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The Direct Mail Solution — Chapter-01: How to Think about Direct Mail to Grow Rich
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How to Think
about Direct Mail
to Grow Rich
By Dan S. Kennedy
OR YOU TO REALLY PROFIT FROM THIS BOOK, YOU WILL NEED TO HAVE
faith and confidence in direct mail. You will have to think about
it accurately and correctly, be able to justify investment in it
and in figuring it out and making it work in your situation. You’ll
need to be a rational, reasoned believer. How you think about direct
mail will predetermine what you will and won’t do, how determined
and persistent you’ll be, and ultimately how successful you’ll be with
direct mail.
I have produced hundreds of millions of dollars of revenue for
myself and my companies, and many hundreds of millions of dollars
more of revenue for my clients, over a 40-year term and currently,
in over 200 different categories of products, services, businesses,
and nonprofits, and I’ll share some of those experiences as we go
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along. But my personal experience is not as important as outright,
uncontestable facts.
Facts Are Stubborn Things
It doesn’t matter what you think or believe, what others think or believe,
what it seems everybody thinks or believes. No amount of thinking or
believing ever alters fact. It may mask it. But it never alters it. One of
the ways you need to think about direct mail is factually. Craig lays out
many specific facts. I’ll paint in broader strokes.
Many erroneously think of direct mail as outdated and rendered
irrelevant by newer media. Others erroneously think of it as too
expensive, especially when compared to online media that seems to be
free or nearly free, like email. Others think it is too cumbersome and
difficult, especially when compared to dashing off a 140-character tweet
with one push of one button. But the fact that something is newer,
easier to do, or superficially judged cheaper to do is irrelevant. We do
not build wealth by any of those things—easier, faster, cheaper, newer.
We build wealth with profitable results. Walking is cheaper and easier
to do than buying a ticket for a train or navigating preflight security
at the airport, but it isn’t the most effective or (if your time has value)
cost-efficient way to get from Boston to Los Angeles for a meeting. Too
often, the way people think about marketing media options is flawed, in
two key ways: First, in apples-to-oranges comparisons; second, in terms
of raw cost rather than comparative, net return on investment.
The right way to think about direct mail is in the present, its long
history notwithstanding. The right way to think about direct mail is
in the context of the key marketing question: How can you best reach,
reach out to, and obtain favorable attention from prospective customers, clients,
patients, or donors ideally suited to your product, service, business, or charitable
cause? The right way to think about direct mail and to compare direct
mail to other media is in the context of true value (never raw cost),
considering the quantity and quality of customers delivered, and the
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net return on investment drawn from total, measured term, or lifetime
customer value—a metric Craig discusses in Chapter 8. Finally, the
right way to think about direct mail is as a universally proven engine of
business growth. So if you aren’t successfully using it, there’s something
wrong with you, and you are missing out on key opportunities for
growth, profit, and, maybe most important, sustainability and security
for your business.
As I’ll discuss later, there are lots of media you can use to make
sales. None offer as much stability and security to a business as does a
direct-mail marketing system that works.
So, despite any chatter and opining you may hear around you from
peers, friends, and media, you’ve made a smart decision stepping into
the pages of this book to explore direct-mail opportunities for your
business.
The fact is, more commerce is driven and wealth created
by direct mail than by any other media. This was true before the
internet. It is true now. If direct mail were outlawed on the first day of
a month, the economy would grind to a halt by the 30th day of that
same month. This truth is supported by the many facts provided to you
throughout this book. Even modern media-tech companies like Google
rely on direct mail (and telemarketing and human salespeople) to sell
advertisers on using their media. Of the top 500 ecommerce sites I know
of, nearly all also mail print catalogs, enveloped solo offers and product
literature, and postcards, most in large quantities, very frequently.
Lifelock, a huge advertiser on radio, in print media, and across the
online media spectrum, also mails huge numbers of direct-mail pieces.
