What Does Direct Marketing Cost?

For the purpose of this article we will be talking about direct mail, telemarketing and email marketing. With direct mail, you can mail out a simple letter, a colourful postcard or small package with a sample of your product. Telemarketing allows you to speak directly to your prospects and inform them of your product or service. An email campaign can be as simple or elaborate as you want, providing your prospects with quick links to your website.

You can also try to do all three! The key to marketing is repetition. By reaching out to your prospects using different marketing methods, you strengthen your initial message. This also gives your prospects a variety of ways to respond, which will improve response rates.

Of course, the costs associated with each direct marketing method will vary for each form. Regardless of the form you choose, there are a few things to think about when setting a budget for your direct marketing campaign.

The first cost is going to be the list you use. Unfortunately, there is no absolute cost to a direct marketing list. Your list cost is going to vary based on what type (mail vs telemarketing vs email) of list it is, how many records are on the list, what data elements it contains (how targeted it is) and how it was sourced (compiled, subscriber, direct source, etc). There is also variance in costs from one list owner to another as their compilation methods vary as well as cost and procedure involved in maintaining the accuracy of the data.

Based on list type, a mailing list is usually cheaper than a telemarketing list as it’s just a name and mailing address. A telemarketing list will have name, mailing address as well as a phone number. The extra cost for the telemarketing list is the extra element of the phone number.

An email list than has name, mailing address and email address will normally also be more than a simple mailing lists. There are email lists that contain just name and email address, and these tend be cheaper. Depending on what kind of marketing campaign you are planning, you might want to steer clear of these email lists as the sourcing of this information might not be entirely reliable.

The more records on a direct marketing list, the cheaper the cost per record. For example, you may pay $.05 per record when purchasing a mailing list with 5,000 names. That same list could cost $.02 per records if you purchase 1,000,000 names. This is because list owners will offer volume discounts.

List owners also impose list minimums. If the number of records falls under their minimum, they will charge a flat rate. This means if they charge $250 for a minimum thousand records, and you only want 500 records, you will still have to pay the $250 minimum.

If you want more targeted lists, or specialty lists, these will cost a bit more. In general, the more data elements, the greater the cost. A simple list of females in Seattle is going to cost less than a list of female nurses in Seattle with a good credit rating who own cats. Although a finely targeted list may cost more, they should perform better than a broadly targeted list. You will have to determine if the added cost is worth the improved response rates.

After the cost of the list, the next expense will be the delivery of your message.

If you choose to send your message out by direct mail, you will have to take the cost of printing and postage into account. By using postcards instead of envelopes, you can almost cut your postage rate in half. If you purchase a large enough mailing list. you can mail out en masse, allowing you to qualify for bulk rates.

If you decide to use telemarketing, the size of your telemarketing list will help determine the cost of your campaign. If your list has only 1,000 names you can probably call the list yourself, keeping the telemarketing campaign in house, which will obviously keep the costs down. If you are working with a large telemarketing list, you might want to consider contacting a call center. A single caller at a call center typically makes around 100 calls per 4-hour shift. Of course you’ll have to pay for the service.

The costs associated with an email marketing campaign are probably some of the lowest. You will have two options, you can either purchase an email list and send the emails out yourself or you can have the list owner deploy the list on your behalf. The size and the frequency of the emails should help you decide which option is best for you. If you plan on emailing to the list very frequently, it would be more cost effective to send them out yourself. However, if you plan on sending out to a large list you might want the list owner to send out the emails on your behalf as they have dedicated servers that are whitelisted allowing for better deliverability.

As mentioned before, there is no straight answer to what a direct marketing campaign is going to cost. It’s like going to a car lot and asking what a car costs. There are many variables that go into the cost of a car – year, make, model, etc. It is the same is with direct marketing. The best advice is to find a knowledgeable list broker who can explain all of these options and help figure out the best direct marketing campaign that will work for you. List brokers don’t charge for their services and will know which is the most cost effective method of direct marketing for your product or service.

Telemarketing Lead Generation and Other Direct Marketing Services

Promotional marketing makes it easier for you to reach possible clients and invite them to your company event, but it is not enough. Do not overlook traditional direct marketing services when developing your company’s promotional campaign. Direct marketing techniques are still as effective today as they were years ago. You will get better results when you address your clients directly.

Educate yourself with traditional direct marketing techniques you may want to use. A company offering professional direct marketing services will help you execute your marketing plan flawlessly. You can increase your responses significantly through the following methods.

Telemarketing Lead Generation

The most difficult part of traditional direct marketing is gathering fresh contacts. The Internet makes it easier to make your information available to the widest audience. Not everyone will check their emails, though. You must use Internet marketing strategies with traditional advertising methods to acquire the most desirable results.

Using telemarketing for lead generation purposes increases your response. You will see as high as 30% increase in registrations for your event. Following up regularly on these registered participants will give you a minimum of 60% increase in your attendance rate. Remember that your sales prospects increase if you convince more people to attend your business event.

People respond more to telemarketing because they talk to your company’s representative directly. They can ask questions and make clarifications on the spot, which helps them make more informed decisions. They will also be more open to providing additional information once you’ve built trust. Telemarketing lead generation is a great way to start building your contacts.

Direct Mail Promotion

Sending hard copies of your promotional materials is another method professional direct marketing services provide. Brochures, informative newsletters, posters and invites to your events are some examples of materials you can send potential clients via direct mail. These contacts may be from your provider’s market research, your existing subscriber list, or from the telemarketing lead generation campaign.

