offer, direct mail allows you to pin­point the peo­ple who fit your physcho­graph­ic, demo­graph­ic, and geo­graph­ic pro­file.

Rea­son # 4: You get an imme­di­ate response
Once you send out your direct mail piece it doesn’t take long to get a response. With­in one to two weeks you’ll receive about 80 per­cent to 90 per­cent of all those who are going to respond. If your cam­paign works, you’ll know about it quick­ly. If it’s a bomb, you’ll that quick­ly as well.

Rea­son # 5: It’s easy to track your return on invest­ment
If you’re a small busi­ness own­er you can’t afford to waste a sin­gle pen­ny on waste­ful mar­ket­ing. With direct mail mar­ket­ing you can code your mail pieces to deter­mine the exact num­ber of respons­es you received from each cam­paign. And as I said before, the results of your direct mail cam­paign come back fast, so once you know what worked and what didn’t, you can imme­di­ate­ly start to “tweak” your mail piece to increase your response and hold your mar­ket­ing dol­lars account­able.

Rea­son # 6: It’s rel­a­tive­ly inex­pen­sive
With just $.50 (at the time of this writ­ing) you can send out a direct mail piece that includes your full mar­ket­ing mes­sage. It is amaz­ing what you can get into a small busi­ness size enve­lope and keep under the $.50 lim­it. Pho­tos, news­pa­per arti­cles, let­ters, spe­cial reports, and more can be put in these envelopes for under $.50. This means you can reach 100 tar­get prospects for only $50. Com­par­a­tive­ly speak­ing, that’s a bar­gain!

Rea­son # 7: It gets one-on-one atten­tion
One of the best things about direct mail is that it gets one-on-one atten­tion from your tar­get prospect. Unlike bill­boards or radio and tele­vi­sion com­mer­cials that get your atten­tion while two to three oth­er things also have your atten­tion. Direct mail is opened one piece at a time and read one piece at a time. It gives you the best chance of catch­ing your prospect’s atten­tion and keep­ing it for a peri­od of time.

Rea­son # 8: It’s some­thing you can touch and feel-it hangs around
Direct mail is some­thing that you can hold in your hand. It’s not made of elec­trons that can be delet­ed with the twitch of a fin­ger. It’s not a radio fre­quen­cy sig­nal that is here and then gone a moment lat­er. It is phys­i­cal. It is some­thing that can hang around for a peri­od of time. It has “lin­ger­ing” mar­ket­ing effects.

All these rea­sons I’ve men­tioned make direct mail a very pow­er­ful mar­ket­ing medi­um that, if done right, can have a very high return on your mar­ket­ing dol­lar.

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It is essen­tial that you choose a part­ner who has state-of-the-art tech­nol­o­gy plus the staff to exe­cute projects effi­cient­ly and strate­gi­cal­ly. Fulltech’s tool­box is supe­ri­or, and our team has the expe­ri­ence and the skills, plus unpar­al­leled com­mit­ment to your suc­cess. We will work togeth­er to cre­ate and imple­ment mar­ket­ing solu­tions that suc­ceed – your busi­ness and it’s chal­lenges are like our own. More than a ven­dor – we’re a part­ner in your suc­cess.  
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Honing your marketing message

Your mar­ket­ing mes­sage should be more than a tag line or a slo­gan. It will iden­ti­fy you and your unique sell­ing propo­si­tion. Your mar­ket­ing mes­sage will com­mu­ni­cate your image, exper­tise and the val­ue you bring to the mar­ket place. Your mar­ket­ing mes­sage begins with your adver­tis­ing then con­tin­ues through your appoint­ment set­ting, prac­tice envi­ron­ment, prod­ucts, com­mu­ni­ty involve­ment, cus­tomer ser­vice and many oth­er ele­ments of your prac­tice. Your mar­ket­ing mes­sage should appeal to the demo­graph­ic mar­ket place iden­ti­fied when you study the demo­graph­ics of your area. See our arti­cle Mas­ter­ing Your Area’s Demo­graph­ics for more detail.

