What Are The Most Important Parts Of A Direct Marketing Campaign?

By "most important" I mean, which parts have the biggest effect on the success of your campaign?

If you ask many people about this, you'll probably get several answers.... As Jim Straw says, everyone is right, and everyone is wrong.... But it's still interesting to know what people think.

An example of what I mean is something Jeff Barker posted earlier.... He said "The best sales letter in the world won't sell very well if it's sent to the wrong market and if you really have what your targets want, then a very ordinary sales letter will do the job."

Clearly he says the target market is more important than a good sales letter....

I'm still testing all this out for myself (I don't pretend to be the Wizard of Web Marketing, but I DO keep on going and learn as I go along)....

However, here are some snippets from my reading....

Benjamin Suarez says that the success of a promotion comes down to one formula -- here it is (from "Seven Steps To Freedom II" p. 2-27 to 2-28):

Rate of sales in direct marketing =
Demand for the product x Selling effectiveness of promotion x Quality of the prospect x Efficiency of the media

Or for short it's due to "PPPM" (that's how I remember it)....

That is, you need
- a good product that people want
- a good promotion (sales letter, advertisement, etc.)
- the right target market (prospect)
- the right media to reach them (direct mail, magazine ads, newspaper ads, TV, radio, internet, etc.)

I think this is a great formula, because I agree, you do need all these elements for a blockbuster promotion. But it ranks all these elements equally.... It doesn't say that one is more important than the other.

Here's another viewpoint.... This is called the "40-40-20 rule", and it was developed by the great direct marketer Ed Mayer.

Before I go into the rule, let me share something about Ed Mayer....

This comes from an issue of The Gary Halbert Letter (I'm quoting this paragraph under fair use).... From the Sept. 3, 1987 issue....

Gary Halbert writes about Ed Mayer....

"Ed was known as the Dean of Direct Mail. He was a short, wizened, bald little man who could keep me fascinated for hours. He taught a 5-day course on the basics of direct mail for the DMA's educational foundation and his course was easily the most powerful I've ever attended."

Gary goes on to say that you still might be able to get some of tapes of Ed Mayer's course from the Direct Marketing Association (DMA), and recommends them if you still can....

Back to Ed Mayer's 40-40-20 rule. I found this in an interesting book, "Direct Marketing Success" by Freeman Gosden, Jr., published in 1985 (p. 9).

The 40-40-20 rule states that the success or failure of your direct marketing effort is due to:

40% - The Audience
40% - Who You Are, Your Product or Service, Your Offer
20% - Creative, Format, Postal

Here's what this means....

40% - The Audience

This is your target market. Your "starving crowd." If it's not targeted at the right market, it makes success difficult.

This means picking the "right" list for your product, for example, or the right magazine, or the right ezine, and targeting the right group of people.

40% - Who You Are, Your Product or Service, Your Offer

This is a combination.... "Who You Are" means things like, have they heard of you before? Is your audience "familiar" with your name already in a positive way? It could also mean third-party endorsements.... Even if they haven't heard of you, but you are endorsed by someone or a company they trust, it can go a long way to winning their trust too.

Your Offer means your price or the deal you are offering.

The offer is sometimes (but not always) encapsulated in the headline....

I've done my due diligence and studied headlines, and I do have a stack of headlines which I refer to. Here are a few which help to clarify the offer....

"Save Over 40% Off Retail And Receive A Travel Kit ($50 Value) Free With Purchase"

"Released At Last - 137 Perfectly Legal Ways To Get A Check Out Of Uncle Sam!"

"The Secret Of Making People Like You"

"How To Reap Unbelievable Profits As The Dow Jones Soars To Over 4000 In The Next 18 Months, And Then Crashes Like A Lead Balloon!"

"How I Started A New Life With $7"

"Give Me 5 Days And I'll Give You A Magnetic Personality... Let Me Prove It - FREE"

"$80,000 In Prizes! Help Us Find The Name For These New Kitchens"

In a nutshell, the "offer" means what will you get -- both what products and what benefits -- and for how much?

All those ads, where they offer you all those "free bonuses" -- that's part of sweetening the offer.

Anyhow, according to Ed Mayer, the offer, combined with who you are and your product, is 40% of your success.

20% - Creative, Format, Postal

This is the part everyone sees -- the copy, graphics, how the envelope looks (in direct mail), how a web site looks (online), etc. This is probably the most analyzed part, yet it is only worth 20% of your success, according to Ed Mayer's formula.

Probably people spend TOO much time on this, time which could be better spent on choosing the right target market, and improving your offer....

Well, those are a couple of points of view....

I'm not an expert in this area, just a student. But I like to think I'm starting to delve deeply into direct response both in my study and in my tests....

