Increase your direct mail response rates with a freebie.
By Alan Sharpe
Although it may seem counterintuitive, giving something
away at no charge can lower your cost per lead. That's
because offering a freebie usually increases your
response rate.
Here's an example of what I mean.
Your cost per lead is the money you must spend to acquire
one lead. When you mail 10,000 strangers at a cost of $0.50
each ($5,000), and get a response rate of 1% (100 leads),
then your cost per lead is $50 ($5,000 in cost divided
by 100 leads).
Now let's say you offer a free information booklet. The booklet
costs $1 but offering it increases your response rate from
1% to 3%. Here is what happens:
Your cost of mailing remains constant: $5,000
Your response rate increases: 3%
So your number of leads increases: 300 leads
Your cost per lead drops: $16.66 ($5,000 divided by 300)
Add the cost of your freebie: $1 per lead
And your new cost per lead is: $17.66
So you see that, by offering a freebie that costs you $1 extra
for each lead you generate, you almost cut your cost per lead
in half, even though your total costs increase. That's
because your $1 freebie tripled your response rate, from 1%
to 3% (entirely possible).
By the way, if you want to reduce the number of "freebie
collectors" that you attract, link your freebie with
what you are selling (a free lawn analysis, for example)
rather than offering something that just about everyone
would want for free (an AM/FM radio, for example).
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Alan Sharpe is a direct mail copywriter. Alan helps businesses generate sales and secure sales meetings with qualified
prospects using cost-effective, compelling direct mail marketing.
Subscribe to "Sharpe & Direct," his weekly
direct mail marketing newsletter
at www.sharpecopy.com. Discuss your next direct response marketing lead generation campaign during
a free 30-minute telephone consultation with Alan.
Book your consultation now by phoning 1 877 SHARPE COPY (742-7732).
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