Targeted Leads and Busienss Marketing information: If response rates of 1, 3, or even 5 percent still seem low to you, compare direct mail response rates to general advertising. Say you're placing an ad in a metropolitan newspaper. Your newspaper ad generates 58 leads. Sounds like a good response. But then consider that the newspaper has a circulation of 650,000. Your 58 leads represent a response rate of .009 percent. Compare that to a direct mail response rate of even a conservative .25 percent and you can see a substantial difference.

To get 58 leads at the .25 percent response rate you'd have to mail to only 20,000 people. If your response rate is a respectable 1.5 percent, you'd have to mail to less than 4,000 people to get the same number of leads. Keep in mind, however, that while direct mail responses are high, so are the relative costs. It costs more to reach a potential customer through direct mail than through print advertising media. To refine your response estimates you need to track and, if possible, test your mailings. Chapter 6 reviews the procedures.

The term back end refers to selling to identified customers or sometimes qualified prospects who have already responded in some way. The back end is the ultimate goal for most direct marketing programs. Successful front end strategies, however, are important in the short term, since costs and risks are usually higher for front end advertising. To compare direct marketing to sales again, the front end could be considered the prospecting stage where rejections are higher and planning and professional execution especially necessary.

Response Makers - Targeted Leads