It’s no surprise that global marketers are flocking to lower-cost online marketing channels like email and paid search engine marketing. And while these channels open up opportunities for small business owners to compete with enterprise marketers, it’s far too early to consider direct mail down for the count.

Although recent industry estimates suggest that direct mail spending is down by as much as 3 per cent (according to consulting firm Winterberry Group), much of that decline has been driven by the current economic crisis and its impact on overall marketing spending. Online channels continue to grow at a healthy pace, but increased costs for qualified lists and paid search keyword inflation are making it increasingly difficult for small businesses to compete. As a small business, how should these trends affect your marketing spending and how should you allocate your spending across online and traditional channels?

As a small business, it can be difficult to justify the cost of a new customer mass direct mailing. With expected response rates anywhere in the range of 0.1 percent to 5 percent, mass direct mailings are likely still within reach for large enterprise marketers, but they are now too risky for smaller businesses. However, that’s no cause for alarm: like many other business practices, marketing strategies have to be adapted to make sense for smaller businesses with more limited budgets.  By following some key best practices and learning valuable lessons from the big guys, small businesses can find new life in direct mail marketing. 

Here are four key ways to make direct mail more effective and yield higher sales:

1. Segment Your Prospect Universe – The costs of direct mail make “micro-targeting” a necessity, especially in a challenging economy. Instead of marketing to the entire world, consider targeting more specific industry segments, or consumers in a specific geography or income bracket. Based on the product or service you sell, your ideal customer will exhibit certain behaviours that you can define and quantify – targeting those specific customers is the best way to control your direct mail spending. This will also help to drive stronger response rates from more qualified prospects, helping to increase the return on your marketing investment. The best response rates will come from your existing customers and pre-qualified prospects – be sure you’re focusing on those.
2. Integrate Your Marketing Channels – Instead of deploying your marketing campaigns as “one-offs”, make your channels work together to drive your prospects through the sales cycle. Deploy direct mail in conjunction with targeted paid search (Google & Yahoo! search marketing), telemarketing and email marketing. For example, direct mail makes an ideal teaser or promotional piece and sets the stage for follow-up promotional offers that you distribute via email. Another alternative might be sending a direct mail piece to all the prospects that hit the paid search landing page on your web site. Linking your marketing channels together helps to create a deeper relationship with your prospect, and reinforces your brand at different points during the sales cycle.
3. Take Advantage of Online Fatigue – The online channel absolutely needs to be a vital part of any marketing strategy, but remember that your targets are becoming increasingly bombarded by offers whenever they check their email and do online research. As good as search marketing is, for many of your prospects it blurs the line between objective information and pure propaganda. The result is that consumer and small business prospects stop paying attention to certain online ads and paid search placements – they can easily become noise and a barrier to getting to the real information prospects are looking for. This is where a traditional direct mail drop can be a welcome break from the incessant online assault.
4. Push the Direct Mail Envelope – Direct mail may still be viable, but generating a decent response will take creative that sets you apart from the pack. Although you might not be able to compete with the sophistication of a larger enterprise campaign, you can increase response rates by including a tangible, time-sensitive reward that your prospects need to act on. A call to action gives your prospects a reason to call your company, visit your website and learn more about your products and services. It’s also gives you another opportunity to make your marketing channels work better together to drive increased sales.  

Direct Mail is far from dead. In fact, now is the time to start thinking about the ways direct mail can augment your existing marketing efforts and help to increase the overall performance of complementary online marketing campaigns.