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The Direct Mail Solution — Chapter-07: We Know Where YOU Live
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101
We Know
Where YOU Live
By Dan S. Kennedy
EVER BEFORE HAS PRIVACY BEEN SO VIOLATED—AND OFFERED
up for sacrifice. Online, entities like Facebook trade in
information extracted from your conversations with friends,
selling it in live time to the highest bidders, and aggregated to any
and all purchasers. Your drugstore rewards or discount card moves
data about you to countless marketers.
Still, nothing is as precise in targeting known buyers within a
product, service, need, desire, or interest as the response lists used
for direct mail. You can know exactly where your ideal prospective
customer, client, patient, or donor lives, and you can go get him!
N
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How to Use Predictive Factors, Mailing Lists,
and Direct Mail to Attract Your Ideal Customers
Most business owners are indiscriminate in seeking more customers.
This is easy and simple but costly and can, in time, actually cripple a
business. It produces a relatively low average customer value—so low
that it may make it impossible to do much marketing or to use the best
marketing media and methods. It clogs up your business with poor-
quality, low-value, poorly retained customers. It puts you in head-to-
head competition with all the other indiscriminate marketers, battling
for the attention of nominally interested people. If you switch to smart
use of predictive factors that pinpoint the most valuable and most likely
to respond customers and tailor your message narrowly to them, rather
than broadly to everybody with a pulse, you can process fewer leads and
customers and end up with the best ones for you. This is the marriage
of effectiveness and efficiency.
Consider an auto dealership. With mass advertising, it floods its
showroom with 200 prospects on Saturday, who are divvied up at
random to the 20 salespeople—whichever salesperson is loose and
up next when the next prospect walks in gets him. But only a small
number of the 200 prospects are well-qualified, serious, ready-to-buy
customers. Most are more casual shoppers. Not all the 20 salespeople
are equally skilled either. It’s likely two are terrific, as many as eight are
good, five are okay, and five are barely hanging on. In this scenario, a top
prospect could be matched with the worst salesperson. A prospect with
poor credit and casual interest might consume two hours of the best
salesperson’s time. Another top prospect might be kept waiting and
leave while all the salespeople are busy with poor prospects. Imagine
if we could bring in only the 40 best prospects and employ only the 10
good salespeople. We would process less but make more money. This is
even more critical in a smaller business where the owner-operator is the
salesperson, such as in a dental or law practice.
Applied differently to different businesses, this is the idea behind
combining the predictive factors of best customers with mailing
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lists. I’ll quickly take you through the top, general predictive factors
of response. You have to delve into your own current clientele and
current best clientele to look for special predictive factors at play in
your business. For example, the sweet spots for highest response to
direct mail to divorced women are two months after a divorce in weight
loss and four to six months after a divorce for cosmetic dentistry or
surgery. In different businesses, I’ve seen strong biases in best customers
for having served in the military; having crew cuts; being long-haul
truckers; subscribing to National Geographic; political affiliation; a
person’s or family’s name in the business name (Smith Brothers Carpet
Cleaning vs. Oak Hill Carpet Cleaning); and on and on and on. I can
assure you, there are such biases within your customer base, and they
are common specifically among your best customers.
A client I work with in the seminar business recently had a
conference attended by nearly 1,000 of his customers. Various
products and services were presented and sold during the conference.
There was about $1.5 million in sales. Fifty-two of the 1,000 spent
between $10,000.00 and $28,000.00, accounting for almost $1 million.
In other words, two-thirds of the revenue came from 5 percent of the
attendees.
What my client should do is microscopically research, probe, and
analyze those 52 buyers. Examine all the information available about
them by looking at the 52 websites, sending a survey that appears to
be for all customers but is actually constructed and sent only to them
(with a $100 bill attached as a thank-you for completing it), even go
hide in the bushes and eavesdrop on their dinner table conversations
if need be. In earnest, search for any commonality all or most of them
share. If they all came from Midwest states, if they all own dogs, if they
are all in a certain age range, if they are all politically conservative, if
they all engaged in any specific activity or purchasing with the company
before this conference, then these commonalities become criteria
for selecting prospects to mail to, to acquire new customers, to rule
out customers, and to cull mailing lists of people not to mail to. The
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objective is to get as many new customers as possible who match the
factual, demographic, attitudinal, and behavioral profile of these 52
stars—and to bring in fewer customers who don’t fit the profile.
