I’ve been quoted as saying that every winning sales message begins with a simple, easily understood, ultra-compelling promise … goes on to prove the seller can deliver on that promise … and ends with a singular, clearly defined, easily measurable call to action.
And while there should always be one primary promise, overarching point of proof, and ultimate call to action in an online campaign, it’s also true there are secondary, supporting promises, proofs, and calls to action as well.
I think we’re all familiar with the idea of listing promises and proofs before we start to write, and then prioritizing their presentation in our copy. And we generally are well aware that each piece of media in our sales funnel needs a strong call to action to graduate our prospects to the next step in the funnel.
But here’s an idea you may never have been exposed to …
If you study the writing of Gene Schwartz, one of the things you’ll find he does more than just about any other copywriter I know of is use command statements. What are command statements? These are like mini calls to action embedded throughout the running copy.
They leverage the law of commitment and consistency. C&C says that it’s human nature to remain consistent with our past thoughts and actions. So if you were to go along with a command embedded in Gene’s copy, commitment and consistency says you will be more likely to comply with the next command, and the next, until you encounter the ultimate command that consummates the sale.
How does this work? Well let’s take a look at one of Gene’s ads. I’ve underlined the many secondary calls to action Gene used to leverage commitment and consistency, engage the reader more fully in his copy, and much more!
I’LL MAKE YOU A MENTAL WIZARD AS EASILY AS THIS —
Yes! Here at last is your chance to gain the
THINKING MACHINE MIND you’ve always dreamed
About … so easily and quickly you’ll be astounded …
and do it without risking a penny!
By HARRY LORRAINE
Let me explain! (The very first sentence in the running copy is a command. The sentence is superfluous save the fact it obtains buy-in from the reader. If he obeys and keeps reading, the reader has made a tiny, ever so subtle commitment.) I don’t care how poorly organized your mental powers are today — how difficult it is for you to concentrate … how bad your memory may be … how much a prisoner you are of crippling mental habits … how long it takes you each morning to get your mind going with adding machine accuracy and certainty!
I BELIEVE THAT YOUR MIND IS WORKING TODAY AT ONLY 5% TO 10% OF ITS TRUE POWER — SIMPLY BECAUSE YOU DON’T KNOW THE RIGHT WAY TO FEED IT INSTRUCTIONS.
Simply because you don’t know the right way to feed your mind problems — so clearly and logically that those problems half solve themselves before you even have to touch them.
Simply because you don’t know the right way to feed your mind facts, figures and names and faces — so they burn themselves into that mind in such picture-form you remember them forever.
Simply because you don’t know the right way to give your mind A FULL CHARGE OF ENTHUSIASM … so that it revs up instantly every morning … so that it operates at full power not for just a few brief minutes each day … BUT FOR 10 HOURS AT A STRETCH!
Mind Power Is A Trick! I’ll Teach
It To You In One Weekend!
Yes! Problem solving is a trick! Concentration is a trick! Memory is a trick! Habit breaking is a trick! And above all, generating the will power that means success, IS A TRICK! Mind power can be made to order — you don’t have to be born with it. The secret to a fast-acting, full-power THINKING MACHINE MIND is as easy as tying your shoelace. And I’m willing to prove it to you, without your risking a penny! Here’s how!
(Here’s where the flurry of commands begins)
Let me send you — at my risk — one of the most fascinating books you’ve ever read. When the book arrives, set aside a few moments a day from the following weekend. Glance though just one chapter. And get ready for one of the most thrilling weekends of accomplishments of your entire life. (This entire paragraph is comprised of commands. The second one projects the prospect forward in time, so that each succeeding command creates a future paced vision in the reader’s mind. Gene did this a lot.)
The Very First Hour After You Pick Up This Book
You Will Perform A Feat Of Mind Power
That Will Astonish Your Friends!
