Mail Order Millions - Find your fortune the easy
way. The secrets revealed in this free report.
YOUR BLUEPRINT FOR MAILSHOT MILLIONS
MICHAEL FARRELL
CONTENTS
I LIKE JUNK MAIL
IF AT FIRST YOU DON'T SUCCEED
THE MATHEMATICS OF DIRECT MARKETING
COST AND VALUE OF A CUSTOMER
YOUR FIRST STEP
BUILD A MAILING LIST
THE OPENING OFFER
THE IRRESISTIBLE OFFER
THE DISCOUNT
THE FREE GIFT
THE FREE AFTER-SALES SERVICE
THE PACKAGING
THE FIRST STEP (CONTINUED)
YOUR COMPUTER
ADVERTISING
WRITING YOUR AD
PLACING YOUR ADS
DEALING WITH ENQUIRIES
THE FIRST STEP (CONTINUED YET AGAIN)
MAILING LISTS
FINDING MAILING LISTS
PROTECTING YOUR INVESTMENT
GET TO KNOW YOUR CUSTOMERS
TAILOR YOUR OFFERS
DON'T LET THEM FORGET YOU
THE IMPORTANCE OF TESTING
THE REAL SECRET OF MAIL ORDER SUCCESS
MARKETING YOUR ADDRESS LISTS
THE BLUEPRINT
I LIKE JUNK MAIL
Now not many people will admit to that, will they? It's trendy to
complain about the vast quantity of rubbish which floods through
the letterboxes of Britain every day. In the same way, I've yet
to discover anyone who will admit to watching Coronation Street
(where do those eighteen million viewers all come from, I wonder?)
So here's my confession. I like Coronation Street. And I like
junk mail.
I like it so much, in fact, that I will go to quite extraordinary
lengths to receive it. I am an inveterate filler in of coupons in
newspapers. If I need something - a pair of shoes, an insurance
policy, a camera - then I'll buy it mail order, just to get my
name on another address list. I act as a "sleeper" for various
friends in the direct mail business, letting them know if a person
has used their mailing list illicitly.
Am I a madman? Well, maybe. But not because I like getting junk
mail. In that respect I don't differ greatly from the majority of
the population. Amazingly, most people actually like receiving
sales material through the post. Survey after survey has proved
this. Most people in the U.K. get only one or two letters a week.
Mostly it's a bill. A nicely put together mail shot is welcome by
comparison. It's usually interesting to read. There's no
obligation to buy. It's much nicer than a door to door salesman,
where you have to be rude to get rid of him. With a mailshot, you
say "no" by not replying. No-one bothers you. There's no
pressure. No hassle. Few people actually object to "junk mail". But
nobody will admit that. Not on your life. One has one's
image to maintain, after all.
I have a special reason for liking "junk" mail. I make my living
from it. It's a very good living, too. Junk mail is the stuff of
life to me: it feeds me and my family, puts a roof over our heads,
provides us with comfortable transportation and not a few
luxuries. To me it is definitely not "junk". It is a real life
golden goose, depositing its golden eggs regularly and according
to plan.
In this manual I will tell you how you can create your own golden
goose. How you can harness and control the incredible power of
direct mail to generate an income which could last for a lifetime. If
you are already in business - any kind of business - you'll be
able to exploit this miracle technique to multiply your profits. If
you're not a business person, then, this manual will tell you
how to become a very successful one, in a way which minimises the
risk.
But first things first. Let me tell you how I started in this
business.
IF AT FIRST YOU DON'T SUCCEED
I'd always been fascinated with the world of mail order. When I
was a kid of eight or nine, I'd get a real kick out of seeing the
postman walk up to our door with a parcel. Usually it was
something like a pair of trousers or some boots for Dad (my mother
bought most of our clothes from a mail order catalogue, because
you could pay in small amounts each week), but it still gave me a
thrill to unwrap the package. When I got my first paper round I
joined a children's book club. I could have bought the same books
at the newsagents I worked for, or borrowed them from the library
- but that way I would have missed the excitement associated with
knowing that a parcel was on the way, eagerly watching for the
postman to bring it, the glittering colour of the cover when the
book was pulled from its brown envelope, the smell of newness
about it ...
Like I say, I was hooked on buying through the post.
So it was natural that I would consider mail order when I was
looking for ways to make some extra money a few years ago. By
that time I had acquired a wife and family, a mortgage and hire
purchased car. Apart from the mortgage I loved them all, but
found them more than a little expensive to maintain. After
feeding them respectively with food, money and petrol, there was
precious little left for the finer things in life, like pints of
beer and Saturday outings to ... well, no, I won't tell you which
football team I support!
I decided on clothes as my route to affluence. I bought 100 nylon
anoraks dirt cheap at an auction. I think they cost me about
œ120
- this was in the days when you would expect to pay about œ6
for
the same product in a shop. Cheap they might have been, but that
œ120 represented more than half the wealth my wife and I had
accumulated after ten years of marriage!
I placed an advertisement for the anoraks in a well known paper. It
cost an arm and a leg, but their art department provided a
sketch of a smiling gent wearing an anorak to illustrate the ad. I
decided to charge œ5 plus post and packing for the coat, so
it
would cost my customers about the same to buy from me as it would
to buy from their local market.
I sold two. One was promptly returned for a refund. In the
pocket was the remnants of a half sucked boiled sweet and a bus
ticket.
Not to be deterred, I decided to shift them by direct mail. I had
a rudimentary grasp of the business, even in those days. After
all, I'd been a compulsive postal buyer for years, and was on
dozens of mailing lists. I'd even got sophisticated enough to
make slight changes in my name and address when ordering goods by
mail, so that I could see how many times the company rented out
its list. When a letter came addressed to Michael Z. Farrell, I
knew exactly who had made money by renting my address.
I even had a pretty good idea of the kind of list I'd need to
attract buyers for my anoraks. You see, when I bought a dozen
rose bushes from a nursery which sold by mail, it wasn't long
before I started getting literature about greenhouses, lawn mowers
and tools. Shortly after ordering a set of loose covers for our
three piece suite, we were getting information about soft
furnishings for the bedroom, carpets, and so on.
It seemed pretty clear to me that the experts in direct mail
always looked for prospective customers among people who had
already bought a related product. That's what I would do.
I wrote to several companies who were currently advertising
clothing in the press, asking if I could rent their mailing list
for a mailshot. Most of them didn't reply. two actually gave me
what looked like a professional quote for their lists and I opted
for the cheapest. The list eventually came: 2000 names put on to
labels using some kind of spirit duplicator (this was before the
days of computerised mailing services).
I then gave some thought to the "literature" which would promote
the coats. Even in those days there was some pretty sophisticated
direct mail material around: the lavish brochures promoting
Readers' Digest books for example. I couldn't hope to compete
with those. In the end I decided to adopt a "Market Stall" image. When
you buy goods from a street market you don't expect fitted
carpets and air conditioning. You just want good value for money. My
sales material would be the mail order equivalent of the street
market. A cheap and cheerful way of displaying value for money
merchandise.
I eventually produced a folded leaflet extolling the virtues of my
anoraks: showerproof, crease resistant, range of colours and
sizes, etc. The leaflet reproduced the sketch which had been made
for the newspaper ad. The leaflet was accompanied by a "personal"
letter from me, emphasising the excellence of the coats and
pointing out that they would cost at least £2 more to buy in
the
shops. The letter promised a money back guarantee if the customer
was not satisfied. Finally, I devised a little certificate
entitling the prospect to £1 reduction if the order was made
within 10 days.
Though I say it myself, it was a neat little sales package. The
brochure was simple but appealing. The price of the product was
reasonable - a bargain, in fact, if the £1 voucher was used.
I
mailed 2000 sets of this literature with a degree of confidence.
I didn't sell a single anorak.