You have these kinds of predictive factors for your own clientele. But
let’s back up and look at the top generic predictive factors of response,
which you should consider when obtaining mailing lists:
The strongest predictor of buying behavior is buying behav-
ior. There is an important principle to understand: A buyer is
a buyer is a buyer. People buy multiple products from multiple
merchants in the same category of interest. Not all list owners
will rent to direct competitors, but some will. Craig and I both
do some pro bono work for a wonderful animal charity, Happy
Trails Animal Sanctuary. (http://happytrailsfarm.org). Its leader,
Annette Fischer, is an outstanding, self-taught copywriter and
a big user of direct mail. In the last year, for the first time, she
has begun using response lists with more and more sophistica-
tion and better and better results. Happy Trails is a small, local,
home-grown sanctuary in northeast Ohio. When Craig went to
work renting mailing lists from national animal-related chari-
ties, just of donor names in Ohio, some refused due to their view
of the direct competition issue. One that said yes was the Doris
Day Animal League, and that list provided a very high, first-
donation positive return on investment from Happy Trails’ mail-
ing to acquire new donors.
There are also buyers of related but noncompetitive subscrip-
tions, products, or services. For example, subscribers to a maga-
zine about fine wines fit with a local restaurant boasting the best
wine cellar of any in a 500-mile radius. While the restaurant oper-
ator using that list doesn’t know for a fact that these people dine
out often at fine restaurants, he does know they are interested
in fine wines, pay to read about fine wines, and almost certainly
spend money on fine wines. This is a big leg up over mailing to
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any and all homeowners in his area. And it dictates a message
matched to these subscribers. The bigger the mailing universe to
be tapped, the more you want to drill down to best buyers or buy-
ers currently “in heat,” which Craig has written about, in terms
of multibuyers, frequency, and recency.
The second strongest predictor of buying behavior is activ-
ity behavior. A golfer is infinitely more likely to buy the new
high-tech golf club than a nongolfer. But “golfer” covers a broad
spectrum of activity. He may golf four or 40 times a year, play
casually or compete in tournaments, play only at home or travel
on golf vacations, have taken lessons, subscribe to just one or to
four golf magazines. In effect, the higher his passion level and
active involvement level, the more likely he is to buy things tied
to that category of interest.
The third strongest predictor of buying behavior drops
down to demographics—age, gender, income, net worth,
homeowner or renter, married or single. This is not just lim-
ited to marketing to consumers; it can apply to B2B, at least
to small businesses. As example, I have had two clients, both
selling a somewhat similar program to dentists. Early test-
ing revealed a strong bias: The dentists buying were between
50 and 60 years old and were in secondary, suburban mar-
kets, not major cities. This information allows reducing the
mailing universe by two-thirds, spending more reaching out
to only the best prospects, and more directly targeting the
message, using age-appropriate photographs and otherwise
syncing with the prospect. For a general understanding of the
links between demographics and buying, I recommend study-
ing the economist Harry Dent Jr.
I also have two demographic-targeted marketing books, No B.S.
Guide to Marketing to Leading-Edge Boomers and Seniors and No B.S. Guide to
Marketing to the Affluent.
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Using Predictive Factors to Select and Get Lists
Direct-marketing professionals who are smart (not all are) endeavor to
work with as many “knowns” as possible. The longer the list of known
facts about best customers and predictive factors of best customers, the
better.
Consider this example. A northern Virginia and Washington, D.C.–
area matchmaking service, a client of mine, has a bias in its clientele
of Kennedy Center members and attendees. They also need relatively
affluent and accomplished men, of certain income, who are fit or
interested in fitness and/or who travel frequently, and, of course, who
are single or divorced. There is some evidence its ideal client is fashion
conscious or at least interested in his appearance. There are other
knowns that I’m not going to name, but that did govern list search.
Figures 7–1 (page 107), 7–2 (page 108), and 7–3 (page 109) are some of
the work product regarding available lists gathered for It’s Just Lunch
by Craig Simpson.
