Direct Marketing Overview

1. Direct Marketing Overview Advertising University April 6, 2006

2. Agenda • Introductions • Definition of direct marketing • Customer lifecycle stages • What makes a successful direct mail effort? • The mailing list (or database) • The offer • The creative • How it comes together • When should you use direct? • Review samples brought in by class • The direct marketing mantra: test-measure-refine • Key metrics • How to tell if you will love direct marketing like I do • Suggested reading, etc.

3. Introductions • Me: • 15 years in direct marketing • Specialize in direct marketing strategy • Currently Direct Mail General Manager at Lexicon Marketing • Former VP/Direct Marketing here at TPG! • You? • Anyone on a direct marketing driven account? • Do share!

4. Definition of direct marketing • Targeted • Response vehicle: BRE, BRC, 800#, fax, web form

5. Customer lifecycle stages We market to people differently based on where they are in their lifecycle:

6. Q: What makes a successful direct mail effort? • The mailing list (or database)? • The offer? • The creative? • Note to self: Stop here so you don’t give away the answer • A: All three, to various degrees. • Conventional wisdom says: • The mailing list (or database) – 40% • The offer? – 40% • The creative? – 20%

7. The List • Srds.com

8. The Offer • An offer is a promotion • It is not the product itself • It is what you do to get the prospect to want to buy the product • What are some examples from your sample mailings? • Always use a “Call to Action” (CTA) • Expiration dates work!

9. The Creative • Why is the creative a relatively small factor in direct marketing performance? (Discuss) • Opportunity to really tell a story – you have more real estate • Test results have told us this time and time again • The “What’s in it for me?” factor • Visual look and feel depends on the target • Doesn’t have to be “ugly” • 2 color can be as good as 4 color • Copy • Don’t spill your guts on the outer envelope • Don’t be afraid to tell the prospect what to do • Be clear about what the prospect gets when they respond • Mailing Format • Letter/Envelope vs. Self-mailer • Additional components: BRE, buckslip (lift note), brochures • USPS adding a surcharge for certain formats

10. How it Comes Together

11. Q: When should you use Direct? A: When the Goal = Increased Sales • Are there specific sales opportunities in a particular lifecycle stage… • ACQUISITION? • Generate leads • CONVERSION? • Convert leads • RETENTION? • (Key question: How big is your customer database? The bigger it is the more opportunity) • Increase sales from current customers • RECAPTURE • Reactivate lapsedcustomers

13. Mailing Sample Review

14. The DM MantraTest-Measure-Refine • Test • Measure • Refine

15. Key Metrics • Every company tweaks the definitions, so it is important to ask how a metric is calculated – don’t assume • Response Rate • Conversion Rate • Cost per Acquisition • Lifetime Value (ROI)

16. How to tell if you will love Direct • Blend of creative/analytical skills (but more analytical) • No burning desire to raise creative to the “next level” • Don’t mind learning a lot of rules (before breaking them) • Detail oriented • Can communicate with with both nerds & creative types, bring them into a room, and actually make something productive happen! • Thick skin (especially if you work at a general agency) • Desire to prove your theories with numbers, yet understand that not everyone believes statistics (hopefully not your client!)

17. Suggested Reading, etc. • “The New Direct Marketing” • by David Shepard Associates • the-dma.org • The Direct Marketing Association’s website • Srds.com • Datacards for thousands of lists and databases • List brokers, managers, compiler • “On the Art of Writing Copy” • by Herschell Gordon Lewis • Inside Direct Mail • Sometimes they even give results