Introduction

The U.S. Direct Marketing Association (DMA) has found that direct mail can get response rates as high as 4.4%, often outpacing email response rates in the low 0.1 — 1% range. Of course, these numbers vary by offer, creative and the list you use, but you shouldn’t be averse to testing to see how your marketplace would respond to a direct mail campaign. Here’s how:

Picking the Most Powerful Mailing List

The #1 most important factor that will determine the success of your postal direct mail campaign is the quality of your list.

Direct mail campaigns are expensive compared to most online marketing tactics, so without a good list, it’s going to be hard to get a good ROI. Here are the best practices to compiling a direct mail list:

There are a number of sources you can use when compiling a postal mailing list:

1. An in-house list.The best lists are often compiled in-house. Your best prospects (in descending order) will be:
   • Recent past subscribers
   • Recent cancellations
   • Older past subscribers and cancellations
   • Your product/event buyers
   • Buyers from sister publications

   Note: There are no laws requiring customers to opt-in to a direct mail campaign they way they opt-in to marketing emails. So once you get an address, you’re free to use it. However, you may want to add an “do not mail” flag field in your database in order to process returned mail or customers who don’t want to be mailed.

   In order to create an in-house list of new prospects, you can offer something on your site that needs to be mailed, such as a bookmark, booklet of top tips, company calendar, or other flat item. You could present this offer either as a special campaign or as a standing offer on the thank-you page after a prospect has given you an email address. This is also a savvy move since nowadays many customers, especially younger ones, do not receive paper statements and thus, may not update the billing address on their credit card. A current mailing address ensures that your postal direct mail reaches them directly and in a timely manner.

2. Third-party lists. If you don’t have an in-house mailing list of qualified prospects, you’ll need to compile one. Your best sources for names are:
   • Direct competitors: Direct competitors are good sources for lists since their customers have already bought information products, and therefore, are likely to buy from you. Note: It’s imperative you get a list of people who bought a similar information product (i.e., a subscription). So if you’re the publisher of Hunting News, you’ll want a list of people who have bought another hunting publication, not people who have bought annual report.

     Savvy publication marketers know the value of working with competitors, but fewer online marketers do. It can be hard to break someone new to this idea in, so stick to doing barters with marketers who understand this.

     Often a competitor will only rent to you if you rent to them and they’ll need a formal agreement. A list broker can serve as a middleman to help you create a contract for this type of agreement. Agreement includes number of names, “recency” (see below), how much a particular person bought and other detailed information.

     When working with a competitor, don’t try to get clever and slip your competitor crappy names. The point is to build a trusting relationship between your company and theirs, hopefully for the lifetime of your publication. That relationship might end up being one of the most valuable assets your company has.

   • Relevant Paid Content Publishers: Some competitors may not be willing to share their subscriber lists, but will let you rent their list of customers who have bought one-off information products, such as eBooks, event tickets, printed magazines or books, a paid Webinar, or even membership to a read association. Again, make sure their content is relevant to your target market. Hunting News may want to rent a list from a competitor who ran a hunting expo, but not a gun expo.
   • Relevant Non-Content Vendors That Sell Direct: Vendors have historically not had good lists, but with the advent of content marketing, this is no longer the case. Look for vendors who sell products directly to your marketplace or generating sales leads direct to business. So, for example, Hunting News may want to rent a list from a vendor who sells hunting equipment directly to consumers, not brick-and-mortar stores.
   • Compiled Lists: Some companies will compile lists from professional directories or scrape names and addresses off the Web. Often these are very cheap, but the names are not qualified (i.e., who knows if they’ve ever bought and information product in your niche) and therefore terrible for responses. New direct mail marketers sometimes get conned by these types of lists because it has some of the right info (professional title, zip code), but then find the list is nearly useless.

There are also some other factors that affect whether a list will be powerful:

1. “Recency” of purchase: In addition to buying similar products or services from you or your competition, the “recency” of a customer’s purchase is also important. Customers who bought a subscription to a publication in the last month are exponentially more likely to buy another one than people who bought a subscription a year ago. It’s not because the one-year-old buyers moved; it’s just the idiosyncrasies of consumer buying habits.
2. Multi-buyers: Customers who have bought multiple information products — from you or your competitors — should be considered “high-value.” If the price of these purchases is high, you may want to hit them frequently with direct mail since your ROI will be higher with just one sale (see How Often to Mail a List).
3. Who else has rented the list: When you’re evaluating lists, your list broker can tell you who else has been renting the list. Always ask if they rented it for a test or if they “rolled it out” (i.e., mailed the whole list)? If they rolled it out, it’s probably a good list, assuming you have the same marketplace.

