Double your response rate and halve your cost
(c)
article on this web site to anne@hamilton-house.com
Imagine this
scenario – you mail 10,000 addresses.
Those addresses all have something in common – they might be 10,000
schools, or maybe they are 10,000 businesses.
Most likely
the people or businesses on your list will have something else in common. The schools might all be local authority
schools because you know that private schools won’t buy your services. Maybe all the businesses have over 20 staff.
But now
imagine that there is a specific factor that is influencing which people buy
from you and which ones don’t. You
know, perhaps, that just 3% of the organisations on your list respond to your
mailings. The question is – why do
these 3% respond, and the rest don’t.
Put another
way, the question looks like this. Are
there some organisations on your list of 10,000 that might, one day, reply,
while there are others that will never reply?
The answer
(in every case we have ever examined) is simply, yes. There are some organisations that are never
ever going to buy from you. It might
be because they already have another organisation they buy from and with whom
they are very happy. It might be
because they never read direct mail. It
might be because they have the perception that they can’t afford your
product. Or maybe they don’t see your service
as relevant to them. (You might think it
highly relevant but their perception is the reverse).
Whatever
the reason, they are not going to buy, and every time you send them a mailshot you are just throwing money away.
This is an
interesting thought. What it means is
that if you could only identify the firms that are not going to buy from you,
you could probably cut your marketing costs in half. Or put another way, you could double your
response rate.
To do this
you have to make an assumption – that many of the firms that will not buy from
you have something in common. If you
can find out what that common factor is, you can then do one of two things –
you can eliminate them from your list, or you can try sending them some very
different advertising copy to overcome their objections to your current
advertising.
We’ve done
work on this problem for many companies, and every time we have done this, we
have found an answer – an answer that immediately saves our customer a lot of
money on every mailshot.
Here are
two examples – one from the world of business and one from education.
The Business Example
In this case the company was mailing businesses
with over 20 staff within a certain geographic area. We analysed the results of a couple of mailings
and found that although 20% of the firms being mailed had over 200 staff, only
1% of the profits made by the company came from such businesses.
The solution in this case was to produce a
completely new set of adverts for the larger companies. These adverts stressed the credibility and
size of our customer, as well as selling the product. They also offered the product for sale at a
much higher price. The result was
wonderful – sales to these larger firms went up dramatically and this part of
the mailing list became as profitable as the rest of the list which contained
the smaller companies.
The Education Example
Here we found that our customer was hardly
selling anything to schools which were in the top 25% of GCSE exam results, and
nothing to schools in the bottom 25%.
It seemed a curious result, but on checking the data against an earlier
mailing we found much the same result.
Research revealed a reason for these odd
findings. The client was selling a
product that boosted GCSE results.
Schools at the top of the league hardly needed it – they were getting
all their pupils through the GCSEs with grades A* to C anyway. Schools at the bottom of the league table
on the other hand had little faith in this sort of product. They felt it was irrelevant to “their type of
children”. The comment we heard was “it
might be worthwhile in some schools but it wouldn’t work here.”
As a result our client stopped mailing top
achieving schools, and immediately cut his marketing bill by 25%. He mailed the middle 50% as before, and so
doubled his response rate. But then he
wrote new advertising material for the lowest achieving schools, stressing that
this approach was specifically designed for such under-achieving schools, and
could indeed help schools that were designated by the state as “failing”. Sales came back up.
If you
would like to know more about this approach please call 01536 399000 and ask
for the database department, or alternatively, for a more in depth review of
the possibilities please go to http://www.datapost.org.uk
(c)
article on this web site to anne@hamilton-house.com