They can add up to big bucks in a hurry.

 What’s worse: if you decide to spend your hard earned cash on them, there is no guarantee that you’ll get any response.

Think about it. Your dealer could spend hundreds and hundreds of dollars on a nice newspaper ad and not hear from a soul. Or maybe they’ll hear from the people trying to sell them advertising in their publications.

These salespeople will tell them that it pays to advertise – you must spend money to make money – but they‘ve just spent a big chunk of money on that newspaper ad and have nothing to show for it. Now they’re not eager to spend any more on advertising. And advertising/promotion is vital, even for the smallest of dealers. What do they do?

I’m going to suggest they try direct mail.

Direct mail can help your dealers make more sales for a smaller outlay of promotional dollars.

All your dealers have two things in common. They serve the homeowner and they require leads for the sales force to follow up.

Today, we’re going to examine what experts feel is the best, most efficient and most economical way to gather live leads from the world of homeowners. Direct mail.

Direct mail arms your dealer with a rifle
     instead of a shotgun.

Newspaper ads are a shotgun approach to advertising. Especially when we are trying to sell home improvements.

Newspapers are sold at newsstands. Newspapers are delivered to apartments, condos, businesses. Many markets have more than one newspaper.

On top of that its estimated only 81% of Americans even read newspapers. Newspapers are delivered to brand new subdivisions that may already have energy efficient windows. This is a shotgun approach.

Direct mail enables a dealer to select exactly the prospects he wants and avoid those upon whom any promotion would represent money wasted.

With direct mail they aim their rifle at the homeowners in their marketing area and don’t pay for all the non-prospects the shotgun approach would deliver.

With direct mail they can literally pick their targets.

They can target their marketing promotion to reach those people who are most likely to purchase with direct mail they can select targets based on who they are trying to reach.

For example: single family dwelling units, 15 year old homes, five years length of residence, $50,000 household income, owner occupied, etc.

This why direct mail is the way to go for those dealers who want to get the most bang for the buck. Most dealers think direct mail is too expensive. Compared to what?

Direct mail is the best channel for
     dealers on a limited budget.

With direct mail they can count the responses received and track the sales results.

Direct mail gives you unlimited testing opportunities. Before spending a lot of money on a mass mailing, first you can test smaller audiences, using a wide variety of demographic “recipes.” Then use the recipe that gave you the best response.

Very few people don’t respond to their own names.

With direct mail you can personalize the promotions so you are talking directly to the prospect. They have already let you into their house.

About 94% of Americans purchase through some type of direct marketing each year. Studies show that 60% of people say they “usually read or scan it.” 31% say that they “read some of it.” 9% say they “don’t read any of it.” That means you have a 91% chance of reaching your audience through direct mail.

What should we mail?

A lot of different parts, each one costing money.

That’s why the self mailer was created.

A single sheet folded down to letter size. Addressed on the outside and ready to mail. Very cost effective for mass mailings. If printed on the proper weight stock it can include a response card. The self mailer allows for more advertising space, more space to make our offer, more space to present our product. It is the way to go on large mailings. It is not generally an entry level product.

That brings us to the postcard.

The direct mail postcard is powerful, yet very affordable.
Postcards have the ability to out pull traditional direct mail letters because they arrive naked. Since they are not clothed in envelopes they automatically attract more eyeballs.

In fact a recipient will often read the entire sales message on the postcard before deciding to keep it, or toss it.

Eight good reasons to use postcards:

Postcard marketing is affordable – even for the smallest of dealers.
Mailing a postcard to a prospect every month for a year costs only $4.44.
That includes the cost of the postcard, the cost of the list, the addressing, and the postage.

Marketing has many different rules that have been developed over the years. One of these rules is the “rule of Seven.”

This means that people need to be exposed to your message at least seven times in 18 months before they’re ready to buy from you. It used to be the “rule of four” but that was before the internet.

Postcards can “brand” your business. If you start - and stick to – a regular postcard mailing program, your business will gain a reputation.

When you’re marketing with postcards, your competition doesn’t know. They sure know if you’re advertising in the paper or on radio.

It’s easy to track your results. First of all you have the list of names that you mailed to.

Postcards are versatile. You can use the same postcard to seek business from prospective customers, and solicit repeat business from existing customers.

Testing an offer with postcards is easy. Just send the card to a small group and see how they respond. If you’re satisfied with the results roll out a bigger mailing.

Postcards don’t waste people’s time. They don’t even have to open an envelope to read your message.

Postcards are easy to redeem. If you run a coupon on the card for a discount they have it right in their hand when they call.

What can I expect for a response rate?

In direct mail lore there is a rule that states you can measure the success of your efforts by a minimum response rate of 1-2%. In other words if you send out 1,000 pieces you’ll have a successful mailing if you get 10 responses.

Well that’s one view of direct mailing success, if you’re selling widgets.
Home remodelers are not selling widgets. They are selling a service. An expensive one to boot.

There are many factors that control response rate. There are loose leads, and we can get more of these easily at a lower cost. There are tight leads, and we get fewer of these with a little more difficulty and at a higher cost. But the dealer has to make the choice.

And that choice is based upon the sales force needs. A higher rate of conversion and a few salesmen would dictate one choice – a low rate of conversion and a large sales force dictate another. In determining the type of lead we are after, the offer is the important element. Usually, the more lavish the offer, the more response you will get and usually the less qualified the lead or interested customer.

In postcard mailings we look more for ½ of one percent. That’s 5 responses out of 1,000 pieces mailed. Realistically in this business success can be measured by 1/10 of one percent response. Why, because of the cost. Cost can be a fooler.

It is common to quote direct mail costs as so many dollars per thousand in the mail. But that’s only the beginning. Professionals withhold judgment for two steps down the line.

Last year they ran 283 addresses. 56,600 post cards. They told me that they usually get 1 lead for every 200 cards. That’s easy math. 283 leads at a cost of $78 each…..$22,074*

What should their closing percentage be?
     10% 20% 40%

Let’s use 20% 283 x .20  =  57 jobs

What’s the average sale? $2,000 $4,000 $5,000

57 jobs x $4,000  =  $228,000

Let’s use 40% 114 jobs x $4000  =  $456,000

What if they only had a 1/10 of 1 percent response

56,600 cards @ 1/10 of 1 %  =  56 leads

What should they close? 40%? 23 deals

23 x $4,000  =  $92,000

*price based on 39¢/per piece prior to May 14th, 2007 Postal Increase