I noticed one element was missing from these two discussions -- the timing. As Gordon pointed out, this may be the most important element of all. I suppose it might show up in that the right elements - the audience, the product/offer/who you are, and the creative elements - could change over time.

Are these percentages the same today? Some say they have changed over time, or that they change for different types of promotions.... Freeman Gosden, Jr. says that in telemarketing, the list or audience becomes 60% (p. 10). That's because each call, when you count people's salaries you have to pay, is much more expensive in telemarketing than in direct mail, making the fact that a call is not wasted more important. Hence, the audience importance is increased....

Any comments on this? Do you know of other viewpoints I haven't mentioned? I'd love to get your comments....

- Dien Rice

Dien,

I have to agree with what you said that I said ;>)For me, the right market is paramount to the success of whatever you're selling.

Get the market right and you can fumble everything else and still make money, but have the wrong market or something that your market doesn't even want and then sometimes nothing can save you.

Of course every aspect of the campaign, must be of reasonable quality, but if the market's wrong, then it's all for nothing.

A common problem with people who want to make money from their own efforts, is the love product.

They find a product or develop one that they just love, their love for it blindsides them and they can't see that while they might love it, there just isn't a market for it, or the market's too hard to reach or too small or worse case scenario, they’ve got no money.

And that brings me to another important, yet usually neglected point.

Pricing

Most people who want to make money from their own efforts usually not only find the product first, but select one that is often so low priced they can never even hope to make money form it.

You know the one’s I’m talking about, the $20 product where you need 1000 sales just to break even. Now I know there are millionaires out there who’ve made their fortunes from low priced products, but if you had the chance to sell something for $200 or $20 would you really choose the $20 product?

Some will say that when starting out you should start low priced and work your way up or have a range of products covering low and high prices, but product development and the marketing of something takes time, so why spend the time developing something for $20, when you could develop something for $200?

There is a psychological reason for why, but I’ll save that for another day.

Writing a sales piece for a $20 product takes the same time as one for $200.

The point I’m trying to make is that not only should you find a hungry market, but you should make sure they are affluent enough to afford what you have for sale.

A friend of mine is a used car salesmen who started out selling cars under $5000. Then 3 years later he got the opportunity to work at a Mercedes dealership. And guess what? When comparing the two, he said that the low end spent more time deciding, more time haggling, more time getting the money together and generally it took more of his time to make the sale.

But at the Mercedes dealership, 90% of the customers already had the money, knew which model they wanted and were ready to buy.

Were the Mercedes people better people? No, but they made better customers, Better customers as in having the money and knowing what they want. But affluent customers and high priced products isn’t for everyone and it all comes down to the barrier.

So when you’re deciding on who to target, make sure they can afford what you have for sale.

Jeff

But what about Bill Myers? Well, not only does he subscribe to the idea of selling high, but if you haven’t heard or don’t know, he’s finally back online in a personal way. Yes, after God knows how long, Bill Myers Online is taking subscribers from the 1st of September. This isn’t an ad for him, but as a past subscriber, I've found he not only knows what he’s talking about, but has a proven track record walking the talk.

I didn't make this up, but it is a good way to work out your price point and it can lead you to suitable markets.

How much do you want to make per month? Let's say $5000......and how many customers would you like to have? Well how about 12 a month?

That gives you a product price of at least $416.

Now all you have to do is find a market that is use to spending that kind of money on something they want.

You can play with the numbers, but remember that if you price low at the very begining, like $20 you're going to need 250 sales per month (compared with 12) to make the same $5000.

Just my 2 cents, I mean $200 worth ;>)

Are you the Jeff Barker from the testimonials that Peter Sun uses? The same Jeff Barker who used to run ads in the ABMMO mag?

Thanks for your time.

Michael Ross.

> By "most important" I mean, which
> parts have the biggest effect on the success
> of your campaign?

> If you ask many people about this, you'll
> probably get several answers.... As Jim
> Straw says, everyone is right, and everyone
> is wrong.... But it's still interesting to
> know what people think.

> An example of what I mean is something Jeff
> Barker posted earlier .... He said
> "The best sales letter in the world
> won't sell very well if it's sent to the
> wrong market and if you really have what
> your targets want, then a very ordinary
> sales letter will do the job."

> Clearly he says the target market is more
> important than a good sales letter....

> I'm still testing all this out for myself (I
> don't pretend to be the Wizard of Web
> Marketing, but I DO keep on going and learn
> as I go along)....

> However, here are some snippets from my
> reading....

> Benjamin Suarez says that the success of a
> promotion comes down to one formula -- here
> it is (from "Seven Steps To Freedom
> II" p. 2-27 to 2-28):

> Rate of sales in direct marketing =
> Demand for the product x Selling
> effectiveness of promotion x Quality of the
> prospect x Efficiency of the media

> Or for short it's due to "PPPM"
> (that's how I remember it)....

