It has always bothered me that a 3% response rate is considered successful in direct mail prospecting. I know all of the arguments. (“It’s part of the acquisition costs. We’ll make it up with the next mailing.” “The breakeven is low, so a lower response is profitable.” And, my personal favorite, “It’s how things are done in the mail order industry.”)
I’ve even been known to offer a little justification myself. But there is an indisputable fact: a 3% response rate equals 97% failure. For those of you uninitiated in the mail order industry, this rate is only acceptable when you are prospecting. Even so, it is a scary number.
The reason I adapted to the status quo was that I couldn’t find a better way. It doesn’t matter how much data you have, it is impossible to select prospects with a high rate of accuracy. This is due to individual preferences that only appear when you get to know someone very well.
My sisters and I are a perfect example.
There are four of us. We look so much alike that people who know us sometimes get confused. We grew up in the same house with the same parents and attended the same schools. Our similarities end there. While we may shop from the same catalog, our styles are very different and we may be buying for our parents. If you rent names from that catalog, odds are that we don’t have an interest in your product.
This is why the 3% response rate for rental prospecting is acceptable. Too many unknowns prevent better targeting. But, everything changes when the prospect is acquired by inquiry. Instead of blasting your way into the prospects mailbox, you are invited. Your recipient has indicated an interest in your offerings and is more likely to buy.
Social media is a game changer.
It provides a venue for communicating with customers and prospects on a one to one basis. If you actively participate with a consistent and inviting voice, relationships are started or enhanced before the catalog is in the mail.
There is so much about your company and brand that is unknown to outsiders. Your history, philosophy, and item development information is often confined to internal documentation. While some is proprietary, the rest is your story to be shared with the world.
Your company’s story is what differentiates your business from the competition. Lower prices, better quality, and unique features can be easily copied and enhanced. The character of your company, not so much.
Social media offers a venue for telling your story one tweet, post, and video at a time. Use it wisely to attract prospects and engage customers. The relationships built here improve direct mail response rates and strengthen your business. So, give your friends a shout out. Maybe they’ll pass it on.