In the end I rented a market stall and sold the entire stock cheap
over two Saturdays. I made a nice little profit out of it, too!
If I'd been a sensible man I'd have set up my stall permanently. But as
I've already mentioned, I'm hooked on mail order. I was
determined to make a success of selling through the post.
For the next year or so I didn't attempt to sell anything by mail
order. Instead, I studied the subject. And when I say "studied",
I really mean it. I spent every spare moment reading books on
Direct Marketing. It wasn't easy to get hold of them, either. Many were
out of print, even more were American. However, with
the help of my local public library and by dint of frequent
bankers drafts in dollars to publishers in the U.S.A., I gradually
built up a comprehensive library on mail order.
It would be nice to say that the secret of direct mail success hit
me like a blinding light o opening the first of my books. But it
wasn't like that. In fact, for a long time, I couldn't see where
I'd gone wrong in my attempts to sell via newspaper ads or by
direct mail. All the books were much of the quality of the
mailing list, for example. Well I was pretty sure that my mailing
list contained genuine buyers of clothes. It was difficult to see
how the company would have had any other list, in fact. (I
discounted the possibility that they had been simply copied from
a phone book. A shady list broker might do that, but surely not a
manufacturer). Again, my books told me that you should offer an
incentive to encourage the prospect to order. I'd seen that, but
still no orders had come in. At first sight it seemed that I'd
done all the right things. Surely, only monumental bad luck could
explain the failure.
Gradually little clues started appearing in the pages I was
reading. Don't misunderstand me. The clues weren't planted
deliberately by the authors. They were footnotes or "asides":
often case histories of famous direct mail campaigns which had
succeeded. I decided to concentrate my attention on these
aspects, listing anything which struck a cord in my mind and
making outline notes on the features of the successful campaigns
used as "case studies".
Eventually I had filled a couple of note books with these
jottings. One evening I sat down and asked myself the following
question: "Is it possible to abstract from these notes a game plan
which ensures that any direct mail campaign will succeed? Is it
possible to map out a blueprint for success?"
I think the answer to this question is "yes". As a result of my
researches, I devised a set of rules to direct the operation of
any mail order campaign. I rarely deviated from it. I can hardly
say that all major newspaper and direct mail campaigns have
succeeded when I have stuck rigidly to this blueprint.
I'm going to tell you about my blueprint in this manual. You
might think it strange that I'm so ready to part with such a hard
won secret. But, of course, it isn't really a secret. It's used
by all successful professional direct marketeers. Passing it on
to you won't diminish in any way my own profits. And I sincerely
hope that it will do a lot to increase yours!
However, a few words of warning. You won't like all of what
follows. If you follow the blueprint to the letter, you'll need
to make some sacrifices. For example, it will demand time. You're going
to have to find several hours a week to work at your
direct marketing programme.
You're also going to need money. I'm not going to pretend that
this is a business which you can start without investment. You're
going to have to advertise, rent mailing lists, buy stationery and
so on. If you haven't any money to spare at the moment, then
shelve this project until you've managed to save some. I can't
give you precise figures, since you may be reading this after a
period of inflation, but you should have saved up the equivalent
of a month's wages before starting.
You must be aware of the possibility of failure, too. The
blueprint, if followed to the letter, should succeed. But there
are aspects of the blueprint where individual judgements have to
be made, and only you can take the responsibility for those.
THE MATHEMATICS OF DIRECT MARKETING
The object of my blueprint is to teach you how to ensure that all
your mailings and profitable. You won't be able to assess whether
or not a mailing is making or losing money unless you keep
meticulous account of every penny you spend and every penny you
receive.
This statement should be obvious - but, sadly, it isn't to most
people who embark on a business venture. You've probably heard
that most small businesses fail in the first year or so. What you
may not have known is that the most frequent cause of failure is
the inability to keep proper records. This means that the
proprietor is unable to see if he's making a profit or a loss -
until it's too late. It also means that he can't spot trouble
before it comes, and take steps to avoid it.
My method of making money from direct mail hinges on the ability
to predict the result of any mailing. This can only be done if
detailed and accurate records of all expenses and takings are
kept.
Incidentally, I'm not just talking about book keeping. This is
obviously very important and something which you have to do. But
you must also make a separate account of each campaign you run,
whether it's a direct mailing to a bought list or a series of
advertisements run in a newspaper.
Once you have the "raw" figures, you have to operate on them in a
way which is peculiar to the mail order industry. I'll show you
how to do that in a minute or two. First let's make sure that you
know exactly how to keep a record of your expenses and takings.
First the expenses. It's vital to allow for every expense. Here
are the expenses I allow for when I do a mailshot:
(a) The cost of printing the promotional literature.
(b) The cost of the envelopes.
(c) The cost of the postage.
(d) The wages of the people who "stuff" the envelopes.
(e) The cost of the mailing list. (I don't include this if I'm
sending a mailshot to my own list of customers.)
(f) The cost of the product (cost to me, that is). This will
obviously depend on the number of sales.
(g) The cost of mailing out the product - postage, cost of packing
and so on.
(h) The cost of dealing with refunds. (Postage, cost of damaged
goods, and so on).
The takings are much easier to record. They are simply the money
you receive for orders - less any money you have to pay out in
refunds.
The profit of a mailshot can then be found by subtracting the
expenses from the takings.
I can almost hear you saying, "But that's obvious". OK. so it
is. But the fact remains that out of every 100 new entrants to
the direct marketing business, more than 90 will not even bother
to keep the simple records mentioned above. And only one out of
ten thousand will use the blueprint described in this manual,
which virtually guarantees success.
Another objection you might raise is that you don't know how many
sales you're going to make until you've actually made them! A
very valid point, and one which I will be devoting some time to
shortly. First, however, let's see how a guessing game can give
some very valuable information to the direct marketeer.
WHAT IF ...?
All successful businessmen spend a lot of time playing "What
If ..." games. In fact, these games are so important that many
businesses shell out large quantities of money on computer systems
which allow them to play such games more quickly and efficiently.
We won't be using a computer for our game. The back of an old
envelope will be quite adequate.
Take another look at the list of expenses above. You'll see that
most of them can be listed accurately even before you attempt to
do a mailshot. Postage, for example. Printing, envelopes, wages,
mailing list - we know what they're going to cost in advance. They are
fixed costs, which do not depend on the number of sales
made. The other costs do depend on the number of sales, and it's
with these that we play our what if games.
The best way to show you how it works is to give you an actual
example. A few months ago I decided to try a mailshot to my own
list of customers. The product was a book costing the customer
œ18. I had bought the books in quantity and the unit cost to
me
was œ3. It would have cost me œ2 to pack and post
each book.
Here's the list of fixed costs I made, per thousand names:
I've rounded these fixed costs off to the nearest pound to make
the calculations easier. They add up to £266.
Now we play "What If ...". I didn't know what sort of sales rate
I'd get, so I made a few guesses. What if it were 1 per cent?
That means I'd get 10 sales out of every thousand letters posted. The
goods would cost me £30, and it would cost me £20
to pack and
despatch. My total costs would therefore be £316.
Ten sales would bring in £180. So on a one per cent
conversion
rate, I'd make a loss of £136. But wait. I haven't yet
allowed
for returns. I'd decided to offer a money back guarantee with
this book, and some customers would be sure to take me up on it. Past
experience shows that around one in twenty returned their
goods: that's "half a return" in every ten. This would bring my
takings down from £180 to £171. My expenses would
be reduced by
£1.50 (the cost of "half" a book to me), provided it was in
good
enough condition to sell again. So my likely loss on a one per
cent conversion rate would be £314.50 - £171 =
£143.50.