(More command statements follow)
Turn to page 144. Read 3 short pages — no more! And then, put down the book. Review in your mind the one simple secret I’ve shown you — how to feed facts into your mind so they stay there, permanently, as long as you wish. (Four more commands. Note how these actions are to be carried out in the future, but they are stated in the present tense. Holding two worlds in consciousness simultaneously is momentarily confusing, and encourages intense focused attention on the part of the reader.)
Then put this same simple trick to work for you — that very same hour.
Call in your family or friends. Ask them to make a list of any TWELVE facts, names, or objects they wish, as fast as they wish. Have them write down the list so they won’t forget it. (Four more commands. If the prospect is reading, he has probably slipped into a light waking trance, oblivious to his surroundings, engrossed in a pleasant daydream like state. Then something really interesting happens. Here’s the miraculous part. These next sentences describe the prospect exercising his new found powers, living them in the theatre of his mind, reveling in them, owning them.) But as they give you each fact, YOU are going to perform a simple mental trick on that fact that burns it into your memory, IN PERFECT ORDER, for as long as you wish!
And then — INSTANTLY AND AUTOMATICALLY — you are going to repeat that list, backwards and forwards, in perfect order, exactly as if you were reading that list in your friend’s hand. And then you are going to have one of the most exciting moments of your life, as you watch the expression on those people’s faces as you reel off those facts as though they were flashing on a screen on the inside of your memory.
(Then here in this next little section the spell is momentarily broken and the prospect is brought back to the present. It’s kind of like the dawning of the second act where tension is momentarily released in an exquisitely crafted play.)
Thrilling? Yes! But also one of the most profitable secrets you will ever learn. For that list of twelve facts can just as easily be an appointment schedule — with each appointment flashing into your mind at just the right time and place that you need it! Or a shopping list — or the outline of a speech — or a sales presentation — or the highlights of an important article … or a list of things that have to be done in perfect order.
Any one of them — they flash into your mind automatically, as through you pressed a button. And this astonishing mental gift — which will serve you every day for the rest of your life — is yours from the very first hour you pick up this book.
Which Areas Of Your Mind
Do You Want To Strengthen
In A Single Weekend?
Concentration, Willpower,
Self-Confidence, Habit Breaking!
(And now back to speaking about the future in present tense language, projecting the reader forward through the final act … )
Yes! From this moment on, in one thrilling hour each day, you begin testing the wonder-working AUTOMATIC ORGANIZATION techniques on every untrained corner of your mind! You begin breaking through mental barriers — mental limitations that have been blocking you for years.
You begin tapping into the buried powers of your own mind … powers that you have glimpsed before in brief flashes … now brought to the surface … organized with simple formulas that double their potency — and placed forever at your beck and call, ready to go to work for you in the blink of an eyelash.
For example —
DO YOU WANT TO DEVELOP “STEEL SHUTTER CONCENTRATION” — OVERNIGHT?
(Here Gene launches a barrage of secondary calls to action that thunder toward the close, commanding his prospect to experience the different aspects of his new found mental powers.)
Then turn to page 85 … read one simple page … then thrill to your ability to absorb huge amounts of information — easily and swiftly — even in a room full of half a dozen howling children.
DO YOU WANT TO DEVELOP X-RAY EYES – POWERS OF OBSERVATION THAT AMAZE YOUR FRIENDS? (Then turn to page 136 … play three fascinating games … and then startle your friends, time and time again, by your ability to spot revealing details — putting together hidden pieces of evidence — that they never even dreamed were there at all.)
DO YOU WANT TO SEE HOW EASY IT IS TO REPLACE BAD HABITS WITH HABITS YOU CAN BE PROUD OF? Then get ready for the revelation of your life on page 103 … that replaces agony with fun … that actually lets your bad habits break themselves without you hardly touching your willpower.
YES! AND DO YOU WANT TO GENERATE ENTHUSIASM … FRIENDLINESS … PERSONALITY AT AN INSTANT COMMAND? Learn to overcome shyness and fear, automatically … make anyone like you … dissolve opposition with as little as a single word … and earn both trust and respect from everyone you meet — and keep them — for good.
Read It For 10 Days —
Entirely At Our Risk!
