Suppose your sales channel has found that the product is very appealing to a particular individual within a business, such as the person in charge of marketing, and your channel partners have also told you that certain vertical industries seem to be more interested in the product than others. You would want to make sure that the lists you use offer additional selectivity to accommodate these audience characteristics.

You would select on the basis of names and titles of Marketing Directors or Managers, if they are available, and SICs (Standard Industrial Classification codes) to get at the right industries.

Suppose you are marketing a product at a price point of $5,000. Businesses with 2S or less employees may not be a good market for your product. Chances are a business owner or manager of that smaller size company would not purchase a product at that price unless it were absolutely essential. That may be true, but here is the question you need to ask yourself: Is a higher response rate what you really want?To limit your risk, you would probably not want to mail to these smaller businesses, so you would use mailing lists that provide selectivity on the basis of business size.

If an individual receives a direct mailing and does not respond, a follow-up call from a telemarketer may prompt a response. In fact, there is some evidence that aggressive telemarketing which is conducted right after a direct mail campaign can in-crease overall response, even if the target audience has not yet responded. Telemarketing does have some drawbacks, however, when applied to lead generation in the business-to-business market:

Telemarketing is significantly more expensive than direct mail on a per-contact basis. A high-quality direct mail contact in a quantity of 10,000 may cost in the $2.50 to $5.00 range, but a telemarketing contact could cost from $7.00 to $15.00 each for a few thousand calls. Telemarketing costs do not typically decline on a unit cost basis with increasing quantities because telephone line charges and personnel costs remain stable.

Direct mail costs almost al-ways decrease on a unit cost basis as mail quantities increase. Quantity or Quality? We have established that direct mail, when enhanced by telemarketing, may produce higher response rates than direct mail alone, but the incremental cost could be significant. In a moment, we will see if the same holds true with Internet-enhanced direct mail lead generation, but first, there is an issue we need to address: the quantity of responses versus the quality of responses.

Earlier, we talked about the challenge of diminishing returns. A knee-jerk reaction to this problem may be to increase mailing quantities. At first glance, it seems like a logical strategy. If response rates are declining, you simply mail more, right? In many cases, this is exactly what you should not do.

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