What if I got a 2 per cent return? Fixed expenses would still be
£266.00. I'd have to despatch 20 books per thousand mailings
now:
this would cost me £100. I could expect one return, giving me
a
£3 reduction on expenses, so my total expenses would be
£266 + £97
= £363. Takings would be sales on nineteen books (allowing
for
the return) = £342. We're still making a loss, but this time
only
a small one of £21.
Now let's push up the conversion rate in our imaginations by just
half a percent. We now anticipate 25 sales per thousand mailings. Fixed
costs are still £266. Cost of supplying 25 books would be
£125. The five per cent return rate would reduce this to
£121.25. Sales, allowing for returns, would amount to
£427.50. Total
expenses are £387.25. A profit of £40.25 per
thousand letters.
I hope this has illustrated two points very clearly. First, the
importance of considering EVERY expense. Secondly, and more
fundamentally, the vital difference even half a percent can make. In
this case, the difference between making money and losing it.
You may well be thinking that £40.25 profit for mailing a
thousand
letters is no big deal, considering the work involved. I don't
agree. It took me about half an hour to decide to order the books
and send off the order. The main sales brochure was included as
part of the deal (it was an American publication). I wrote a
covering letter for British customers: this took about an hour. I
spent another hour driving to the printers and arranging for the
printing to be done. Then I had to collect the printed circulars
a week later and drive to the people who stick things in envelopes
for me - another hour. It took me half an hour to take the filled
envelopes to the post office and arrange for them to be franked. A
total investment in time of four hours, spread over several
weeks.
With a two and a half percent take-up, I'd have made £40.25
per
thousand, as calculated above. With a list of over ten thousand
customers, total profits would have been just over £400. I
make
this an hourly rate of £100. If you're already earning in
excess
of £100 an hour, O.K. This isn't any big deal. But it does me
very nicely, thank you!
In actual fact I got a five per cent conversation rate on that
particular mailing, but that's another story.
The main point of all this is that you must be ready to think in
terms of FRACTIONS OF A PERCENT, if you really want to succeed in
mail order. You can't do this unless you keep meticulous records.
COST AND VALUE OF A CUSTOMER
The example I've just given concerns a direct mail shot to my own
customer list. If I'd bought in a mailing from somewhere else,
I'd have made the same kind of calculations but this time the cost
of the mailing list would have been added to the expenses. My
blueprint also requires me to work out the cost of obtaining a
customer when using someone else's list or when advertising in the
press. Again I'll illustrate this with a real example.
I once ran the same advertisement in two well known Sunday
newspapers. After a year I analysed the results of those ads. I
got my computer to abstract the following data:
The number of people who had answered each advertisement.
The number who had bought from me.
The cost of the advertisement over the year.
The value of the sales generated.
Here are the actual results:
Paper
A Paper B
Number of replies: 583 299
Number of buyers: 112 82
Cost of ad:
1447 749
Total Sales Value: 2513 2348
Which is the best ad? Before we can answer that question, we must
work out exactly how much it cost to receive a reply, and how much
it cost to get a new customer.
Before we can do this, there are two more expenses which have to
be taken account of: the cost of sending out circulars to everyone
who answered the ad and the cost of fulfilling orders. Obviously
this will depend on the number of replies and sales. I calculated
it as follows:
Paper A Paper B
Circular cost + post:
189
97
Cost of fulfilling orders: 448 328
So, the total cost per reply is found by dividing the total cost
(advertising and circular cost and post and fulfilment costs) by
the number of replies. Similarly, the cost per customer is found
by dividing the total costs by the numbers of customers.
This gives:
Paper
A Paper B
Cost per reply:
3.57 3.93
Cost per customer: 18.61 14.32
We can use the total sales value to give us some idea of the value
of a customer and of a reply. By dividing the turnover by the
number of relies we get the "turnover per reply". By dividing the
turnover by the number of customers we get the "turnover per
customer". This gives:
Paper
A Paper B
Turnover per reply:
4.31 7.85
Turnover per customer: 22.43 28.63
All right. You can relax. That's the end of the mathematical
analysis for the time being. What information can we derive from
this.
First of all, both ads were making a profit. Although I was
spending £3 or £4 to get someone to send me a
stamped addressed
envelope, each one I received was worth more than this. In this
respect Paper B outperformed Paper A.
Secondly, and more significantly, I was paying a lot of money JUST
TO GET A BUYER. If you've dabbled in mail order before, you may
have thought in terms of paying 10p for an address label, or
£10
for an ad which brings in 100 replies. Forget it. That's cloud
cuckoo land. The £14 or £18 I was paying for a
customer is
actually peanuts compared to what the really big operators will
spend. But it's well worth it. One good customer can be worth
several hundred pounds to you. I have people on my mailing list
who have each brought me thousands.
The few pounds I spent to get hold of them is trifling in
comparison.
However, this is a matter for the next chapter.
YOUR FIRST STEP
We now come to your first step in your journey to direct marketing
success. And here is the first instruction in your blueprint:
BUILD A MAILING LIST.
What's that you say? You've heard it all before? Sure you have. It's
standard advice, isn't it? Every instructional manual on
mail order (and there are plenty of them) tells you to do just
that. So how is this one different?
It's different not because of the instruction, but because of the
manner in which you will carry out the instruction. Most manuals
tell you that you can leap into instant profit in mail order. Sling a
few letters out, and rake in the dosh. Sorry lads and
lasses. It work VERY occasionally. But I want to show you a much
surer route to mail order wealth. One which is just about as
certain as anything can be in the uncertain world of business. And
because it's more certain, it's also slower.
You will not expect to make money while you are building a mailing
list. You might even have to "lose" money. Actually "lose" is a
bad word. When I started out on the scientific mail order trail,
I liked to think that when I spent a pound getting more addresses
to put on my list, it was rather like putting a pound in the
building society. The difference being that my mailing list would
bring me a better rate of interest. Or so I fondly hoped. So far
I've been proved right. I'd much rather put £100 into an
advertisement than in a savings account. Of course, like a high
interest savings account, you have to be prepared to wait a bit
before you can get your hands on your money!
First then, you must realise that for the first few months to a
year, any money you spend on your mail order venture is
INVESTMENT. You just NOT expect a return straight away. As I
said in the first chapter, you're not going to like everything I
say. I also said you're going to need some money. Now you can
see why. It should also be clear to you that you must not leave
your job to go into full time direct marketing just yet. ALL
millionaires had to eat while they were digging the foundations
for their fortunes. Most of them did this by having a "day job".
Now let me sugar the pill a little for you. It MAY be possible,
if you are VERY lucky, to get enough money back in the short term
to cover your costs. If you are even more lucky, you might make a
small profit. Take another look at the figures I quoted for my
advertising in the previous chapter.
Those ads were designed to build up my mailing list. I wasn't too
bothered about making money from the sales. I was after NAMES. Each
name I could salt away on my computer database was money in
the bank; not this year, perhaps; but certainly next. However, as
you can see, I DID make some initial sales. In fact, although I
spent around £2,500 on advertising and mailing, the return on
these two ads in the first year was nearly £5,000! So not
only
did I get my names, I also doubled my money - or very nearly.
You might actually make some money right away. I hope you do. But I
don't expect you to. I certainly didn't when I started
working in a "scientific" way. I get a fast return these days
mainly because of the experience I've built up over the years, and
because the first mailing piece is a real winner. But it took
years to get it that way.
So you must build up a mailing list. And you must do it in the
knowledge that it will make money for you in the future, but not
right away. How do you set about it.
THE OPENING OFFER
You need an opening offer. I say "opening" offer, because you
intend to sell to every customer not once, not twice, but many
times over. I make no apologies for stating what should be a self
evident truth. I am constantly amazed at the number of newcomers
to the mail order business who make no attempt to follow up the
first sale. I even met a self styled postal trader recently who
didn't keep the names and addresses of the people who answered his
ad! So I repeat. Your money will be made on follow up sales to
the customers who buy your opening offer.