(And from here Gene goes on to close.)
It’s amazing to see how formulaic Gene’s copy really is when you break it apart this way. He had these structures on which he would hang the most irresistibly compelling promises — structures like this one that he used over and over again in different ads.
How else can you use secondary calls to action
to engage your prospects and get them into the habit
of doing what you tell them to do?
Here’s a list of different secondary calls to action I pulled from my swipe file. These statements are like little doses of smelling salts that wake your prospects up and get them involved in your copy. Once again the command is underlined.
Exhibit #1 — “Don’t be surprised if you’ve never heard about America’s best-kept moneymaking secret … ” (This is an interesting statement. The conscious mind recognizes negation in speech, as in "Don’t do X," however the unconscious mind pays more attention to the "X" than the injunction "Don’t do.")
Exhibit #2 — “Do Not Read This If You Have Moral, Ethical Or Religious Reasons Against Hurting (Or Even Killing) Someone Who Violently Attacks You, Your Wife Or Your Kids”
(You can command your prospects to focus their attention on your sales argument through a particular sense. Here’s another one that leverages reverse psychology)
Exhibit #3 — “So please, don’t take my word for it. Listen to what actual USERS of ENHANCED ORAL CHELATION are saying … “
Exhibit #4 — “Just listen to the story of a man named Andrew Canter and you’ll see exactly what I mean … ”
Exhibit #5 — “Let’s take a look at what I’m talking about … ”
Exhibit #6 — “How do I know? Simple. Just look at the real economic indicators.”
Exhibit #7 — “Look, Gross Domestic Product (GDP) growth — the most common barometer of the nation’s economic health — is a lie!”
(You can command your prospect’s mental processes.)
Exhibit #8 — “Think heart disease only strikes older people? THINK AGAIN!”
Exhibit #9 — “Think about this for a minute:”
Exhibit #10 — “To make sure what I’m about to offer you is a good ‘fit’ for you, I’d like to ask you a few questions. Answer them honestly:”
Exhibit #11 — “Let’s connect the dots.” (“Us”, as in “let us” is powerful because brings you together with your prospect.)
Exhibit #12 — “Allow me to explain … ”
Exhibit #13 — “And get this — although 25 to 30 million Americans fall into this category, few doctors ever test for this dangerous protein!”
Exhibit #14 — “Add it up yourself: That’s a total of $267.05 in discounts and FREE gifts just for giving Enhanced Oral Chelation a fair try.”
Exhibit #15 — “Note the date on the far left, and the net transaction amount on the far right.”
Exhibit #16 — “Imagine yourself walking briskly along a hot, sandy, sun-drenched beach … ”
Exhibit #17 — “Remember, you risk nothing by giving xyz a fair try.”
Exhibit #18 — “Let me tell you why I wrote this report:”
(Tell your prospect to consume your copy.)
Exhibit #19 — “I urge you to read every word of this report as if your entire future depended on it”
Exhibit #20 — “Read the following case studies thoroughly … ”
Exhibit #21 — “Please stay tuned for a few minutes and I’ll explain everything … ”
(Tell your prospect to take some action that proves the point you’re trying to make.)
Exhibit #22 — “Go and Google the name of your town/city/neighborhood and your key search phrase. Are you on the first page where it counts?”
(Some marketers even go so far as to punch out embedded commands in an effort to plant sub-conscious suggestions in their prospect’s minds.)
Exhibit #23 — Only if you are DEAD SERIOUS about taking your already-existing Internet business to the next level do I want you to bother to fill out the form at the bottom of this page.
(Bullets can be used as secondary calls to actions too. In order to obtain the promised benefit, what does your prospect have to do? That’s right, buy the product.)
Exhibit #24 —
- Get 6 to 7 times more qualified prospects at one-fourth of the cost of direct mail!
- Triple your Website traffic, and increase "Opt-In" rates, even if all of your online lead sources have dried-up!
- Burn your brand name into your prospects’ minds, cut customer attrition rates in half, and slash your creative costs by 73%!
