“Is direct mail dead? Really, it’s not – but you have to be really smart about it,” South said.
According to South, one of the biggest factors that determines the success of a campaign is what it’s selling.
“If you are targeting general loan programs that have been out for a few years, then responses really aren’t where they were two years ago, just because those people have been hammered from all different types of marketing media,” he says. “However, if you’re first to market, the first to launch a direct mail campaign about a new program that opens up a new group of consumers or homeowners, we’re seeing really good responses. An example of that would be these new FHA loans
where there’s low credit or no credit check required. That’s really opened up the door to target a group of homeowners that typically haven’t been targeted over the last few years.”
Three factors for success
In fact, South said that Best Rate Referrals breaks the success of any direct mail campaign down into three parts – and the biggest factor is, unsurprisingly, marketing to the right people.
“Seventy percent of the success of a mail campaign has to do with the mailing list you’re mailing to,” he said. “That includes the type of data, where you got that data, and the filters you used to create that list of homeowners or consumers.”
Another factor, of course, is the content of the mailing itself – but that might not be as big a factor as some think.
“Twenty percent of the success of a direct mail campaign is the actual letter,” South said. “A lot of people think, ‘I need to make this fancy, pretty letter. I need to send it out to a graphic designer and spend 500 bucks to make it look really good.” That’s nice, but really only about 20% of the success of your campaign is coming down to that letter.”
The third factor for success is one that’s a bit less intuitive.
“The last 10% is really the day of the week the mail is delivered,” South said. “We find that if the mail is delivered later in the week, the response rates drop considerably. The best way to combat that is to mail it out on a Thursday or Friday. Assuming you’re sending it first-class mail, it’ll be delivered Monday, Tuesday or Wednesday of the following week. By following that game plan, you can increase your response rate by at least a half a percent – just by having the mail delivered o those specific days.
“Think about it: you get your mail at the beginning of the week, when it’s a new week and you’ve got all this stuff on your plate you want to get done,” he added. “So you’re more active with regards to responding to a direct mail offer. Later in the week, you’re thinking about the weekend and what you’re going to do for fun. You’re not thinking about refinancing your house or anything like that.”
Boost your open rate
These days, most professionals think of “open rates” in terms of email marketing. But of course, your direct mailing isn’t going to do much good if it goes straight into your customers’ trash cans.
“You have your list of people that you’ve filtered down, and you’re going to mail it out – but how do you get that person to open the letter?” South said. “How do you make it not look like junk mail?”
That’s especially challenging when some of the tried-and-true strategies to get customers to open their mail aren’t working anymore.
“A lot of people think, ‘I’m going to do handwritten fonts on the envelope to make it look like somebody wrote this.’ That might have worked five or 10 years ago, but it doesn’t work these days,” South said. “So what we’ve been doing is putting messaging on the outside of the envelope to entice the homeowner to open it. There’s all sorts of different messaging you can do. Instead of just the return address, print something on the envelope that catches the eye and entices them to open it. If no one’s opening the letter, no one’s going to read it and call you.”
Keep it simple
In the end, South reiterated, a successful direct mail campaign is all about timing and good planning.
“It’s really all about being first to market and working with a direct mail partner that understands the industry and keeps up with that type of stuff,” he said. “If you do that, you can be successful.”
Is direct mail dead? Many originators might say yes; after all, electronic communications are instantaneous – and there’s no postage to worry about. But that doesn’t mean you should abandon direct mail entirely. According to Zach South, president of Best Rate Referrals, a well-handled direct mail campaign can still yield impressive results.