If you are using a third-party list, you should test the list before running a campaign using the whole list (you will need to buy the names you test). You should ask the list seller if you can test every nth name, i.e., every 4th, 8th or whatever numerical you wish to use. You don’t want to use the most recent names on the list. Customers who bought something are often your best prospects (see Recency explanation above), so by using only their names, you’ll get an inflated response in your testing period.

Note: There is always an extreme difference between lists, not only in terms of a response rate, but in how long names off a list will stick around as a subscriber. That’s why you’re always going to want to test any new lists you acquire.

The minimum list rental is usually 5000 names, even if you only want to test 1000 first. Competitors will send their rented lists to a bonded and insured list house — you do not actually get to see the names. Instead, the list house and mail shop will create the labels and send out the mailings.

However, a mail shop can run all the files to de-duplicate them so that you’re not sending two pieces of mail to the same person. You can also provide the mail shop with your own list and suppress your customers’ names so that you’re not mailing your current buyers. The mail shop can then tell you percentage of overlap with your names. This is useful since you should have some overlap if your competitor is targeting your marketplace. If there’s a 0% overlap, you may want to abandon the list.

After suppressing names, don’t ignore them. You may not want to send them an offer to your subscription, but technically, those names are multi-buyers (they’re buying products from you and your competitor). You’ll want to hit those names with a special, premium offer at some point.

Lastly, you’ll need to have a way to find out which list an order came from. Either you use a special landing page when they order, a different QR code, different phone numbers, or different URLs (see Conversion Tactics below for more on this). You’ll never be able to trace every single order (leading to White Mail), but you’ll want to try in order to get the most out of your marketing dollars.

Remember, the quality of your list is the most important thing. It’s better to mail 300 qualified leads than 30,000 “ish” leads.

A solid list should be mailed once a year or once a quarter. It’s rare for anyone to send postal direct mail on a monthly basis, unless you have such a super-qualified list (people who have bought $2000 products from you in the past) that it makes sense to mail them two to three times in a short period of time. You’ll want to mail the list until your response rates start to decline precipitously. At that point, you should retire the list for a while to prevent consumer fatigue. You can re-use it at a later date.

You may also want to group your mailings by location or other demographics. For example, a site like Angie’s List may send direct mail according to postal code, offering local/regional specials. But beware — segmenting your list will cause more variation in your response rates. Each list will likely have a different response rate, and it usually costs more money to make smaller batches of personalized mail pieces than one large batch of a standard piece.

If you’re renting a list, you can ask to be sent a file of new, added names at regular intervals. You’ll have to pay for this service.

There has been a longstanding rumor that a 2% response rate to a direct mail campaign is good. However, it’s hard to find an actual source for that number. In reality, response rates often vary depending on:

1. The quality of your list
2. The softness of your offer (i.e., asking only for an email address will get a much higher response rate than asking someone to buy a subscription. More on hard and soft offers in “The Offer” section).

Therefore, marketers should look to get statistical conclusiveness from testing in order to make a healthy guestimate as to how their direct mail campaign will do. If you’re not using statistical software, the rule of thumb is 100 responses (possibly 50 if you’re in a B2B or super-niche industry), to get an idea of the percentage response you’ll get from mailing the whole list.

Classically, direct mail marketers always looked to break-even. But now, marketers may have more options. Growing your subscription base may be more important for your shareholders than breaking even.

The longer you can wait to break-even, the more aggressively you can market, which means you will expand your subscriber base more aggressively. If you require each new account is profitably right away, you’re going to have to be so careful with your campaigns and will hold back the growth of your subscriber base.

For example, subscription sites like Foreign Affairs are willing to wait until the year-two renewal mark to break even on their postal direct mail campaigns. Other sites, like WritersMarket.com, have strong back-ends and are able to cross-sell other products and services to new customers. Sites like these would be wise to spend money — and even lose some money — on direct mail acquisition, since the value of an acquisition goes beyond a monthly or annual subscription.

Before running a direct mail campaign, make sure your company has a clear idea and plan for when they expect to break-even and how much they’re willing to invest. Your company’s philosophy will affect everything from the number of mailings to the cost per piece to how many lists you rent. See the table below for how ROI can vary depending on your list.

