Controversial statement, we admit, especially from a marketing agency. But hear us out.

Ask most marketing managers what their job comes down to, honestly, and it’s to drive revenue. That’s what all of business is for. Revenue comes from sales, new or repeat. So, whichever way you dice it, marketing is there to support sales. And what do salespeople need? “Good leads!” (We learned that from Glengarry Glen Ross).

So, how do you generate leads? With “lead gen”: direct mail, print and online. Stuff you send out to individual people to make them click and move one step closer to buying. It’s not cool, it’s not cutting edge, and nobody talks about it on marketing blogs. But in both B2B and B2C, direct mail is how frontline marketing still gets done. DM budgets may be dropping in favour of advertising, but conventional wisdom still tells you to buy large lists and send out direct mail. Marketing by numbers, literally.

What’s the problem? For a start, the numbers don’t add up.

In a recent example, a client wanted to get 100 people to attend their upcoming webinar. They were starting from scratch and so asked us about buying a list and doing an email campaign. They wanted to target the head of a specific function at companies in the UK with over 5,000 employees. Well, there are only 2,500 companies in the UK with over 1,000 employees, so the number with over 5,000 is probably about 500. Now, even assuming that we could buy an amazingly accurate list of those people (and let’s face it, that’s not very likely), we’d need a 20% conversion rate to hit the stated target. That just doesn’t happen with DMs. See:

For every 100 names that you buy:

  • 20 will have duff contact details and will never receive your email
  • 35 won’t find the proposition at all relevant to their role or company

(Now’s the time to start casting evil eyes at whoever manages your lists, or the broker you bought it off)

  • 25 would have been interested, but have bought something recently/are happy with current supplier/have signed contract
  • 13 won’t be interested because they don’t have need, budget, authority or the desire to change
  • 5 will say that they’ll turn up, but won’t, for whatever reason
  • 2 will actually show up (and how many translate into sales? Well, who knows)

Of course, no marketing communications activity will translate into 100% success. But a 7% response rate is considered pretty good by DM standards! If you scored 7% on a test, would you be happy? Of course not! It’s no wonder that in every survey of buyers, they say that DMs/eDMs are right at the bottom in influence, and that’s at every stage of the buying cycle. Think about the last pile of cards you picked off the doormat. British Gas. Virgin Media. Direct Line. When was the last time you did anything but put it in the recycling (even the charities, if you’re honest)? It’s probably the same with your desk at work, and your email inbox. DM is irrelevant, context-free, intrusive.

Not happy with 7 hits from your 100 emails sent? You’ve got two ways of increasing the number. Increase the size of the list—which costs money and risks ruining your reputation, as well as diluting the accuracy further—or increase the quality of your targeting. It won’t surprise you which option we prefer. People still open handwritten envelopes (and not those ones that are printed to look like they’re handwritten—nobody likes to be lied to). People will answer a personal message from a senior executive who has looked them up on LinkedIn. You’ll get the same 50 responses whether you reach out to 100 cherry-picked individuals or 5,000 people off a ropey list from some broker, and it’ll probably cost you less. Just because you can send 5,000 emails in half a second doesn’t mean you should.

There are fundamental alternatives to the conventional DM sent to a conventional list bought from a conventional broker. We’ve reiterated them time after time on this blog. Be relevant to your target buyers in what you offer. Engage with them on their terms, via channels they use (including events). Form relationships so that when they come to buy they look you up, instead of bombarding them with mailers on the offchance that they’re looking to buy. Send newsletters with genuinely valuable content. Post blogs. Get involved in communities. Invest in your channels. And if that all sounds like it takes too much time to pay off—and it may do—invest in more online advertising: in surveys it’s actually more popular than direct mail, and as well as raising awareness you can actually target it quite precisely to get some conversion rates going. Today you can do really clever (if slightly creepy) stuff like re-targeting (try looking at a few items on johnlewis.com and then browse around a bit, it won’t be long until you see a re-targeted ad).

We hope we’ve made our point. Lead gen through direct mail is a mug’s game for you, the company trying to sell your wares. As a result, it’s also a mug’s game for agencies like us. We can do a damned good job and still fail horribly. And we don’t like to fail. We’re not satisfied with 7% return, and nor should you be.

Agree? Disagree? Leave a comment or drop us a line… we’d love to hear from you.

Posted by John on 16 June 2011