What will you sell them? That's up to you, of course. This
manual is not intended to tell you what to sell: rather, how to
maximise your chances of making money by selling. But maybe a few
guidelines may be in order.
Really successful direct mailers don't care what they sell. They'll
deal in anything. Drayton Bird, a director of one of the
largest direct marketing advertising agencies in the world, tells,
in his excellent book "Commonsense Direct Marketing", how he
started in mail order selling hairpieces through a newspaper ad. He
then got involved with the famous "Bullworker", a device for
building up muscles. Later he sold books, a newsletter, medals... the
techniques of direct marketing change hardly at all with the
product.
Always keep in mind that the sole object of the first sale is to
obtain a customer who you will make follow up sales to. This will
influence your selection of product. Ideally, you need a product
which can be duplicated in a slightly different form, or given a
different twist, so that the same customers will be interested.
Examples are: book clubs, where a lavish loss making opening offer
leads to continual repeat book sales over a period of years;
newsletters where the customer subscribes to receive a fresh
edition each month; a series of specially minted medals, where the
customer buys the first of a series and is then persuaded to
complete the set; consumable goods (perfume, foodstuffs) or goods
which wear out eventually (shoes, clothing).
Another good general rule to follow when selecting a mail order
product is to try to select something a little bit out of the
ordinary. Something that you couldn't find in the local shops. If you
browse through papers which carry classified advertising,
you'll see that it's often the unusual, even bizarre, products
which are being advertised.
However, the selection of a product is very much a matter you must
decide on, so I'll say no more. As I mentioned before, this
manual is designed to teach you a set of techniques which can be
applied to any product.
THE IRRESISTIBLE OFFER
Whatever product you choose to sell, there's one rule you must
follow every time you do a promotion. This rule applies to your
opening offer as it does to all subsequent offers you make. You
MUST MAKE THE CUSTOMER AN OFFER HE CANNOT RESIST.
If you accept this simple rule and follow it exactly, you really
cannot lose in the mail order game. Unfortunately, nearly all
novices stumble at this first hurdle. Which, of course, is good
news for you and me, since the field is left open for us.
A typical mailshot arriving in my office contains just one sheet
of white paper. It's usually been photocopied. The text has been
set out on a typewriter or a word processor with a dot matrix
printer. It tries to sell me a business book for £12. Now,
I'm a
sucker for direct mail, as I've already mentioned. But, my
friend, there is no way I will ever part with £12 on the
strength
of a single sheet of badly typed copy.
Now imagine another mailshot arriving, promoting the same book. The
circular has been well laid out and typeset. It's been
professionally printed. There's a letter with the circular,
addressing me as if I were a valued customer. The letter
pinpoints one or two benefits in the book which I might find
useful. It mentions that the book is not yet on sale in
bookshops, and goes on to offer me a substantial pre-publication
discount.
A couple of slips of coloured paper are also included in the
mailshot. One of them attracts my attention by the bold headline:
FREE GIFT! it cries. I can't chuck it away without reading it -
who could. Apparently I'll get not just one book but TWO if I
order within ten days. Another popular title by the same author
is briefly described on the slip. TURN OVER says the slip, AND
SEE WHAT OTHER CUSTOMERS THING. On the back I see a selection of
testimonials in which people describe how the book has changed
their lives.
The second slip is a special order form to use in order to claim
the discount and the free gift. It also includes a guarantee. If
I don't like the book, I'll get my money back.
In this mailshot, the promoter has worked hard to make his offer
impossible to refuse. I'll probably buy.
In order to remove any misconceptions you may have, an offer which
is "impossible to refuse" will, in fact, be refused by most people
who see it! A really superb offer which, you would think, must
make the world and his wife form a queue outside your door within
three minutes of reading it, will persuade, if you're lucky, about
five people in a hundred to buy. A poor offer will persuade
nobody! However, we've seen what a difference just HALF A PERCENT
can make to your profits. Even if your irresistible offer only
did this, it would be worth spending time and trouble on.
So how can YOU make an irresistible offer? There are two things
to consider. First the actual offer itself. Next the packaging.
Your offer must always contain something in addition to the main
product. You MUST have a sweetener, an incentive. The more
incentives you have, the more likely you are to make a sale. Incentives
fall into one of the following classes. Select the
ones which apply in your case.
THE DISCOUNT
Offering your product at a cut price is the best incentive of all. But
it must be a real bargain, particularly if you're selling goods
which are readily available in shops. If your product is novel,
then you only have to make your price compete with the other mail
order companies selling it. You might even have a totally unique
product, in which case you will be in the happy position of having
only yourself to compete with.
Never forget that your first offer has, as its primary aim, the
building of a mailing list. This means that you can be a bit more
generous with your discounts than later on, when you'll be pulling
out all the stops to make money. You can select a price which
makes you break even, or, perhaps, sustain a small loss. It's the
names you want.
A discount should always be geared to prompt ordering. Tell your
customer he has to order in the next 7 to 10 days, or by the end
of the month. If you can date stamp the material, so much the
better. (Be careful, here, though. If you date stamp your
material and there's a hold up at the printers, you could be stuck
with a load of unusable circulars).
THE FREE GIFT
The free gift is a very popular mail order ploy. Obviously it
costs money to make such an offer. But as you're after names
rather than profit, you can afford to do it.
The free gift should be relevant to the product. If you're
marketing hand crafted shoes, how about throwing in a pair of
socks. No, make the offer irresistible. Make it THREE free pairs
of socks, and a tin of polish. Selling a camera? How about
throwing in a free film, an extra lens and a book on photography?
Sounds a lot? That's right. That's why you'll get the orders.
THE FREE AFTER-SALES SERVICE
This works very well when selling pricey technical items like
computers. The offer of free on-site maintenance for a year could
swing the sale. However, I do appreciate that few of my readers
will be marketing these types of goods. But the "after sales"
idea can work well in other sections of the market.
For example. Suppose you're recruiting members for your favourite
MLM plan. Plenty of other people will be in the same programme,
using the same literature to promote it. Your offer of personal
assistance to help your members build their own "downlines" would
make your mailshot stand out. Or maybe you're marketing a
financial newsletter. How about a free "helpline" service, whereby
subscribers could consult you on financial problems?
If you think that the examples given above are crazy, that such
wild extravagance would bankrupt anyone within months, then mail
order is not for you. It's the seemingly extravagant, flamboyant
offer which characterises the really successful mail order
entrepreneur.
THE PACKAGING
By "packaging" I mean not the wrapping up of the product, but the
mailshot.
Some companies go to extravagant lengths with their mailshots,
including cassettes, computer discs, lavishly illustrated multi
page colour brochures and some complex examples of paper
engineering. Why do they spend so much money? To add to their
mailing list, of course.
Your own mailshots will, no doubt, be more modest in appearance. But
this shouldn't mean that they are shoddy and unattractive in
appearance.
First, the product must be made to sound exciting - really
exciting. To ensure this, get a professional to write the sales
material for you. It will cost you money. The outlay will be
more than compensated for by the business generated. Let me give
you a practical example. In 1984 I wrote a one page circular,
incorporating an order form which promoted a book I'd just
acquired the distribution rights to. That circular has been in
continual use since then, and it's now 1990. If I'd paid to have
it written, I would have parted with, I'd guess, about £50 -
£100
in those days. The circular brings in more profit than that each
week.
Yes, I know. I don't practise what I preach. I didn't go to the
professionals for my own sales material. I wrote it myself. But
writing is a skill which takes time and practise to acquire. In
some ways it's a gift, and not everyone has it. In fact most of
my friends in the direct mail business don't write their own
material. The pay to have it done. And unless you enjoy working
with words, I suggest you do the same.
