Please Mr. Postman
Fewer advertising methods seem more antiquated on the surface than direct mail. In the age of social media brand-building, it’s becoming harder to imagine a piece of paper in a prospect’s mailbox translating to a new membership.
According to Mark de Gorter, the chief operating officer at Workout Anytime, there are several reasons direct mail is still an effective form of media.
“We are in the proximity business,” said de Gorter. “Most clubs derive members from a 10 to 15-minute drive time radius and not much more. Direct mail allows clubs to target specific geography — and even specific demographics — with little waste, particularly if there are not many sister clubs in the market.”
Contrary to popular belief, direct mail often ends up being more cost-efficient than traditional advertising media in turning leads into members. “With more traditional media — television and radio, for instance — you end up paying for eyeballs and ears that will never have a chance of becoming a member,” said de Gorter. “So while those vehicles can be good from a branding standpoint, when you filter out the true population [of prospective members] versus the cost, they become extremely cost-inefficient.”
Workout Anytime has two direct mail strategies, one for the opening of a new club and another for driving new members to existing clubs.
“If we have a brand-new club in the market with virtually no members, we’ll buy a basic list — often referred to as a ‘resident list’ — that mails to every resident in the area, allowing us to essentially carpet-bomb the local market,” said de Gorter. “With virtually no members, the list cost is much lower, and there is no risk that a current member will receive the piece, since there are no members in the area yet.”
According to de Gorter, once your new club has established a presence in the community, the direct mail strategy needs to shift toward specifically targeting prospective members.
“You don’t want to send mail to your existing members — it’s simply a waste of money,” said de Gorter. “We use a technique called ‘suppression’ where we take a local mailing list, then pass our membership list through a filter to remove those names.”
This strategy is also more cost-effective, according to de Gorter. “For example, if you have 5,000 members in a local market and your mailing list has 20,000 names, removing your members takes the effective list down to 15,000, which lowers your printing costs and your postage costs,” he said.
A common criticism of direct mail is its inefficiency when translating mailers to new members — however, when you take into account the long-term value of each new member compared to the relative cheapness of each piece of mail, the ROI is significant.
“The key metric is to evaluate your costs, which include creative development, printing, postage and handling, and the lifetime value of each member — not necessarily just the enrollment fee or dues,” said de Gorter.
It’ll take your best math skills, but there’s a simple equation to measure your direct mail success rate, according to de Gorter. “The traditional metric for direct mail is one-half of one percent response — meaning for every 10,000 pieces mailed, you should expect to get a minimum of 50 deals,” he said. “If the lifetime value of your member is $1,000 and the total cost of each piece [of mail] is 50 cents, 10,000 pieces mailed with a one-half of one percent conversion rate would mean 50 memberships at $1,000, or $50,000 in revenue against the cost of a $5,000 campaign. That’s a 10:1 ROI.”
While direct mail is a numbers game, it’s still like any other advertising medium — there are certain factors you can take advantage of to boost the effectiveness of your campaigns.
“Timing and seasonality play a key role in direct mail,” said de Gorter. “From a timing standpoint, you will need about 10 to 14 days to go from the print shop to the mailing house to households, so time-sensitive campaigns are not good candidates for direct mail. And from a seasonality standpoint, we never run direct mail after the middle of November. All the holiday mailing — holiday cards and catalogues, etc. — just creates more clutter in the mailbox and lessens the chance proper attention will be given to your piece.”
And of course, don’t forget about your call-to-action, the staple of any ad campaign. “All direct mail should carry a promotional call-to-action to drive traffic,” said de Gorter. “A price discount, value-added premium or combination of the two — with an expiration date — are basic table stakes for a successful direct mail program.”
Consider implementing direct mail, and start reaching prospective members right in your backyard.