(And of course no list such as this could forget …)
Exhibit #25 — “but wait, there’s more!”
As you can see, sprinkling commands — secondary calls to action — throughout your copy can help get your prospects more involved in your sales message … build forward momentum down the page … create gradually heightening commitment …and fan the flames of desire — all worthwhile objectives on the way to the sale!
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19 Powerful Direct Mail Strategies to Boost Your Leads by John Finn
18 Numbers Every Direct Response Marketer and Copywriter MUST KNOW To Produce Bigger WINNERS More Often and Bigger MAILINGS More Often
1. Mail Cost: This is simply the total cost of sending a promotion to prospects. It includes the cost of paper, printing, mail list rental, postage and lettershopping (inserting, collating, addressing, affixing postage, sorting mail to US Postal Service requirements and delivering it to the Post Office).
Postage, mail list rental and lettershop don't offer a lot of room for quibbling – although the U.S. Post Office will be happy to show you how you can get postage discounts by presorting … and of course, you can always arrange swaps with other list owners and discounts from list brokers to get your mail list costs down.
The big variable of course, is printing. Going with a big, gaudy, all-singing, all-dancing 24-page, full color, tabloid-sized self-mailer (the biggest, fattest, funnest, happiest floozy in the whole direct response biker bar) will almost guarantee you'll get your prospects' attention. It will also send your printing costs soaring.
And while settling for a stark two-color #10 carrier envelope containing an 8-page sales letter and order form will save you a bundle, you're just likely to get lost in the mailbox, sending your response rates crashing.
So for our purposes, let's take the middle path – with a sensible, 24-page standard-size (8 ½ x 11) self-mailer – and say this mailing to 250,000 prospects will cost us $125,000.
(NOTE: When calculating mail costs, marketers almost never include the cost of copywriters' advances and graphic design, as these costs will be spread out over many mailings.)
2. Mail Quantity (QTY): This is simply the number of copies of your sales promotion being mailed. If you've been paying attention, you already know we're talking about a mailing being sent to 250,000 prospects.
3. Cost Per Thousand (CPM): To figure your CPM on a mailing, just divide your Total Mail Cost by Mail Quantity and multiply times 1,000: Total Mail Cost: $125,000
Divided by Mail Quantity: 250,000
Equals a Cost per Piece Mailed of: $0.50
Times 1,000
Equals a "Cost Per Thousand" of: $500
If a marketer is mailing a promotion that costs him $500 per thousand pieces mailed, he just says his mail cost is "$500/M."
Mostly, marketers just use this number to gauge the cost of a particular promotion package/list combination against others.
Let's say you test two promotions. The first is the dirt-cheap #10 carrier envelope with an 8-page sales letter inside, and costs only $450/M to mail.
The second is a big, gaudy, full-color tabloid-sized 24-page self-mailer that costs $560/M (24.4% more) to send to prospects.
If the cheaper package generates a better Return on Investment (ROI) than the more expensive one, for example, a smart marketer might say, "Hmmm … I wonder what would happen if we put the stronger headline and sales message into the cheaper package format?"
Most of the packages I create cost my clients between $500 and $560 per thousand pieces they mail – but a cheap postcard sent to cheap names could cost as little as $320 per thousand.
4. Orders: This is just the number of prospects who said "YES!" to your offer and paid for a product. Pretty straightforward stuff, but vital to know in order to generate other numbers used to manage direct mail campaigns.
In this case, we'll say our promotion pulled 2,500 orders.
5. Response Rate: Another easy one – Response Rate is nothing more than Orders divided by Mail Quantity:
Orders:
Divided by Mail Quantity:
Equals a Response Rate of:
2,500
250,000
.01 or 1%
Comparing response rates is a great way to identify opportunities for beating a strong control and for boosting response and mailing size (and therefore royalties) in future promotions.
Let's say a new promotion you're testing for the first time produces a slightly lower ROI than their control. Many mailers would simply chalk it up to a failed test and move on.