> That is, you need
> - a good product that people want
> - a good promotion (sales letter,
> advertisement, etc.)
> - the right target market (prospect)
> - the right media to reach them (direct
> mail, magazine ads, newspaper ads, TV,
> radio, internet, etc.)

> I think this is a great formula, because I
> agree, you do need all these elements for a
> blockbuster promotion. But it ranks all
> these elements equally.... It doesn't say
> that one is more important than the other.

> Here's another viewpoint.... This is called
> the "40-40-20 rule", and it was
> developed by the great direct marketer Ed
> Mayer.

> Before I go into the rule, let me share
> something about Ed Mayer....

> This comes from an issue of The Gary Halbert
> Letter (I'm quoting this paragraph under
> fair use).... From the Sept. 3, 1987
> issue....

> Gary Halbert writes about Ed Mayer....

> "Ed was known as the Dean of Direct
> Mail. He was a short, wizened, bald little
> man who could keep me fascinated for hours.
> He taught a 5-day course on the basics of
> direct mail for the DMA's educational
> foundation and his course was easily the
> most powerful I've ever attended."

> Gary goes on to say that you still might be
> able to get some of tapes of Ed Mayer's
> course from the Direct Marketing Association
> (DMA), and recommends them if you still
> can....

> Back to Ed Mayer's 40-40-20 rule. I found
> this in an interesting book, "Direct
> Marketing Success" by Freeman Gosden,
> Jr., published in 1985 (p. 9).

> The 40-40-20 rule states that the success or
> failure of your direct marketing effort is
> due to:

> 40% - The Audience
> 40% - Who You Are, Your Product or Service,
> Your Offer
> 20% - Creative, Format, Postal

> Here's what this means....

> 40% - The Audience This is your target
> market. Your "starving crowd." If
> it's not targeted at the right market, it
> makes success difficult.

> This means picking the "right"
> list for your product, for example, or the
> right magazine, or the right ezine, and
> targeting the right group of people.

> 40% - Who You Are, Your Product or Service,
> Your Offer This is a combination....
> "Who You Are" means things like,
> have they heard of you before? Is your
> audience "familiar" with your name
> already in a positive way? It could also
> mean third-party endorsements.... Even if
> they haven't heard of you, but you are
> endorsed by someone or a company they trust,
> it can go a long way to winning their trust
> too.

> Your Offer means your price or the deal you
> are offering.

> The offer is sometimes (but not always)
> encapsulated in the headline....

> I've done my due diligence and studied
> headlines, and I do have a stack of
> headlines which I refer to. Here are a few
> which help to clarify the offer....

> "Save Over 40% Off Retail And Receive A
> Travel Kit ($50 Value) Free With
> Purchase"

> "Released At Last - 137 Perfectly Legal
> Ways To Get A Check Out Of Uncle Sam!"

> "The Secret Of Making People Like
> You"

> "How To Reap Unbelievable Profits As
> The Dow Jones Soars To Over 4000 In The Next
> 18 Months, And Then Crashed Like A Lead
> Balloon!"

> "How I Started A New Life With $7"

> "Give Me 5 Days And I'll Give You A
> Magnetic Personality... Let Me Prove It -
> FREE"

> "$80,000 In Prizes! Help Us Find The
> Name For These New Kitchens"

> In a nutshell, the "offer" means
> what will you get -- both what products and
> what benefits -- and for how much?

> All those ads, where they offer you all
> those "free bonuses" -- that's
> part of sweetening the offer.

> Anyhow, according to Ed Mayer, the offer,
> combined with who you are and your product,
> is 40% of your success.

> 20% - Creative, Format, Postal This is the
> part everyone sees -- the copy, graphics,
> how the envelope looks (in direct mail), how
> a web site looks (online), etc. This is
> probably the most analyzed part, yet it is
> only worth 20% of your success, according to
> Ed Mayer's formula.

> Probably people spend TOO much time on this,
> time which could be better spent on choosing
> the right target market, and improving your
> offer....

> Well, those are a couple of points of
> view....

> I'm not an expert in this area, just a
> student. But I like to think I'm starting to
> delve deeply into direct response both in my
> study and in my tests....

> I noticed one element was missing from these
> two discussions -- the timing. As Gordon
> pointed out , this may be the most important
> element of all. I suppose it might show up
> in that the right elements - the audience,
> the product/offer/who you are, and the
> creative elements - could change over time.

> Are these percentages the same today? Some
> say they have changed over time, or that
> they change for different types of
> promotions.... Freeman Gosden, Jr. says that
> in telemarketing, the list or audience
> becomes 60% (p. 10). That's because each
> call, when you count people's salaries you
> have to pay, is much more expensive in
> telemarketing than in direct mail, making
> the fact that a call is not wasted more
> important. Hence, the audience importance is
> increased....

