do you want to reach your prospects? Will you do regular monthly mailings? Quarterly? It’s important to mail your own customer list on a regular basis so you keep your name before them and take advantage of the momentum created by any recent purchases. You’ll want to monitor the responses to these mailings closely to ensure you aren’t mailing either too often or too infrequently.
• Where do you want to reach potential customers? At home? In the office? The type of product or service you provide will determine the best place for reaching prospects. If you are selling a subscription to a trade publication, you would most likely want to reach prospects in the office. If you are selling clothing, you probably want to reach them at home. However, this isn’t always the case. You may want to test some different approaches just to see what kind of response you get.
Once you’ve thoroughly analyzed your customers, you need to take a close look at your prospects. To whom are you trying to sell your product? The following questions can help you get a good feel for your audience:
• Are your best prospects men or women?
• Are they young, middle-aged, or retirees?
• What is their average annual income?
• Where do they live?
• What do they like to do in their spare time?
• How much do they already know about the product or service you have to offer?
Reviewing the information you have about your existing customers can help you develop a profile that can be used to find more people like them who will, presumably, also be interested in your product or service. It’s extremely important to know who your current customers are. By knowing the characteristics of current customers, you’ll have a much easier time of prospecting for new customers because you’ll know exactly what to look for when you’re researching mailing list availability. If you don’t have all of this information, you may want to consider conducting some research or getting access to secondary sources that can provide you with important insights and information. Secondary sources may include research or information available through trade organizations that serve the market you’re interested in, or data available through the US Government (e.g., the Census Bureau).
1.1 Identify your target market’s buying habits
Another important aspect of identifying your market is determining their specific buying habits. When you’re considering the purchasing habits of your potential customers, you’ll want to know the following information regarding the product you’re selling:
• Where do customers typically buy this product? Suppose you’re introducing a line of deli foods that you’d like to sell through the mail. Traditionally, customers would buy deli items at a deli. You’ll need to address this obvious objection to purchasing through the mail in your advertising materials. In addition, knowing that there are alternative sources of supply will help you in determining pricing, developing unique benefits, and structuring your offer.
• Are purchases seasonal or special occasion? The answer to this question will help you plan your mailing strategy. Obviously, if you’re selling Christmas items, you won’t be mailing in June; neither would you mail in December, which would be too far into the holiday season. You might, instead, opt for a late October mailing date. Seasonal considerations also apply to swimwear, educational materials (which often see low sales during the summer months), and gardening supplies.
• Is purchase premeditated or impulsive? Direct mail works best for selling impulse items. Premeditated purchases (e.g., cars) lead consumers to local retail outlets. They don’t sit around to wait for a brochure to show up in their mailbox.
• How does your price compare with competitors? Pricing is a major consideration, as it forms the basis for your offer. Know who your competitors are — both your direct mail competitors and alternative sources of supply. If a consumer can conveniently buy a very similar item locally at a good price, your direct mail offer may not have much appeal. You’ll need to structure an offer that points out the benefits of your pricing, fast delivery, etc., to woo them from more traditional sources of supply.
2. Segmenting, Targeting, and Positioning
Once you have a good general idea of the consumers you wish to reach, it’s a good idea to get more specific. Segmenting, targeting, and positioning are three key terms in marketing that apply to direct mail marketing efforts.
2.1 Segmentation
Segmenting involves breaking the consumer universe down into manageable market segments. The goal is to reach the most highly responsive consumers at the least cost. There are an infinite number of segments that an organization might choose for its marketing efforts, and various ways in which segmentation may be approached.
Demographic segmentation, for example, breaks the market down in terms of various demographic characteristics such as age, gender, race, marital status, income, education, and occupation.
Psychographic segmentation, by contrast, breaks the market down in terms of activities, interests, and opinions (AIO). An example of psychographic segmentation would be a sports retailer appealing to individuals who enjoy rock climbing.
For market segmentation to be effective, Charles D. Schewe and Alexander Hiam, authors of The Portable MBA in Marketing, suggest certain criteria must be met. They include:
• The market must be identifiable and measurable. Segmentation needs to be based on some shared characteristic (e.g., enjoying country music or being a teenager).
• The segment must be large enough to be profitable.
• The market must be reachable. Marketers can reach females between the ages of 25 to 40 without much trouble, but attempting to reach 15-year-old redheaded boys or mothers of lactose intolerant children who enjoy cooking will be more challenging.
• The segment must be responsive. Young women in their early twenties might be a promising segment for a high-end hair product, but not if they’re in college and struggling to pay rent and tuition.
• The segment must not be expected to change quickly.
Segmentation may also be based on internal information. Usage patterns may suggest certain segments of customers who are more responsive (e.g., heavy users of a particular product). There are infinite possibilities involved in identifying market segments, as segments may be comprised of psychographic, demographic, and usage criteria in various combinations. Once these possibilities have been identified, the next step for the marketer is to determine which segments to target.
2.2 Targeting
The goal for marketers once segments have been selected is to prioritize those that are likely to be most responsive. Competition is an important factor in considering which segments to focus on. If a major competitor has already chosen a particular market segment, that segment might not be as promising to you as another segment that has not yet been selected by the competition.
Consequently, when considering which specific market segments to target, it is important to consider the activities of the competition — both direct and indirect competitors.
Direct
