Direct Mail is Dead …
Making The Transition
From The Mail To The Web!
Dear Business Builder,
Happy Friday and welcome back to In The ‘Net Trenches. My does time fly. I can hardly believe another week has come and gone.
Many of you may be startled to read today’s headline – “Direct Mail is Dead” and I certainly don’t mean that literally. I picked the headline writing technique up from my good friend Bob Bly. You see Bob has a love of controversy … he thinks it’s a good conversation starter to point out something that is quite contrary to common belief. And I agree. In fact, one of his most recent headlines proclaims “3 Reasons Why Online Advertising Doesn’t Work.” In actuality, his headline sits atop a promotion for his most recent “how to” e-book on that very same topic. He most certainly got my attention!
Although direct mail isn’t dead, it’s certainly getting tougher to make the numbers work. I spoke to two different veteran direct mail marketers this week and both were interested in making the transition to the web. And both were very concerned about the mail.
Direct Mail Crisis
The rising cost of paper, printing and postage combined with a shrinking universe of direct mail prospects is of huge concern to the industry I specialize in … health and financial information publishing. This is an industry that has been direct mail dependant for over 20 years. But in the last several years, direct mail hasn’t been working quite like it used to.
Fewer prospects equal less possibility – An aging direct mail universe is a huge factor in what’s happening to our industry. Our demographic is typically older … okay I admit it, they’re really old. And our prospects are getting too old to care or they’re dying – there’s no nicer way to state that. And, they’re not being replaced at anywhere near the same levels as in the past.
Production costs are rising – Every year the cost to produce direct mail increases. And a postage increase earlier in the year certainly didn’t help. When you combine that with a smaller universe, it becomes harder to break even. It takes volume to make the numbers work.
Because of that, our industry is moving its marketing budget to the web in a big way. But if you’re an info-publisher that has yet to make that move, just how do you get started?
A Switch in Marketing Model
Imagine your marketing efforts as a funnel. Your lower-priced, acquisition-type products are the wide opening of the funnel. As you move further down into the funnel, you’ll find your more mid-priced products. And then moving further down, the narrow tip of the funnel would be your highest-priced, most premium products.
In direct mail, the goal with the wide-end of the funnel is to pull in as many new customers as possible by promoting a product that is priced at the very low end of the scale – less than $100. Then once that new customer becomes a part of your house file, you promote increasingly higher-priced follow-on products in an attempt to upsell them and increase their lifetime value. These follow-on products are referred to as your back end.
The beauty of direct mail is you can rent a customer mailing list from your competitors and mail your promotions to prospects that have demonstrated they’ll buy a product like yours. These “A” prospects should be the highest responders to your direct mail promotion.
But, on the web you don’t have the luxury of renting a competitors mailing list and knowing you’re only promoting to your very best prospects. So, the funnel model doesn’t typically start with a paid product. It starts with a free e-zine or e-newsletter.
An e-zine becomes a prospecting tool – it gives you the ability to introduce your company and products to less qualified and less targeted web prospects. It’s a lead generator. Coupled with additional free bonus reports or white papers, an e-zine gives you the ability to add large numbers of new prospects to the wide end of your funnel.
Through the inclusion of product ads in the e-zine, it becomes the first line of promotion you’ll use to start to convert those prospects into paying customers. And then through ongoing e-mail marketing, you’ll continue to move them down into narrower parts of your funnel – upselling them to even higher-priced products.
Free Can Be a Tough Pill to Swallow
For a veteran info-publisher that has made a life-long living selling information, offering that same information for free can seem quite contradictory.
But, it becomes a necessary tool in your marketing arsenal when promoting to a far larger, less qualified universe like you’ll find on the web.
In a free e-zine you give away the bread, not the meat. Just enough quality information that allows you to demonstrate your expertise, allows you to bond with your new prospect and build credibility.
If you do that well, a new paid customer is just an e-mail or two away.
Hope that helped and happy Friday!
Until next week,
Julie McManus
Editor, In the ‘Net Trenches
THE TOTAL PACKAGE
And Web Media Goddess
P.S. Are you in the ‘net trenches? Do you need help? Send
me an e-mail to AskJulie@MakepeaceTotalPackage.com and
I just might answer your question in an upcoming issue.
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Comment by Zack Fogarty — August 31, 2007 @ 4:43 pm
Junk mail is dead, whether in the form of DM or email.
\”Junk\” being defined as either: 1) you don\’t know who the information is coming from or 2) you know who it is, and you don\’t trust them.
Whether you\’re selling extra girth or more troops in Iraq, both rules apply with equal severity.
So yes, junk DM is dead, and good riddance.
The web finally tipped the information-overload scales, and now it\’s rare to find people who still \”believe what they read.\”
A wonderful turn of events, I think; as an an critical faith in liars can bring down a nation–and the fall of America would be a lot harder on U.S. DM than the price of paper.
So… earn my trust… or get out of my boxes until you do.
How you earn that trust is the correct question moving forward.
The answer is pretty simple, I think. Makepeace has figured it out: Tell the truth…
(and give it away for free).