The client can test all these lists separately, segments of these lists
separately, or merge-purge and overlay two or three lists and mail only
the duplicates. With this, we know where their highest probability
prospects live!
And we can go further. We not only know where our target prospect
lives, we can know what direct mail he has responded to in comparable
product and service categories. Once you know which mailers have
been repeatedly using a list, usually on the full data card or data page
provided by the list manager, you can utilize the archive service at
www.InsideDirectMail.com and get copies of the “control” direct-mail
pieces used by those mailers. With thorough examination of the top
10 campaigns being mailed to a list, a picture emerges comprised of
commonalities, about the type of appeals, ideas, stories, price points,
premiums, etc. the people on this list are most frequently responsive to.
This is a very important point about message. The narrower and
tighter your list, the more knowns about the list, the response behavior
of the people on the list, and the response triggers used by other mailers
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FIGURE 7–1 It’s Just Lunch List Opportunities—Page 1 of 3
to that list, the better we can craft a message with irresistible appeal to
that list. One of the many ways businesspeople sabotage their direct-mail
efforts is with big, broad, sloppy, one-size-fits-all messages. A fundamental,
foundational tenet of all my work is: Message to Market Match.
If the stakes are high enough, we can find a professional copywriter
or even an entire marketing team with specific and direct experience
in selling to these particular prospects via direct mail, in comparable
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product and service categories. I described one place and way to conduct
such a search in Chapter 6.
Circumventing Search (Sorry, Google)
Some contemplating all this complexity—which we prefer thinking of
as sophistication—will say: Why go through all this when I can just
advertise on Google, push up high in organic search, and get people
interested in and looking for my products to find me?
Ah, grasshopper, the obvious often hides the truth. Far more
opportunity exists in circumventing search than in being fed by it.
FIGURE 7–2 It’s Just Lunch List Opportunities—Page 2 of 3
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First of all, an enormous amount of selling occurs with people
who aren’t actively searching for what they buy when their interest is
aroused. A person currently patronizing Acme Dry Cleaners is probably
not searching online (or elsewhere) for a different dry cleaner, but if that
different dry cleaner shows up in that consumer’s mailbox, with a good
sales letter stirring up dissatisfaction with Acme, making a case for its
superior service, advancing a terrific offer, that consumer—who that day
hadn’t a glimmer of thought about searching for a dry cleaner—can be
had.
This is not to suggest you don’t want customers who are actively
searching. You may, you may not. But if you do, fine. By all means,
be where they search, and don’t limit that to online. A client of mine,
Gardner’s Mattress, does very well with a Yellow Pages ad in the
Chiropractic section, not the Mattress section. This is called out-of-
category advertising, one of many clever place strategies I teach. But
FIGURE 7–3 It’s Just Lunch List Opportunities—Page 3 of 3
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you do not want to be dependent on search. You neglect the way most
fortunes are made—that is, by circumventing search.
My Titanium Member Nelson Searcy is the nation’s number-one
advisor to pastors on church marketing. He uses direct mail extensively
for his own thriving churches, and he guides more than 3,000 other
pastors in doing the same. On pages 113–117 at the end of this chapter,
you will see a couple examples of his very effective postcards, and you
can see more at www.ChurchLeaderInsights.com. What is extremely
effective here is that Nelson is not relying on online search activity
to fuel his churches’ growth, nor is he mailing a message for those
actively looking for a church to attend. To the contrary, he is interesting
the “un-churched” with specific subject matter, a description of an
appealing experience, a special event or offer. Most, and maybe all, of
the people who responded were not, on the day or week they received it,
searching Google for a nearby church to attend.
Second, the other reason to circumvent search was presented in
Chapter 1. The person searching online for anything never finds only
you. Instead, he is drawn into a swirling maelstrom of competing
options, confusion, and chaos. In my book No B.S. Trust-Based Marketing,
my co-author Matt Zagula, a top financial advisor and coach to financial
advisors, used the product category “Life Insurance” as an example. A
Google search offers 189 MILLION resources to study and companies
and brokers to consider, including discount brokers and even experts
telling consumers not to buy life insurance at all. If a person gets mired
in this, he’ll be dead long before he buys any life insurance. Even if he
roams around a little and checks out 18 or 30 or 50 of these providers,
the odds of you getting him are very, very poor.
