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Life Cycle of a Direct Mail Campaign

By Leslie Mandel
The Rich List Company

The life cycle of a Direct Mail Campaign begins with a strategy - a plan. This can be visually represented on an xcel sheet where the elements of your campaign and the timetable over which you will implement them can be viewed simultaneously. The rows across represent your activities and the columns underneath the cost of the activities and perhaps the individual(s) conducting them. This plan can be developed anywhere from six weeks to 12 months prior to the date you plan to send your direct mail and has four distinct elements; lists, mailing, results and donor recognition. These elements and some of the strategies that attend them are discussed below.

I. Lists
1. The Mail Date: This date will give you the time frame within which all the elements of the mailing must be accomplished.

2. Size of the Mailing: Decide how large your mailing will be. Here are some mail statistics to keep in mind: Responses to direct mail average 1 to 2 percent. For example, if you mail 10,000 names you can expect 100 to 200 responses. If you phone the list as well you may increase donations 100 percent. Using the above example if 10,000 names were mailed and phoned 2 to 4 percent or 200 to 400 responses can be expected. List owners normally charge 1.5 times the base price of the mail list for the second usage of phoning and charge for the phone number as well. For example if the mail list charge is $100/ thousand names the phone usage is $50 and the cost of the phone numbers is$20/ thousand. The total cost for mailing and telemarketing the list would be $170/ thousand names. The size of the mailing will determine other costs such as paper, envelopes, staff and so on.

3. Choosing the right list and from whom to order it is entered in the next column. There are approximately 50,000 lists available on the market and experts agree that 60 percent of the success of your direct mail campaign consists of choosing the right list to mail. How do you find the right list for your organization? Organizations such as Nextmark have free downloadable software organizations can use that will acquaint them with the lists that are available. Standard Rate And Data (www.srds.com) is a publishing company that publishes a book on every list in the world. They also list the List Managers, and which lists they manage, and the list owner and which lists they own. One must pay to see the lists on the Internet, which requires a password and user name. The MIN System is completely different from SRDS, but does about the same; only they are only online for the brokers to use. They charge a large fee to see the same information that is on SRDS and NEXTMARK. All three are similar; list owners will list their lists in all places available.


Most list owners also have websites, which can be found by searching on the various Internet search engines. If one goes to www.richlist.com and clicks on access direct mail source data cards, a list of lists will appear which can be searched individually to obtain a particular list cost, counts, and a general description. If one scrolls down one can also obtain the usage, or who else has ordered the particular list.


Lists can also be ordered through list managers or the list broker with whom you can consult about the lists available. A list Broker orders lists for a client who mails, and gets paid a discount of 20 percent of the price of the list. A List Manager makes a deal for a percentage of all orders and they are the ones that print the data cards. If you order directly from the list owner or manager, you will obtain the discount normally paid to the list brokers, which is 20 percent.

The strategies that attend list selection are discussed briefly below:

a. Selects or demographics, which include such characteristics as gender, age, income, homeowners, college graduates, geography, (such as state and or zip code), are available at an extra cost per thousand names. Some lists will not have phone numbers available of the demographics requested. (This can be determined by a “clearance”, see below) The demographics of your own in-house donor list (if you don’t know what they are some investigation should be a top priority) should be matched to the lists you order. For example, if your organization offers services to children, and most of your donors are female, you may consider ordering lists with only female names. Or if your organization offers services to, the elderly, you might choose lists that donate to elderly causes, or a list of donors who have elderly parents living with them.

b. Zip codes are another indicator of demographics. Zip codes are used to break down mail for delivery. The first two digits indicate a particular state, the third the SCF, which stands for Sectional Center Facility, or the county or large city post office, the fourth digit to the local post office the fifth to the mail box on the street, or local depots where the postal worker picks up mail. The plus four digits deliver the mail directly to the particular individual home. The SCF is the smallest zip code segment, which organizations may wish to target for mailing. For example, if you are a synagogue with a particular zip code, you may wish to mail an appeal to all of the list names in the same SCF. The famous television show 90210 illustrates how well zip codes correlate with demographics such as income level; most of us recognize the population living in Beverly Hills California as high-income households.