> Any comments on this? Do you know of other
> viewpoints I haven't mentioned? I'd love to
> get your comments....

> - Dien Rice

Dien,

You see "timing" is tied to both the audience 'do they want your product at this point?' and with the product itself 'is it wanted by the market'.

If your product is not wanted it does not matter what audience you select or the the price-point you choose or the marketing tool you employ, DM, space ads, TV, radio, Internet or just dropping flyers out of a plane.

Without good timing, your campaign is DOA...the better your timing the more money you'll make.

The second biggest mistake I see (and have done myself) is 'falling in love' with one product and service. Instead of giving it a fair shake and saying 'next'...we continually try to force a round peg into a square hole. What any business needs are various products or services, hoping one will be grasped by the market and your bank account fills.

Take care,

Mike Winicki

Hi Jeff,

That was a great post.... and I agree with you on pricing!

It's taken me a while to really understand this point....

In brief, here's how I understand it. In direct response, each person you attract to read your offer costs you money.... Whether it is the cost of the mail, or the cost of the newspaper ad, and so on....

So, let's say each direct mail piece costs you $1 each to make and send. Then sending it out to 500 people will cost you $500.

Now, let's say that 1% of the people who get your mail end up buying. That means that out of the 500 people you sent it to, only 5 people will buy.

That means that those 5 people have to cover your total cost of $500. That is, in this case you need a MINIMUM of $100 gross profit per person who buys just to BREAK EVEN.

So if you're not making at least $100 gross profit per sale on this particular promotion, you'll lose money.

This is what really hammered the point home to me.... Direct response marketing costs money, and you have to at least cover your costs!

It doesn't mean you can't offer low cost stuff, though, but if you do you need both low cost as well as high cost products. You'll probably make most of your money on the higher priced items....

One way is the "back end" model, where you make your real money from the "back end." Reader's Digest is like this.... I've read that they don't make any money selling their magazine. Reader's Digest makes their real money on the "back end" selling their books, CDs, etc. to their subscribers.

Another model is having several products, both low priced and high priced, with the lower priced products serving as "introductory" products. Jim Straw uses this approach .... You can buy a $10 report from him. If you like it, he's expecting that you'll be back for more of the higher priced reports he has, all the way up to his $100 report....

I like the latter model (Jim Straw's one) the best, but they both would work. :)

Gosh, Jeff, now you've got my brain cells working.... :)

> I didn't make this up, but it is a good way
> to work out your price point and it can lead
> you to suitable markets.

> How much do you want to make per month?
> Let's say $5000......and how many customers
> would you like to have? Well how about 12 a
> month?

> That gives you a product price of at least
> $416.

> Now all you have to do is find a market that
> is use to spending that kind of money on
> something they want.

> You can play with the numbers, but remember
> that if you price low at the very begining,
> like $20 you're going to need 250 sales per
> month (compared with 12) to make the same
> $5000.

Wow, that's a good calculation.... I hadn't seen that before! Thanks for sharing that Jeff!

Oh, and that's GREAT news that Bill Myers will be back online! :)

I get nothing from this either, but you can check it out at www.bmyers.com .... (It will be a subscription web site....)

- Dien

Jeff,

I've always done better with my higher priced products.

Not only do I earn more with less work, but customers who are willing to pay more are usually more better to work with, cause few problems, and are nicer overall.

You can't believe the whining, complaining, billing problems you can get with someone who who paid $20 vs. someone who paid $100-200-500.

Every once in a while I'll test lower priced priced and find I'm dealing with a whole new market.

This happened during a recent test. I had 2 different versions of a product/service. One low priced and the other "high" priced.

The people who paid the higher price (8x higher) were great. Very few complaints, nice to work with etc. In general the people who paid the low priced entry $20 expected much more for their money, wanted lots of support, and were generally a pain in the neck to deal with in comparison. etc.

I need to put a sign on my wall to remind me to stick with higher priced products and services! :-)

Ron

Jeff wrote -

> But what about Bill Myers? Well, not only
> does he subscribe to the idea of selling
> high, but if you haven’t heard or don’t
> know, he’s finally back online in a personal
> way. Yes, after God knows how long, Bill
> Myers Online is taking subscribers from the
> 1st of September. This isn’t an ad for him,
> but as a past subscriber, I've found he not
> only knows what he’s talking about, but has
> a proven track record walking the talk.

You didn't post the URL. Is he still at bmyers.com?

Rick Smith, "The Net Guerrilla"




The Home for Guerrilla Product Developers

> Are you the Jeff Barker from the
> testimonials that Peter Sun uses? The same
> Jeff Barker who used to run ads in the ABMMO
> mag?

Yes

> Thanks for your time.

Your welcome

> Michael Ross.