The Mail Box Trumps the In-Box

Google is sending out mass mailings to advertise $100 worth of free Pay Per Click advertising, proving that even the company that transformed internet marketing to a “Must Do” realizes that Direct Mail belongs in that category as well.

Google has evidently realized that as big as the Internet tent is, not all of their prospects are in it.

Direct mail remains an attractive option for companies for three reasons.
First, physical mail is seen as a safe and tried-and-true medium in the age of identity theft, viruses and email spam. There is still a personal connection to checking the physical mailbox that the computer in-box just doesn’t have.

Second, virtual marketing only reaches a specific demographic. Physical mail reaches people who either do not use the Internet, or use it only occasionally; or the hordes of “Banner Blind” consumers who are indifferent to online solicitation.

And third, the internet is awash with marketing offers, making it hard to cut through the clutter. Google is zigging while others zag. While competitors are clogging up computer screens and in-boxes they have the mailbox all to themselves.

I have always recommended a mixed-media approach to my clients, and now one of the biggest players in the game validated that approach in a very big way.

Three Ways to Make Your Business More Visible

It must be a sign of the challenging times. Creative Composition has seen a remarkable increase in the number of businesses ordering signs. We’re busy making business identifiers, sale banners, location markers, sponsorship posters, the list goes on and on. It was as if one day there was a collective notion that businesses were becoming invisible.  Maybe it’s true.

From where you sit -right now -try and envision all the businesses you see on your way to work every day. How many of them can you recall? Have they all started to blend into the landscape?

Is your business one of those unnoticeable spots?

Here are three ways to think differently about signage…

1. You can use banners to gain attention with a specific product or seasonal message. Full color banners that are designed properly can get you the attention you want.     
2. Do you have exterior windows? One way to use the space is to use colorful vinyl graphics with a message that will draw attention and traffic. Classier and more attention-grabbing than window painting, vinyl is also more durable.  
3. Want to make the most of foot traffic in your business? Floor graphics can draw attention to specific items that you want to sell. Maybe it’s a new product or service you are offering. When a potential client walks in and sees your message it will bring your message from their feet to the top of their mind.

When it comes to visibility it’s hard to find a value more powerful by the square foot.

Want some traffic? – use a Powerful Graphic!

Direct mail marketing has a distinct advantage over email and other forms of cyber communication…your prospects can actually touch your message and hold your promises in their hands. Unlike email that can be discarded with just a cursory glance at the subject line, the much-maligned “snail mail” still has the power to cut through the clutter. Now more than ever, since many businesses that used to stuff the mailbox (think catalogs) are on-line only, fewer pieces of mail in the mailbox means yours has a bigger impact.

That said, getting your mail piece into your customers’ hands isn’t enough, they’ve got to OPEN it. Here are some tips to ensure your message get the full attention it deserves:

• Hand affixed stamp – This is a personal touch only rarely used by the direct mail industry.  It really doesn’t cost much more to use a stamp… a meter mark or a printed indicia is a dead giveaway that you are mailing a solicitation.
• Return address should be from a person, not a company -  Personalize your mailer from one person to another.  Another option is to use no return address.  You do not need to use a return address at all if you are using a 1st class stamp.
• Use a blank envelope — Envelope can be any size, or color, and some say that the envelope quality can increase open and response rates too.  Avoid window envelopes!
• Hand address your envelopes — Always!! This is critical to getting your mail piece opened by everyone that receives it.  A personalized, hand addressed envelope is almost always opened.  There are many ways to automate “handwritten” addresses.
• Keep it simple – Make your point in an easy to read, uncluttered, ad or sales letter.  You simply need to get interest and create curiosity.  Be sure to personalize the letter by addressing the person that you’ve mailed it to in the salutation.  Adding a handwritten signature, P.S., sticky note, or hand highlighting important features of your letter will tell your recipient that you took the time to send this letter to them personally!  Stop spending so much of your ad budget on fancy, cluttered graphics, bulky envelopes, and junky looking teaser copy…keeping it simple makes your ad easy to read.  Personalizing it will keep the interest of the reader from start to finish.