How do you find a professional copywriter? Your local yellow page
directory will have the advertising agencies in your area listed,
and they should all employ copywriters. But do be careful here. You
need an agency which is well experienced in direct marketing. Some
agencies have little experience in this field, having spent
their time devising lavish ads for cars to fill the pages of the
colour supplements, or inventing memorable slogans for brands of
lager. Make sure you choose an agency where they have at least
one writer experienced in writing "long copy". Ask to see
examples of their work.
If all else, write to me, care of the publisher of this manual,
and I will forward you the addresses of a couple of freelance
copywriters.
Incidentally, if you do use an advertising agency, you could also
get expert advice from them on the construction of the mailshot:
envelope messages, discounts, free offers and so on. They'll also
be able to suggest suitable mailing lists for you.
Which brings me to the next chapter.
THE FIRST STEP (CONTINUED)
It may seem that we haven't got very far. You've spent a fair bit
of money by now, getting your product and your sales material
organised. Yet you still haven't fulfilled your first objective. Which,
in case you had forgotten, is to build a mailing list.
As with most worthwhile enterprises, it's the initial groundwork
that takes the time. Like decorating a room - you spend more time
stripping off old wallpaper, filling cracks and cleaning down
surfaces than you do papering and painting. Or, if you don't, the
decoration job looks shoddy and doesn't last. Or, maybe, like me,
you've watched the building of a new house. Nothing seems to
happen for weeks and weeks. Then, suddenly, the walls are roof
height within a few days. Of course, the builders have been
digging foundations, laying drains and pouring footings during the
time that nothing seems to be happening.
Treat your mail order business like a house, or a room that needs
decorating. Spend plenty of time on the preparations. If you do,
your business will almost run itself eventually.
Enough of these analogies. You want that mailing list. Here's
the next thing you must do to get it. Buy a computer.
YOUR COMPUTER
I'm quite serious. It's almost impossible to operate my blueprint
without a computer - you'll see why later.
You may already possess a computer, of course. In which case it
will probably do for the purpose. A simple home computer which
the kids have used for playing games will serve quite well, for
the time being at least. But you will need a disc drive rather
than a tape recorder to attach your computer. You'll also need a
piece of software - a database manager. There are database
manager programs available for all popular computers, and you'll
probably find something suitable in your local hi-fi shop.
I have no intention of giving you a detailed account of the
operation of a computer system in this manual. Get a computer, a
disc drive, a printer and a database manager, and learn how to use
them. Again, you're investing time and money. Just think of
those foundations.
The computer system will do three jobs for you. First, it will
store the names and addresses which go to make up your mailing
list. Secondly, it will abstract vital information for you. Thirdly, it
will print out address labels.
Of course, you can also use the computer for typing business
letters, keeping your accounts and so on. These are bonuses. It's
primary aim is to process information for you. It's ability
to do this quickly and accurately is the whole basis of my
blueprint for direct mail success.
You are now in a position to begin the construction of your
mailing list. You have an opening offer - one which is pretty
well irresistible. You have a nicely produced set of literature
promoting your offer. You have a machine to store information. Not it's
time to meet the world.
ADVERTISING
Your first method of obtaining customers will undoubtably be via
advertisements in the press.
Please keep in mind the essential purpose of this first stage. It
is to build a mailing list. Therefore you won't be placing the
kind of advertisement which invites readers to send money direct. You
won't be "selling off the page".
Your strategy is more subtle. You're going to invite readers to
send for your literature. Hopefully some of them will buy. But
if they don't - you'll still have their names and addresses neatly
tucked away on your database.
First, you must select the papers in which you intend to
advertise. The selection will, of course, be determined partly by
the nature of the goods you are selling. My own experience
suggests that it's best to use papers where there are other
advertisers selling the same kind of goods. A few pounds spent at
a large newsagents will steer you in the right direction, but I'm
going to make a few suggestions anyway.
For just about any kind of goods, the Exchange and Mart is a good
bet. If you live in or close to London, there's a similar paper
called "Loot" which also carries ads for a wide range of goods. The
daily newspapers often carry small classified ads, e.g. the
Daily Mail on Saturdays. Sunday papers are also excellent media
to advertise most kind of goods.
A number of magazines carry a good range of classified ads - The
Lady, The Countryman, Country Life, This England, are examples. Many
specialist magazines also have good classified section: for
example, the gardening and angling press (good targets for outdoor
wear), computer journals, DIY magazines, practical health and
psychology papers, magazines catering for retired people,
religious organs, etc., etc.
As you can see, there's no shortage of places to advertise.
WRITING YOUR AD
The construction of your advertisement deserves time and thought. It's
a good general rule to be guided by other advertisers'
successful efforts.
So you should be constantly studying the advertisement sections in
the papers you decide to place advertisements. Identify those
which appear week after week, wording unchanged. They are the
ones which are working. Model your own ads on those. But please
don't copy. Your message must be original. Readers will soon
spot that you're attempting to use someone else's efforts to
feather your own nest. You might also get into some awkward
copyright tangle with the owner of the original ad!
The AIDCA formula has been used for years in the advertising
industry, and you might find it useful if you're going to write
your own ads. AIDCA is an acronym for ATTENTION, INTEREST,
DESIRE, CONVICTION and ACTION. Your advertisement must first
ATTRACT the reader's attention - by a compelling headline,
usually. So interested, in fact, that they begin to DESIRE what
you have to offer. A good ad will build on this desire and turn
it into a CONVICTION that you're really offering a fantastic deal. The
reader is then compelled to take ACTION: either by sending
money for the product or by writing to request further details.
This might sound like a tall order for a three line ad in Exchange
and Mart - but if you look at the regulars, you'll see that the
formula is there. A snappy opening, a few words extolling the
product, creating interest and desire, then an invitation to act -
write for details, etc.
If you have opted to use an advertising agency to write your
promotional literature, you can also get them to construct a few
advertisements for you. Another source of help is the paper or
magazine which will be publishing your ad. They are often
prepared to give advice on the composition of an advertisement.
One thing which your advertisement MUST contain is a key. When
you get a reply from a potential customer, you must know which
paper he saw the ad in. Since he will rarely bother to mention it
in his letter (often all you'll get is a stamped, addressed
envelope), you should incorporate some feature in your address
which identifies the medium.
A popular method is to use a department code after your name:
"Smith's Mail Supplies, Dept Z", for example. But many reader's
won't bother to write the department on their envelope, correctly
reasoning that "smith's Mail Supplies" by itself will still reach
you. So it's better to make some alteration in the actual wording
of the address. For example, in one paper you could put "Smith's
Mail Supplies", in another "Smith's Supplies", in another "S.M.S."
and so on.
You need the key for two reasons. First you need to analyse the
pulling power of an ad by the method I described earlier. Secondly,
it's a powerful piece of information about your customer
which my blueprint makes much use of. See the next section for
details of this.
PLACING YOUR ADS
It should be easy. Just send the ad off to the selected
periodical and leave them to get on with it. In practice, there
are several hurdles you need to clear before your advertisement is
exposed to the world.
Some papers will want you to fill in a form. It's a very long
form, and asks all sorts of questions which you will probably feel
are intrusive: how much money have you put into your business, how
long have you been trading at that address, have you ever been
declared bankrupt and so on. If you want to advertise in those
papers, you must fill the form in. And I must warn you now that
there's a good change that your ad will be rejected. In the same
way that banks will only readily loan money to people who have
already got money, these papers will only accept ads from
companies which don't need to advertise; i.e. companies which have
already built up an extensive mailing list.
This is unfair, I know. But it's the way the advertising world
works. When your company is a household name, those same papers
will be eager to accept your ads.
Fortunately, there are plenty of papers which do not operate such
tight restrictions. Often your ad will be placed without
question. Sometimes you might have to submit the sales material
for approval, perhaps even a sample of the product.