Not me! I ask to see the Response Rate and Average Sale (see below) my mailing produced.
If the Response Rate is lower than the control, I figure that my headline and deck copy aren't doing a good enough job of grabbing the prospect's attention and converting that attention to readership. So, I go to work on the headline and intro copy.
If the Average Sale is lower than the control, I go to work on strengthening my two-year offer (if it's a newsletter promotion) or the larger purchase option if it's a supplement or other product.
And of course, if both are lower than the control, I work on both. You'd be surprised how many times you can turn losers into winners just by taking another swing at them!
6. Gross Revenues (GR): This is simply the total monetary value of the products your promotion sells. For our purposes, we're going to say we generated $412,500 in total sales. Our Gross Revenues are $412,500.
Again – we don't use this number much by itself. Instead, it is used to derive the more crucial numbers below that directly affect our mailing plans.
7. Average Sale (AS or AUS): Remember how I said that our promotion offers two choices? The prospect can either buy the standard version of our product for $99 or the deluxe version for $179.
So some customers will only spend $99 for the "Standard" version of our product, while others will spend $179 to get the "Deluxe" version. (Or, if it's a subscription to a newsletter, some will pay $99 for one year and others will pay $179 for two years.)
To calculate Average Sale, just divide Gross Revenues by Total Orders:
Gross Revenues:
Divided
Equals an Average Sale of:
$412,500
2,500
$165
This is an incredibly important number. For reasons we already explored, it's crucial to know how good a job your promotion did in bumping prospects up to the higher order. And the best way to do this is to compare the Average Sale each promotion generates.
8. Fulfillment Cost (FC): Now, you spent $125,000 on your mailing and got $412,500 back – a profit of $287,500, right?
Whoa – not so fast there, Sparky! There are costs associated with accepting all those orders.
For starters, there's a cost of, say, $5.00 per order for return postage, credit card processing fees and inbound telemarketing (the 800 number service that takes orders for you).
And don't forget: We have to actually fulfill those 2,500 orders. That's going to cost money, too.
Now, let's say it costs you $20 to manufacture and ship the $99 standard model and $30 for the deluxe $179 model.
And since you loaded up the offer for your Deluxe model, 2,062 of your 2,500 buyers (about 82.5%) went for it while only 438 (17.5%) paid $99 for the Standard model.
So … The Number of Deluxe Buyers: 2,062
Times Fulfillment cost per Deluxe Order: $30
Equals Fulfillment Cost for Deluxe Orders: $61,860
The Number of Standard Buyers: 438
Times Fulfillment cost Per Standard Order: $20
Equals Fulfillment Cost for Standard Orders: $8,670
Then you just add it all up …Fulfillment Cost for Deluxe Orders: $61,860
Plus Fulfillment Cost for Standard Orders: $8,670
Plus Order-Taking Costs: $7,500
Equals a Total Fulfillment Cost of: $78,030
Of course, this is just an example – and depending on your product and offer, you may have other costs associated with fulfilling your orders. If so, you add them in, too.
Plus, some direct marketers choose to omit certain costs from this calculation. In the newsletter publishing industry, for example, some publishers don't include the cost of publishing and mailing monthly issues to subscribers. They figure they'll get enough early renewals to more than cover that.
And really aggressive, growth-oriented publishers don't even include the cost of the free gifts (usually printed reports) they send to new subscribers – pretty much for the same reason.
By ignoring costs that are quickly offset in each new subscriber's first 30, 60 or 90 days onboard, newsletter publishers show higher Net ROIs (see below) on their best lists and are able to mail more names, therefore growing their subscriber files faster.
9. Fulfillment Cost Per Order (FC/O): Simple – this is just your Total Fulfillment Cost divided by Total Orders …
Total Fulfillment Cost:
Divided by Total Orders:
Equals Fulfillment Cost Per Order of:
$78,030
2,500
$31.21
Here's another opportunity to turn a losing promotion into a winner – or a winner into a bigger winner.
