Fortune or Famine – What will it be ?

Latest news from Marketing Mechanics

01-Sep-2008

   Here’s a perfect example of a recent & true scenario. Client X decided to embark on doing their own research and own direct marketing campaign. The results and costs shown below are factual.   Client X: Objective – To obtain new clients and build sales. Mechanism – Purchase a database and send direct mail. Action: A new brochure is made and 10,000 printed. Artwork cost $ 500 Printing cost $ 1800 Postage cost $ 4,500 Envelope cost $1000 Label and fulfillment cost $ 1,000 Database cost $ 3500 Total cost $ 11,300 Divide by 10,000 = $ 1.13. Not too bad per mailout really. Results Maybe 2% response rate = 200 Maybe 10% of the respondents buy =  20 sales Each sale if only a one off must make $ 565 to break even.     Using the above calculations, why did the customer call me in distress? What could have went wrong and why did his money go down the drain?   The distress call was because the client rented a database from a company that guaranteed a 95% deliverability or your money back. That’s all and great, and a good way to have confidence in a company supplying rental data. Just as well they got that guarantee as the client received approx 75% of the direct mail envelopes returned to sender. Why? Most of the people had moved or were deceased or for some other reason. The data rental company came good on their guarantee, but what about al the other costs incurred?   That left them with a whopping $ 9025 down the drain. Gone. Kaput. Sayonara. Not to mention the time wasted by the client and their staff.   What could the client have done better? Is there anything the client could have done to avoid what has happened?   Basically, there are some precautions I suggested the client could take. These would be: (1)   Ask the data broker how long they have been in business? (2)   Ask them are they ADMA qualified and then contact ADMA (Australian Direct Mail Association) to see if they are a listed provider (3)   Ask the broker who their current clients are and contact one of their clients for a referral. (4)   Ask the broker what percentage of their business is repeat business.   These four simple questions, may have avoided the whole issue as there are just as many bad and unethical list brokers out there as there are good ones. Know who they are and look at past work they have done and past clients. That way you can have more confidence.   Alternatively, put the responsibility on a marketing agency or direct mail agency to do this research for you and use reputable suppliers. That will solve all your problems! And probably save you a lot of time and money too!   TIPS   Here are a few tips to help you avoid throwing advertising and marketing dollars away.   Mail Drops If you are doing a mail drop, don’t just do it once, you will get a much better response and bang for your buck if you do it 2-3 times in the same area. Remember, advertising is about memory recall.   Print If you are running a print campaign, don’t let your advertising rep try and sell you a one off feature or one off ad. Ensure you have the budget to run a series of ads at least over a min of 3 weeks. Its better to go with a smaller ad more often than a one off larger ad. Advertising is about repetition and building your brand and confidence in potential customers.   Enews If you are wanting to send an Enews – Don’t send a crappy text, red font, blue font email. It will probably be detrimental to your business more than assistance. Always keep a professional look, invest a few hundred dollars and have the Enews developed by a professional.   Radio If you are taking radio advertising, don’t get sucked in to buying up front by your radio reps. They may try and sell you “Run of station” which means they are simply filling the gaps where they couldn’t sell. Get a plan together and ask your marketing consultant for advice.   TV is affordable! We can cut a great ad for under 10k and your 30 sec spots generally are cheaper than radio – you can grab a 30 sec spot from $ 100!   I truly hope my advice has helped you, and I'd love to hear your feedback. You are always welcome to drop me an email with your question or phone me up for advice – we are always here to help!    

  Written by: Diane Costa. Director, Marketing MechanicsPlease feel free to contact us on 02 9565 2120 for more information or visit us online @ www.marketingmechanics.com.au VIEW OUR BLOG! http://marketingmechanics.blogspot.com/