Eventually, your advertisements will appear and you will have made
a start with the construction of your mailing list: a treasure
infinitely more valuable than gold!
DEALING WITH ENQUIRIES
As soon as you get letters from interested readers, enter the
customer details on your computer database. Double check that
you've entered the name and address correctly. This might be
difficult in some cases: you'll soon learn that the word
"handwriting" is interpreted in the wildest possible sense by a
large number of people!
Of course, it's not only the name and address you'll be entering
on your computer. When you set up your database file, you should
also allow space for such items as: the paper in which the ad
appeared, the date you received the reply, the goods which you've
promoted to the customer, the goods he actually bought, the amount
of money he's spent with you, and so on. You should also leave
plenty of space for additional comments which might occur to you
later. Send off the promotional leaflet as soon as you receive the
enquiry. And if you get an order, despatch the goods immediately.
You're trying to build a profile of yourself in the mind of the
customer. An image of reliability and efficiency. This image
will be the basis of the relationship which you will attempt to
build with each customer in time.
THE FIRST STEP (CONTINUED YET AGAIN)
We're spending a lot of time on this first step. That's because
it's the most important. Nothing is more essential to the success
of your direct marketing enterprise than to create a database of
customers.
MAILING LISTS
The second method of building your mailing list is by the use of
other people's lists.
Let me say at the outset that using "bought in" lists is a very
risky business. Risky, that is, if you are intending to make a
profit from your mailshot. Conversion rates of one per cent are
actually excellent when you use a rented list. More often it's
half a percent, or even less.
Why should this be? People are extremely reluctant to part with
money to someone they've never heard of. Someone who writes to
them, without invitation, asking for money. It has to be an
extremely powerful message to sell on a "cold" mailshot. So why
am I even suggesting the possibility?
Look at it from a different angle. Suppose somebody DOES buy from
your unsolicited mailshot. What a prospect to add to your list. You
have the address of a person who is so keen to buy goods
through the post that he's sending off a cheque to a company HE'S
NEVER HEAD OF AND NEVER HAD DEALINGS WITH! A prime target if ever
there was one.
Let's do some more sums. Suppose you do only get half a per cent
conversion on a "cold" mailshot. That means you must send 200
pieces of mail to get one customer. That will cost you £30
for
the stamps, £2 or more for the envelopes, £16 to
£20 for the
circulars, and, let us say, £16 for the rental of the address
list: a total of about £65 to £70. The one sale you
make brings
in - let's say - £15. So you've made a loss of about
£50 on those
200 mailings.
Putting it another way, the customer has cost you £50. Sounds
like a lot of money just to add one name to your mailing list,
doesn't it? But, as I've just pointed out, you've got yourself a
real quality name. And again I'll illustrate with a simple
example from my own experience.
While drafting this chapter, I got my computer to run the results
of a cold mailshot I did four years ago. I'd bought 1000 names
for œ60 - names of book buyers. I mailed them all with a
simple
circular and letter shot - the printing cost me about £35 as
I
recall, postage was £130, envelopes œ8 and
"stuffing" cost was £10
- a total of £243. I got 11 customers for that expenditure.
I've
just checked the sales recorders of those customers. One of them
has spent getting on for a thousand pounds with me. A couple more
have also spent three figure sums.
So that investment of £243 has paid off tenfold! Yet what if
I'd
taken the short term view, and merely totted up the money received
from that first mailing. It amounted to just over £100. So
I'd
made a loss of £140.
Now do you see the value of the long term view? The need to
regard your first mailings as investments.
Once again I stress that you're not angling for money, at first. You're
angling for PEOPLE.
FINDING MAILING LISTS
Where do you get your mailing lists from? There are various
companies who specialise in the supply of lists. They are list
brokers: they rent a list from the list owner, then sublet it at a
higher fee to the ultimate user.
List brokers are particularly useful if your resources are
limited. You will often find that the list owner will only rent
out, say, a minimum of 5000 names at a time. This will cost you
getting of for £500 and is a major expenditure if you're
starting
out. A list broker may have several customers requiring the same
list' he could rent 5000 names, then split them into groups of
1000.
Incidentally, note that I say "rent" rather than "buy". When you
obtain a mailing list, it will be for just ONE use. The names
will be supplied on self adhesive labels, so you just stick the
label directly on to your envelope. You are not supposed to
record the names of the people on the list so you can use it over
and over again. If you do this, the list owner will find out and
will sue you.
Besides, most of the names on a bought list are no good to you. You're
only interested in those prime customers who will continue
to patronise you for years to come - and their names will go on
your list when they send in orders.
How do you contact a list owner directly? The simplest way is to
do what I did - write to the companies marketing products which
are related to the goods you intend to sell. Many of them will be
reluctant to allow anyone else into their particular spot on the
market, but some will be quite happy to let you have their
customer list. They will have already built up a strong
relationship with their customers and will know that a little
competition won't hurt them. They will be very happy to make some
almost pure profit out of the provision of a few thousand address
labels.
Don't expect lists to be cheap. Or, if they are cheap, avoid
them. There are no free lunches. If you want a quality list -
one which will bring you a 1% response - you have to pay for it. Expect
to pay £70 - £120 per thousand.
When your advertisements have been running for some time, you'll
find that list owners will approach you. Finding lists is always
difficult when you're new to the game. In a remarkably short time
it's more a question of which one to use.
You now have the nucleus of your mailing list. You will have
noticed that it contains two types of person. The names obtained
from rented lists will be made up entirely on people who have
bought. The names obtained from advertisements will be made up of
people who have bought plus people who have merely replied to the
ads. However, both types of customer have one thing in common. They've
both gone to some degree of trouble to contact you. The
more trouble they've gone to, the better their potential. If
they've gone as far as writing you a cheque, they are your
"bankers. They're the ones who will make you wealthy. But even
if they've just gone to the extent of sending you an SAE, they've
still shown some interest in you. There's a good chance that the
enquirers can be converted to buyers.
Your mailing list will take you about a year to build up to a
reasonable size. You need to aim for several thousand mixed
buyers and enquirers. As you will have appreciated, it's been
demanding of time, more importantly of money. Is there any way
you can reduce the demands it makes on your pocket?
If you have a really good offer, it may be that you receive enough
return from advertising to cover your costs. You might even make
a profit! If your resources are limited, it's probably best to
stick to just advertising in the first instance, and move on to
the mailing list method when you're more established. It is
actually possible to build up a good mailing list free of charge. But I
can't guarantee that this will be the case. You must be
prepared to suffer technical losses in the first instance. If you
can't afford to do this - forget about mail order for the time
being. Put a little money away each week until you've built up
some capital.
The other way of subsidising your outlay is to rent out your list
to other businesses. You can do this once your list has built up
to around 1000 names (this won't take long). A little later in
this manual I will deal briefly with the marketing of your mailing
list. However, if you decide to do this, you should consult a
specialist text.
PROTECTING YOUR INVESTMENT
If you have a precious possession, you look after it. You keep it
in a safe place, you insure it, you check it every now and again
to make sure it's in one piece.
Your most precious possession is now your mailing list. So you
must protect it. The worst thing that can happen to a mailing
list is for it to disappear. And the trouble with storing a list
on computer is that it is liable to suddenly disappear into -
well, not thin air, but certainly to vanish. Computer discs are
usually reliable. Occasionally, however, a disc gets "corrupted"
in some way. If this happens, you won't be able to access the
information it contains. Your precious list will have gone
forever. Just think: it might be worth hundreds of thousands of
pounds. All gone because of an electronic gremlin.
Another damage is that you might instruct the computer to erase
the file containing your mailing list. Obviously you won't do
this deliberately; it's surprisingly easy to type in the wrong
commands, though. Just one mistyped key could do it.