c. The origin of a list also influences who uses it. Many charities rent out their list of donors to other charities or commercial mailers. An investigation of the origin of the lists may provide you with clues as to where the list came from and if the lists are being rented by charities with similar goals to your organization; it may be worthwhile to rent them over another.

d. The quantity of each list. Keep in mind that each list will require a minimum order of 5,000 names. Sometimes a list owner will allow an order as small 1,000 names from 5 different lists as long as the total is 5,000 names. If a charity has mailed before and knows a particular list works well, meaning brings in a high number of responses, they may want to order all the names available on that list and less from other lists they have never tested. Testing a list generally means using it for the first time. Continuation of a list means the list was tested, brought in good results, and is ordered again or continued.


e. Email lists generally produce 6 to 10 percent responses, but are more costly than traditional mailing lists. For example a regular mail list may cost $75/thousand names where an email list can cost anywhere from $1-500/thousand email addresses. Properly written subject lines, should prevent your emails from being considered spam. Email lists and text messaging cell phone numbers are never provided to the renter, the renter provides the copy to go out and the email and test messaging owners send out the copy and provide statistics on how often the message has been viewed. On test messaging to cell phones, a WAP push link will allow responders to directly email you back. Email lists and text messaging lists should be marked double ‘opt in’ which means the email address from each name has been approved to receive mail. Additionally list owners will not rent to traditional spammers. Due to U.S. privacy laws email and text messaging lists usually do not provide the usage.


4. The third column indicates whether to phone the list names. Additionally whether staff or volunteers make the calls and the cost of hiring additional callers if necessary.


5. The fourth column indicates the number of in-house donors (if any) that you will mail at the same time. Your in-house donor list will need to be merged/purged with the lists you are renting. If you are using multiple lists each rented list must be merged/purged from the other rented lists, so there are not duplications in your solicitation. Professional services, called ‘letter shops’ in the U.S., do this for you. These services are discussed in detail further below.

6. List costs are entered in the next column. List cost is based on price per thousand. For example 5,000 names, which is usually a minimum order, might be $100/ thousand, or $500 total cost. Telephone numbers might be $20/extra per thousand. Selects or demographics such as gender age, income, homeowners, college graduates, geography and so on will be extra per thousand names each. Shipping also is an extra cost. The majority of lists are now mostly shipped by email for a fee of $50. If you need pressure sensitive labels, or Cheshire labels, there is a cost/label and ground or overnight shipping cost. Discounts are based on price per thousand only, not on the selects. There is no discount on the extra charges for demographics or phone numbers. There are also volume discounts for orders over 50,000 or 100,000 names. Mailing and telemarketing lists are provided to the renter for one time use only, unless unlimited usage is requested. The cost for unlimited usage is normally double the base price.


All of these elements will be printed on the individual data card for each list. The data card is menu from which one chooses which lists to order. The data card includes the price of the list, the number of names available on the particular list, a written description of the composition of the list, its origin, and who else ordered the list in the past, called usage.


7. List Payment Date should be entered for each list ordered. Depending on the vendor, payment for lists may be wanted in advance, before shipment, or 30 to 60 days after the mailing is sent. Traditionally all telemarketing orders, political mailers and commercial mailers are asked to pay in advance.


8. Send clearances to the list owner or manager is entered in the next column. This form is sent to the list owner or manager requesting: 1. The date of your mailing (in order not to conflict with a possible list owner’s mailing. For example some, charities that sell their own lists may not want the “renter” of the list to mail on the same date. Charities can make up to one dollar per name renting out their lists to other charities or commercial mailers, an income that goes directly to their bottom line. Some charities do not want their board of directors to know they are renting out their list, so the list is given a name different than the name of the charity. Some lists may have dozens of charities wanting to use the list on the same date.