Creative Composition is a full-service direct mail marketing company and commercial printing operation. We’re happy to share our expertise with you. Have a marketing question you’d like addressed?  Contact us at 800-427-1955 or email us at inquiry(at)creativecomp.com.

How to calculate Lifetime Profit Value of your Average Client:

1. Calculate your Average Sale (AS ) per customer (total sales divided by total customers).

2. Multiply by the Average Profit Percentage (APP).

3. The result is your Average Profit (AP) per sale.

4. Multiply by Average Frequency (AF) of purchase per customer, per time period (i.e. year).

5. The result is the customer’s marginal net worth per period.

6. Multiply by the buying life span of your average customer.

7. The result is the customer’s lifetime LPV.

FIVE METHODS OF INCREASING YOUR LPV

#1 Take a premium price position—Many people fear this technique. However, once you understand that low price is the least powerful of all motivators, your fear goes away. It’s true. Consumers are looking for value first. They really want a reason to buy your product or service other than price. Price is in the equation, but it is rarely first. Frankly, by assuming the premium price position, you’re likely to make more money and attract a better clientele. As long as you provide a quality product or service and give consumers a “reason why” they should buy, you have no need to fear this position. Look at what the premium price position has done for Mercedes Benz and the Ritz Carlton. The key to premium price is giving massive value.

#2 Encourage larger sales—Encourage larger sales by planning and training your staff, always keeping this goal in mind, and making sure offers are specifically structured to get people to buy more. It involves always having “up-sell” offers as part of your marketing efforts. You can also take advantage of packaging and add-ons. Offer an upgraded package or larger model.

#3 Give the customer a reason to buy more often—Getting your customers to buy more often may not require anything more than asking them. You should be sending offers to your customer base every six weeks. Some businesses take advantage of bounce back coupons, club rewards and prepublic sales, continuity programs, frequent buyer programs, etc. Whatever it takes, do it. Plan it. Make offers, extend special services, and give incentives for frequent purchases, etc.

#4 Take advantage of the Back-End—This tactic is akin to getting customers to buy more often. It simply means that you will market other products or services to them. This can go beyond the scope of your current products or services. It may involve joint ventures with other companies. Look at American Express. Do they limit the kinds of things they’ll sell you? No! They’ll sell just about anything and everything. That’s because they understand that to keep you as a customer, they must keep selling to you. If you sold stoves and ovens, do you think your customers might have a need for pots and pans? You can work out a deal with a local pots and pans retailer to share clientele. Realize that when you stop selling to your customers, they stop being your customers! Always have something to sell on the back end.

#5 Lower costs—To the Maverick Marketer, this means you spend as little as possible to get the job done with the greatest efficiency for both the short and long terms. It doesn’t mean skimping, but it does mean avoiding unnecessary costs—costs for marketing whistles and bells that may be pretty, but don’t advance the sale. When you leverage your marketing, your overhead automatically goes down.

When you clearly understand your customer’s LPV you will be more fully empowered. You will treat your customers like the treasures they are. You will understand that you can afford to spend more than you think you can to bring in a new customer. You will also recognize that the cost to acquire a new customer is much higher than it is to ask an existing customer to buy more or come back again.

How Much is My Best Client Worth?

So the question is how much can you afford to spend to buy a new customer?

In order to answer that question you need to know the financial value of your average client throughout the period of their buying lifetime. We’ll refer to this as the Lifetime Profit Value (LPV).

Here is an example.  If you profit $50 dollars a year from your average customer, and you keep the customer for five years, you can afford to spend $250 to “buy” an average customer and still break even. But we aren’t in business to break even.

Now, if you could buy that same customer for $50, you would make a profit of $200 over the life of that customer.

Understanding the customer’s LPV will give you far greater insight into the customer’s real financial value. When you truly understand the client’s LPV you will be able to make better business decisions. You can expect some changes in perspective:

1. Your customer service will become more important
2. What you spend on marketing will become more scientific and less emotional
3. You will want the marketing to be accountable, to know what’s working and what is not
4. Once you know the LPV you will want to determine a way to increase it.

If you would like to know how to calculate the Lifetime Profit Value of your customer just send me an email and I will send you the formula. Also I can send you a free white paper on Five Methods of Increasing your Lifetime Profit Value.

Just email me- mark(at)creativecomp.com.