The point is, you must keep a back up copy of each disc storing
vital information. All computers have a facility for making back
up copies, and it's quick and easy to do. So do it - daily if
possible, certainly weekly.
So now you have several thousands of names on your customer
database. It's now time to move on to the second stage of your
blueprint.
GET TO KNOW YOUR CUSTOMERS
Before I tell you how to do this, let me make one thing very
clear. Just because you have moved on to stage 2 of the
blueprint, it doesn't mean that you should abandon stage 1.
In fact, it's a bit misleading dividing the blueprint up as a set
of separate steps. Rather it should be regarded as a series of
integrated activities, all of which are carried out at the same
time. Of course, at first, you can only do one thing: start to
build your mailing list. Once you've made a start with that, all
the other activities of the blueprint should be carried out in
concert. And you should still carry on extending your mailing
list in the manner I have described in the preceding chapters.
With this in mind, let's see how you can get to know your
customers.
There was a time, before the multiple chain stores and the
supermarkets arrived on the High streets, where all shops were run
by their owners. The proprietor would often live over the shop,
an important member of the community he served. In those days,
all shops had a counter dividing the customer from the goods. the
shop keeper would stand behind the counter and fetch anything you
required from the shelves behind him, or from some mysterious
store room, hidden from your view.
Despite the disadvantages of this system (it's slowness, for
example), it had its points. One advantage, from the shop
keeper's point of view, was that it enabled him to get to know
about his customers. He got to know what brand of tea you drank,
which paper you read, how many children you had. He was able to
form a fairly accurate idea of your financial status.
A shrewd tradesman could use this information to increase his
profits. His windows would be filled with goods which he knew
would appeal to his customers. If he had a new line in which he
knew would appeal to your tastes, he would tell you, show it to
you. He'd make you think he'd got it in specially for you.
The old style shop keeper would make you feel special. He'd greet
you by name, enquire about the health of your mother in law,
recognise your children when they came in for a lolly. You would
use his shop because you KNEW him.
Few such stores remain. Even the corner shops and the village
stores have moved over to self service. Instead of a man or woman
who takes a keen interest in your needs, you get a bored assistant
prodding at the till buttons while carrying on a desultory
conversation with a colleague.
However, you are now going to bring back those halcyon days of
personal service. You are going to develop a personal
relationship with the customers stored away on your database. Like the
old time shop keeper, you're going to get to know your
customers, then exploit the knowledge you obtain to make money.
Your computer is an essential tool in this process. Indeed, it
already contains much vital information. You know, for example,
what goods, if any, the customers have bought. If a person has
spent £10 buying a book through the post, he'll be ready to
spend
£10 on another book quite soon. If he's bought a garden
plant,
he'll buy another plant. Or a greenhouse, or a lawnmower. This
much should be obvious.
Another piece of information you already have on your database is
the paper carrying the advertisement which the customer replied
to. This gives you a picture of your customer and tells you a
little about his or her interests. Obviously if it was the Church
Times or the Angling World you have an immediate picture of the
customer's interests. However, even a general magazine can give
you valuable information. A glance at the magazine can tell you
that it's "down or up market", whether it appeals to men or women,
highly literate people or otherwise.
With this one piece of knowledge, you can already think in terms
of tailoring your next mailshot to appeal to a particular type of
customer. However, I'm anticipating the subject matter of the
next chapter.
How can you find out more about your customers? And what
information should you obtain?
The easiest way to find out about your customers is to write and
ask. However, it's unlikely that you'd get many replies if you
sent out a circular saying "tell me about yourself". You'd also
be neglecting a fundamental axiom of the mail order professional,
which is that every communication with a customer should carry the
potential of a sale.
So you'll gather your information by selling something.
You can do this right away with the customers who place orders
with you as a result of your first mailshot. Tucked in with the
goods will be another sales circular, promoting a related product.
Naturally, this new circular will have been prepared with the same
care that you took over the first one. It will have been
professionally written, neatly typeset, and attractively
presented.
There are two key differences between this mailshot and the last
one, though. This one is post free - you were going to send him
the goods anyway. And the chances of making a sale are many, many
times greater now. You're selling a buyer, not an enquirer. that
1% return you hoped to get from the cold direct mailing will leap
to, perhaps, 10% or more.
The fact that a customer buys again is, in itself, valuable
information.
However, you can gain a lot more information than this by
including a questionnaire with the goods. This will contain a
list of questions designed to give you more information about the
customer. Here's a list of items of information you could obtain
from such a questionnaire:
Age. Sex. Marital Status. Number of Children. Occupation.
Income. Hobbies. Subjects on which the customer would like further
information.
Questionnaires like this are now often included with the guarantee
which accompanies many types of goods. The customer is invited to
fill in the questionnaire when returning the guarantee card.
When devising the questionnaire, make it as easy as possible to
complete. Let the customer tick boxes wherever possible. For
example, when answering questions on age or salary, give a range
for them to select from. The final section mentioned, "Subjects
on which the customer would like further information", should also
include a selection of items to tick. Include a wide range of
items sold by mail order: clothes, DIY products, books, videos,
records, correspondence courses, gardening items, etc. Don't just
limit yourself to the items you plan to sell yourself. Always
keep in mind the possibility that you'll be renting out your list
to a wide range of other businesses.
You'll need an incentive to make the customer return the
questionnaire. The usual one is to make the returned
questionnaire qualify for entry in a prize draw. You could even
promise a free gift to everyone who returns it. You're still
building your mailing list when you add all this extra information
to your customer records, and you must still regard this as an
investment.
The questionnaire is only going out to buyers, not enquirers. So
now you must get more buyers. Prepare a second mailshot, this
time for the people on your list.
All the advice given in an earlier chapter about selecting a
product and producing a high quality sales circular still applies. This
time the computer is mailed to every address on your own list
(your computer will print out address labels for you). Orders are
despatched as received, each containing a questionnaire, together
with a circular promoting another product - this could easily be
your original product if the customer hasn't already bought it. Update
your computer files when orders come in. Do the same when
questionnaires are returned.
Gradually you'll build up a picture of your customers which will
enable you to "work your list" to maximum effect.
TAILOR YOUR OFFERS
You've spent a long time digging the foundations of your mail
order business. It might have taken you a year or two to build up
a top quality mailing list packed with information about your
customers. As I have mentioned more than once in this manual, the
blueprint doesn't come cheap, in terms of both time and money. But now
you are ready to start making money. With luck you should
be making it for many years to come. The investment is about to
pay you dividends.
DON'T LET THEM FORGET YOU
You must never let your customers forget you. To make sure of
this, you must mail them no less than six times a year.
I'm not suggesting that you have six brand new offers every year
(although some firms seem to manage this). There's no reason why
you shouldn't repeat an offer that's gone out before. My own
practice is to mail each offer THREE times. The second one goes
ut abut six weeks after the first, and is sent to all those
customers who didn't buy the first time. The mailing is identical
in every respect to the first one. I get about half the
conversion rate I did with the first mailing.
About four months later I do the third mailing. This time it's
slightly different. I send the original sales circular, but I
also include, if possible, a testimonial or two. This shot
usually brings in another two or three sales per hundred - enough
to make a small profit. Any kind of profit is fine by me.
Using this technique, you can keep in regular touch with your
customers by having just three offers a year. Here's the sort of
timetable you could follow in your first year of "working" the
list.
January: Mail out Offer A to the entire list.
March: Mail out Offer B to those who bought Offer A in January.
D the second mailing of Offer A to those who didn't buy.
April: Mail Offer B to those who didn't receive it in March. Do
a second mailing of B to those who had it in March but didn't buy.
June: Send out the third mailing of Offer A. Complete the second
mailing of Offer B.
September: Mail out Offer C.
October: Second mailing of C. Third mailing of B.