You will prob­a­bly find that you will have mul­ti­ple audi­ences to tar­get. For exam­ple, the mar­ket­ing mes­sage that appeals to cus­tomers age 72 and under is dif­fer­ent from cus­tomers over the age of 72. Mar­ket­ing mes­sages based on income or net worth lev­el is also essen­tial to address. For more infor­ma­tion on how to tar­get more than one audi­ence in a sin­gle mail cam­paign, con­tact us we would be glad to help.

Your mar­ket­ing mes­sage should dif­fer­en­ti­ate you from your com­pe­ti­tion. A com­mon way to dif­fer­en­ti­ate your prac­tice is through the image your mar­ket­ing mes­sage con­veys. The aver­age con­sumer cares more about the pro­fes­sion­al pro­vid­ing the instru­ments than the prod­uct or man­u­fac­ture. Now con­sid­er that con­sumers are bom­bard­ed with adver­tis­ing and you will require a plan to make your mar­ket­ing mes­sage res­onate with your tar­get mar­ket. You will need to com­mu­ni­cate a con­sis­tent mes­sage over time.

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If you had a million dollars to spend on a better Mailing List, what would you spend it on?

If you had a mil­lion dol­lars to spend on a bet­ter Mail­ing List, what would you spend it on?

Here are a few ideas ….

Pay each of your exist­ing cus­tomers to paint a red X on their roofs, then hire a heli­copter to fly around your mar­ket area so you could final­ly see where your cus­tomers are com­ing from. Well not exact­ly, but we actu­al­ly have some­thing even bet­ter! The map­ping tools avail­able today are even bet­ter than fly­ing in a heli­copter. Using your exist­ing cus­tomer data­base with a visu­al inter­ac­tive map­ping tool, you are able to fly around your mar­ket place. You will be amazed at what you can learn from see­ing clus­ters of where your cus­tomers live.

1) Imag­ine being able to see your cus­tomers neigh­bors and all the way down to your cus­tomers house. You will be able to see all the roads, high­ways, rivers, lakes, bridges or lack of roads and oth­er bar­ri­ers that may be stop­ping prospec­tive cus­tomers from com­ing to your office. Also you may dis­cov­er some areas to mail that are fur­ther away but, don’t have any­one else to ser­vice them. Inter­ac­tive map­ping doesn’t cost a mil­lion, maybe one to two hun­dred dol­lars or we might just do it for free.

2) Hire the nations top mar­ket­ing research firms to study the demo­graph­ics of your area and break it into mar­ket seg­ments so you could tar­get your area bet­ter. Again not exact­ly. But … Your local news­pa­pers, cable com­pa­nies and yel­low pages does exact­ly that. They hire the nations top mar­ket­ing research firms to define mar­ket seg­ments. This infor­ma­tion is avail­able to you, since you are a poten­tial adver­tis­er with them. All you have to do is know how to ask them for the mar­ket seg­ment data.

3) Hire a psy­chic to tell you which peo­ple on your mail­ing list will get your mail in time for them to book an appoint­ment for your time sen­si­tive event. If your like me you don’t believe in psy­chics. What you can do here is con­sid­er NOT mail­ing to P.O. Box­es for your time sen­si­tive events. P.O. Box­es for some cus­tomers make up 5%,10% or even 15% of the mail­ing list. Many of these cus­tomers may not check their mail­box­es in time for your time sen­si­tive event. Stop mail­ing them and you could save 5% to 15% on your print and mail­ing costs. Oh shoot we are sav­ing mon­ey and we were try­ing to spend a mil­lion bucks.

4) Buy a super com­put­er to ana­lyze your cus­tomer data­base to iden­ti­fy what age, income and oth­er demo­graph­ics your cus­tomers have in com­mon and the mar­ket pen­e­tra­tion you made into that seg­ment. Well It doesn’t take a super­com­put­er any­more to do this. We have a inex­pen­sive tool that can ana­lyze your cus­tomer data­base. If you have not ana­lyze your cus­tomer data­base you should. Cus­tomers always learn some­thing they didn’t know when they look at our pro­file reports of their cus­tomer data­base.