Simple direct marketing is often the most effective

The reason why simply is sometimes better is because small businesses have the luxury or targeting only certain locations and smaller areas, meaning costs can be much lower.  Direct mail is a channel that entrepreneurs can optimize with a limited investment but drive tremendous growth. 

In the past there has been a stigma with direct mail, also referred to as “junk mail.”  But just like everything else, as the medium has grown so have the tactics, targeting and offers.  Major corporations have seen success with it - including catalogs, brochures and even simple postcards.  Everyone from Comcast to Verizon to American Express send promotions through the mail for one reason:  they work.  And when I say work, I mean they not only drive people to take action (sign up for credit cards, change cable services and buy the newest cell phone) but also drive brand awareness, something that online advertising often can’t accomplish due to “advertising fatigue.”  If you’re not seen, you’re not remembered. 

Perhaps one of the best examples of direct mail having a huge impact on a company’s bottom line is the IKEA catalog.  According to the furniture retailer’s site, the 2010 version of their catalog was “the world’s third most printed publication (next to the Bible and Harry Potter).”  Last year 198 million copies of the catalog were printed in 56 editions and 27 languages.  When you think about the sheer volume of that, it’s incredible.  In 2009 IKEA reported over 20 billion in sales worldwide.  Needless to say their direct mail efforts drive significant dollars. 

But let’s face it entrepreneurs can’t afford to send out 10,000 direct mail postcards, let alone 198 million.  Catalogs take design work and immense coordination, and I’m not suggesting that’s the route you go.  But that’s not to say that small business owners can’t also take advantage of a local customers’ mailbox and drive business.  It’s all a matter of scale.  Here’s what you need to conduct a successful direct mail campaign:

·        A list of local customers you can mail to: there are dozens of sites that can walk you through this process and sell you a targeted local list for between 10 and 20 cents per name, assuming you don’t have one already.  You can often categorize by new or old resident, income range, age and other demographics.  A 1,000 person list will cost you roughly $150. 

·        A compelling postcard (or brochure, etc.) with a unique offer that you can track back and measure: coupons are always a good way to measure effectiveness because that means the customer has to bring it to a physical location to redeem it, but you can also use a unique URL on your site you want to drive traffic to.  You can even use a coupon code for a web purchase if your site is sophisticated enough, to drive offline traffic to your online store.  Again there are dozens of online sites that allow you to custom design your own postcard, with 1,000 typically costing under $200. 

·        Figure out the postage:  there are different ranges of delivery time as well as guarantees on delivery, depending on which you choose.  If you mailing is time sensitive or you want them all to arrive within a certain time frame (usually between 3-5 days) you should use first class mail.  Bulk mail rates are cheaper but more sporadic in terms of delivery times.  If you choose first class mail for a standard postcard campaign, you should pay roughly $250 for 1,000 cards mailed. 

These estimates show you can get a postcard marketing campaign up and off the ground for less than $600.  If you’ve got a high average order business, say a consulting or services company, one direct mail campaign could give you a significant return on investment because oftentimes you only need a handful of people to take action to make it profitable.  Direct mail can also have a longer term impact than email, because postcards and brochures can be kept in a house and acted upon at a later date, while emails often get deleted immediately and are rarely saved. 

Like anything in small business marketing, balance and testing is important.  Knowing where your marketing dollars go and what your investments bring in is always important.  But if you haven’t considered doing a small direct mail marketing campaign to give your business a boost, you might be missing out on a channel that can really drive new customers and revenue for your small business. 

How have you used direct mail to drive sales? Do you consider it too expensive for your small business?