Direct mail is a popular channel among marketers because of its proven ability to generate repeat business and increase customer retention. On average, repeat customers spend 33% more than new customers! Direct mail is also capable of helping your business turn new, one-time purchasers into loyal customers who not only consistently buy from your business but also provide word-of-mouth referrals.
According to research published on AllBusiness.com, happy consumers tell an average of nine other people about their excellent experience with a business. Customers who are dissatisfied are more likely to discuss their bad experiences with an average of 22 people. Customers talk! Make sure they are saying something good about their experience with your business.
Understanding Customer Retention (AKA Maintaining Repeat Customers)
Customer retention refers to a company’s efforts to keep its current customers coming back. Remember, customer retention starts with the first interaction you have with a customer and continues throughout the entire relationship they develop with your business.
A study by Gartner Group and “Leading on the Edge of Chaos”, by Emmet C. Murphy and Mark A. Murphy, found that companies who prioritize their customer’s experience generate about 60% more profits than their competitors. More importantly, just a 5% increase in customer retention can increase business profits by 25%-125%! That’s HUGE.
Numbers are important. There is a 60-70% chance of converting a current consumer into a return customer. For converting a new lead? There is only a 5-20% chance. That’s a big difference and is one of the many reasons why your marketing efforts should not only focus on acquiring new customers.
TIP: Focus on the clients who are already in your clutch – your current customer base! Next, determine how to best get additional business from them. According to the Gartner Group, only 20% of your current clients will account for 80% of your future income.
It’s important to note that retention efforts take longer to produce results when compared to lead generation or customer acquisition initiatives. This is because they are not as easy to measure. The ingredients of successful customer retention rely more on loyalty, your relationship with your customer, and their engagement with your company. But the wait is worth it!
Customer retention and customer acquisition are not mutually exclusive. Customer retention initiatives, when done correctly, are able to generate new revenue through the word-of-mouth marketing and referrals that come from your repeat customers.
Now that we have convinced you with the statistics, here’s how your business can use direct mail to encourage repeat customers and up your customer retention.
Direct mail is statistically proven to be effective when it comes to attracting potential leads for your business. It’s even better for ensuring that these new customers become repeat customers.
Here is how you can do it for your business.
Start with a plan. Define your goal.
Are you thinking of running a direct mail campaign centered around your holiday sales?
Or maybe you’re a nonprofit organization looking to remind someone to make a follow up donation this year. Did you know that direct mail brings in an average of 78% in donations for nonprofits? That is huge!
Whatever your goal is for your campaign, use that as the center focus for your direct mail piece.
Decide on a target audience.
It’s much easier to sell to an existing customer. Create a direct mail campaign that targets your past customers. They are more inclined to trust your business in comparison to a new consumer because they are familiar with the quality of your products and services. In fact, according to Marketing Metrics, there is a 60-70% chance of converting an existing customer into a loyal one!
You can even hyper target your existing customer list. Create a direct mail offer according to your segmented group of customers. If you notice someone buys a particular product frequently, it might be a good idea to create a direct mail offer, such as a coupon or promo code, that specifically works for that product! You can even use these segmented groups within your customer list to develop a campaign that promotes complementary products they might also enjoy.
Another option for direct mail campaigns is EDDM. This stands for Every Door Direct Mail. This is great for marketing on a local level. But, it can also be used for large businesses as well. EDDM is used according to zip codes instead of unique addresses. You can research more about EDDM here: https://www.usps.com/business/every-door-direct-mail
How does your mailing list look?
Make sure your mailing list is up to date and that it’s not missing any of the necessary information that’s needed to be delivered successfully. If you purchased a list from a database company, scan through it! You might notice that it contains incorrect address information. Your commercial print provider is also capable of assisting you with a mailing list. Have a question about this? Reach out!
Interested in adding Informed Delivery? Business mailers can run an “interactive campaign” that allows users to digitally preview their household mail and manage packages arriving soon via email. This enhances and extends the campaign mail moment for consumers, thus reaching their target audiences on a digital channel through email!
Develop a compelling message centered around your goal.
Create a message that will really entice your recipient and make sure they are using the right language and key words to grab their attention. Whether it’s offering extra loyalty perks, getting personal, or sending special coupons to valuable customers, you will want to create a message that reminds your customers why they love purchasing from you.
Bed, Bath, and Beyond is a great example of using direct mail discount offers to drive repeat customers back to their brick-and-mortar stores. For one, the coupons like NEVER expire. Everyone knows that. When you often think of Bed, Bath, and Beyond, their coupons are typically the one thing that come to mind! They have created both a strategic and effective channel for their customers.
When developing your direct mail campaign message, always be sure to include a call to action. This will help your business respond to customers and encourage repeat sales. You want to ensure that your mail piece is specific, measurable, attainable, realistic, and time sensitive.
Design your mailer.
You’ll want to create a campaign piece that visually enhances your message and central campaign goal. The design should inherently direct your recipient’s eyes to the call to action message. Create a headline that grabs their attention.
If you are creating a segmented audience campaign, don’t be afraid to get personal. Variable data is your friend. Incorporate their name or their picture to really leave a lasting impression and to show that your business cares. According to the Customer Retention Ideas Report, 68% of customers leave you because they perceive you are indifferent to them. Make sure they know that you believe they matter to your business. Incorporating an individualized touch can go a long way.
You can also Integrate your direct mail campaign with your digital marketing strategy. Use the same design and message and simultaneously digitally target those on your customer list. If you want to learn more about how this is possible, check out our direct mail digital integration service, SP DIRECT!
Printing and Mailing Your Direct Mail Campaign.
This is where Solo comes in! As a commercial print provider, we are more than capable of handling all your mailing and fulfillment needs. At Solo, all steps from data processing to inkjetting and tabbing are handled in-house by a Solo Printing team member. This ensures data security while also offering the most efficient turnaround times and competitive pricing. Our team has the experience to execute mail orders that range from a few hundred to hundreds of thousands. You can trust Solo with any size fulfillment service order.
Direct mail delivers your message to your target demographic at a level of saturation, customization, and targetability that other marketing methods can’t match.
Measure and Analyze Your Campaign’s Performance.
Here are several direct mail KPIs that you can use to measure and analyze your campaign’s performance.
- Responses / Pieces Sent = Response Rate.
- Number of Orders / Responses = Conversion Rate.
- Campaign Cost / Number of Orders = CPA.
- Revenue / Number of Orders = Avg. Order Size.
- Avg. Order Size – CPA = Revenue per Order.
- (Revenue – Campaign Cost) / Campaign Cost = ROI.
If you’re still struggling to quantify results and determine your ROI for your direct mail campaigns, we have the solution for your business. SP Direct is Solo Printing’s direct mail digital integration platform that will provide our partners with the ability to pair standalone marketing services with their direct mail campaigns.
This marketing-based solution:
- Tracks the effectiveness of our customers’ direct mail campaigns.
- Provides solutions for the challenges that center around direct mail as an offline marketing channel.
- Increases the results of our customer’s direct mail campaigns by 23-46%!
If you’re interested in requesting a quote or contacting one of our account executives regarding direct mail or printing, please fill out the form below. A member of our team will get back to soon!