In mail order it is that frequently quoted but often highly misunderstood response rate’ which makes all of the difference between magnificent profits and dismal failure. In truth, mail order is an easy venture in which to achieve high profits and sometimes virtually instant success, but it’s also a business that suffers an extremely high drop out rate amongst newcomers to the profession.
To understand why this apparent contradiction should exist, we must first of all define response rates for the benefit of those new to mail order, from which we might illustrate the massive impact that a slight improvement to one’s rate can have upon ultimate profits.
‘Response rate’ basically is that percentage of orders to result from however many offers are made to especially targeted potential customers. This might perhaps best be explained in the light of campaigns carried out by direct mail, that is the directing of mailshots (offers) to prospective customers usually identified as likely to be interested in what it is you have to offer. From a campaign of say 1,000 packages, and 30 orders subsequently received, the actual response rate would be as follows:
______ x 100 = 3%
A response rate of 3% might on the face of it seem exceedingly low, but taking costs of mailing into account and with an offer likely to generate $20 pure profit from each order received, the profits achieved from that 3% can prove staggering. A 1% increase to response rate – not a lot to hope for – can have a tremendous impact upon the level of profits each campaign produces. Let us now take a look at calculations derived from various response rates to a campaign of 1,000 mailshots, and consider for ourselves exactly why many of today’s millionaire mail order dealers will go to extreme lengths to achieve just a ‘tiny’ half per cent increase to the number of order received.
Assuming the average cost of a 1,000 package to be $700 ($290 postage; $30 envelopes; $90 mailing list; the remainder for circulars and package contents), and further assuming a product yielding a net $40 profit, that is after all costs of production and dispatch have been taken into account, the profit margin from various response rates would then be as follows:
Size of Mailshot % Response Rate No. Orders Net Profit
1,000 (cost $700) 2 20 = $80 -$600 = $100
3 30 = $1,200 – $600 = $600
4 40 = $1,600 – $600 = $1,000
And finally consider the impact now of just one-half a per cent increase:
4.5 45 = $1,800 – $600 = $1,200
That increase from 4% to 4.5% is one which involves just one more order received from every two hundred people approached. Even from a relatively small 1,000 package direct mail campaign, that one order brings in an additional $200 pure profit with no extra costs being involved. Need we then really consider any further the importance of doing all within your power to improve your response rate, even if only a tiny improvement is achieved? Surely not! So let us instead get on with the basics of exactly what goes towards success in direct mail, and what relatively little known secrets have achieved multi-million fortunes for many of today’s operators in the exciting and hugely profitable world of mail order.
Make Your Own Mailing List
(And guard it with your life). People who have contacted you with an order or merely an enquiry are amongst the best contacts you are ever likely to have to whom to mail offers in the future. Remember they have asked you for information, not vice versa; they are keen. And most likely they are not on anyone else’s mailing list. They are your exclusive prospects. Keep a record of them all.
Regularly mail to those addresses on your list, and make such amendments as are necessary in respect of ‘gone aways’, and those not longer interested in whatever product or service you offer.
Make Buying As Attractive A Proposition As Possible
Even if you are attempting to sell to long-established customers, you should of course do all you can to stimulate a sale. Make special offers, give discounts, gifts and so on.
Offer Greater Incentives To Increase The Size of Orders
Hundreds of tiny, low-profit orders are unlikely to make your fortune, so try to encourage customers to increase the size of their orders by the use of inducements, gifts, discounts, and special offers.
Offer Special Discounts To Lapsed Customers
Bring lapsed customers back into your active buyers lists by offering special inducements such as gifts, discounts, etc., based upon your knowledge of those past customers and their special interests.
Offer Incentives To Encourage Early Ordering
To facilitate fast turnover of stock and of course to assist whatever cash flow problems might otherwise be experienced, offer a special discount or gift, perhaps offer a ‘three for the price of two’ package to all customers who send in their orders by a specified date.
