Don't you just LOVE junk mail?
Those in direct mail marketing do
By Christine Selvig • Bankrate.com

To the recipient, it's probably junk mail. But if you're the one who sent it, that envelope contains the key to generating leads, developing traffic and making sales.

Direct mail advertising has a low response rate, but the sheer numbers involved in the mailings make the effort worthwhile. Though most of the envelopes bursting with coupons, special offers and discount certificates end up in the circular file, some don't. Depending on the offer, response rates can run from a trickle into double digits.

And that's enough to turn one person's junk mail into another's gold mine. The Direct Marketing Association estimated that in 1999 businesses would earn a dollar for every 8.8 cents spent on direct mail marketing.

If you want to use direct mail marketing to pep up your bottom line, your trip to the customers' mailboxes will be a roundabout one. Your route may include stops at graphic designers, printers, label distributors, mailers and the post office.

The map
Before you set out on the journey, you need to make sure you know where you're headed. Defining your goal will make setting your course and evaluating your results much easier.

Do you want this piece of advertising to:

• Increase traffic in your brick-and-mortar or e-store?
• Produce leads for your sales force?
• Boost sales of a particular product?
• Extend an offer to existing customers?
• Produce a certain level of revenue?

Once you know where you're headed, figure out how much you're willing to pay to get there. Your budget will help you form your strategy, define your target and come up with your offer -- the hook that will keep those offers out of the circular file.

There are several ways you can put together your direct mail package. You can do it yourself, farm some of it out or rely on a full-service firm to put it together and get it out the door for you.

Farm out some work
If you hire some helpers:

• A graphic designer will turn your concept into an offer, coordinating the different components of your mailer. The Graphic Artists Association estimates a freelance artist would charge a small business between $750 and $5,000 for this work. It you'd rather do it yourself, surf over to the Postal Service's direct mail site for a free template download.
• Your printing costs will depend on quantity, quality, and ink choices you make. Kinko's, for example, charges 34 cents for 1,000 cards with two colors of ink and envelopes. Postcards Plus charges 18 cents for its oversized postcard when you buy 10,000.
• List companies help you reach your target market. At List Bazaar, for example, we narrowed down our list to 147 prospects in a given area code by clicking through a series of demographic options. The cost for labels for this highly targeted group was just 40 cents apiece. Getlists.com sells its list of new homeowners for $200 per thousand names.
• Mail services will address, sort and bundle your mail and then take it to the post office. They keep abreast of postal rules and regulations, and work to get you the best postal rate possible. If you use a service you won't need to apply for your own bulk mailing permit. Bulk mailing permits cost $100.

The full-service option
Time is money. And sometimes you can save yourself both time and money by leaving all the details of your mailing to a professional. Directmail quotes.com, a well-organized site with a wealth of information on direct mail marketing, will help you develop your project specifications, then forward them to shops in your area so they can send you a bid. We tried this out and our request was sent to 16 service providers in our area.

The U.S. Postal Service has a great informational site also. In addition to the lowdown on postal regulations, this site offers advice and how-to information relating to different types of direct mailings.

A couple of the list providers have put together all-in-one service sites as well. In addition to their targeted mailing lists, these companies offer graphic design services, printing and mailing services. Eletter and Americalist.com walk you through the quote process online. While Americalist.com will get back to you with your quote, the interface at eletter.com will serve you up a quote and accept your business right online. Eletter will send as few as 10 letters for you.

Go co-op
Cooperative direct mail programs are a cheap and easy way to dabble in direct mail marketing. Cooperative mailers send out envelopes filled with coupons to residents within geographic areas about once a month. Because consumers expect freebies when they open these envelopes, you'll need to have your offer firmed up before you enter into an agreement with one of these services.

You provide the freebie and the company will provide you with everything else. They'll design, print and stuff your deal into their signature envelopes and send them out to 10,000 homes for about 4 cents to 4-1/2 cents apiece. Some will also put your coupons on their Web site.

While the cooperative direct mail option doesn't call for much of an investment, the other alternatives do. Before sending your marketing piece out to the masses you might want to take it for test drive. Send it out to 5,000 or fewer of the names on your list. Your response rate will give you an idea of what you can expect from the larger mailing and give an opportunity to address any problems.

We've put together a chart of some sample prices from different sources around the country. Take a look.

-- Posted: May 22, 2000