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Daily Archives: April 17, 2011

Determining how many to mail and how often

I have “Good News” and “Bad News”.
First, the Good News…
There are plenty of customers out there, even when the economy is not doing so good.

What is the Bad News?
You probably don’t have a big enough advertising budget to reach them all.

What determines a Geographic Market?
Geographic markets for small businesses fall into three categories:

  1. Physical Location – Customers Come To You
    Like a restaurant or dentist. Unless the business is located in a very rural area, the geographic market will usually be about a 3-mile radius. This market can have 20,000 or more prospects.
  2. Local Business – You Go To The Customers
    Like a lawn service or home remodeling company. In this case the geographic market is larger and is usually defined by neighborhoods. This market can have 50,000 or more prospects.
  3. Business Without Boundaries – Customers Can Be Anywhere
    Like phone, mail or an Internet order businesses. The geographic market can be huge, statewide, nationwide or even worldwide. This market can have hundreds of thousands or even millions of prospects.

Whatever type of Geographic Market your business has, chances are you won’t have a large enough budget to reach all of your prospects on a regular basis. That’s good news. It means you have a lot of room to grow your business.

When using Direct Mail – How many and how often?
If direct mail is part of your advertising plan, how many prospects should you target and how often? There are lots of theories about this problem. The reality for most small businesses is that this question will be most influenced by their advertising budget.

My recommendation is to segment a portion of your potential market (based on your budget) and then mail that segment as often as you can (again, based on your budget).

In other words, for the same budget, I would rather mail 1000 prospects 5 times than mail 5000 prospects 1 time.

There are advantages to this approach.
The targeted market segment becomes your “control group” for experimentation. By mailing to the same prospects, carefully monitoring response and fine-tuning your message, you have an opportunity to develop an acceptable and predictable response rate.

When that happens, hopefully you will see an increase in sales. More sales = a larger advertising budget and you are ready to expand your mailing area. Expand but don’t abandon the original mailing segment. Perhaps you can reduce your frequency in that area due to the increased visibility you have created, but remember, “out of sight, is out of mind” and you don’t want to risk losing the business from that segment.

Direct Mail Works.
Direct mail is one of the most effective media methods you can choose to grow your business, however, like most everything else worth doing, it takes time and money. You have to spend time planning, monitoring and improving your campaigns. Furthermore if you are starting with a modest budget, results will also be modest and more time will be needed for success. So before you start, make a commitment to stick with it and don’t quit until you reach your goal.