Last year, Bud spent over $40,000
with two advertising agencies and got just two new customers. 
We met over coffee at a spot
midway between his office and mine. We met because I’d received a mailing from
him and had immediately responded in this way:
“I received your mailing
today.
As a professional, I’m
interested in the results, if any.
I’ll be astonished if you get
any reactions besides mine and any at all that are positive. This approach
screams your company’s need for contact management.
Consider if you will these
two requests:
1. If I’m missing the point, please correct me.
2. If not, let’s have a cup of coffee. I could be of
help to you.
One of the simple wonders of
Contact Management used for business development is the ability of the computer
to remind a user to take action. If we haven’t connected in a week, I’ll call
you.
We really do need to talk.
The first hour is free. It
will include the one piece of advice you need to double your income.
Sincerely,
Jerry Fletcher”
This is what I call a Back Sell letter. Because I’m a target for a massive range of mail
offers, I look for the badly structured ones and those obviously not connected
to a strong contact management approach. I then sell them…usually with a letter
like this that is calculated to “hook ‘em, hold ‘em, pitch ‘em and close
‘em…and get them to call me.
Bud’s story was all too
familiar. His letter was a valiant attempt to build his business by mailing to
a remnant of a list he purchased for the last ad agency he’d worked with. My
response was the only one he’d received ten days after the mailing.
Bud, shamefaced admitted to
me that, “The first agency told me all I needed was a glossy full-color
brochure. I’m kicking myself now for going along with them. I admit that part
of the fault is mine for not sending out those brochures. I can’t bring myself
to recycle them yet but no prospect will ever see them if it’s up to
me.”
The second agency told him
he needed to convert his direct mail act to and online and social networking
approach to generate those new customers. He really liked the approach they
developed.
“They told me to be sure I
had plenty of people to answer the phone and even suggested that I add some
lines,” Bud said.
The results? Forty thousand
dollars spent. Two agencies. A total of two new clients.
So I asked him, “What did
you do before your agency search?
He described his multiple
package mailings with letters that cleverly intimated the power of his personal
development training course. They were memorable mailings followed by telephone
calls to the recipient. Twenty of every hundred were interested enough to talk
more. Eight to twelve signed up. The cost of the three mailings was about $15.
So a hundred cost $1500 plus phone time.
I asked his margins…both
percentages and actual dollars. He told me and then spoke the words that forced
me to write this blog:
“This
is the first time I’ve had this conversation. No one else I’ve talked to has
asked me about margins or shown me how to calculate break even on a mailing or
even asked me about follow-on business.”
If you believe you or a colleague need help
to develop better marketing approaches, learn from Bud’s experience. Don’t
trust any marketing counsel that doesn’t include looking at the return on your
investment. If they don’t calculate break even, they are not certainly not direct
specialists. If they don’t show you in hard numbers how you make money using
their services they are the only ones who will profit.
Bud’s learned a very
expensive lesson but his business will pull through.
We looked at his old
approach and found that he’d been breaking even on the first sale to new
customers so the high cost of his mailings wasn’t all bad… especially when you
considered the fact that nine out of ten of the new customers took the
follow-on training with a margin ten times that of the first round and a
selling costs of pennies.
To build your business
through direct marketing, on or offline, ask the right questions:
What return can I expect on my investment?
What is the break even on what you’re proposing?
Will this provide an ongoing revenue stream?
If they can‘t answer, don’t
work with them.
Bud learned the hard way.
Both he and I hope you don’t have to.
It’s your money and your
business. Don’t be afraid to ask “Direct Questions.” It could save you big
bucks.
Jerry Fletcher says, “Why
not get results for your money?”
Contact Management Systems? Find
the Ward Boss story at www.NetworkingNinja.com