In the past, direct response meant mailers, but today direct response also encompasses email and online services such as Google AdWords. With direct mail and email, the solutions (your products and services) are hunting for the prospects. With online ads, the prospects are hunting for the solutions. Depending on your target market and its level of search activity, all of these approaches should be considered.
There are typically three errors that reduce the effectiveness of direct response marketing.
Let’s look at these in more detail.
Unless you’re offering a new product or service that solves some hitherto unsolvable and vexing industry problem, or you resort to bribery, you can generally expect a response rate of somewhere between .2 and .4 percent for any given mailer. Prospecting emails to fresh lists typically get open rates of 9 to 15 percent and “Click-Through-Rates” (CTRs) of 2.8 to 3.2 percent. Business-to-Business Google Adwords appear to have an average CTR of between .9 and 1.4 percent.
As a rule of thumb, you can probably beat those numbers through simple cold calling. However, not everyone has the time or the staff to devote to cold calling efforts. Also, if cold calling isn’t done properly, prospects may come to think of you as a pest.
To counteract the low response rates for a single mailer or email, you need to think about sending a well-orchestrated series of individual mailings. Each mailing or email will need to be sent in the correct sequence, building on information shared in the previous mailings. It’s very important that you not send the same letter or email each time. You can also run online ads continuously, always testing copy lines against each other to see which lines draw better.
It’s easy to get phenomenal response rates – up to 100 percent – from a single direct response piece. All you have to do is offer each respondent a free car! That’s exaggerating, but in many cases the impressive results boasted by direct mail services are based on respondents being rewarded with goods or services that often have no direct relation to whatever a company is ultimately trying to sell. What you end up with is list of people who were interested in acquiring the proffered premium item, but not much else.
The easiest thing to measure is the number of responses, and so that’s often the only thing that does get measured. When the number of responses becomes the focus, we sometimes forget to count how many of those so-called leads actually convert to sales. But the conversion rate is far more indicative of a campaign’s success than the number of respondents.
With this campaign, the offer was to view an interactive online video that walked the prospect step by step through information they would find beneficial. When a prospect viewed the video, the client was notified.
This campaign featured an offer to present information live in a question and answer format. Follow-up telephone and email scripts were also developed.
For most business-to-business firms it’s not realistic to sell products and services through the mail or online. What you’re normally attempting to do is start conversations with prospects about the problems they’re facing for which your products or services might represent a solution. You want them to raise their hands and indicate that solving a particular problem is of interest to them.
They probably won’t do that if you start by trying to sell them something. Instead, the best way to do it is to make them an offer they can’t refuse. That doesn’t mean a discount on your products or services, although you might consider doing that later in the process.
Do you have information your prospects would consider valuable? Perhaps you’ve accumulated statistics or best practice information that isn’t well known in your industry. Do you know something that can save them time and money without requiring them to buy anything from you? Those are the kinds of offers that prospects feel comfortable responding to, because they don’t entail much in the way of commitment – normally prospects just have to supply their contact information. And you get to start a dialogue with your prospects about the problems they’re having, which puts you in a much better position than calling them up cold.
Of course, you’ll want to make sure your offer corresponds to a real problem for which prospects want to find a solution. Proper segmentation based on market research is always recommended to make sure your offer hits the mark. It will cost you less in the long run if you don’t assume.
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