Yesterday we had to make a decision whether to spend several thousand dollars on a direct mail marketing piece. My gut said send it, the budget said be very careful, and my boss said I feel like we’re gambling.
The truth is, marketing is a lot like gambling.
There are no guarantees. Even trends and statistics from similar past efforts do not ensure similar results again, but they can provide direction to help you make a good decision.
Here are the facts. Past direct mail pieces, in coordination with emails, valuable promotions, and a solid web presence have yielded around a 1.8% conversion rate. That means, that one or two people out of every hundred responded by purchasing the product. For this particular project, that rate
would have yielded 162 new customers. Payback for the cost of the mailing would occur at 27.
It is a gamble. We might get 4; we might get 400.
But there were two strong factors that made my gut say send it.
First, we have a great product that the 9022 people on this mailing list probably don’t know about. If our product was new or even mediocre, if we didn’t have a track record of delivering it with excellence, if there wasn’t positive buzz about it online and by word of mouth, the risk would have been much higher.
Second, we have a great mailing list. The list is exactly our target audience, all with a recent history of purchasing a different, albeit similar, product from our organization. Not everyone has access to such a large list that targeted, but the concept scales. Even with 10 or 12 customers like those that we had on our list, they would be your best bet for such a marketing effort.
So, yesterday, sometime after 4pm, we rolled the dice and I told our marketing firm to send the mailing. You know what? It did feel like gambling. I guess we’ll see.