You should now see why it's so important to keep your mailing
lists on computer disc. Only a computer can quickly select for
you all those customers who have not bought Offer A but who have
bought Offer C. Or all those customers who have spent more than
3100 with you, etc.
Please note that I am not suggesting that you deliberately
restrict yourself to six mailings a year. That should be a
minimum objective. If you can manage one mailing every month, so
much the better.
Won't your customers get fed up with all this bumph dropping
through their letter boxes. Won't they start objecting to the
immense volume of junk mail emanating from your address. Some
will - but not many. You see, to most of them, your mail will not
be junk mail. It will be welcomed and read with interest. This
is because you've taken trouble to get to know your customers. You're
going to use that knowledge to select offers which are
going to be of immediate interest and appeal to them. Your
reasons for doing this are to maximise your profits, of course. But it
will have the double effect of making your mailshots
welcome in most of the homes they are delivered to.
You must make sure that every offer is carefully targeted to the
requirements of your customers. You have an immense amount of
information about them. You know what kind of papers they read. You
know what kind of money they are prepared to spend on any one
purchase. You know what they like to buy. You know, from the
questionnaire, what their main interests are. It should be a
relatively straightforward matter now to select offers which they
will seize on with enthusiasm.
THE IMPORTANCE OF TESTING
My blueprint is intended to be a scientific approach to making
money from direct mail. By selecting offers which are likely to
appeal to the recorded needs of the people on your mailing list,
you are acting in a scientific manner. Using the jargon of
scientists, you are setting up a hypothesis - a guess which is
based on and which fits the available evidence. But no scientist
will accept the truth of a hypothesis until it's been tested
exhaustively. And you must test as well.
Perhaps an example will help. Suppose you get your computer to
search for the leisure interest most often ticked on the
questionnaires you send out. Suppose it turns out to be
gardening. So you decide to select a product which will appeal to
that interest.
It has to be a novel product, something which you couldn't buy in
your local garden centre. It mustn't cost more than œ15 -
you've
discovered that if you offer goods above this price the response
falls dramatically.
Some time later you come across what looks like the perfect
product. A set of video cassettes on various aspects of
gardening. There's one on planning, one on lawns, one of
herbaceous borders, one on vegetable growing and so on. They
failed to sell in retail outlets and you can buy them as a job
lot, cheap. You take the plunge and buy them.
You have sales literature prepared as described in an earlier
chapter. The literature promotes the videos as the "Complete
Library of Gardening". Your plan is to get your customers to sign
up to take one every month at a cost of £12 each.
You DON'T immediately send to the entire list. Not even to all
those who ticked the gardening box on the questionnaire. Instead
you test your product on a sample of your list.
Effectively, you're following the same principle as the companies
who carry out opinion polls. By careful sampling, they can
predict the results of a general election pretty accurately by
taking the opinions of a few hundred people. You will select a
representative sample of your entire list for the test.
There are several ways of doing this, but the easiest is to take,
say, every tenth name and print an address label. So you'll be
mailing to ten per cent of the list. Unless your list is very
small indeed, the test mailing should tell you whether or not it's
worth carrying on. You will analyse the results as shown earlier
in the manual, and check the profit per thousand mailings - you
can do this even if you only sent two or three hundred pieces in
the test. Despite what some of the experts say, I have always
found that even a mailing of three hundred gives a useful
indicator of the likely results of a full mail or "roll out".
If the test proves a flop, think again. Don't abandon the
product. Rejig the literature. Try to find a different angle. Maybe the
club idea won't work for the videos. OK. Then try
listing the titles in a catalogue and let your customers order as
many or as few as they like. Test again.
If the test result is inconclusive - showing only a very small
profit or a very small loss, then test on another sample.
And if you get a good result, one which gives you a clear profit:
roll out.
THE REAL SECRET OF MAIL ORDER SUCCESS
I said earlier that all the activities which I have included in my
blueprint are interactive. They should all be carried out at the
same time, and they will all reinforce one another.
This reinforcement will be the real cause of your ultimate
success.
When you find, by the testing method outline above, that you have
a winning mailshot, you'll have a winner not just for one mailing,
but for many years to come. This is because you will still be
carrying out the first two steps of the blueprint: building up a
mailing list and compiling information about the people on it.
So you'll always have fresh addresses for your top performing
mailshots. And once you've identified three or four real winners,
you'll have a substantial income by just automatically mailing out
to the new prospects. You'll be able to predict with almost total
accuracy the money you will make from each of these "bankers". After a
couple of years the investment of time and money you made
will seem trivial. This is the real secret of mail order success.
MARKETING YOUR ADDRESS LABELS
You can make a very substantial extra income by allowing other
mail order dealers to use your mailing lists. This gives you a
product you don't have to go out and buy. It's on tap at the
touch of a computer button: you are your own manufacturer.
The profit is excellent, too. You can buy a box of 8000 computer
labels for less than £30 - that's around £3.50 for
1000 labels. If you maintain a good database, you can rent out 1000
addresses
for anything between £70 and £120, depending on the
demand!
You have packed your customer database with information. So you
can offer your mailing list customers a choice of lists: people
interested in a variety of leisure and professional goods, people
who have spent more than a certain amount, people who have replied
to ads in a particular paper, people living in selected areas of
the country, etc. Your computer will happily select on the basis
of any information you've stored.
Mailing lists should be marketed in the same way as any other
product. That is, you must have a well written and well presented
sales leaflet. You must find a mailing list of likely customers. You
must test the pulling power of your leaflet and your list
selection. Then roll out: and maintain the roll out indefinitely.
Your mailing list should prove one of your best selling products.
Indeed, some companies follow the steps of the blueprint with the
sole object of building up a marketable mailing list!
You must keep your list clean. The regular mailings you make to
your list will do this. Erase all returned addresses immediately. Ask
your customers to let you know of any returns they get,
offering to replace on a 5:1 basis. That way, you'll get build a
reputation for a well managed list, and customers will rent from
you again and again.
To stop people abusing your list by using more times than they
have paid for, you must seed your list with "sleepers". These are
the names and addresses of friends who return all mailshots they
receive to you. You can then check who is sending what. When a
customer orders a list, make sure he signs an agreement specifying
that it's for one use only.
Actually, few dealers will want to mail a list twice. The real
danger is that an unscrupulous customer may type your addresses
into his own database and then rent them out as his own. He will
obviously not type in any identifier you may have added to the
labels so the only evidence of multiple use will come when your
sleepers start getting mailshots from companies you haven't rented
your list to. And there's no proof that their names might not be
on someone else's list quite legitimately.
Your best way out of this problem is to key the sleepers' names or
addresses individually, each time you rent out a list. You could
make slight changes to their initials, put their Christian names
in full, put a letter after their house number, make a trivial
spelling change to some part of the name and address - anything. But
you must keep a record of the changes so that they make be
associated with the order. I get my printer to buzz out the
modified addresses on the back of the order.
If you do find that customers are re-renting your list, it is a
very serious matter. Consult a solicitor immediately. However,
on a reassuring note, I have had this kind of trouble only ONCE in
the last decade, and that was sorted out quickly.
.
THE BLUEPRINT
I end by giving a brief summary of my blueprint for direct mail
success.
BUILD A MAILING LIST. Be prepared to spend time and money on
this!
GET TO KNOW YOUR CUSTOMERS. Get as much information as you can,
and store it on your database.
TAILOR YOUR OFFERS. Select goods and services which will satisfy
your customers' needs and desires, as indicated by the information
on your database.
TEST YOUR MAILSHOTS before "rolling out".
MARKET YOUR MAILING LIST.
And finally, most importantly,
OPERATE THE ABOVE ACTIVITIES IN CONCERT. Mail out your tried and
tested shots to every name added to the database. Keep on
gathering information. NEVER STOP.