If you receive testimonials referring to the efficiency of your service or the quality of your product, have these briefly added to your advertising circulars, perhaps stating that the original documents can be viewed at your premises by appointment.
Include Several Offers In One Envelope
By far the biggest advantage of direct mail as well as the enquiry method, namely that in which the reader of your classified or display advertisement is requested not to send money, but instead to write for further details of what is on offer, is the opportunity to include in your reply details of other offers similar to that in which the interest might lie. It, in the case of the enquiry method, customers are not interested in what they originally sought extra information on, there is every possibility that readers will place an order for some other item.
Always Enclose A Reply Envelope For The Customer’s Order
One on which your address has been appended by any of several varied means, such as adhesive label, printing, rubber stamping, typing, photocopied label, etc.
Here we are basically taking into account the fact that we are all extremely lazy at heart, so the easier we make the task of ordering for the potential customer – in this case saving him or her the job of seeking out an envelope for the order -then the greater are our chances of making a sale.
Passing Brochures On
Particularly if your brochure or mailshot has proved expensive to produce, ask those to whom they are sent, if not interested in your offer for themselves, to pass the package on to a friend. Those who do pass the brochure on, even if seemingly insignificant in number, will involve no cost or trouble to you, and even if only one order results from every mailshot you make, then the exercise must undoubtedly be worthwhile.
Don’t Try To Be Too Clever
At least, not in your approach to the customer! He or she is not likely to be impressed with any suppressed literary talents that manifest themselves in a sales letter the reader needs a dictionary to interpret. So don’t confuse the customer with long, elusive words that detract from the benefits of the offer you are making.- the dictionary will stay on the shelf and your letter will go straight into ‘file 13’ – the rubbish bin!
Ensure Your Offers Are Aimed At Suitable Prospects
Even the most unusual and unique of items will meet with a zero per cent response rate if offered to people who don’t want them or simply just don’t need them. So it follows, if you decide to purchase or rent lists from appropriate sources, you should ensure that the broker provides names which in fact represent suitable targets for your offers.
This aim can perhaps best be achieved by sending your broker a copy of the direct mail package you intend to promote, following which he or she can make a professional assessment of that list best suited to your needs.
Keep Accurate Records Of All Contacts
If someone contacts you to express an interest in an item you might one day have for sale, even if at the time is seems highly unlikely you will ever be able to fulfill that person’s requirements, always record the details of the conversation or letter concerned – Just in case! Be prepared!
Reduce The Size Of Your Mailshots
Where appropriate, and where testing has proved your response rate either remains unchanged or preferably increases, have your A4 circulars reduced to A5, then have several combined into booklet or leaflet form, saving costs and at the same time producing something often more attractive and easier to handle than a batch of loose A4 documents.
Evidence also reveals that brochures are more likely than their individual sales leaflet counterparts to be put to one side until such time as the prospective customer has time to read the contents.
Get To ‘Know’ Your Buying Customers
It is essential for expansion and increased orders that you get to know your buying customers and thereby can adequately and fairly accurately predict their future needs. For obvious reasons you will therefore be able to direct only those offers you know they are likely to place orders for, eliminate those they aren’t interested in, and hence your response rate is likely to soar as a result.
Selling On Commission
Locate suitable items and products offered by other traders on commission or dropship basis. Include these circulars in your own mailings; if your own advertisements stop pulling orders for a while, you may be able to keep going simply on the strength of selling for someone else. Of course this is no adequate alternative to identifying the underlying problem as to why your own products and services have ceased being profitable; it is purely a stop gap measure until things approve.
Posting Your Correspondence
Even the day on which you post your mail can have a significant effect upon whether the reader becomes a buying customer. Posting for receipt on Friday (commonly pay day) seems to have a favourable effect upon whether an order will be placed. Also important in this ‘receipt on Friday or Saturday’ principle, is the fact that usually the reader will have more leisure time in which to read your mailshot than is likely to be the case for one received in Monday’s, Tuesdays or Wednesdays post.