Companies like J.Crew, with brick-and-mortar stores and robust
ecommerce, mail hundreds of millions of catalogs. If you simply look,
you will see direct mail playing a role in virtually every kind of business:
retail, service, B2C, B2B, and, yes, (supposed) ecommerce. It is not only
as I said, a universal and largely essential engine of business growth,
it is even more vital in retaining, developing, and selling to existent
customers regardless of how they were obtained in the first place.
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“Plugging the holes in the money bucket” for businesses, something
I do a lot in my consulting practice, always involves direct mail. You
can find an in-depth discussion of plugging holes in a business’ money
bucket in Chapter 5 of my book, No B.S. Guide to DIRECT Marketing
for NON-Direct Marketing Businesses (2nd Edition), which is an excellent
companion to this book narrowed to direct mail.
This is, of course, contrary to the popular perception that direct
mail is antiquated, that everybody hates “junk mail,” that nobody
reads anymore, that we live in a digital world, and that you, the
businessperson, must focus on everything online. This statement is also
probably contrary to what employees, peers, your trade association and
trade journals, the media, friends, and family are all telling you. It is
important to listen more to facts than opinions. To methodically follow
the money, not popular opinion.
Something has brought you here. A nagging feeling that too
much of what you are being pushed to do is laden with waste, defies
accountability, is trendy and popular, and is eagerly embraced yet
ineffective. An awareness, maybe, that the direct mail you get from
very successful companies is clearly built for accountability and must
be productive or it wouldn’t continue. A desire to be more in control
of your sales. Whatever has brought you here, you are going to
encounter contrarian facts, strategies, methods, and opportunities.
Prepare yourself.
When presented with facts, there are three ways people can react.
Ignore them—a popular approach in government. Deny them and
insist on contradictory opinions and beliefs. Embrace them and find
opportunities by using them.
It is a fact that 1 percent are rich, 4 percent do well financially,
15 percent do okay, and 80 percent are distant, distant also-rans.
The Income Pyramid in America, and in virtually any organized sub-
population, such as an industry or profession, is a fact. It is not an
accident. It is not a forced injustice. There are reasons for this fact, one
of which is the way people choose—and they do choose—to react to facts.
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Prosperity by direct mail is fact. Now we want to find your
opportunities to participate and profit.
As an admittedly nonlinear, hop-about introduction to those
opportunities, I’ll finish off this chapter by telling you about some
of my favorite reasons for relying on direct mail for myself and for
countless clients, as well as linked entrepreneurial and marketing
strategies and sources of power in the marketplace.
The Power of Opposite Direction
In price, there is always a battle, and at the bottom, there is a crowd in
combat over cheap, cheaper, cheaper yet, and cheapest. Howard Schultz
went in the opposite direction with coffee, and thus we have Starbucks.
An enormous amount of price elasticity is available simply by heading
in the opposite direction of a crowd.
In distribution, there is always a stampede of followers following
followers to any new doorway. J.K. Rowling held her Harry Potter
books back and out of digital distribution until millions of copies
in hardbound and paperback editions had been sold, thus reaping a
much, much, much greater financial harvest from her work. My client,
the Guthy-Renker Corporation, created the number-one selling acne
remedy, built and then sustained an $800-million-plus business with
it (Proactiv®) by not putting it on drug store and discount store shelves
where all the other OTC acne products are.
The entrepreneurial world is full of opposite-direction success
stories. A lot of ordinary businesses producing ordinary incomes
exist by doing ordinary things. Exceptional businesses producing
exceptional incomes tend to go in opposite directions. The entire
world of algorithms was birthed by a renegade going in the opposite
direction of the entire Wall Street community, a fascinating story
told in the first part of the book Automate This by Christopher Steiner.
Opposite direction is one of the big themes of my Renegade Millionaire
System and Renegade Millionaire Marketing System, a comprehensive
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blueprint of entrepreneurial fortune-making. (DanKennedy.com/
store).
On GKIC stages, we’ve had a lot of opposite direction entrepreneurs.
