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Direct mail: junk mail with a purpose

24 October 2003 by
Direct mail: junk mail with a purpose

It may have a dreadful reputation, but direct mail can be a highly effective way of improving your profits.

Because your main experience of direct mail is probably from large credit card lenders or insurance companies, you may think direct mail is a very expensive way of promoting your business, something that's all too complicated and best left to the big boys. Think again. Direct mail can work wonders for your business. Scaled down, it can be a very personal way of making contact with your customers.

What is direct mail?

Direct mail is a method of communicating, in written form, with a known set of current, potential or lapsed customers. Your communication is sent through the Royal Mail. The communication can be for any of the following reasons:

  • To tell prospective customers about your business
  • To tell current customers about a special offer or promotion
  • To remind lapsed customers about your business and maybe make them a special offer

Where should you start?

Don't panic. Direct mail is simple as long as you stick to the rules. It is important not to stray from them, as this will only dilute the impact of your mailing and make your campaign less cost-effective. Remember: you are trying to send the right offer, to the right customer, in a way that will encourage them to buy your product or service.

Find your databases
Current and past customers: Yes, you do have a database, it may be on the back of old receipts or in a guest register, or simply in your reservations book, but it exists.
Potential customers: You can get hold of a list of potential customers. Approach your local Chamber of Commerce, or the tourist board. They will have some databases available to you if you are a member for a nominal fee.

Get spring-cleaning
Collect all your names and addresses on a simple computer database so you can print off labels. A typed label will help ensure that your mail arrives and has a professional edge.
Make sure all addresses are complete. That means: full title and surname, house number or name, street, town or city and, above all, the postcode. There is no point in sending a piece of direct mail that has an incomplete address.
Only use UK addresses unless your business has a very strong international appeal.

Choose your target market
You need to categorize your target market into potential, current and past customers. It will probably be necessary to further divide them into business and leisure customers. If you can, add this categorisation to your electronic database. If you can't, make sure you set up a reference system. Remember: it's quality that counts. Don't be tempted to lump together different markets; you'll be wasting your money.

Decide on your message
Take time to craft a suitable offer that will appeal to your target market. The key is to ensure that you tell your reader quickly in the text what you are offering him and that it is appropriate to him. You could say: "The Countess Hall hotel would like to welcome you back to Somerset with 50% discount." Make sure your offer is simple, of good value and relevant to your target market.

Keep it simple
Keep your costs low by not trying too hard and not trying to be too clever. A simple letter, well written, on good quality paper and with a strong offer will be as attractive as a pop-up, all-singing-all-dancing mailshot. You may want to add a flyer, produced by a local printer like Kall Kwik. (See the article on advertising for guidance on putting together an advert or flyer).

Stuff your envelopes
The sad truth is that manual labour costs money. Anything below 1,000 items is manageable in-house, and you should stuff your direct mail packs within the business if you can. If you have to farm the job out, your local high-street printer should be able to undertake the job for you, for a fee.

Track the response
You need to track the business generated by your direct mail campaign. Keeping your staff informed and interested in your marketing activity will help ensure that when you get enquiries, they are checked for origin.
However, you may want to add a response mechanism to your mailer so you can see what works best and focus on this next time round. Set up a reply-paid address section on your mailing. To do this:

  • Pick up a Response Services leaflet from any main post office
  • Complete the form and pay your deposit: £100 will open your account and after that the Royal Mail will invoice you as required
  • Follow the guidelines for the presentation of the reply-paid details on any printed matter.
  • Finally, when the responses do come in, update your database every week so that you can improve its quality with minimum time and effort.

How much will all this cost?

To keep track of your likely costs and establish how profitable the campaign is likely to be, make sure you have asked yourself, and answered, the following questions:

Who am I trying to attract?

How many contacts do I have that are good quality?

How much will the mailer cost to produce?

What is the envelope cost?

Is there any cost for stuffing the envelopes?

What is the total cost of postage?

What is the TOTAL COST of all elements?

What offer can I make that will be attractive?

What business is likely to be generated?

How will I know which bookings relate to the promotion?

How will I track the success rate?

What is the likely increase in business of all the responses?

Is it still profitable for me to carry out the campaign?

Remember that direct mail produces a response on average of 2-3%. It doesn't seem like much, but it could give you the business edge you need, or bring in your next big customer. What matters is the value of the business coming in.

Data Protection Act

You need to be aware of the Data Protection Act 1996, which protects the public from unsolicited mail and entitles them to privacy at their address. You should make sure you are data-protection compliant by formally registering your business and the data you gather with the registrar. This can be done by calling 01625 545700 or by looking on their Web site .This site, or the advisers, can help make sure that you do not contravene the act by mistake. See the article on data protection.

Stuart Harrison, formerly managing director of brands and franchising at Premier Hotels, now runs his own consultancy, the Profitable Hotel Company. He is also a visiting fellow of Oxford Brookes University.

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