Certain times of the year are also noted for producing higher response rates. Just before Christmas and vacations are likely to find the prospective customer far too interested in other matters to spend time or money on taking up your offer.
Just after Christmas and when the holidaymaker returns home – both occasions likely to find money in short supply – tend to find those offering money making and business opportunities in with more than a fighting chance of making a sale.
One highly respected American publisher incidentally, maintains that the very best time to prepare and post money making offers, is just as the New Year hangover begins to subside, when the stark reality of debts incurred over the festive season begin to make their presence felt to prospective customers.
Underline Important Words, Phrases And Sentences
Again, possibly stating the obvious, sections of your circular or letter text if underlined, will strike immediately in the prospective customer’s attention. Too much underlining however and you’ll achieve little but serious confusion on the part of the reader who might instead consign your mailshot to the nearest rubbish bin. Any document to cause such confusion, or present an untidy and careless impression, will lead the reader to doubt the truth of your claims. So choose the words you emphasise, whether with underlining or emboldened type, with the utmost care.
Write Manuals, Guides And Folios Yourself
If you operate in the field of home publishing, write a few short guides, or longer manuals if you feel so inclined. These can then be offered to your customers without competition from outside sources. Select a good title, one not currently catered for, and you might have the makings of a multi-million pound industry as has happened on so many occasions for many people who hadn’t written a thing before in their lives.
Should you elect to write short folios, perhaps comprising 8 or 9 A4 pages, you can offer these as free incentives to purchasing customers, again alleviating to some extent competition from other publishers who might be making the same primary offer as yourself.
Keep Sentences And Paragraphs Short And Punchy
Your letters and circulars should be written as if talking the whole thing out to a friend, and not with any intention of impressing the reader with your literary or marketing skills.
In the literary sense, short sentences and paragraphs tend to create a sense of urgency that positively wills the reader to hasten his or her way through the text, unable to put the document aside until the very last word has been safely devoured and an order is almost certain to come your way.
Make Ample Use Of The Word ‘You’
In mail order, we seek of course to win the potential customer over to our side, to join us in a unique partnership, one that will almost certainly never find customer and dealer meeting face to face, but one which must nevertheless be based on mutual confidence and trust.
In letters, circulars, leaflets and advertisements, the use of that word you goes a long, long way to establishing that confidence and trust from which long business relationships often result between buyer and seller.
Use The Advertising World’s Most Persuasive Words
Certain words if incorporated into the text of advertising literature and circulars, are renowned for the favourable impression conferred on the reader. Included amongst those worlds are:
absolutely, amazing, bargain, big, complete, confidential, discount, discovery, easy, excellent, exciting, free, genuine, gift, gigantic, greatest, guarantee, health, huge, independence, interesting, largest, latest, love, magic, millions, millionaire, money, new, offer, outstanding, popular, powerful, practical, professional, profitable, proven, quality, reduced, remarkable, reliable, results, reveal, revolutionary, safety, save, secrets, sensational, special, sturdy, successful, superior, surprise, terrific, tested, tremendous, tycoon, unconditional, unique, unlimited, unusual, useful, valuable, wealth, wonderful, you.
And note well – the word ‘FREE’ is the most effective of all action stimulators.
Questions Are Sometimes More Effective Than Statements
By questioning the reader, in not too bold a fashion, we are able to talk to the subconscious, which is of course fully aware of the subject’s main needs n life. So ‘You need to get well away from the rat race’, might well be seen as an infringement on the reader’s privacy. Worded ‘Like to escape the rat race?’ and you immediately become a ‘friend’, someone able to understand the problems your subject (and virtually everyone else) faces. You have effectively made efficient use of the technique of autosuggestion and will no doubt find your response rate greatly increased as a result.
Folding Your Documents
We are told that psychologically, the first 4 or 5 seconds after the recipient receives a mailshot are of vital importance in determining whether or not a sale will ensue. Anything that can serve to bring your offer and its benefits to the interest of the reader within that short space of time will increase your chances of a sale. One technique known to go a great way to accomplishing the task is to fold the mailshot with printed side facing outwards, and consequently saving the second or so it takes the recipient to unfold the letter to read the contents.