If you’re running a direct mail campaign for the first time, it’s even more important to run small tests first so that you can make an informed decision about your expected break-even and response rates.

Here are the best practices when creating direct mail pieces for online subscriptions:

There are varying degrees of “softness” to a direct mail offer. Here are the best ones for subscription sites, along with which list to use when making them:

• Soft: Any offer that’s free and doesn’t require a credit card. Usually you’re just asking for a name or email address in order for the customer to receive a free email newsletter, special report, mail-able product (calendar, bookmark, etc.). You could also ask customers to enter their name and email address into a sweepstakes for a high-value item, such as an iPad or cash. These sorts of offers are best when you’re mailing a third-party list you don’t own since they maximize your response rate.

• Medium: Any offer that requires a credit card number but not payment, such as a trial offer with credit card. Another medium type of offer would require a super cheap payment, such as a $1 trial. Medium offers are good when you’re using a direct competitor’s list that you can use over and over again and you’re sure you’ll get a good response from it.

• Hard: Any offer that requires a respondent to pay more than $1. That could be an offer for a discounted subscription or the full-price subscription. This offer is best made to your expired or cancelled subscribers. It’s also well used by household names, like The New York Times, or if your offering a professional courtesy (see below).

• Two-stage offer: This is something new online that combines both soft and medium/hardoffers. Basically, the postal direct mail offers something free in order to drive the respondent online. The landing page has the free offer, but also presents a harder offer, such as a trial or discounted subscription. A good example of this would be the quiz creative described below.

There are a variety of formats for postal direct mail, each of which has specific advantages. Be sure the format you choose matches your brand’s identity and appeals to your target audience (e.g., women shoppers are more likely to respond to a fun postcard than a long letter about a consumer magazine). Here are some of the most popular formats used:

1. Single postcard — can be black & white or in 4-color and can vary in size from traditional vacation postcards to half-page cards. Larger cards often get better response rates, but they are also more expensive to mail. Don’t feel pressured to use color — often a handwritten note or black and white graphic on the front is just as effective. Remember, the success of your campaign will depend on the quality of your list, not your artwork.

1. Double postcard — these mail pieces have a section for respondents to rip-off and mail back. This might be an effective way to get audiences that traditionally don’t go online (see our Case Study on EBMedicine for more on this).

1. Letter and #10 envelope — this is most used for professional and B2B audiences. It can be expensive to personalize both a letter and the envelope (a.k.a. the “carrier”), so you may want to use a window envelope to reduce production costs. These types of mailings can also include a reply card, Business Reply Envelope (BRE), lift note (a folded note with short marketing copy) or a buckslip (see image). These pieces are known to improve response rates, but also increase postage since #10 envelopes are weighted before mailing. Also, a BRE should only be used with an audience resistant to replying online.
   

   

2. Professional courtesy offer and #9 envelope — these “professional discount” offers are usually made to members of an organization (like the American Medical Association). There’s no sales copy, just a professional courtesy voucher from a well-known brand name in the industry.

1. Magalog — this looks like a magazine but usually promotes a newsletter, often in 4-color and with editorial and sales copy. This has been known to work well for consumer titles, but if you’re looking to transition your audience from print to digital subscriptions, you may want to try a special tablet/iPad edition instead. It’ll be an easier way to target digital readers and an easier way to get email addresses. For online-only content, you may want to test sending a print magalog with screenshots of videos and infographics and other art from your site in order to entice new users.

1. The Long Letter — this is a method most often used by financial or executive publishers, and sometimes by health publications. The letter is very long — 12 pages sometimes — and details all the benefits and features of a publication. There’s also often bolded and underlined text throughout the letter, calling attention to key marketing copy.

1. Quizzes — quizzes have been known to engage women and professional wonks. You don’t have to tell them you’re offering a subscription — often the question can be something as simple as “What’s your REAL age?” or “Are you more like Spock or Kirk at work?” and then followed by “Log on here to find out.” When respondent get their answer, they’re also presented with a subscription offer. Quizzes are a great tie-in to QR codes (see more on QR codes below).

1. Free Gift Inside— many nonprofits use address labels to solicit donations, but subscription and membership sites can use this tactic less manipulatively. For example, a crafting site may send recipients stickers with their name that they can attach to their work. Other free gifts include bookmarks, flat magnets, and post-it notes. Printing “Free Gift Inside” on the envelope is known to increase open rates.