Third, there is the Google Slap, which Matt also talks about. Google
is constantly monkeying around with its algorithms, changing its rules,
secretly altering the way it judges your site’s content and your Facebook
activity, and God only knows what else to determine your ranking and
how, when, and how much traffic gets to you. It is actually in control.
You aren’t. And that’s a bad thing. At best, you never get to “set it and
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forget it”; you must be constantly monkeying, just as it is. This supports
an entire industry of SEO (search engine optimization) consultants,
service bureaus, and other vendors, and frankly, the field is overrun with
charlatans.
Nobody monkeys with direct mail. Everything being revealed to
you here about the world of available mailing lists stays pretty static.
You can get to “set it and forget it” with a collection of lists that are
productive for you, a direct-mail campaign or campaigns in rotation
that work with those lists, and a mailing schedule. In the middle of it,
the USPS doesn’t wake up one morning and decide it’s going to deliver
blue envelopes this week or deliver your piece only to every fourth name
and only deliver somebody else’s only to the other three.
The Price, Pain, and Power of Complexity
Everybody lusts for the easy button.
It is a mythical creature.
I now have 40 years’ experience building businesses, helping others
build businesses, and getting to work intimately with a great number
of people who’ve created extraordinarily successful businesses and
companies. I can tell you that far more often than not, success, power
in the marketplace, profit, sustainability, and wealth are directly and
proportionately linked to the complexity of the business’ marketing
processes and its owner’s willingness to embrace complexity.
To many, this is an unwelcome fact.
As with many things, if you just look at the price tag out of
context, the price is too high. What you’ve been presented with so
far and what you are about to be presented with in this book are, at
least at first, difficult and complicated—and therefore painful. But if
you ask clients like Steve Adams, with 21 thriving pet stores with way
above industry average revenue and profit per store; Michael Kimble,
who prospered wildly in an industry that suffered mightily in 2009,
2010, and 2011; and Phillis Pilvinis, a high-income financial advisor
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whose introductory workshops were full while peers struggled with
diminished attendance . . . these people will tell you that the price put
in context is well worth paying.
Nothing can give you greater, more sustainable, and more reliable
competitive advantage than mastery of direct-mail marketing for your
business.
Now, more good news/bad news. Using direct mail for customer
acquisition requires significant out-of-pocket investment, and none
of it is concealed, as it may be with the time costs of online and social
media or, for that matter, shoe leather. You write out checks for lists,
copywriting, printing, and postage. It’s all right there in front of you,
in red and white. You may even incur a higher cost per first transaction
with direct mail than with some other media, although the overall
quality of the customer and long-term or lifetime customer value may
be considerably better.
This puts pressure on you to manage your marketing, each lead
and customer, and your business as a whole for maximum yield. To
leave no dribble of juice in a piece of fruit. Probably to add new steps to
your process, new price and offer perambulations to your products and
services, new strategies (possibly including continuity or ascension),
and new disciplines governing every touch point with a customer where
they are won or lost, made more or less valuable. In the next chapter,
Craig takes you through many of these back-end opportunities. I also
strongly urge getting and reading my book, No B.S. Guide to Ruthless
Management of People and Profits.
This pressure can be a very positive thing, like the pressure that
converts grains of sand to valuable pearls or coal to precious diamonds.
It can compel you to build a better business machine, from beginning
to end, top to bottom. It can lead you from effort to organized effort. It
can make you a better manager as well as a better marketer. It can make
you rich.
In Figures 7–4, 7–5, 7-6, 7–7, 7–8, and 7–9, you’ll see three of Nelson
Searcy’s very effective church marketing postcards.
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FIGURE 7–4 Nelson Financial Peace, front
FIGURE 7–5 Nelson Financial Peace, back
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FIGURE 7–6 Nelson Easter, front
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FIGURE 7–7 Nelson Easter, back
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FIGURE 7–8 Nelson Tempted Journey, front
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FIGURE 7–9 Nelson Tempted Journey, back
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