Mail Order Marketing

Mail Order Marketing
 

Mail order marketing generates billions of dollars in cash for both large and small companies alike. One of my marketing friends in Kansas has a company that does 99% of its marketing through the mail and generates roughly $800,000 to $1 million dollars each and every month. That’s $9,600,000 to $12 million dollars a year by mail order. As a side note, in the late 1980’s this gentleman was a down-on-his-luck carpet cleaner who discovered information publishing, started his own mail order business with $300, and has since made over $100,000,000 selling information by mail.

Mail Order Secret #1:
To be completely frank, mail order is NOT a business. 

Mail order is a delivery method for your marketing messages. It’s the same thing as calling a business on the Internet an “Internet business”. Even though the Merck pharmaceutical company advertises on television, most people don’t refer to them as a “Television Business”. And while most furniture stores advertise in the local newspaper very few of them are called “Newspaper Businesses”. You may want to promote your products or services by mail, but that doesn’t make it a mail order business. This is a clarification that’s important, because I’ll be talking about various business opportunities throughout this book that can ALL be promoted by mail.

Mail Order Secret #2:
There is a proven system to making money in mail order. 

You find a specific niche market that can be reached by mail, and you sell them something for which they’re HUNGRY. For example, you can go online to SRDS.com (or to your area’s largest library) and find the Standard Rate and Data Services directory of direct mail lists. Inside that directory are mailing lists of all types of groups. You can find mailing lists for people interested in arts and crafts, dogs, cats, skydiving, mountain climbing, business opportunities, Karate, fly fishing, antiques, and painting. There are mailing lists of people who subscribe to certain magazines, have purchased items off of TV, who attend college, and who drive certain types of cars. There are literally thousands of different mailing lists available to you. The key is to find a mailing list of customers who WANT something and deliver that particular product or service to them.

Often, someone will come to me with a product that “Everyone needs”. That normally spells disaster. Why? Let’s take a look at products that “Everyone needs”. Maybe it’s dishwashing detergent, or laundry detergent or something along those lines. Where do these companies advertise? Do they mail out direct mail sales letters or place ads in small niche magazines? No. These companies spend millions upon millions of dollars selling their products to the masses. Their full-page ads (many costing $25,000 to $50,000 or more) in monthly magazines drive people to local grocery stores and discount chains to buy their products. That’s the problem with having a product that “Everyone needs”. You’re not able to focus your marketing efforts on a small niche market. You’re forced to spend millions of dollars promoting your product on TV, Radio, and in major magazines. And most people don’t have the deep pockets to do that. And if you DO have a hot “mass market” product, stand back because people with BIGGER, DEEPER pockets than you are likely to rush in, steal your basic idea, and launch it before you have a foothold in the market.

The secret to success with ANY mail order business is to target a smaller NICHE market - a group of people who all have the same interest. Making money. Real Estate. Fishing. Weight Loss. Health. Whatever. Next, they MUST be easy to reach either through direct mail lists that you can purchase or magazines to which they all subscribe. And finally, you need to create or find a product that this niche group WANTS (not needs, WANTS), and sell it to them. It’s a simple formula for success, but one that many new mail order marketers don’t understand. 

Now, here’s The ADVANCED Mail Order Marketing Formula:
Whenever you’re starting your mail order campaign, you need to realize that the target market doesn’t know or trust you yet. So trying to get them to fork over $100, $250, even $500 for a product, course, service, whatever is going to be incredibly difficult. Most mail order marketers sell a low-cost or even free “Front-End Offer”... maybe a booklet, report, audio CD, trial subscription... so that the prospect has very little risk involved in their purchase. Because their risk is low, they’re more likely to take a chance with you. Then, once they’ve purchased from you, it’s important that you PROVE YOURSELF to them by giving them more than they expected. How you deliver the first product is going to give them an idea of the quality of ALL of your products and your customer service philosophy. Make sure to give a great impression.

Then, once you’ve proven yourself to your buyers you can mail additional offers to them, selling them higher-priced products.

In direct response marketing, it’s known as the “Marketing Funnel”. Imagine a funnel. You “pour” in thousands of buyers at the top of the funnel using free or low-cost offers. Once they’re in the funnel, you sell them higher priced products. You’ll discover that fewer and fewer customers will buy as the price rises. So as your customers move DOWN your funnel, you’ll sift and sort until you get to the bottom of the funnel and have a small number of very, very high quality customers who may pay you thousands of dollars for seminars or live coaching. The products at the top of the funnel are free or inexpensive. The products at the bottom are very expensive. So as people move down the funnel, you get fewer and fewer people willing to shell out larger and larger amounts of money. But you also end up with a very high-quality group of buyers as they move through your marketing funnel.

Mail Order Secret #3:
Create (or find) a product or service ONLY AFTER you have found a market that is easy-to-reach (usually via mailing lists or magazines).
The biggest mistake that people make is finding or creating a product first and then trying to find a market to sell it to. Often the person believes (through very little or no actual research) that the product will sell because “everyone needs it” or “I’m sure people will buy it”. However, once the product has been completed, after much time, effort, and money invested, the entrepreneur discovers that either there’s no market for the product or that there might be a market that can’t be easily reached through a specific mailing list or magazine. Often it’s much better to do a little research, find a mailing list or magazine that reaches a target market, and then create a product that this market wants. Do that and you have a recipe for success.

