Why Direct Mail Is An Effective Direct Response Marketing Strategy
We have talked to hundreds of clients about their marketing in the financial services sector and direct mail is still one of the best ways to generate an inbound call. In the Debt Settlement, Mortgage, Reverse Mortgage, Loan Modification, Foreclosure Prevention, Litigation, Tax Resolution and Bankruptcy Fields mail should be a part of a diverse strategy. We know that sales organizations in these fields use television, magazine and newspaper ads, radio and internet to feed their sales organizations but I would like to call attention to the limitations of the most prevalently used strategies other than mail and then focus back on how mail outperforms it.
Television does indeed generate what most people in the marketing sector would call a hot inbound call. They are sold typically as raw unique calls and it does get the phones ringing. We have listened to thousands of sales calls with the recording technology employed in tv campaigns and I can tell you that no matter what your ad says or contains, you are going to get people that call in that simply do not qualify. Most TV campaigns are built around a 9am to 5pm sales day in whatever time zone the organization is in. Here is an example of how TV may be less productive than you would hope for.
Example 1: For Debt Settlement a TV Commercial does not have enough time to break down what types of debts may be included in the program. Although the commercials make reference to unsecured debt and credit cards, people still call in with questions about cars and student loans. Combine this with high unemployment and its direct correlation to being home during the hours the commercial plays in prime time hours during the day and you have a recipe for people calling in that want to eliminate debt but don’t have the income to make payments in a program. While the commercials typically talk about $10k in debt many of the callers will not have 10k in debt, won’t be the right kind of debt and will not have an income that qualifies them. So while the price per call model has a reasonable cost per lead, it does not always deliver the right targeting. Unfortunately, this is a part of the game. This is the same for Loan Modification or Foreclosure Prevention TV Calls. With these campaigns no matter how detailed the commercial you cannot guarantee that the person who calls in has the right loan amount or the level of distress that you need. Add this problem to the risk that people calling are unemployed, and once again you have a hot inbound call representative of a prospect that will not qualify.
It Is Important To Note That There Never Is a Perfect Magic Bullet! GenStar Marketing Believes You Should Weigh All Options Carefully When Choosing Your Marketing Strategies. A Marketing Campaign That Best Fits The Unique Attributes Of The Sales Organization And Staff Is Always The Best Option. Understanding The Positives And Negatives Of Each Strategy Will Allow Companies To Make Good Marketing Choices For Their Firm.
Internet Leads are a part of an online strategy. Some organizations do quite well with these but it is important to understand the risks of this strategy as well. With Debt Settlement and Loan Modification Internet Leads you have several components that require consideration. How good is the strategy employed to generate them? If you get co-registration leads there is a pretty good chance you will hate them because the service you offer is not the primary service offered in the methods used to generate them. This translates into less interest and that becomes an issue with sales people that become frustrated and I can say comfortably that nobody wants a sideways sales staff. We could make a case for search being higher quality than email because of the implied interest and email being less competitive because they aren’t searching for the service. Very Important Item To Consider When Buying Internet Leads! The contact ratio for internet leads in the short term is between 40-65%. Just because someone fills a form out does not mean they will pick up the phone or respond to email. So there is some waste built into a campaign no matter what. Internet leads also do not perfectly qualify people for debt settlement and loan modification. Again, there may not be any income, they may not be late on credit cards or homes and they may not have a debt or loan amount that fits your box perfectly. Internet leads are generated with broad characteristics of responders and there is no way to perfectly control the response. With the waste of those you can’t reach and the waste of those that don’t fit your qualifications you have to work hard to make sure you get in touch with as many inquirers as you can and be okay with however that works out. You can either live with these realities or you can’t. It is definitely a point to consider.
Example 2: A sales organization purchases 100 exclusive loan modification leads. Short term contact ratios hit somewhere in the range around 50% so at the very list the beginning looks like you throw have your purchase out the window. There are some nuances to internet leads that make them tough. First of all, without a CRM solution buying internet leads in our opinion means that you will always lose. Why? Getting internet leads by email means you are relying on your server to get those leads fast when studies suggest that every minute you lose in getting back to someone who inquires online lessens the chance of closing the lead. The reasons are simple. 1) They apply on another landing page and they reach the prospect first. 2) They become distracted with something else can’t answer the phone, forget and then get marketed to by someone else. It is competitive out there for sure. CRMs also allow for proper lead management and supervision by sales managers. Beyond that the job of keeping sales reps accountable and all leads worked to conclusion is a daunting task. 50% contact ration when mail will give you 100% contact ratio clearly makes mail a more attractive option! It is important to remember once again that no marketing solution is perfect. Some groups work internet leads about as well as you can and the solution works for them. Like everything else it has its pitfalls and what we have identified may indeed make direct mail a better solution for your organization.
Direct Mail in our opinion is one of the best strategies available to loan modification, litigation, foreclosure defense, debt settlement and tax resolution firms because of data’s ability to get you to the people that need the service. One of the biggest reasons is that many companies want to focus on very geographically specific areas and internet and television campaigns are not built like this. Internet publishers develop product inquiries on a more national campaign and companies that don’t service the whole nation makes getting these leads more difficult and more costly. Mail is not all that exciting and we understand that, but its effectiveness is undeniable. With a good creative you can deliver your message to people that have known late payments, known debt loads, known tax liens, and known loan amounts. These are essentially your ideal targets. We do believe it is in your best interest to have people that are your ideal targets calling you. With mail you are highly effective in your targeting and you are not wasting leads based on low contact ratios and people that are responding that don’t fit the criteria. This gives mail a huge advantage. Another important point to consider is that mail may have an online component with the use of PURLS. Personal URLS as they are known give mail recipients an option to respond online at a URL dedicated to them. It features a short application and request for contact form that allows them to reach back out to the company. The page may be created customized to the look of current websites held by the company to create a consistent look and branding. Personal URLS give companies marketing with direct mail extra sales opportunities with their campaigns. Over time it will also create an email list for re-marketing efforts.
Direct Mail is by no means perfect. Income of the recipients cannot be perfectly known or targeted. Geographical income demographics may be targeted so companies offering these services are not hitting people in completely devastated areas where there is a higher likelihood that there is no income, but again it can’t be perfect. Our point is that direct mail gives a sales organization the best opportunity to be effective with their targeting and intelligent use of data will help them get the leads they need to grow their business. Gen Star Marketing will guide you through the mail process and help you reach its true potential.
Let’s recap the advantages of mail:
1. 100 % Contact Ratio
2. Hot Inbound Calls
3. With Effective Data Filtering You Will Get Calls From Prospects That Are Closer To Your Ideal Customer!
4. Use of Personal URLS also known as PURLS gives companies an online aspect to their marketing and tends to increase response.
We recommend that you start out with a test of 10000 pieces. When done correctly, direct mail should give you the most effective and highly targeted prospects in marketing. The cost per conversion should beat the other marketing strategies above. Direct Mail will deliver high quality calls and it is up to you to make sure to take advantage of the opportunities. Don’t forget to ask us about our direct mail webinars and trainings for both sales managers and sales staff. With the high quality of the direct mail calls, it is important that staff understands what calls are coming in, how they are generated, what the mail piece says, and how to begin the phone call. We will help you open the call with our webinar, you use sales talent, company branding and product knowledge to close the sales.