Chapter 17: Direct and Online Marketing: The New Marketing Model

Direct-Mail Marketing

Direct mail is well suited to direct, one-to-one communication. It permits high target-market selectivity, can be personalized, is flexible, and allows easy measurement of results. Whereas the cost per thousand people reached is higher than with mass media such as television or magazines, the people who are reached are much better prospects. Direct mail has proved successful in promoting all kinds of products, from books, magazine subscriptions, and insurance to gift items, clothing, gourmet foods, and industrial products. Direct mail is also used heavily by charities to raise billions of dollars each year. The following example shows the power of direct mail in obtaining contributions, in this case for an ailing public TV–radio station:

When planning its capital improvement campaign, public TV–radio station WFYI set what it thought was an ambitious five-year, $5 million fund-raising goal. The results, however, far outstripped projections. Instead of sending out the usual glossy, full-color brochures, WFYI used a brutally frank approach centering on its dire financial straits. It used cardboard, rubber stamps, and duct tape to create an introductory mailer. A silvery, die-cut TV set illustrated the message, "In 1969, Indianapolis was the largest city in the nation without a public television station." Turning the page, the copy continued "It could be again," with the TV now held together with duct tape. An inexpensively printed follow-up brochure showed a time line of the station's 18-year history. Above the line in black were milestones and accomplishments. Below, in red, equipment failures. When the time line hit 1996, expenses had become an angry, unreadable blotch of red ink. The direct approach worked: Despite sending out only 500 mailers, the campaign raised some $3.5 million in only the first nine months. That's an astounding return of $7,000 per piece.¹⁸

Direct mail's fundraising power: Using a brutally frank approach centering on its dire financial straits, public TV–radio station WFYI far outstripped what it thought was an ambitious five-year fundraising goal.

The direct-mail industry constantly seeks new methods and approaches. For example, videocassettes and CDs are now among the fastest-growing direct-mail media. With VCRs now in most American homes, marketers mailed out tens of millions of cassettes each year. For instance, to introduce its Donkey Kong Country video game, Nintendo of America created a 13-minute MTV-style video and sent 2 million copies to avid video game players. This direct-mail video helped Nintendo sell 6.1 million units of the game in only 45 days, making it the fastest-selling game in industry history.¹⁹ Some direct marketers even mail out computer diskettes. For example, Ford sends a computer diskette called "Disk Drive Test Drive" to consumers responding to its ads in computer publications. The diskette's menu provides technical specifications and attractive graphics about Ford cars and answers frequently asked questions.

Until recently, all mail was paper based and handled by the U.S. Post Office, telegraphic services, or for-profit mail carriers such as Federal Express, DHL, or Airborne Express. Recently, however, three new forms of mail delivery have become popular:

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  Fax mail: Fax machines allow delivery of paper-based messages over telephone lines. Fax mail has one major advantage over regular mail: The message can be sent and received almost instantaneously. Marketers now routinely send fax mail announcing offers, sales, and other events to prospects and customers with fax machines. Fax numbers of companies and individuals are now available through published directories. However, some prospects and customers resent receiving unsolicited fax mail, which ties up their machines and consumes their paper.
  
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  E-mail: E-mail (short for electronic mail) allows users to send messages or files directly from one computer to another. Messages arrive almost instantly and are stored until the receiving person retrieves them. Many marketers now send sales announcements, offers, product information, and other messages to e-mail addresses—sometimes to a few individuals, sometimes to large groups. As people begin to receive more e-mail messages, including unimportant ones, they may look for an "agent" software program to sort out the more important messages from those that can be ignored or discarded.
  
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  Voice mail: Voice mail is a system for receiving and storing oral messages at a telephone address. Telephone companies sell this service as a substitute for answering machines. The person with a voice mail account can check messages by dialing into the voice mail system and entering a personal code. Some marketers have set up automated programs that exclusively target voice mail boxes and answering machines with prerecorded messages. These systems target homes between 10 a.m. and 4 p.m. and businesses between 7 p.m. and 9 p.m. when people are least likely to answer. If the automated dialer hears a live voice, it disconnects. Such systems thwart hang-ups by annoyed potential customers. However, they can also create substantial ill will.²⁰
  

	Consider the challenges and potential benefits of taking direct-mail marketing abroad.