Friday, November 19, 2010

Direct Marketing's Secret Equation

Are there secrets to success in business? How about magic bullets or quick fixes? Free lunches?

If you’re in business, you already know that if something is too good to be true it probably isn’t true, and that there is no substitute for hard, thoughtful work.

One of the unique aspects of direct marketing is that the results of an offering can be more easily and accurately measured than in any other marketing form.

Get a list, send out an offer, calculate the response, and you’ve pretty much described the process of direct marketing. Targeting your offer is supposed to be efficient. The advantage of having a quickly identifiable result to a marketing effort is attractive because the results help guide the next marketing campaign.

That’s where the 40/40/20 rule comes into play. You have no doubt heard of the Pareto Principle, also known as the 80/20 rule. This guideline conveys the idea, in business for instance, that 20% of your customers make up 80% of your sales revenue.

Developed by marketer Ed Mayer, the 40/40/20 rule helps to sensibly guide your direct marketing efforts. The first 40% of your effort is acquiring the appropriate list of prospects. This is your target audience. The list will be the recipients of your offer. It is essential that you define your list with care so that the names you mail to are worthwhile and current.

Tied to the list is the next 40% of the rule, and that is the offer itself. The product or service you are offering is equally essential to the target market. Ideally the offer matches the needs of the list so that your response rate is maximized. The offer is what attracts your customer to call you or to buy.

Now let’s address the 20% portion of this rule, the smallest portion. The 20% refers to the creative content displayed in your mail piece or conveyed in an e-mail. The creative elements of your offering are important, but obviously pale in comparison to the list and to the offer.

However, each element in this formula relies on the other elements for its success. A great offer sent to an unqualified lead won’t produce results. Similarly, great advertising copy won’t make up for a lackluster offer.

Keep Ed Mayer’s 40/40/20 rule in mind when you are forming your next direct marketing campaign and you’ll quickly see why laying a strong foundation with your list and with your offer will reward your efforts with successful, measurable results. We’ll talk about some of those metrics in the future, so stay tuned.

GT Marketing LTD is a full-service direct marketing and direct mail production facility. GT Marketing handles fulfillment, warehousing, and expert direct mail production, consultative marketing, and project management. Call us to discuss your project at 800/435-7492 or e-mail us at