Direct mail - a charity's guide

Robin Sumner
Director, Romax Marketing & Distribution Ltd
Tel: 020 7732 7414

Contents

• Introduction
• Direct mail is about communication
• Will it work - how will I know ?
• Where is this coming from ?
• The mailing list
• Mailing houses
• What can a mailing house do for you ?
• How much should a mailing house cost?
• What will need to be provided to the mailing house
• So the scenario is set, what now ?
• Mailing check list
• list purchase
• database
• creative
• printing
• stationery
• postage method, Royal Mail;
• Mailing house
• guideline costs of using professional help to create a mail shot
• summary
• recommended text
• useful U.K. trade associations

Introduction

As a charitable organisation, you may be considering direct mail, as a means of raising
required funds, raising the recognition factor of your organisation and its role, talking
directly with members of your charity, or a combination of all of these approaches. With any project there are pitfalls along the way, and it is advisable to get as many opinions as possible before making any important decisions. The following pages will refer to charity members, donors and activists, as donors.

Direct Mail is about communication:

When an organisation has grown to a size where personal telephone or personal meetings, are unfeasible due to time and financial restraints, there is an alternative. Direct Mail can be used to develop donors, retain donors, reactivate a donor who may not have responded over a certain length of time and of course donor acquisition.

If used well it can be seen as a cheap and alternative method to some form of advertising and marketing of a charity's brand image. If used incorrectly and without the relevant amount of preparation it can be a costly activity. Direct Mail is by no means a stand-alone method of marketing. Marketing gurus will judge the amount of resource that they wish to place in to above the line advertising (i.e. television/ radio/press), or below the line advertising (i.e. direct mail/door to door/telemarketing).

Will it work - How will I know?

How do you know if the project is to be a success or not? With all methods of advertising, you can never know the response to a particular campaign until after it has been completed. It is therefore the measurement of the responses that will judge the success of the campaign. Many marketing executives will measure the amount of response as the success of the campaign. From a perhaps cynical, but broader picture, the responses are only a success if they contain an order or a donation for the cause that the organisation is trying to advertise. The conversion rate i.e. the unit costs of the campaign compared with the income generated, is a much more representative picture of the success of the campaign.

Measuring all stages of a campaign is vital to gauge its success. Have the project plans and aspirations mapped out for all stages.

Where is this coming from?

Having worked for the Royal Mail as an account manager, and in my current capacity as a direct mail consultant and director to a mailing and fulfilment house, I have a wealth of personal knowledge, and can draw on much industrial experience both from my own experiences, and through colleagues'. The following examples and checklists are designed to act as a guide through the direct mail maze. It is not designed to be exhaustive, as the scope for direct mail is almost infinite. It is designed however to be a comprehensive introduction to a successful campaign.

As the speciality of the mailing house is the production, and distribution of the final mail
piece, this guide will be biased towards this aspect of the project. There are obviously
creative and design agencies that will complete the specifications of the project, but it is always advisable to get input from the production side concerning the practicality of ideas, right from the beginning. This approach will prevent high costs, and ensure that the timetable can be adhered to; it may also save you money, as there are many methods of earning discount through mailing services.

Mailing lists

Who are you going to mail to?

The list is often portrayed as the most important aspect of the mailing, as getting the right message to the right person with the right product at the right time with the right creative, is the first skill to master.

If you are looking to purchase a list rather than use a database, or wanting to mail a combination of a current database and cold list, then you need to be aware of your donors and the reason that they are donors to your particular cause.

The message that I am attempting to portray is this: do not rush into buying a list of names. Research the list and make sure that the list has been through
the following checks before it is posted.

1. M.P.S. (Mailing Preference Service) Ensure that the list you purchase, has been run against the list of people who have formally opted out of receiving direct mail within the last 6 months.
2. That you have negotiated a maximum 'return' percentage of 'gone-away' or 'Passed away' contacts.
3. Some list brokers/owners will have the facility to run the list against the register of death updated monthly.
4. That the list or database that you are using has been de-duplicated to ensure that even if there are more than one member per household, only one member receives the information. (The recipients' perception of organisations, particularly charities that send multiple copies are uncaring and inefficient).
5. The addresses are fully and accurately addressed and Post Coded. Not only will this prevent the recipient from receiving incorrectly addressed mail and possibly alienating them from the cause, but it will increase the discount percentages you receive from the Royal Mail.

Once you have the list, you will now know the exact number of recipients you will be posting your mail piece to.

At this stage you should be talking to a mailing house (or number of) and design agencies if not already decided upon. Some agencies can recommend mailing houses, but this might not always be the best solution. Always sample the market to get the best deal for the particular type of mailing that you are attempting.

It is recommended that each charity speak individually to the Royal Mail, as well as the mailing house that they have chosen to complete the pre-posting work. The majority of mailing houses have good relationships with Royal Mail, as you would imagine, but employing a mailing house to interact solely with Royal Mail, may end in a lack of understanding and loss of additional savings available in certain circumstances to direct account holders.

Mailing houses

What can a mailing house do for you?

