How to Convert Prospects Into Customers Using Direct Marketing

In direct marketing, persuading prospects to open their mail is essential to having an effective campaign.

If the timing is right and it's smartly packaged and appealing, the odds are surprisingly high that they will. According to a recent survey, three out of four adults, or 77 percent, stated that they regularly read their direct mail, and 59 percent said they had read it in the past week.

According to a recent survey Scott Marden, director of strategic marketing at Webcraft, a direct marketing service in Lawrenceville, New Jersey, about half of the 23 percent of adults who never read their direct mail simply don’t have the time. In April and May 2001 Webcraft conducted a telephone survey of 2,000 adults to determine the effectiveness of direct mail. Its goal was to identify those prospects most likely to respond to direct mail mechanisms. The report’s first results address direct financial and insurance industry direct mail.

Knowing which prospects are most receptive to direct mail is key. "Start with the 9 percent of America that reads every piece [of mail] they receive," says Marden. This group is composed primarily of 59 percent women and people with household incomes under $30,000, or 46 percent. Next are the 16 percent of people who only read mail about products that they're already planning to buy. Sixty-one percent of that group is composed of women, of whom 28 percent are from the Midwest. Making sure the mail reaches these prospects when they are most receptive is crucial. About two out of three, or 61 percent, of readers of finance-related mailings say that timing is one of three factors that motivate them to open the envelope. The other two factors are personalization and appealing look.

Since many people are looking to transfer credit card balances, finance-related direct mail has one of the highest response rates of all direct marketing campaigns, Marden notes. Four out of 10 people who have more than one credit card say they read their finance-related direct mail. Eighty-two percent of this group of people also say they read all their direct mail at least some of the time. Consequently they are prime targets for all other marketers.

Marden advises credit card companies seeking to increase their customer base to also consider which demographic groups are most likely to be receptive to specific types of offers. For example, 39 percent of seniors (defined by the study as 72 and older) and 38 percent of young/olds (defined as 56 to 71) say the term “no annual fee” appeals to them when choosing a credit card, compared with 32 percent of Gen Xers (defined as 25 to 36) and 28 percent of Gen Ys (defined as 18 to 24). Thirty-nine percent of Gen Xers, 37 percent of Baby Boomers, and 33 percent of Gen Ys state that getting a low annual percentage rate on purchases is the most appealing offer of all.

Insurance companies using direct mail would do well to target consumers with changing needs, according to Marden. Two thirds of all adults, including those with incomes between $30,000 and $50,000 and 75 percent of Gen Xers, say it would be helpful to receive information on insurance following a major life change, such as a marriage, birth, retirement, or home purchase.

Some people automatically toss direct mail into the trash. Fifty-six percent of mail chuckers are men between the ages of 56 and 71 (21 percent) and people with household incomes below $30,000 (42 percent). Marden advises companies to forget about sending direct mail to this group; instead, put a flashy message on a billboard. Chuckers like to be entertained.