Make Your Presentation Different To Your Competitors’
(Even if the actual item, product or service you offer is identical in almost every way). Be different by being more professional; more attentive; quicker; by offering better gifts and discounts; unusual gifts and discounts; perhaps exclusive incentives such as those manuals you have authored yourself, and which only you are able to provide to buying customers.
Sell Or Rent Your Own Mailing List
Easy profits can come from selling or renting those names and addresses you have compiled yourself to fellow operators eager for new contacts. More can be asked in respect of those identified as buying’ customers as opposed to mere inquirers and curiosity seekers.
Use Difference Coloured Paper For Multi-Sheet Mailings
Where you include several offers in one envelope, use different colours on which to have printed or photocopied circulars produced. But don’t go too far and present the reader with an eye-catching and gaudy package that finds its way straight into the nearest rubbish basket.
All you seek to do is make your package look a little more interesting, perhaps more inviting, and sometimes also serving to make your mailshots stand out from the crowd of piled circulars awaiting the recipient’s attention when the time comes to decide between those offers to consider and those on which to pass
Acknowledge Receipt If Delays In Dispatch Are Likely To Occur
Advise customers of any outstanding orders that will not be filled within the time originally specified. It’s not just a matter of common courtesy as much as establishing and maintaining that trust and confidence upon which the mail order operator depends for future custom.
Make A Clippings File
Cut out and keep any headlines and artwork which might prove suitable for circulars and other documentation you may create for yourself in the future. Stuck onto paper, photocopied, and shadow lines obliterated with typists’ correction fluid, the end result can be a highly successful and professional circular indeed.
The same basic procedure can be used for creating manual covers, letterheads, and any other documentation likely to benefit from some form of illustration.
Offer A Guarantee
Guarantee everything you offer for sale if you wish to induce the more skeptical element amongst those to whom you direct your mailing packages.
How To Get Your Advertisements Typeset ‘Free’
Many publications and advertising agencies will offer to typeset your advertisements free of charge, usually in respect of full-page insertions. When published you will often be sent a copy of the typeset document for your own use. If this is not the case, then remove the advertisement from the publication concerned, and delete with typists’ correction fluid, any of those tell-tale indications of advertisements printed on the reverse side of the page.
Consider Selling On Credit Or Approval
Some people will buy higher priced items if they are allowed to pay in installments, perhaps by standing order or by means of providing the seller with post-dated cheques. Others will purchase something that is first of all sent to them on approval, with the opportunity to return the item if unsuitable, or alternatively to send payment if satisfied with what they have been sent.
Research shows that the number who will pay and stick to the rules of good sportsmanship far outnumber those who will keep your goods without sending payment.
A variation of this method is to ask for a small deposit before dispatch of the order, with the balance to be paid if the client is satisfied, or else for the item to be returned to you in good condition for a full refund of the deposit made.
Describe Benefits Rather Than Features Of The Product
Perhaps with the possible exception of status symbols, the potential customer is far more interested in the benefits he or she will derive from your product, than the features of the product itself. Consequently instead of stating how well-written your manual is, what excellent typesetting is involved, inform the customer of what financial or personal benefits he or she is likely to achieve from purchasing a copy.
Personalise Salutations Where Possible
A letter addressed to ‘Dear Mr. Smith’ is far more likely to be read than the far less personal ‘Dear Sir’, ‘Dear Opportunity Seeker’, ‘Dear Reader’ or whatever other variation one chooses on this set theme of putting something – anything after that ‘obligatory’ word ‘Dear’. If you don’t have any dear indication of name and status, then put nothing but a headline and get straight on with the message or your offer.
This personal approach is one far more likely to establish that personal touch we have mentioned throughout this text, that relationship known to increase your chances of a sate many, many times over.