Direct mail works because your target customers will have something tangible to use as reference. These materials will serve as a constant reminder of your brand, your products and services. It is also more difficult to ignore these packages once they are there. This is in comparison to email promotional materials, which you can easily overlook with a click of the mouse button.

Direct Selling

Out of all the direct marketing services, direct selling is the one you will be most familiar with. You see it everywhere you go – in the malls, on the streets, even in your own home. You will promote and sell your products and services to potential clients face-to-face. You can do this directly by approaching each client one by one or visiting their homes. More companies choose the indirect way, where they either showcase their products in business conventions and company-sponsored events or they display their products at public markets and wait for clients to approach.

This is effective because your potential customers can see what you have to offer. They can inspect your products thoroughly or ask about your services directly without having to go through a representative. You can tell people what your brand is all about more accurately than any representative.

Remember that no marketing strategy is effective on its own. Combine these traditional marketing techniques with modern Internet marketing methods. You will observe your sales prospects increase over time.

Direct Marketing Essentials – Developing the Offer

In direct marketing terms the OFFER may include free information, incentives, or rewards for loyalty and continuing to purchase from you. Basically it can be anything that helps drives your target market to purchase.

So even if you have the best product on the market, you can achieve better results by developing a RELEVANT offer to make your small business stand out from the crowd.

So what are the main considerations when developing the offer?

Offers should be designed to be relevant to your target market and to the product or service you are providing. They should also be timed well to help position your product effectively.

If the direct marketing offer you’re providing doesn’t complement or add value to what you are trying to sell, then your prospects won’t commit. In most cases, the offer is the difference between success and failure.

I’ve found that the biggest motivator is prospects’ perception of the value of the offer you provide relative to cost of the actual product. Further still, most people are motivated by something for free or any special privileges associated with the purchase of a product.

But I think it’s important to discuss some of the pros and cons for all the various offers out there, plus some of their associated hurdles before you start discussing options with your designers, printers or mailhouse.

Free Offer: Buy a newspaper and get a free CD! Offers like this helps to increase short term sales. On the other hand, if you provide free information in an offer-package then you encourage customers with a higher commitment potential. E.g. Get the first lesson free!

Samples: If you include a free sample in a direct mail piece then you need to account for cost considerations. If you ask for a nominal price then it encourages commitment and a bit more interest.

Free Gifts: This must be appropriate to the product or service sold or your prospects won’t commit. The FREE set of steak knives would only be of value if you were selling other kitchen appliances…..or an abattoir perhaps?

Free Trial: This is fairly standard with most direct mail pieces. The good news is that it can double orders when compared to offering just a money back guarantee.

Free Shipping: Spend more than $100 and we’ll post it to you for free! If your product is available internationally, then you may want to revisit your cost margins and breakeven point before going to market with this type of offer.

Sweepstakes: This is great at commanding attention and causing excitement. Sweepstakes always boost sales, but these days it is better to offer a prize everyday of the month to keep your prospects interested, rather than offering one big lofty prize. Just make sure the sweepstakes doesn’t cast a shadow on what you’re actually trying to sell.

Time Limited: You can further overcome buyers inertia by making your direct marketing offer time limited, as everyone hates to miss out! If you give a reason for your prospect to act immediately then you will have a greater chance of making more sales in the short term.

Exclusive Membership: Subscribe for a fee and receive exclusive discounts, benefits and experiences which aren’t offered to the general public. Just make sure the membership has the right mix of benefits to get your prospects lining up at the door.

A lifetime membership could also be used as it offers no commitment to ongoing purchases required.

Discount Offer: Always be careful offering discounts as your primary goal is to make a profit and not to cannibalise sales you would have made anyway. Just because you get a great response, doesn’t mean you will have healthy margins. Plus, if you always offer a discount then you are teaching your target market that your prices are too high.

The only time you should discount is when you believe you can gain an incremental purchase. For example, if you have a new visitor who becomes a repeat visitor a certain number of times but doesn’t buy, then perhaps a discount will help overcome this.

Invitations: We invite you to attend a free seminar to learn more about XYZ! Invitations are used primarily for business to business direct marketing. Just make sure that you get enough attendees showing up on the day or it may be detrimental to your product or service.

How you can add value to your offer to increase response?

As an expert marketing consultant, I recommend four ways to add value and help lift the number of responses to your direct marketing efforts. I always tend to include at least three of these in every Direct Mail piece to help further overcome buyers inertia.

1. Payment Terms: You should give as many options for payment as possible, and pay particular attention to the age group of your target market. Baby Boomers and beyond like the option of paying using bank cheques and many elderly buyers still do not know how to use the internet compared with younger generations who were brought up on computers. Other payment terms to consider include credit card purchases, BPAY, EFT Transfer, Cost on Delivery (COD), part payments revolving credit and offering open accounts.

2. Response Methods: Some people like to pick up the phone while others prefer email contact. Either way, you need to ensure response options stand out from the remainder of the DM piece. These include Freecalls, 1300 numbers, switch numbers, coupons, faxes, email. I’d also like to point out that 1800 numbers (Freecall) are only free when you call form a landline. Many mobile plans charge for 1800 numbers over and above your monthly cap, which has recently aggravated many users in Australia. So beware!

3. Endorsement Letters: These always prove effective provided they are legitimate! Testimonials and publishers letters are great to help endorse a product and overcome buyers inertia. I generally use three testimonials as a minimum to help sell a product or service.

4. Money Back Guarantee: This is standard practice these days. If you believe in your product or service then you should include this anyway. Plus it helps reassure purchases without the need of viewing the product.