The role of a mailing house may seem very obvious, but different mailing houses have different skills, machines and experience. Some can help with pre-posting enclosure and stuffing/insertion, some handle responses and fulfilment as well. Do not be tempted to think that all mailing houses can do all things in the same time scale for the same money - shop around with the knowledge of what you are intending to do and ask how they could be of assistance to you.

The creative design has a lot of influence on the final enclosure. What may seem like an excellent design may in fact be highly impractical from a mailings cost effective viewpoint. Anything can be stuffed and packaged but the more complex the job obviously the more it will cost. Try to arrange a meeting between all parties so that effective compromises can be made.

How much should a mailing house cost?

How long is a piece of string? I will not attempt to list the possible variances that a variety of mailing houses can offer, but it may be advisable to get recommendations, or refer to the independent authorities to get a list of accredited mailing houses, or ask the mailing house whether they follow the guidelines set out by these independent authorities (A mailing house can not apply to join an accredited agency until they have traded for a minimum of two years. Of course this does not mean that they are not more suited to complete the job).

What will need to be provided to the mailing house?

Again this varies according to the particular job that you are attempting to complete. The best way of introducing the concept is to use an example, so here is an example.

The facts: a charity has decided that they need to clean up their database. They have always kept a record of the names on computer, but the accuracy of the data is in question. The charity is mailing a simple mail piece reminding the donor of the charity's causes and requesting that they renew their membership as it has expired.

The decision has been made to mail all non-subscription donors, who have not donated in the last 18 months or more. Having run a simple program against their database the charity has discovered that they have a potential mailing (for simple calculation's sake) of 15,000 names.

Creative: As the charity does not have the funds to employ an agency to write copy for them they decide that they will compose a letter they themselves as the message will be quite clear. To increase the likelihood of increasing the financial response, they decide to include a Freepost envelope, as their only method of free response. They do place in the charity's telephone number for donations direct to them via credit card.

The mail piece will consist of the following: a personalised A4 letter, one leaflet outlining the latest work (of which they have an ample supply), and a response envelope.

So the scenario is set, what now?

This is a relatively simple mailing, the first thing to do is speak to Royal Mail, and say that they are considering doing a mailing, what help can they give them?

Secondly, approach a few mailing houses. The following things need to be done:

1. Decide on the way that you want to post, as a charity and as the mailing is not urgent, Mailsort 3 (a Royal Mail 'discount' service offering from 15% saving) is advisable. In order to achieve this incentive saving, the list must be sorted in to a particular order.
2. Decide whether you want to test the Mail shot on a small portion of the mailing list. This is to be advised as in the long term it may well save you a lot of money. If the test works, you will have lost nothing.
3. Running the database through a Mail sort computer program sorts the addresses very quickly and easily. This places the addresses in a particular order, which allows a more simple handling procedure by Royal Mail so they pass on the cost saving to the customer.
4. To achieve Mail sort the database must be at least 90% fully and accurately post coded. It is often better to ensure that all of the addresses are as accurate as possible, by running them against another program, which contains the Postcode Address File (PAF) data. This program can (depending on the manufacturer), add in the missing parts of a postcode or address from the data available. This should be done before you mail sort the database.
5. Run your list through a de-duplication program this will prevent multiple copies to one address.
6. Run your list through the MPS and death register records.
7. Remove addresses of people related to the organisation.
8. Add a couple of 'seed' addresses (addresses of members of the charity added to the mailing), to ensure that the mailing is sent at the correct time and delivered as requested.
9. Once this has been completed, run the now possibly diminished database through a mail sort program to produce the final number of items and the cost of the mailing.

The mailing house is going to need the following from you the client:

1. The list only if they are going to supply all of the stationery and print it all before insertion.
2. The leaflet needs to be supplied to the mailing house.
3. If using your own Royal Mail accounts the mailing house will need the account docket books, and information on the correct Postage Paid Impression (PPI), for printing purposes.
4. The date you wish to post the items.
5. The date you wish the items to arrive at the address.
6. Other information dependent on the role that the mailing house is playing in the overall management of the mailing.

As the charity is going to be sending personalised letters, then the letters must be printed in mail sort order. The Mail sorted database is put through a mail merge program to place the varying details on to the letter text.

It is up to the mailing house to keep the letters in the correct mail sort order. To enclose them in that order along with the return envelope and leaflet insert, then to bag and present the Mail sorted letters to the Royal Mail with the appropriate account docket books.

SIMPLE!

This job is easily manageable by machine, but there may be a machine set up charge and a minimum cost involved. Hand insertion will take a little longer to complete, but has the advantage of individual checking and no machine set up charges. There may also be minimum run sizes and hence charges on machine runs. The most important thing is to ensure that the mailing house that you choose has the ability to print the letters and insert and prepare them correctly and in the time scale that you designate.
 

Mailing Checklist

List Purchase (answer the following questions with YES or NO)

1. New list to be used?
2. Did you source a list that truly reflects the target audience for potential donors?
3. Has that list been updated in the last 6 months?
4. Is the list M.P.S. cleared?
5. Has the list been run against the death register?
6. Have you arranged for the new list to be run against your current database to remove duplicated addresses?
7. Have you agreed a suitable level of 'gone-away' returns?
8. Is the list data 100% post coded?