See, for many mailers, all that really matters is the Net Return on Investment (we're getting there). And there are only four ways to increase Net ROI:
Cut mailing costs
Boost response rate
Boost average sale
Cut fulfillment costs
We've pretty much covered "A," "B," and "C" above. But cutting – not just ignoring, but actually cutting – fulfillment costs can be an equally powerful tool.
Combining or eliminating premiums can often cut costs without affecting response rates, for example. A couple of months ago, I created a test panel for one of my controls in which we offered two fewer free gifts with each order … cut Fulfillment Costs Per Order by nearly $20 … and response, average sale and Net ROI all INCREASED!
10. Net Revenue (NR): NOW it's time to start counting your profits – by subtracting your Mail Cost and Fulfillment Cost from Gross Revenues:
Gross Revenues:
Minus Mail Cost:
Minus Fulfillment Cost:
Equals Net Revenue of:
$412,500
$125,000
$78,030
$209,470
This of course, is a very important number. If it's negative, you have a loser on your hands. Positive, and you're generating new customers at a profit.
And as we're about to see, if you're making too much or losing too much on your new customer acquisition mailings, you're messing up.
11. Net Revenue Per Order (NR/O): Just divide your Net Revenue by Total Orders:
Net Revenue:
Divided by Total Orders:
Equals Net Revenue Per Order of:
$209,470
2,500
$83.79
Frankly, I don't use this number much. But it's nice to know, I guess.
12. Gross Return on Investment (GROI): If you want to know how well your mailing did overall – without coloring the number with fulfillment costs – you want to know your Gross Return on Investment.
To find it, just divide Gross Revenues by Total Mailing Cost:
Gross Revenues:
Divided by Total Mailing Cost:
Equals Gross Return on Investment:
$412,500
$125,000
330%
13. Net Return on Investment (NROI): Divide Net Revenues by Total Mailing Cost:
Net Revenues:
Divided by Total Mailing Cost:
Equals Net Return on Investment:
$209,470
$125,000
168%
This is the primary number I use when gauging the effectiveness of my promotion and comparing it to other packages mailed against mine and to other controls my client has had.
It's also the key to optimum growth for business owners and marketing execs. When you're mailing every list you can get to come close to break-even and producing a Net Return on Investment of 100%, you're generating max numbers of new customers for free. You're getting all your money back plus new customers.
When Net ROI is above 100%, you're leaving customers on the table – a crime that will come back to bite you on the keester in coming years.
Why? Because every customer you could have gotten but didn't get is worth hundreds, perhaps thousands of dollars in additional sales each year.
On the other hand, when Net ROI is under 100%, you either have to 1) Boost response, 2) Boost average sale, 3) Cut mail costs, 4) Cut your fulfillment costs to the bone, 5) Eliminate marginal lists from your mail plan (and shrink mailing size) – or all of the above.
14. Cost Per Order (C/O): Also known as "New Customer Acquisition Cost" when used in mailings to non-customers, this number wraps everything up.
Since we made Net Revenues of $209,407, our "Mailing Loss" in the equation below is expressed as a negative number. So is our Cost Per Order:
Mailing Loss:
Divided by New Customers Generated:
Equals Cost/Order:
-$209,407
2,500
-$83.76
Again – ideally, your cost per order for new customer acquisition mailings (mailings sent to non-customers) should be $0. A negative cost per order (or a Net ROI) over 100% means you're simply not mailing enough names.
Adding less productive mailing lists to the mix will bring your Cost Per Order up to $0 and your Net ROI down to 100%.
Other Numbers You Need to Know
15. Creative Index: Creative indexing ranks the relative selling power of the direct mail packages you test and use.
Your Creative Index is derived by dividing the Net ROI that your new test promotion generates by the Net ROI being generated by your control – to the same lists in the same mailing.
Or …
New test promo Net ROI:
Divided by control package Net ROI:
Equals a test promo Creative Index of:
200%
100%
2 or 200%
You can also use creative indexing to gauge how quickly response to your control package is declining relative to every other control you've ever had.