Gene Simmons of KISS did something no other rock star of his era
even imagined—he personally retained all rights to licensing of all the
band’s images and built and owns one of the largest and richest brand
licensing businesses. As Gene says, you can buy KISS-branded condoms
and caskets and everything in between. Joan Rivers has made a fortune,
building a jewelry business empire not in stores, not by licensing her
name, but by selling direct to consumer via the home shopping channel,
QVC. I could go on. The point is that, often, acting against common
practice and widely held ideas and new, popular fads or trends yields
breakthrough outcomes.
The use of direct mail today is its own opposite direction. There
is a foolish stampede away from it and, for that matter, away from other
“old” media. I have a client in an industry that was badly damaged by
direct connection with the real estate and mortgage industry crashes
picking up speed from 2008 and 2009 to now. Most of his competitors
and peers who survived abandoned all the “old” media they’d relied on
and made a complete switch to online media, relying on Google Adwords
and manipulated organic search, Facebook advertising and organic
search, YouTube, etc., etc., to generate their leads. Even as they saw their
lead quantity rise but quality collapse so their costs per sale skyrocketed,
they kept pouring all their coal (money+time+attention) into this pit.
My client went in the opposite direction. He just about discontinued
his online lead generation and redoubled his use of well-selected
mailing lists and direct mail, driving people online to read and watch
his video-assisted sales letters and from them to buy his products. He
prospered so well at this, he began buying his competitors’ customer
and unconverted lead lists that they were only willing to email. He
mailed them his postcards and multipage sales letters to drive them to
his online sales presentations, and he made money with his rivals’ lists
even though they were losing money marketing to them!
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The clutter in mailboxes has, in fact, thinned, a Darwinian thinning
of the herd. This is an advantage for today’s direct-mail marketers—
like my client. As all his competitors congregated online and created
overwhelming clutter, confusion, and chaos in peoples’ email inboxes
and throughout the media they used, like Google and Facebook, he
took over the territory they abandoned and, in his category, pretty
much had it all to himself.
Direct mail is the rare creature jointly owned by renegade millionaires
and, at the same time, the well-established giants and leaders and the most
profitable small businesses in hundreds and hundreds of categories.
The Power of “Evergreen” and “Autopilot,”
Predictability, and Reliability
You do not need to be psychic to predict income.
My clients have direct-mail campaigns that I created for them 3, 5,
7, as much as 11 years ago. They mail week in and week out, and have
not needed to change one whit. Because of this, they can accurately
predict the number of new customers being acquired and the amount
of income being created. Further, many lock it all in on autopilot. The
chosen lists go the mailing house; the needed quantity of the direct-mail
pieces go to the mailing house; a preset number are mailed each week;
a predicted number of sales are made each week or a predicted number
of appointments are created for a practice, and a predicted number of
people come to a store or showroom. Such a direct-mail asset is, inside
the industry, called “evergreen,” because it does not brown-out or die,
nor even need watering, fertilizing, or attention. It is much, much
more difficult to achieve evergreen in other media, particularly with
online media, where the speed of change, copycatting, and changing
of rules by the media itself—for example, Google’s incessant changes
in algorithms, content requirements, and ranking formulas. Most
successful advertising created these days has painfully short shelf life,
except in direct mail.
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The Power of Showing Up Alone
Consider the purchase of a commodity, say, a mattress or a portable
space heater. If you search “mattress” on Google, you’ll get a dizzying
array of over 100,000 product choices, informational pieces, consumer
reports, and other things to look at. If you go to Amazon.com and
search, you’ll find a myriad of options being sold by Amazon, and by
other vendors operating their own stores on Amazon’s platform. If
you go to a Home Depot store in October and look at space heaters,
you’ll find an aisle full of different products to pick from. Surrounded
by variably priced, seemingly comparable options, 80 percent of all
consumers pick from the bottom one-third of the prices. Increasingly,
consumers also price-compare what’s in front of them on the shelf with
other sellers via their smartphones.
