In this article, I’ll discuss the safest and most profitable way that you can make big money in direct mail. Oh, you can make more money with some methods, but they’re not as safe; in fact, there’s usually some serious risk involved. After all, with big rewards come big risk… usually. But the method I teach here is surprisingly safe. Nothing is safer than two-step marketing.
Two-step marketing is one of the foundational principles behind direct mail. In Step #1, you’re just trying to attract a highly qualified prospect using a well-designed, low- or no-cost initial offer. Don’t try to sell them too hard at first; just get them to express interest, and educate them on whatever your product line or service happens to be.
Step #2 is to follow up aggressively. Once they’ve responded to the initial offer, the balance of power shifts to you. People hate to be sold anything, but they love to buy. What’s the difference? When they buy, it’s their decision — so make them feel like responding to you was their idea in the first place. Now you can bring out the big guns and tell your full sales story. Now you’re in a position to show them exactly how you can give them the benefits they desire most.
There are many ways you can use two-step marketing. Here’s a quick example: I recently worked on a two-step direct mail campaign for the two straight days. I’d been thinking about it for a few weeks, rolling it around in my head, knowing I had to do this promotion. I’d had a meeting the previous week where my Marketing Director and a few other people chimed in, giving me a bunch of ideas; and we had a nice debate about where to go from there.
The final copy consists of 4-page letter folded to fit in a #10 window envelope, along with an 8.5 x 14 order form and voucher. The outside of the envelope includes some teaser copy to get them to open it up. The voucher is personalized. All in all, it’s a good-looking, simple direct mail piece that took me only nine hours to create… though more accurately I should say it took me nine hours and 20 years to create, given all I had to learn to do it right. It has the potential to make us hundreds of thousands or even millions of dollars.
We’re working on another direct mail campaign with a market size in the tens of millions, and that could generate God only knows how many tens of millions of dollars — yet it might only take 30-40 hours’ worth of creative work to put it together. Think about that. If the possibility of working for 30-40 hours and generating hundreds of thousands or millions of dollars doesn’t excite you as an entrepreneur, nothing will.
You can use two-step direct mail for postcards, self-mailers, or packages like the ones I just described, but you have to test it on a small scale before you roll it out to everyone. Don’t fuss over the cost; all that really matters is your return on investment, the ROI. You’re one direct mail package away from making millions of dollars, depending on the size of your marketplace and how many prospects you reach with your direct mail. The greatest power of two-step marketing lies in the fact that you can introduce yourself to your prospects and reintroduce yourself to existing customers. You can make your lead generation offer free, but it works better if you ask people to spend a little money on it — often as little as a buck or two — so they take you seriously.
If you’re trying to sell something worth thousands of dollars, a small initial sale might be less than $100. Often you lose money on low-dollar offers, but the people who pay for them are now on your house list, and you can make them other offers. Getting them to response to a low-cost offer, as opposed to a no-cost offer, is the best way to get the prospect to come back and buy the more expensive back-end order.
Be very careful here. One of my colleagues placed an ad in Parade magazine many years ago, when it went into 30 million newspapers around the country, offering a free 120-page book. He ended up with 13,000 orders where he had to eat the cost; no one bought the follow-up. It was a disaster. That’s how he learned to at least ask for a dollar or two for postage and handling. That cuts down the response enormously, because only the serious people respond — so your back end is more likely to succeed.
The best and safest way to make the most profit is always to first attract a group of people who are interested in what you have to sell, then convince them they should follow through and buy. That’s the entire basis of two-step marketing. First cast your net, generating leads and building a prospect list. This is where you either rent a list or test the offer with your list of existing customers, people who already know and trust you.
If you’re using a list of new people, you should definitely mail them a lead generation piece. This could be a postcard, or a brief sales letter reviewing your offer’s biggest benefits. Hold back on the meat and potatoes, though; your only goal is to get them to raise their hand and request more information. Don’t tell them too much at this point, or you’ll risk them feeling like they already know everything, in which case there’s no reason to buy. Be high on benefits and vague on specifics, making promises and emphasizing the reasons why they need to respond to find out more. Make them feel like you’ve left them hanging a little, so they need the fulfillment of receiving your package to be satisfied. Remind them that the only way to get that satisfaction is to request that information from you.
Here’s where you separate the sheep from the goats. You can have a huge list of prospects, but the size doesn’t matter if they aren’t serious about your offer. I’ve actually told people things like, “Please include $20 just to prove you’re serious,” or “Please provide $5.95 to help with shipping and handling.” From that point on, you can go to work converting them into paying customers. This is where you make your main offer to the people who have requested more information from you.
Let’s say that your initial mailing went out to 1,000 people; you’ll send the follow-up only to those who responded. That may consist of as few as 1% to as high as 5-10% of the total mailing. Suddenly, you’ve narrowed the list down to 10-100 people you can afford to spend more money following up with. It would be very expensive to mail several follow-up packages to all 1,000 of the prospects to try to get them to buy your product; but even if you had a 10% response, you have just 100 people who said, “Yes, please send me more information.”
It becomes much cheaper and more profitable to follow up three, five or ten times to those hundred people than it would be to send mail to the full 1,000 people — and you’ll probably profit more in the end.