Keith Goodman, vice president, sales and marketing, and a founder of ThinkDirectMarketing.com, acknowledges, "there's a lot more to a successful direct mail campaign than slicing and dicing the data."
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"It was a huge success," he recalls, thanks in part to his use of direct mail. Because of his "roadie" activities, Goodman had been involved with most of the school's dances and he collected the names and addresses of the students who attended the dances. As prom time approached, he sent out announcements for the rock 'n roll prom to those students. Three thousand students each bought a $20 ticket. His modest financial investment had grown substantially and put Goodman on a path of what he describes as "starting things and building things."
His resume includes: partner in a recording studio and production company; creator of a computer software company that grew to $5 million in sales in five years; top sales rep for a distributor of high-end computer graphics equipment; developer of a digital media division for that computer graphics equipment company--a division which grew to nearly $200 million in sales within five years; and building up the sales and marketing office of a computer animation software company--bringing it from #4 in its market to #1.
So what brings a person with this diverse background back to his direct mail roots? A non-compete agreement. When the computer animation software company decided to relocate, Goodman chose to remain in Colorado and pursue other opportunities. But to do so, he had to agree to stay out of the film and video business for a three-year period.
Coincidentally, Goodman's long-time friends, Dean Ross Eaker, Edward Fleiss and Bruce Biegel, were faced with a similar career-altering event. The four combined their resources and began laying the groundwork for what would become ThinkDirectMarketing.com. Its product, ThinkDirectMail, is a family of online direct marketing list products that does away with the "per name" model. This is good news for owners of small and medium-sized businesses, such as insurance agencies.
For many agencies, direct mail is uncharted territory. And for other agencies, a direct mail campaign is a one-time event. Goodman explains that in addition to the ThinkDirectMarketing Geographic and ThinkDirectMarketing Demographic products, the ThinkDirectMarketing.com Web site provides the tutorials, educational content, and interactive tools to change that.
The Web site also provides information about a free ThinkDirectMarketing CD which includes demos of the Geographic and Demographic products, 250 free names for either product, as well as free software. The free software is yet another way to enhance the agency's direct mail effort. Included is Avery Label Pro 3.0, which enables users to create custom labels and postcards for direct mail projects. Also included is Janna Personal Contact 5.0, which is a "full feature" contact manager and marketing list manager (not a demo). This product can also print labels but more than that, it provides reports, tracks marketing activities, and manages customers and prospects. To access the information at the Web site, all an agent needs to do is register--and the registration is free.
"We speculated that if people had virtually an unlimited access to names, they would market more ... firms are marketing more--and growing their businesses as a result."
Use of the TDM Geographic and Demographic products is subscription-based. A subscription to TDM Geographic is $195 per year. The subscription includes 250,000 names which, if you do the math, works out to less than 1/10 of a penny a name. The search capabilities include the ability to search by ZIP code or ZIP+4 to identify all consumers, businesses or both within a specific ZIP code; radius from any listed address from as close as 1/4 of a mile to 25 miles; SIC code (Standard Industry Code) by keyword or business category to find business type; consumer name or address to identify all exact or similar matches; business name or address to identify all exact or similar matches; phone (10 digit) to identify an exact match; and phone (7 digit) to identify all matching phone numbers within a state.
A subscription to TDM Demographic is $395 per year. The subscription includes 20,000 names (which figures to be less than two cents a name). The Demographic product uses data provided by the Prizm Cluster Lifestyle Segmentation System from Claritas, which enables the user to select from one or more of 62 predefined demographic clusters based on income, age, housing, education and other demographic or lifestyle criteria. What's more, users can combine their search with TDM's radius search feature.
The Geographic and Demographic subscriptions are available separately or they can be combined in a Pro Pack for a discounted subscription price of $495 per year. Goodman notes that people often start out with the Geographic product but quickly decide they want the Demographic capabilities as well.
The subscription concept is part of TDM's "new model" approach to distributing direct marketing lists, Goodman continues. "We speculated that if people had virtually an unlimited access to names, they would market more. They would experiment and try different marketing campaigns. They could telemarket, send post cards, send door magnets ... whatever ... now that they have the names." He says this theory is a good one. With a nearly inexhaustible supply of names, firms are marketing more--and growing their businesses as a result. And because there is no "minimum" requirement for the number of names used, firms are more likely to pursue the necessary follow-up steps that precede a sale.
Under the "old" model, names are sold for 20 cents to 50 cents each with 5,000 names being a common minimum number. And generally, all you get are mailing labels. If you want phone numbers, there's an additional charge. Getting the data into a contact management system is another hurdle--that's if the agency has a contact manager. Then you have to factor in the cost of the mailing--not just the postage, but creating the piece that's going to be mailed.
Goodman notes that there's a lot more to a successful direct mail campaign than slicing and dicing the data. "Too often people say, 'I want to do a direct mail campaign.' And when you start asking questions, such as, 'Who are you mailing to? What are you going to send--a letter? What is your offer? What is going to bring them to your door?' people haven't thought it through. So that's where the DMLibrary at our Web site acts as a tremendous value-added tool."
Included in the DMLibrary is a glossary of the terms and definitions related to direct mail campaigns; tutorials on Planning, Budgets, Lists and Databases, List Segmentation, Creative, Testing, Print/Production Postal/Mailings, Customer Relationship Management, and E-Mail Marketing; the bookshelf-recommended reading from direct marketing's leading experts, and postal information.