Showing up amid a lot of competition cripples price and
profit. In such environments, long-established, familiar brand names
have advantage, and if you are a lesser-known but superior choice,
you are at disadvantage. The internet is not really as democratizing
a force in commerce as it is often made out to be. The majority of
traffic converted to buyers is bought and paid for, most of it by the
highest bidders—not obtained through organic search. And the traffic
obtained via “showrooming”—price comparing through smartphone
while standing in store—invariably goes to the lowest-price merchant.
If you choose to mud-wrestle in this swamp, I wish you well, but
you might be better served, wealthier, and happier by opting out. There
is an old line about recessions and No Parking Zones: They are for
everybody else. I refuse to participate. Some savvy users of direct mail can
say the same thing about competition.
There are only two sales channels that actually remove the
consumer from competition, clutter, chaos, and confusion and
focus him on a yes or no decision, on acceptance or rejection of
one offer or provider. One is the salesperson placed in the consumer’s
home or office, mano-a-mano, face-to-face, nose-to-nose, toes-to-toes.
The other is the sales letter placed in the consumer’s hands, as he sits in
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his recliner or at his desk. The latter is the closest possible experience
to the first.
And only my sales letter can bring my customer directly to my
mattress store, predetermined to buy a mattress from me and no one
else. Only my sales letter can keep the homeowner out of Home Depot
and out of Google and get him to pick up the phone and buy my space
heater. With direct mail, you can show up alone and bolt the door
behind you when you enter.
The Power of the Full and Best-Told Story
A lot of media imposes a lot of pressure to abbreviate your sales story.
Don’t.
Personally, I find 30- and 60-second radio and TV commercials the
toughest media to work with. Most experts and most consumers insist
that 7 minutes, give or take, is the maximum attention that’ll be given
to online video, although I can point to notable exceptions, where
20-, 40-, 60-minute—or even 4-hour—online video presentations have
made and are making millions of dollars. To me, the media offering
the least pressure to tell less than the best-told story is direct mail.
With different direct-mail formats, I can successfully engage people in
very long copy and gain the opportunity I want most: to tell my full
and best story without compromise, to prospects picked to receive it
because of known interest in it. I have routinely created and mailed
12-, 16-, and 32-page sales letters, 24- to 64-page booklets, and other
similarly long copy pieces with audio CD or DVD. If I can make it
interesting for an interested prospect, he will read it all, listen to it all,
and watch it all.
This is particularly important for the most difficult marketing,
selling, or lead-generation tasks—such as presenting complex
propositions, new and unfamiliar propositions, things that are met
with high levels of skepticism, or premium price products or services.
Abbreviating these kinds of sales stories to fit preset limits of inflexible
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media or to meet short attention spans linked to certain media can be
deadly.
The Power of Time Commitment
This is a secret: The more time a prospect invests with a marketer, the
more likely he is to buy from him.
In direct sales, for years, the leaders in selling encyclopedias, fire
alarms, vacuum cleaners, and water purifiers had sales presentations
deliberately engineered to last 90 minutes to 2 hours. They might have
been abbreviated, even to the point of allowing each salesman to run
three or four appointments per night, rather than one or two. But it was
well understood that the longer you stayed in the home, the more likely
you were to leave with a sale.
Sales letters are basically salespeople arriving in envelopes instead of
on foot. Direct mail affords the best opportunity to interest, somewhat
obligate, and engage the prospect for the longest time commitment.
With a good direct-mail piece to a well-selected prospect, I may be able
to get him to read a 16-page letter, watch a 30-minute DVD, and pop
a 60-minute audio CD into his car’s player to listen to and from work
the next day. It’s nearly impossible to secure this time investment with
any other form of outreach but direct mail. One of my all-time, most
successful sales letters is 64 pages long. A person reading it is time
invested.
But Wait—There’s More!
I’ve enumerated only a few of many profound advantages of direct mail.
You will discover more as you progress through this book.
The industrialist Henry J. Kaiser observed that opportunity usually
arrives wearing work clothes—and brings a set of overalls and work
boots for you. This book does that. If you are up for it, this work can
transform your business and your income.