fortune

If I had a dollar for every person that said “If Only….”

The sad truth is that at least once a week I see a new client who has called me up in distress. NO - not because their parrot died, but because they all seem to feel the sense of their advertising and marketing dollars going down the drain. Money out and no sales in. Sound familiar?

I am sure at one stage in a person’s career; they have spent money unwisely or made the wrong advertising or marketing decision. I mean, look at some of the global companies you see – here today, gone tomorrow. It’s part of a learning process we must go though to be better business people, right?

Wrong!

With the right advice, you can ensure your marketing dollars are spent with a better chance of getting the results you want.

Here’s a perfect example of a recent & true scenario.
Client X decided to embark on doing their own research and own direct marketing campaign. The results and costs shown below are factual.

Client X
Objective To obtain new clients and build sales
Mechanism Purchase a database and send direct mail
Action New brochure is made and 10,000 printed
Artwork Cost $500.00
Printing Cost $1,800.00
Envelopes Cost $1,000.00
Postage Cost $4,500.00
Label and Fulfilment Cost $1,000.00
Database Cost $3,500.00
Total Cost $11,300.00
Divide total by 10,000 $1.13 per mailout (not bad, actually)
Results
Maybe 2% resonse rate = 200
Maybe 10% of the respondants buy = 20 sales

Each sale, if only a one off, must make $565 to break even.

Using the above calculations, why did the customer call me in distress? What could have went wrong and why did his money go down the drain?

The distress call was because the client rented a database from a company that guaranteed a 95% deliverability or your money back. That’s all and great, and a good way to have confidence in a company supplying rental data. Just as well they got that guarantee as the client received approx 75% of the direct mail envelopes returned to sender. Why? Most of the people had moved or were deceased or for some other reason. The data rental company came good on their guarantee, but what about all the other costs incurred?

That left them with a whopping $ 9025 down the drain. Gone. Kaput. Sayonara. Not to mention the time wasted by the client and their staff.

What could the client have done better? Is there anything the client could have done to avoid what has happened?

Basically, there are some precautions I suggested the client could take.
These would be:

  1. Ask the data broker how long they have been in business?
  2. Ask them are they ADMA qualified and then contact ADMA (Australian Direct Mail Association) to see if they are a listed provider
  3. Ask the broker who their current clients are and contact one of their clients for a referral.
  4. Ask the broker what percentage of their business is repeat business.

These four simple questions, may have avoided the whole issue as there are just as many bad and unethical list brokers out there as there are good ones. Know who they are and look at past work they have done and past clients. That way you can have more confidence.

Alternatively, put the responsibility on a marketing agency or direct mail agency to do this research for you and use reputable suppliers. That will solve all your problems! And probably save you a lot of time and money too!

TIPS
Here are a few tips to help you avoid throwing advertising and marketing dollars away.
Mail Drops
If you are doing a mail drop, don’t just do it once, you will get a much better response and bang for your buck if you do it 2-3 times in the same area. Remember, advertising is about memory recall.
Print
If you are running a print campaign, don’t let your advertising rep try and sell you a one off feature or one off ad. Ensure you have the budget to run a series of ads at least over a min of 3 weeks. Its better to go with a smaller ad more often than a one off larger ad. Advertising is about repetition and building your brand and confidence in potential customers.
Enews
If you are wanting to send an Enews – Don’t send a crappy text, red font, blue font email. It will probably be detrimental to your business more than assistance. Always keep a professional look, invest a few hundred dollars and have the Enews developed by a professional.
Radio
If you are taking radio advertising, don’t get sucked in to buying up front by your radio reps. They may try and sell you “Run of station” which means they are simply filling the gaps where they couldn’t sell. Get a plan together and ask your marketing consultant for advice.
TV is affordable!
We can cut a great ad for under 10k and your 30 sec spots generally are cheaper than radio – you can grab a 30 sec spot from $ 100!

I truly hope my advice has helped you, and I'd love to hear your feedback. You are always welcome to drop me an email with your question or phone me up for advice – we are always here to help!

Speak soon and take care.

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