Harness the Power of Direct Marketing - More Small Business Power Tools

One of the most powerful tools available to small businesses is direct mail. By this I don't mean electronic, Internet-based mail, but the old-fashioned kind that requires a stamp and a trip to the post office.

Why is direct mail such a powerful tool?

It's a way for small businesses, especially retailers, to separate themselves from the big box stores such as Best Buy and Wal-mart, and to compete successfully with the Amazon.coms and Ovestock.coms of this world.

The power of direct mail, if done right, is that it's like getting a letter from your sister, mother or aunt. The postman brings it to your home. It's addressed to you personally. And when was the last time you received a letter from Best Buy, Wal-mart, Amazon.com or any Internet retailer? If so, it was undoubtedly via email and designed to be read by hundreds of thousands of customers - not much personalization there.

The first thing you need to do to start an effective direct mail campaign is capture the names and addresses of your customers. This is easy for service organizations like carpet cleaners, auto repair firms, instant printers, and the like. They already have their customers' names and addresses. All they have to do is put them together as a mailing list. Retailers such as jewelry stores, antique dealers, liquor stores, restaurants, etc. have a tougher time because they don't have an easy way to capture their customer's names and addresses.

There are a couple of answers to this. One is the old fishbowl gimmick, where you ask customers to deposit their business cards in a fishbowl with a prize to be given away in a drawing at some later date. I personally think this has been overdone. Plus, I have heard stories of unscrupulous sales people cleaning out the fishbowls themselves and using the business cards as sales leads.

A second alternative is to post a "guestbook" somewhere near your cash register with a sign offering a free newsletter to all those who register. To make this work, you and your employees have to be kind of aggressive in urging all your customers to sign up, and you can expect that many will not. However, persistence is a virtue and if you keep this up long enough, you will capture enough names and addresses to make the effort worthwhile.

I also like the idea of offering customers some small reward for providing their names and addresses. One version of this that seems to work well is a "frequent diner," "frequent buyer," or "frequent customer" card. Give your customers small, inexpensive cards that you can punch whenever they buy from you (or just visit your store) with the promise of a free something after 10 or 12 punches. Naturally, they have to register for the card and viola! You have their names and addresses.

Last, and most expensive, you can buy a direct mail list targeted toward your best prospects. Chances are, there is at least one company in your area selling lists of prospects by criteria such as recent home buyers, camera buyers, child care customers, etc.

Once you have captured enough names and addresses (maybe 100 or more) to begin a direct mail campaign, you have a couple of alternatives. One, you can input the information yourself. Or, two, if you're strapped for time, you should be able to find a local high school or college student to input the information for you. He or she can use either a word processing program or a database program to build the list. It's just simple data entry and you might offer $0.5 or $0.10 for each name/address input. I like to use a word processing program because once the list has been built; it's fairly easy to create personalized letters, etc. using the program's mail merge features.

What do you then mail customers? I like newsletters a lot. They can be as simple as a single page printed on both sides or as complex as four to eight pages. Another good alternative is personalized letters. Just make sure that whatever you choose to send your customers is important and meaningful and always include an offer designed to bring them into your store or to call you for more information or to make an appointment.

It takes time, money and dedication to develop and implement a direct mail campaign. But it's a powerful tool that can pay for itself in just a few months and then keep paying off for years to come.

For more information on creating an effective newsletter, be sure to look for my article, "Small Business Power Tool: Customer Newsletters."

Article by Douglas Hanna. Douglas is a retired advertising and marketing executive and long-time Denver resident. He is the webmaster of http://www.all-in-one-info.com, a free resource for information on a variety of subjects. Please visit his site to subscribe to his free newsletter, "Tips & Tricks to Save Money & Live Better."

Rising home prices and an improving economy will spark a modest rebound this year. But this time, lenders and homeowners will be more cautious

Household wealth in the U.S. grew in the fourth quarter at a slower pace, limited by a drop in home values that indicates the recovery in consumer spending will take time to gain speed.

The S&P 500 pulled back from a 17-month high as a drop in consumer confidence overshadowed an unexpected increase in retail sales

Sales at U.S. retailers unexpectedly climbed in February as shoppers braved blizzards to get to the malls, signaling consumers will contribute more to economic growth.

Confidence among U.S. consumers unexpectedly declined for a second month in March, a sign Americans are discouraged about the labor market.

Shares of the following companies are having unusual moves in U.S. trading. Stock symbols are in parentheses. Prices are as of 10:10 a.m. in New York.

Lehman used off-balance-sheet transactions to understate its leverage in late 2007 and 2008, deceiving shareholders about its ability to withstand losses, a bankruptcy examiner’s report said

JPMorgan Chase & Co. and Citigroup Inc. helped cause the failure of Lehman Brothers Holdings Inc. by demanding more collateral and changing guarantee agreements, according to a court-ordered report on the biggest bankruptcy in U.S. history.

About 900 bankers will converge on Capitol Hill next week for a conference that lobbyists say will give them a chance to speak out against a proposed consumer protection agency as Senate Banking Committee Chairman Christopher Dodd unveils financial regulation legislation.

A 2,200-page bankruptcy report a year in the making may point the way for plaintiffs looking to sue former Lehman Brothers Holdings Inc. officials, lawyers said, rather than grand juries probing possible crimes.

American International Group Inc. was unprepared for the financial crisis that forced the insurer to accept a $182.3 billion bailout from the U.S. government, the company’s former general counsel said.

Valley National Bancorp, operator of more than 200 branches in New Jersey and New York City, acquired its second failed bank in as many days as U.S. lenders continue to collapse amid losses tied to real estate.

Wall Street analysts give their buy, sell, or hold views on 10 stocks in the news this week

What Wall Street economists and strategists had to say about key developments on Mar. 12

Wall Street analyst opinions on stocks making headlines in Friday's market

What Wall Street economists and strategists had to say about key developments on Mar. 11

Individual investors have largely stayed on the sidelines of the current rally. What will lure them back?

What Wall Street economists and strategists had to say about key developments on Mar. 10