The list works
Your list has worked and brought in what you feel is a good response.
What you need to do now is to bring in sufficient such replies so that we can start analysing the list and see what we have got. Normally speaking we need at least 50 replies to do an analysis - although obviously the more the better.
Because we need a good number here it is often worth doing promotions at this stage in which the customer does not have to buy anything - but simply makes an enquiry.
This may well mean doing a further mailing to get the number up. At the same time you should be recording all these sales/enquiries on a database - because this will become the basis of your "Verified List" - your list of customers and enquirers.
Analyse the list
In analysing the list you must now decide what it is that singles out the respondent from the people who don't respond.
There is no set answer to this, and you will have to work through every option step by step - or bring in an outsider to do this - (click on "Need Help?" if this is the case).
 Need help?
Typical distinguishing features in business lists can be:
-
Size of company (most easily measured by number of staff)
-
Location (by county or postcode or region)
-
What the company does
-
Which person was mailed on the mailing list (eg the MD, the Personnel Director...)
With consumer lists you might find one of these distinguishing features:
From this you might well reach the conclusion that you sell far better to companies with 20 to 100 staff in the south of England, than to any other group. You might find that while only 30% of your mailing went to this group 90% of your orders by value came from them.
That indicates quite clearly that in future you should be mailing this group far more often than any other.
You might want to repeat the experiment just to convince yourself, but once you are convinced move on to Rate Analysis below.
Rate analysis
We need to know now just what sort of percentage response rate you are getting from your test mailing and whether this is profitable or not.
For most mailings, a direct mail promotion costs around 40p per address reached - that is £400 per thousand. So the question is, are you making £400 profit out of the people who replied?
If you got a 3% response rate from this group of people mailed in your test mailing, that would be 30 replies from 1000 - in other words 30 replies cost you £400. Did these 30 replies bring you in the £400 profit you needed?
If not, all is not lost, because you now have the mailing list of these 30 people, and the chances are that next time you will be able to mail just them and get a much higher response rate.
Secondly, you have also learned about the groups that are most likely to buy from you. Using that knowledge you will get to the point where instead of mailing 1000 firms to get your 30 replies, you might just mail 500 firms - the 500 that fit your winning profile.
That means that you are now mailing 500 firms to get 30 replies - a response rate of 6%. Your 30 replies have now cost you £200 not £400.
These factors together should be enough to compensate for any loss on the first mailing - but if not you can either modify the first mailing, or look to the future.
You now have a list of 30 people who have bought from you or at least showed an interest. What you can now do is code these people on your database. We will call them "Verified". What happens to them is now followed through clicking on "Verified List" below. What happens to the rest is covered in "Unverified list".
Verified list |
Unverified list |
|