How do you find out what a particular market wants? SEE what they’ve already bought. The mailing list companies will tell you what these customers have purchased before and how much they spent. Or you can look through the magazines at what your competition is selling. Make sure to check through old copies of these magazines and, if the same ads run year after year, it’s a pretty good bet that the ad works and the product being sold is popular. There’s nothing wrong with creating another product based on an already winning product. Just try to make yours better, easier, faster working, etc.

Mail Order Secret #4:
Many companies that sell by mail are willing to break even or even lose money selling what is normally known as a “front-end” product.
A front-end product is the first product a new buyer purchases from you. It’s usually a low-cost or free product or service that gives the prospect the opportunity to buy something from you with very little risk and gives you the opportunity to prove to the new buyer that you’re a legitimate company that delivers on its promises. The real secret behind most mail order companies is that they rely on the LIFETIME VALUE of a customer. Instead of trying to get rich selling a lowcost product or service, they’re happy to lose money on the first sale, because they realize if the customer is happy with their initial purchase, they’ll be back to purchase from them again and again and again. 

Some customers may continue to purchase from a company for many years, even decades. So losing $5 to gain a customer who ultimately purchases $50,000.00 in products or services from you over a 10-year lifetime is a very cheap investment. The most successful businesses that sell by mail understand the importance of a strong “back-end” marketing strategy and continue to mail their customers additional product offerings on a regular basis. In fact, it’s been said that mailing to your customer database more often (at least once a month) creates a bond with the customer and actually increases the chance they’ll purchase from you in the future.

Mail Order Secret #5:
Do not buy mailing lists from ads in opportunity or money-making magazines.
Even though the prices might be cheaper and (as I’ve seen recently) you can double, triple, even quadruple your order FREE, you normally end up getting the lowest-quality names possible. And with what you’ll be investing in printing and postage to mail out your direct mail piece, you definitely want the best mailing lists possible. You can get very high-quality, reasonably-priced mailing lists from experienced mailing list brokers by going to SRDS.com or going to your area’s largest library and asking for the Standard Rate and Data Services Mailing List Directory. Do not skimp on your mailing list. It’ll be one of the best investments you’ll make.

Mail Order Secret #6:
Count money, not response rates or “undeliverables”.
“Undeliverables” are mail that the U.S. Post Office returns to you, because it can’t be delivered to the addressee, due to a bad address, forwarding order expired, etc. Often, people new to mail order marketing get caught up counting the wrong numbers, such as the number of undeliverables that are returned to you or the percentage of the people from the list who buy. Remember, you can’t deposit response rates. You can only deposit money. So, for example, let’s say that it costs you $5,000 to mail out 5,000 letters to a mailing list. 

And let’s say that you get 50% undeliverables – and only 1% of the people who receive your letter actually buy your product. Horrible, right? Not necessarily. Let’s say that your product sells for $500. A 1%
response rate from 5,000 letters mailed, but only 2,500 delivered would pull in 25 orders. Do that math – and you’ll see that’s $12,500.00 in gross sales. Even if you subtract your $5,000 mailing cost, you’re still way ahead. It’s important to focus your time and energy on counting the numbers that matter. The dollars. The other numbers are interesting to measure, but you should always keep your eyes first and foremost on how much money your mailings are pulling in.

Mail Order Secret #7:
Know Your Math BEFORE Mailing and Make it Work with SMALL NUMBERS!
This is a BIG SECRET! Many mail order marketers understand that no matter how incredible your sales letter is and no matter how wonderful the mailing list broker says their list is, your response rate for any offer might only be 1% or LESS! Smart marketers change their pricing to work with small numbers. For example, let’s say it costs you $5,000 to mail out 5,000 letters to a mailing list you’ve purchased. That covers the cost of renting the list (most lists are rented for one-time-use only), postage, and printing the sales piece and envelope. Now let’s say that you only get 1% to purchase your product. If your product is $25, you’ve only made $1,250. You’ve just lost $3,750. If your product is $100, you’ve made $5,000. You’re at break even. 

(Actually, you will have some cost to fulfill your product, but for this example, let’s assume you have $0 product cost). But, if your product is $250, the exact same 1% response rate pulls in $12,500. Subtract your $5,000 mailing cost and you’re ahead by $7,500! It’s the same list, the same cost to mail all 5,000 people but by changing your pricing you’ve gone from losing money to making money. In the past I’ve sold products for up to $1,000, where I could cover all of my marketing costs with as little as ½ of a 1% response rate. Before you mail your first letter, make sure you’ve done the math. If it doesn’t work out make any necessary changes until the math does work out. Smart marketers price their products and set up their marketing systems to be successful with the smallest response possible. Then, if response is bad, they’ve made money. And if response is great, they’ve made a big PILE of money. Either way, they’ve reduced their risk to almost nothing.

Mail Order Secret #8:
Your best list is your HOUSE LIST!
No matter what mailing list broker you rent lists from, your best list will always be your in-house list of BUYERS. The people who have purchased from you before are more likely to purchase from you again (providing that you’ve given them good value for their money), rather than people from a “cold list” who have never heard of you before. You’ll always get a better response by mailing new product or service offers to your in-house list of buyers than a new list you rent. In fact, many smart mail order marketers will test new product offers on their in-house list before mailing it to an outside list. If the product isn’t a success being mailed to the in-house list, the marketer knows it will probably sell poorly to an outside list. Always remember to go back to your own customer list again and again on a regular basis with new offers.