Put your Letterhead At The Bottom Of Sales Letters
Your message reaches home almost immediately, thereby complying nicely with that ‘first 4 or 5 seconds rule’ mentioned earlier, by placing your address and company name at the bottom of the letter, perhaps with a logo of some description at the top of the page to prevent overbalancing the traditional form one expects in correspondence.
The greater portion of that free space existing at the top of the letter or circular is row used for the inclusion of a slogan or headline pertinent to the offer concerned.
Send More Offers With Every Dispatch
When goods are sent out take the opportunity to include circulars relating to offers of other goods and services available to the customer. For obvious reasons, similar or related offers are likely to result in a higher conversion rate, than might those for which you have no real indication as to whether or not the customer might be interested in.
Follow Up On All Sales
Many firms find they achieve a very low response rate in respect of persons mailed to from lists purchased or rented from outside sources, but that a follow up offer to those who do buy, and who incidentally are now allowed inclusion to the dealers own personal mailing list, frequently bring in a far higher conversion (response rate) – to future offers.
Give Mailshots A Longer Life Span
By which we mean of course that our brochure is not immediately relegated to the nearest junk pile, but is instead put to one side for future reference. This can be achieved in many ways, one of the most popular in recent times being that of producing a short newsletter of articles and snippets with offers liberally dotted throughout. The newsletter will of course have a relatively high chance of being read, if not immediately, then at least at some time in the near future.
Another way of increasing lifespan is to have circulars produced in brochure and catalogue form, often with card or attractive covers attached, thereby offering the potential customer something that will not only stand out from the crowd a little later on, but which might also be deliberately saved for further consideration when time allows.
Another method of accomplishing this extension to the lifespan of your offers is to include some competition within the pages of the newsletter or brochure/catalogue.
The Value Of The P.S. (Postscript)
In the world of mail order, the P.S. serves to reinforce the message of the advertising blurb, or else to make another point or stress one already made. Very often it is that vitally important P.S. which brings about an order from a previously sceptical reader.
Always Include A Clip Coupon
As always attempting to make life as easy as possible for the Intending purchaser. Leave sufficient room for him or her to enter relevant name and address to which the order will be sent, and make sure that your own name and address is included on the coupon in the event the customer should remove the coupon without taking details of the suppliers address where included in some other section of the circular.
Make Your Brochures The Best
Make them stand out from the crowd by whatever means you are able – have them typeset, printed onto quality paper, printed on glossy paper, printed on coloured paper or in coloured ink on heavy white paper – anything by which to imply that your service and what you offer is similarly professional, and that the customer might therefore expect a quality product or service in return for his or her order.
Opening Lines Should Always Offer Something Of Benefit
In seeking to gain advantage of that ‘first few seconds rule’, we must draw the reader into our ‘power’ as early in our message as possible. This is best accomplished by informing them of the benefits the product or service will confer on him or her personally, instead of merely listing the attributes of the item itself – and hopefully doing it within the first or second sentence.
Postcard Vs Letters
Many direct mail specialists have found that sending out offers on postcards instead of by letter increases the chances of a sale – presumably this allows the message to get through to the reader within those all-important first few seconds. This method can also of course significantly reduce printing and stationery costs and perhaps cost of postage too.
Check That Your Product Has Market Appeal
A product similar to one being offered by others will, perhaps ironically, stand you a better chance of healthy profits than will one for which you are the sole supplier, unless of course your product is one new to the scene, and one for which testing has proved a large potential market demand.
Give Good Value For Money
In mail order we depend to a great extent, if not on repeat custom, then at least on word-of-mouth recommendation from satisfied customers. Give good value for money and that recommendation is yours!
Always Ask For A Stamped Addressed Envelope Or Return Postage
If they don’t want to pay the cost of posting the circulars they request from you, it’s safe to assume they will be similarly reluctant to pay for the items concerned – and it does save on your costs to at least ask some contribution towards your expenses.