Database

1. Are you going to use an available database?
2. Is the data 100 % accurate?
3. Have the entries been de-duplicated to remove same addresses?
4. Has the data been run against Post Code Address File if not accurate?
5. Is all of the data entered in the correct data field?

Creative

1. Are you going to use a creative agency?
2. Will you write the letter copy yourself?
3. Have you arranged a meeting between the mailing house and the creative agency to ensure compatibility?
4. Have you included all practical aspects of the mailing in the creative design?
5. How will the creative department supply the artwork?

Printing

1. Does the printer print envelopes effectively?
2. Will they fold the leaflets after printing?
3. Does your mailing house arrange printing?

Stationery

1. Do you know the sizes and shapes available?
2. Will you provide the stationery?
3. Will the mailing house provide the stationery?
4. Who will print the stationery?

Postage method royal mail

1. Have you spoken with Royal Mail Sales?
2. Have you arranged account facilities with Royal Mail?
3. Will you use the account facilities of the mailing house?
4. Is the method of postage payment impression decided?
5. Are you clear on the savings available?

Mailing house

The following Check List is a sub-list of services that are offered by mailing houses. Not all mailing houses offer all these services, in fact practically none. But it may be advisable to know what you require from your mailing house by ticking your requirements from the following:

SERVICE YES OR NO

1. Consultancy/Strategy
2. Creative
3. Supply Mailing Lists - Consumer
4. Supply Mailing Lists - Commercial
5. Data Capture
6. Computer Bureau
7. Database Management
8. Printing
9. Laser Print
10. Print Finishing
11. Enclosing/Despatch
12. Polywrap
13. Response Handling/Fulfilment
14. Telephone Marketing
15. Internet/Electronic Media Services
16. International Consolidation

Guideline costs of using professional help to create a mail-shot

Item No	1000 Items*	5000 Items	15000Items
List Rental	£ 150.00	£ 500.00	£ 1500.00
Letter Print	£ 50.00	£ 250.00	£ 750.00
Leaflet Print	£ 100.00	£ 300.00	£ 500.00
Artwork	£ 150.00	£ 150.00	£ 150.00
Envelopes	£ 50.00	£ 175.00	£ 300.00
Postage**	£ 200.00	£ 1000.00	£ 3000.00
Enclosing	£ 100.00	£ 300.00	£ 500.00
Total Cost	£ 800.00	£ 2775.00	£ 6725.00
Cost Per mail piece	£ 0.80	£ 0.555	£ 0.448

* Mailings using professional help of this description will be liable to minimum charges

** Postage assumes no discount services used

All of the above costs are guidelines only. They are not based on any particular mailing house, reflecting only approximate prices.

Economies of scale will always apply in larger mailings making the item cost cheaper. The item cost is relevant as it is used to calculate the break-even point of the campaign:

Total Costs = Number of donations of 'X' amount needed to break even.

Profit/sale

The second calculation you will want to make is the forecast number of donations. As I
previously mentioned you cannot guarantee any figures, but there are trade averages to base an estimate on.

Possible Response

Existing customer database 6%

Rented List 3%

So, Mailing Quantity = Forecast Number of Donations

Est. Response

Summary

The information provided in this summary of a mail shot is designed to get charities thinking along the right lines when they are contemplating a mail-shot for whatever reason. You will not be an expert on your first mailing, but following some of the recommendations set out above, will prevent you falling into any pit falls, and may actually be of assistance to you!

If you want further advice on particular aspects of a mailing campaign that you are planning, then do not hesitate to contact me:

Office: Mailing House & Office:

Robin Sumner (Director)
19a Well meadow Road Unit 48
LONDON
SE4 2PD
TEL: 020 7732 7414
FAX: 020 7732 0050

Romax Marketing & Distribution Ltd
Brockley Cross Business Centre
96 Endwell Road
LONDON
SE13 6SY
TEL: 020 8698 1600
FAX: 020 8698 1600

Recommended text:

Royal Mail Guide to Direct Mail For Small Businesses Brian Thomas Butterworth Heinemann 1996

Useful uk trade associations:

The Direct Marketing Association
Haymarket House
1 Oxendon Street
LONDON
SW1Y 4EE
TEL: 020 7321 2525

The Advertising Standards Authority
Brook House
2 - 16 Torrington Place
LONDON
WC1E 7HN
TEL: 020 7580 5555

DMARC - Direct Mail Accreditation & Recognition Centre
4th Floor
248 Tottenham Court Road
LONDON
W1P 9AD
TEL: 020 7631 0904

The Mailing Preference Service
Freepost 22
LONDON
W1E 7EZ
TEL: 020 7738 1625

The Direct Mail Information Service
1st Floor
5 Carlisle Street
LONDON
W1V 6JX
TEL: 020 7494 0483

The Office of the Data Protection Registrar
Wycliffe House
Water Lane
WILMSLOW
Cheshire
SK9 5AF
TEL: 01625 545 745