In addition to requesting a particular mail date and approval of the sample letter, the clearance may request counts, which is a request for the statistics of each characteristic or “select,” requested. For example, how many women over age 50 with incomes over $50,000 in NY state or in a specific zip code. (The data card will only give you the total number of names it has available on a particular list.) Sometimes the clearance will request how recently the list was updated or cleaned.


There are other reasons for sending a clearance form: It offers list owners the opportunity to approve of the renter or the renter’s letter. Many times a sample letter of the renter is sent along with the clearance and often also the 501 c 3 letters from the IRS, proving the charity is non-profit.

9. The next column should track the following activities: 1) the clearance has been returned 2) the list has been ordered and 3) the lists have arrived.

II Mailing

Each potential donor will receive a letter in an envelope, which contains a reply card and reply envelope, sometimes also a brochure.


10. The Letter: In the next column indicate who is to write, proof and print it and the printing cost. You may wish to “test” two different letters, mailing one to half of a given list, and another to the other half, coding the reply cards to indicate which letter went to which name. After the mailing, whichever letter produces the highest return would determine which letter is used in future mailings.


11. The envelope internal reply card and reply card envelope. Under this column indicate who is to write, proof, and print it and the printing costs. You will need to decide on a ‘teaser’ on the bottom left hand corner of the outside envelope and who is to write it. A teaser is a one-line description of your appeal, such as “Help these children”, or “Fight cancer”.


12. The Brochure: Whether to include one or not, who is to write, proof and print it and its printing cost.


13. Addressing the mailing (envelope, reply envelope and reply card). There are three options:

1. Hand written 2. Pressure sensitive labels, or Cheshire labels 3. Printing names directly on each piece.


I recommend using a letter shop to print the names directly on all three pieces to enable you to better track donors. Another reason for using letter shop is the other, additional services they provide:

1. Printing the letters. 2. Merge/purging the lists for duplications. (some charities will request that all multidonors, or names that appeared on more than one list be mailed at another time for no cost. This is another element that would be asked for on the clearance or even later on the purchase order for a particular list). 3. Collating all the elements of the mailing; a. stuffing envelops b. sorting zip codes c. delivery it to the post office.


14. Postage/Bar Codes. Most letter shops have an indicia or postage mark that allows payment for only the number of outside envelopes mailed and only for the 1 to 2 percent of the responses to the mailing. When the printer/letter shop has indicia they will normally let you use this printed number (which goes where the traditional stamp goes on the envelope). The letter shop pays the post office and bills for the postage amount.


Furthermore, most letter shops have the software to bar code each envelope, which results in. far cheaper postal rate than just the non-profit rate. Having a letter shop use their updated programs for bar coding and the indicia usually is far cheaper than using both volunteers and a postage stamp. Check with your post office to know if they have such a method of payment. In the USA, charities can get their own indicia for about $75/ year plus the postage. With the size of the mailing decided above you can then cost out the postage, printing and mailing costs.

III Results

Depending on the country in which your mailing is mailed you can expect most contributions to come within six weeks of your mail date. However if contributions are tax deductible, some donors may hold your mail piece and donate just before the end of the year. Of the responses to your solicitation 25 percent will continue to donate year after year or even more than once a year. Each donor who responds to your campaign will now be the organization’s donor – hopefully to donate over the long term.


When the checks or credit card donations clear the bank you indicate in yet another column by each list ordered how many donations the particular list elicited and the total ‘list’ donation. The list selected for the next mailing should be chosen based on ‘performance’ i.e. those that generate both the highest number of responses and income.

IV Donor Recognition

Most charities automatically generate a thank you letter to the donor. Recently, charities have been requesting the donor’s email address and emailing a thank you. The cost to the charity then is only its staff or volunteer time. Whether or not the donor will appreciate this will depend on how much this method becomes the customary method of thanks.


After, you have completed the above activities, the life cycle of your Direct Mail Campaign has ended and then, you begin again.

 


 

The Rich List Company, a Division of Leslie Mandel Enterprises

About The Rich List Company Fax: 212 861-5384  About Leslie Mandel Enterprises
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