The debate over which is better email vs direct mail may continue on into the next century. And that’s okay. It’s often been said that email generates a quicker profit and direct mail produces more engaged customers. So for many businesses there is value in using a mix of both direct mail and email marketing.

Over the years, direct mail has proven its ability to drive growth for companies. A well-thought out and executed direct mail campaign can provide profit, sustainability and security perhaps better than any other media.

Some may think direct mail is outdated, too expensive or cumbersome. But just because other ways may be faster, easier or less expensive, doesn’t necessarily mean that you’ll see profitable, long-term ROI. You need to look at direct mail in the right way though — to see it in context of its overall worth. Direct mail offers the ability to reach and gain the attention of prospects suited to your products and services, which when measured against other lead sources can deliver a higher lifetime customer value for your business.

And part of the power of direct mail comes from the ability to zero in on your specific audience. It allows you to reach the right people – the people most likely to be interested in your specific product or service. The way this happens begins with the list you mail to (or email to for that matter).

So let’s just focus on lists for this post and make sure we have all the basics about them covered. To begin with, we can think of them as two main types: house lists and rented lists. Your house file or customer file is golden. These are the people that have bought or contacted you and that you have collected information on and stored in your database.

Having a useable database is paramount to your success. The more information you have collected on people means the more ways you can segment your file. Initially, if it seems overwhelming, you can begin the segmentation process by splitting people into these three groups.

  1. Single Buyer File – purchased a single product from you
  2. Multi Buyer File – purchased more than one product from you
  3. Inquiry Only File – either contacted, called or made a inquiry from your website, or after seeing your ad, but hasn’t purchased

With these three groups, you can break them into smaller segments based on how the lead was generated. If you’re using a CRM system like Salesforce, whena person’s information is entered in you can specify where the lead came from — down to the exact source even. This helps you determine future marketing and promotions efforts. So for your A, B, and C groups you can segment by how you market. For example,

  1. Internet-generated – display ads, organic search, social media ads
  2. Radio/TV spots
  3. Direct mail
  4. Print Ads – publications, newspapers, newsletters

Now, you have to have an understanding of your sales cycle, is it long or short? You can further segment your list by how recently people bought or were added to the database. Also, by how much they spent. And remember when you’re pulling the list to not include any contacts that are flagged for service issues or are marked as do not contact.

Organizing your house file for a campaign is a great way to start creating customer profiles for your business. Grouping by the criteria above can help you see what zip codes your best customers live in and other demographic information about them.

This is important because your best guide to future prospects is understanding who your current customers are now.

In our next post when we talk about what you need to know about renting lists, the characteristics you’ve uncovered from your house list will come in handy. You want your rented lists to be made up of people who look just like your existing customers.