“Sir, I have a concern,” I stated, kicking off yet another Monday morning conversation with The Effective Detective.
“And this is news, Watson?” The Detective asked, turning lazily to look at me.
“Perhaps not, but that does not change the fact that I have the concern,” I replied, then continuing so as not to be interrupted or lose the thought, ” It seems that for most small businesses and almost certainly for solo-preneurs, email marketing is the only economically viable alternative, which tends to longer ramp up times.”
The Detective looked at me speculatively for a moment, before responding. “What a marvelous observation, Watson. It is of course for the most part incorrect, but still you are to be congratulated for picking up on a common concern.”
Irritation flared, but when I looked again The Detective was out-and-out grinning, and I avoided reacting to the deliberate chain pulling, realizing that was simply a cost of being his assistant.
“Ah, then perhaps you could enlighten my poor ignorant soul, sir,” I shot back with an equally large grin.
His grin stayed for a moment, then faded as The Detective turned serious, and started his explanation.
“You see Watson, we small business marketers as a group have a tendency to try and model organizations far larger than ourselves. The result of course is frustration, and sometimes foolish investments in marketing vehicles that have no hope of generating enough revenue to cover the costs. For the sake of brevity, let us examine one in particular: direct mail.
“Research shows that the typical direct mail campaign has response rates between one half of a percent to perhaps 1 or 2 percent. Due to these response rates, the volume that must be sent out tends to be fairly large; in the thousands or tens of thousands. With printing costs and postage, one can easily run into the tens of thousands of dollars in expense. Something the average small business, two or three-man shop, or solo-preneur can ill afford.
“However there are ways to radically increase the response rates. Using 3D mailers or “lumpy mail”, as it is called, boosts the response rate by several points. Who can resist opening something that rattles when you shake it, a garbage can or a message in a bottle?
“The single best way to increase response rates though is to follow-up with a phone call. This of course is dependant on two things. First, you have someone willing to pick up the phone and make the calls, whether it is you, one or more of your people, or a firm you contract the task out to. Second, you have a definite goal in mind for the result of the call; an appointment, a sale, a follow-up call to further develop interest.
“By increasing response rates to far more acceptable rates by using either or both of these techniques, you can send out far fewer pieces, thus reducing the overall cost, even at a fairly high per unit cost,” The Detective paused characteristically to give me time to respond.
“So a small business could actually send out just a few hundred direct mail pieces, and turn a decent return on their investment,” I ventured.
“I believe I just said that Watson. The return on the investment is totally dependent on the price of the service or item being sold. If you are selling cheap buck and half sunglasses, this might not be the best idea. I would be hesitant to use this method to simply build a list, but like anything else, one must weigh the payback against the costs. Shall we move on to another of your observations Watson?” The Detective answered before turning back to his computer.
“Next week will be fine, sir.” I answered.
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