And stick to them. Know where you want your business to go within the next few days, weeks, months, and years. Make your objectives attainable and ensure that you stick to them.
Never Be Afraid To Learn From Others
Remember there will almost certainly always be others with more experience than yourself; learn what you can from them, their working practices and their advertising policies in general.
Analyse Orders And Profit Ratios
Often, particularly if business is hectic, it is easy to carry on making offers that simply don’t invite orders. Take time every now and then to decide which offers and circulars aren’t paying for themselves, and substitute in their place some circular that does pull well, or else try a different product entirely.
Make Every Word Count
Advertising is never cheap, and so we must strive to get the best we can from as few words as possible. But never, ever cut out important words and phrases to save on costs; that’s not what we are after – we simply seek the elimination of superfluous elements.
Work At Constantly Improving Your Advertisements And Brochures
Whatever your mail order line, always endeavour to be the best, even if your product is not unique. Make your brochures the best; make your advertisements the ones that attract the browsing reader.
Advertise In Low Cost Magazines
Usually the higher the advertising costs, the higher will be the expected response rate. BUT not always. Some low cost advertising brings in high levels of response. Remember that if only a small profit comes in from several such sources the sum total of profit will quickly mount up
Do Series Advertisements For Lower Cost
Many publications offer good discounts for consecutive bookings. Always take advantage of such offers, assuming of course the publication is one in which your advertising regularly proves successful.
Get Other People To Advertise For You
If a viable financial proposition, it’s always a good idea to gain extra trade by having others advertise for you on a commission basis. They advertise – you dispatch – shared workload – shared profits!
Use Powerful Headlines
Just as a strong headline draws your attention to the newsagents’ stands, so a powerfully headed advertisement attracts potential customer interest. Your advertisement is likely to be vying with many others for the attention of the readership – make it stand out!
The Power Of Positive Thinking
If you aren’t enthusiastic and positive about your products, how can you expect the customer to feel that way about them?
Don’t Allow Yourself The Luxury Of ‘Waffling’
Always come straight to the point, don’t waffle, don’t over-embellish your words, and above all don’t venture from the path of convincing the reader that what he or she really needs is your product. You’ll almost invariably lose your reader as a consequence of waffling.
Make Your Greatest Earnings As The Prime Source
The prime source is the main or sole distributor of the item or service concerned, and as such has no need to share the market with fellow dealers. Very, very nice indeed! How do you achieve this enviable situation for yourself? Several ways exist, amongst them making your own product, as does the publisher who writes his or her own manuals for sale; become the sole agent of some supplier overseas; become the sole agent of some local supplier.
Keep On Keeping On
Perhaps the most important advice on how to achieve increased profits is never to let your business grow stale. Always be willing to learn, always be on the lookout for new products, seek to improve your advertising, search for perfection in all that you do.
Make your letterheads and business documentation as professional and attractive as possible. Often a letterhead on coloured paper, or else a colour printed letterhead on white paper, can attract the potential customer far more than would the everyday black version printed on white. Don’t resort to cheap and tatty photocopied documentation if you want to create a good impression!
Print And Mail Services
Experimentation will reveal which print and mail services are the most efficient, reliable and honest. The reduction in cost to yourself can be vast, even if coupled with a lower than average response rate due to the number of other mailshots with which you will be competing. When you find a good print and mail service, stick with it, unless of course the quality of service diminishes, or a better one comes your way.
Include A Sales Letter
Try including a personalised sales letter with your circulars; many find their response rate increases accordingly, often because that little extra personal involvement with the potential customer goes a long way to establishing credibility as a trader.
And Of Course…
…those many other methods by which to increase your response rate are those which will almost certainly reveal themselves in the light of experience and testing on your part.
Complacency has no place in the life of the astute and successful mail order operator. Never stop learning, never give in to fear or doubt, never stick rigidly to advertisements that once pulled many orders but seem lately to yield little response, hoping that the situation will again reverse, this time to one of profitability. Times change, people change, demand changes, trends change. Advertisements should change too.