As innovative and extensive as ThinkDirectMarketing.com is, Goodman doesn't see TDM replacing traditional list brokers. "If you're doing a mailing of 25,000 to 50,000 pieces, a list broker can be your best friend. They really know the market and can assist you with highly specialized lists. ThinkDirectMarketing is serving the portion of the market that list brokers typically won't touch (because of its low volume appetite)." A list broker's pricing structure generally makes it prohibitive for the small to medium-sized business to use its services.
And the higher prices charged by list brokers don't guarantee better data, according to Goodman. He points out that list brokers, many times, will update their lists twice a year which results in a lot of returned mail (and that gets expensive). ThinkDirectMarketing gets its data from Acxiom Corporation, a large aggregator of consumer data, which assures its accuracy. "Every household and every business that's listed in the U.S. and Canada is available online. Our server is almost a terabyte now," he notes. To ensure the highest delivery percentage possible, TDM updates its database every month.
Another unique capability that TDM offers, according to Goodman, is the export feature. Once people get the data they want, they can export it to the numerous database or contact manager products listed on a drop down menu (ACT!, Janna, Goldmine, Access or Microsoft Direct Mail Manager) or to ASCII for universal compatibility.
Goodman says there are a number of products on the drawing board that will be ready for launch later this year. "By late summer, we will be launching an online process to assist our customers in putting together their direct marketing projects. This will maximize their success with our products."
Goodman describes the marketplace response to ThinkDirectMarketing as "hockey stick growth. It is really exciting to see how quick the response to our product has been."
Some people might look at Keith Goodman and say he's been lucky when it comes to his business success. But there's a tongue-in-cheek saying that applies here: "The harder I work, the luckier I get."
Goodman is a national participant in "Making Direct Mail Easy," a national Road Show with the U.S. Postal Service. He is a keynote speaker on using the Internet as a direct marketing resource. He explains that the 45-stop seminar gives ThinkDirectMarketing.com a national forum on developing small business direct marketing. At a recent Road Show stop in Milwaukee, almost 400 people attended the presentation.
The ThinkDirectMail line of products is now integrated into Microsoft's Office 2000 Direct Mail Manager. But beyond that, Goodman sees TDM's relationship with Microsoft as a means to develop data faster and better and to do more things with it.
And visitors to the ThinkDirectMarketing.com Web site will learn that ThinkDirectMail's Geographic product was selected as the Best Marketing Information Product of the Year (1999) by PC Computing magazine.
From Goodman's perspective, ThinkDirectMarketing.com is accomplishing the goals its founders (Goodman, Eaker, Fleiss and Biegel) established early on. "When we first started this company, we wanted to provide small and mid-sized businesses with Fortune 500-level marketing data at a price they could afford. Based on the response we are getting in the marketplace, we are well on our way." *
Why direct mail? ROI!
A visit to the ThinkDirectMarketing Web site (www.thinkdirectmarketing.com) yields a wealth of information about the nuts and bolts of a successful direct mail campaign. As we mentioned early on, Keith Goodman has been a long-time direct mail enthusiast, dating all the way back to the mailings he handled for the senior prom. He continues to extol the benefits of direct mail at the Web site. Here's an excerpt:
"Direct mail marketing has the highest return on investment of any marketing a business can do. A bold statement? Yes, but read on and you will see why.
"In 1998, sales as a result of direct mail advertising exceeded $439 billion. During that same period, expenditures on direct mail advertising exceeded $39 billion. That is more than $11 in revenue for every dollar spent in advertising. There is no other means of advertising that can give you a better average return on investment, period!
"Even more amazing are the growth rates for the direct mail industry. The revenues are growing at an annual rate of 8.7% and direct mail expenditures are growing at over 6%. This means that the percentage of return on investment is growing even more.
"Now this might sound impressive on a national level, but let's look at why direct mail marketing will help your business. Here are five reasons why direct mail is applicable not just to your business but virtually any small and mid-sized business that is looking for ways to grow.
" *Anybody can do it! - You don't have to be a big business to put together a direct mail campaign. Anybody can write a letter, put it in an envelope, put a stamp on it and put it in the mailbox. The key is doing it right, which our DM Tools section can help you with.
" *It is scalable! - You can mail one piece, a thousand pieces or a million pieces. You are limited only by your resources. Up until now, the biggest hurdle for small business direct marketing has been acquiring small, targeted lists. Our ThinkDirectMail list products have changed that by offering highly targeted lists on a very local level.
" *It is targeted! - There is no other type of marketing that allows you to target a specific audience as direct mail. You can target just one person, a street, a certain type of business in just a specific ZIP code or households with just a specific demographic fit. It is all up to you.
" *It is easily accountable. With direct mail you can easily determine the return on investment of your campaign. By putting specific offers in different mailing pieces, you can test the responses to find the most effective message. For instance you can put a Free Offer in one set of pieces and a discount in another and see specifically how many responses per thousand come in. You can then test the most successful program against other ideas you may have. This is something that is very expensive and difficult to do with other advertising mediums.
" *You can start right now. With ThinkDirectMarketing.com and our ThinkDirectMail line of products there is no reason why you can't start your direct mail campaign today."
For more information:
ThinkDirectMarketing.com
Sales and Marketing
Longmont, CO
(877) 288-DATA
E-mail: sales@thinkdm.com
Web site: thinkdirectmarketing.com
©COPYRIGHT: The Rough Notes Magazine, 2000