Marketing to Distant Places-Mail Order Marketing

March/April 1994

by Doug Atkinson, Catalogue Marketing

Direct marketing has grown immensely in the last 20 years because of the ease of using credit cards, the emergence of free-to-the-caller 800 telephone numbers, and the increase in the number of two-income families in the US who have more discretionary income and less time to shop.

A person can choose a product and place an order just by dialing a telephone number or logging onto a computer network, such as Prodigy or Compuserve.

People sometimes choose direct marketing because they are tired of inexperienced store personnel who don't understand their products, parking problems, too much traffic, and limited store hours. Direct marketing is available 24 hours a day.

In the last 10 years, expedited delivery services have allowed even perishables to be delivered in good shape. Expedited delivery services have reduced the customer's wait and the cost is not much more than the cost of ground transportation.

Most direct marketing companies are very reputable and offer good products at competitive prices. Customers appreciate their iron-clad guarantees. Guarantees alleviate fears about returns or getting money back if they're not happy with the product. Anything you can do to guarantee satisfaction is necessary. "Satisfaction guaranteed" is a must in the industry.

As in any business, you'll have to weigh the pluses and minuses before you become involved.

Advantages

There are many good reasons to offer your product directly to the consumer.

Of course you keep more of your gross income if you don't have to go through middlemen.
Consumers like to use 800 numbers to buy through the mail.
You can offer products that you know people want or need because you can gather data about people, store it in a computer, and analyze it.
You, as the processor, the grower, the shipper, are the expert and you have direct contact with the customer. The customer trusts you to provide the best value for his money.

Disadvantages

There is a lot of competition. In your mailbox you see tons of catalogs, particularly during the holiday seasons.
In the last three years, UPS has increased its rates between 13 and 18 percent per year and postal charges have gone up over 40 percent.
There are environmental concerns about the waste of paper and toxicity of inks used in printing.
There is the sales tax issue: every state is hoping to get a little piece of the pie.
It is not a quick way to get rich. If you only offer your product in seasonal catalogs, you will have a three- to four-year wait before you make a profit. For products available throughout the year, you have to mail catalogs three to six times before you make a profit.
People are used to going to stores, picking something up and taking it home--instant gratification. In direct marketing, there is a time lapse because the product is sent from a different location.

Why Should People Buy Your Product

The key to direct marketing, like any marketing program, is to offer the right product at the right time to the right consumer and then provide excellent service so they will come back.

Direct marketing doesn't work for everything. Your product needs to be something people want or need and can't get elsewhere cheaper or more easily. Present your product so the customer sees a use for it.

Important Principals

There are two formulas that are part of direct marketing.

Prospects equals expense. You spend money to produce a list of prospective buyers. This is one of your marketing expenses which will not be recouped in just a few mailings or a few years.
Buyers equals profit. Once you have buyers on your list and you are providing service and products, they will come back to you and the profits will start coming in.

How Will You Find Customers?

You need a list of names of people to whom you can mail information or who you can telephone.

Collect names of people who express interest in your products; for instance, if you have a roadside stand, keep a list of those who buy from you.

You can rent lists that target the buyers you are trying to reach. Compiled lists are available. You can choose different segments of the country, different occupations, different income levels. For instance, if you want to reach all the aerial sprayers in one zip code area, use of compiled lists can pinpoint your potential customers. Sometimes you can also rent lists from comparable types of businesses. You probably can't rent from a direct competitor. You should use a list broker who will make recommendations for lists to rent.

Methods of Advertising

Many magazines have sections for ads. Sunset, Bon Appetite, Cooking Light, and Gourmet Magazine are examples. You can either sell your product through the ad or ask people to write you for a catalog or brochure. Usually, the more you ask the customer to spend--whether it be $10 for the product or $1 for the catalog--the lower the response will be. However, if someone is willing to spend money for a catalog, he is probably also a prospective buyer and may spend money on your next offer--a good candidate for entry into your computerized database of prospective buyers.

Another possibility is listing your product in a shop-at-home catalog--a catalog of catalogs.

Another method is catalog cooperatives. A company puts a catalog together for you and 20, 30, or 50 other vendors. If you don't want to make a catalog yourself or you have only one product, try a cooperative catalog. They do the mailing.

Inserts to be put in other businesses' catalogs and packages may work. We put inserts in our package about non-competitive, perhaps complementary, products.

Other distribution channels for your flyers and catalogs are roadside stands, tourist stops, wineries, and your local Chamber of Commerce. Ask them to distribute a flyer for you. Make it possible for a potential customer to get his name and address back to you so you can add it to your mailing list.

You don't need a four-color catalog. Some people use black and white catalogs. Some people use postcards. Some use one-color brochures. A typical direct marketing piece includes the offer on a small brochure, an order form, and a reply envelope,.

Keep testing. Try catalogs, ads, postcards. Once you find what's working, stay with it, but continue to test other methods--you may need them.

The direct marketing industry is very open. The people in the industry are willing to share information with you. We have conferences all over the country and it's amazing what you can learn by talking to others in the industry.

For more information, contact:

Doug Atkinson, Vice President, Catalogue Marketing, 3501 Taylor Drive, PO Box 8505, Ukiah, CA 95482. (707) 463-5515.