When it comes to direct mail campaigns, many of the classic conversion tactics are still applicable. But we’ve also includes some tips specific to the online environment.

A. Classic Conversion Tactics:

1. Have a deadline. Deadlines make people respond. However, to do this through postal mail, you’ll need to time the mailing carefully — receiving mail too far away or too close to the deadline will affect response rates. To get an idea of how long it will take your direct mail pieces to arrive via postal mail, “seed” your list during the testing phase with addresses of people you know — co-workers, friends, your spouse. Then have these people alert you when they receive the direct mail piece in the mail.
2. Have multiple ways of responding. Don’t just list your URL (which hopefully, is short and memorable); list a phone number and email address as well. And contact information should be listed on every piece of paper in the mailing.
3. Use coupon codes. This is an old-school tactic that lets respondents feel their getting a private deal. However, this isn’t the best tracking device since people often forget to enter a coupon code. You’re better off using a vanity URL for tracking (see below).
4. Include a big, fat guarantee. Guarantees are known to increase response rates. For legal considerations when wording your guarantee, check out our on-demand video with Attorney Lisa Dubrow.
5. Include testimonials. Before social media and “social proof,” testimonials have been helping direct marketers sell subscriptions for years. Just make sure the testimonials are from real people. For B2B publications, get testimonials from industry leaders to really seal the deal.

B. Online-specific Conversion Tactics

1. Use QR codes, but ONLY if you have a mobile-friendly landing page (also see out tips on landing page design below). This is a great way to get respondents to answer a quiz or enter an email address for a free newsletter. You can also link the QR code to a video that has a CTA button embedded in the video, perhaps at the end, but preferably throughout the video.
2. Use vanity URLs, such as yoursite.com/firstname_lastname and link it to a special offer. They should be super easy to type, either a short version of your company URL. And use capital letters of different colors to differentiate between successive words in a URL. For example, our site should be www.SubscriptionSiteInsider.com — this makes it easier for people to remember your URL.
   Vanity URLS are an especially good tactic when trying to get expired accounts to return. However, most people often stop typing after “.com,” so make sure your homepage has a button/link/display ad for visitors to click in order to claim their special offer. Also, make sure to pre-fill their address if you’re using a list of past subscribers and expires. Don’t make them log on and remember an old password — let them come in as if a new customer.
3. Use SEO wording in your direct mail piece. Even though you’re offline, you want to use SEO-friendly copy so that recipients can search for your offer and find it. Also, make sure your headline, copy and images match between your postal direct mail and landing page. Keep in mind that the benefit language that appeals to new prospects will be different than the benefit language that appeals to expires/returns, so cater direct mail campaigns and landing pages for these audiences.
   You should A/B test top benefit copy on your site for new traffic before spending money on direct mail. This is how your on-site testing can get your more powerful postal direct mail test.
4. Help them get online. People who buy via postal direct mail may misunderstand and think they will receive a print publication. You many want to send a welcome letter via print with directions on how to log on. Also, watch your sleeper account very carefully — people who never logged on after they purchased may need a reminder.
5. Optimize Your Landing Pages.That includes:
   • Removing all navigation bars, advertisements, and basically anything that would allow visitors to click away.
   • Making sure all the headlines, graphics, color schemes, and offers match your direct mail piece.
   • If you expect most of your respondents to come through mobile devices, don’t ask for more than an email address or responses to a quiz. After the free offer, you can list a number they can click to call to give a credit card number and place an order.
   • If you expect your respondents to be logging on through a desktop computer, begin the order form on the landing page — don’t make them click-through to another page. And use a one-column form; two-column forms can lead to incorrect field entries when visitors are tabbing through them. Also, always reiterate your benefit at the top of the order form — this is proven to increase response rates.
   • Use a giant, colorful button that has compelling copy like “Get free newsletter” or “Get Instant Access!” The button should never say “Submit,” “Reset” or “Enter.”
   • After respondents have filled out your form, follow up with a “thank-you” page featuring a welcome video or top favorite links to get started. You can also include social media buttons on the thank you page to get visitors to share your offer with others.
   • Create a different landing page for each direct mail campaign in order to better track response rates. That also means that you shouldn’t A/B test these pages since it would ruin your test of your list response rate.