Or if you want to get really fancy, you can average the Net ROI of all new packages produced for any given time – the last six or 12 months, for example, or even throughout your product's history or even your entire company history.
Using an index number to compare the selling power of each new package with your historical norms can give you a clearer perspective on just how strong your new control really is, and in some cases, give you a clearer picture of your chances for improvement.
16. List Index: Smart marketers know how every list they mail typically performs when compared to every other list they've tested – and they use something called "List Indexing" to manage this information.
Each mailer I work with does this slightly differently – here's how one of my favorite clients does it.
First, the client identified the 20 mailing lists that have worked best for him over the past five years, and then figured out the Gross ROI this group of lists has produced for him on his average mailing.
Then, he figured out the average Gross ROI every other list he's mailed has produced for him, and used these numbers to create an index number for every list.
Example:
Gross ROI for "A" Lists on an average mailing: 200%
Gross ROI for List "X" on an average mailing: 150%
Mail List "X" Index Number: .875 or 87.5%
Gross ROI for List "Y" on an average mailing: 100%
Mail List "Y" Index Number: .5 or 50%
Gross ROI for List "Z" on an average mailing: 50%
Mail List "Z" Index Number: .25 or 25%
Using these numbers, my client can now mail new test promotions only to his "A" lists, thus cutting his risk of loss on new sales copy.
If his "A" lists pull at their historical average – 200% Gross ROI – he knows that the same promotion mailed to …
… Mail List "X" is likely to generate a Gross ROI of about 87.5% of that: About 175%.
… Mail List "Y" is likely to generate a Gross ROI of about 50% of that: About 100%.
… Mail List "Z" is likely to generate a Gross ROI of about 25% of that: About 50%.
In short, list indexing allows you to forecast how lists you haven't tested with a particular promotion package will perform … enlarge the size of your rollouts more quickly … mail to more prospects per year … generate more customers per year … and pocket greater profits each year.
17. Doubling Date: While list indexing can help you do bigger mailings, knowing your Doubling Date can help you do those bigger mailings more times each year.
A doubling date is simply the number of days after you receive your first response that you will have received 50% of the money you can expect the mailing to generate.
By doubling the numbers you've achieved by your doubling date, you can accurately predict what the final response will be for each creative test panel and mail list test panel in your mailing – WEEKS before you'll have the actual, final numbers.
This allows you to begin planning each subsequent mailing sooner, thus enabling you to execute more mailings per year … bring in more new customers … etc.
To calculate a doubling date, I use a spreadsheet like this (the column with " …" is where Day 4-Day 59 would go): Mail First Day Day Day Day
Date Response 1 2 3 … 60
Mailing #1
Gross Revenue 1/1/2004 1/7/2004 $1,356 $1,613 $1,870 … $0
Cumulative Gross $1,356 $2,969 $4,839 … $412,500
% of Total 0.33% 0.72% 1.17% … 100%
Mailing #2 3/15/2004 3/23/2004 …
Gross Revenue $1,423 $1,657 $1,891 … $0
Cumulative Gross $1,423 $3,080 $4,971 … $435,432
% of Total 0.33% 0.71% 1.14% … 100%
Mailing #3 4/30/2004 5/3/2004 …
Gross Revenue $1,238 $1,435 $1,632 … $0
Cumulative Gross $1,238 $2,673 $4,305 … $389,543
% of Total 0.32% 0.69% 1.11% 100%
AVERAGE % 0.32% 0.70% 1.14% 100%
Here's how I use this sheet …
FIRST: To the right of the line labeled "Gross Revenue" in the first column, I list the amount of money that came in each day from Day 1 through Day 60.
SECOND: On the next line, marked "Cumulative Revenue," I add that day's revenue to the cumulative revenue from the day before to give me a new cumulative revenue number.
THIRD: On the next line, labeled "% of Total," I divide each day's cumulative revenue by the total revenue the promotion had generated by Day 60 – this gives me the percentage of total revenues that had been collected as of that day.
FOURTH: I add the same information for every mailing the client has done in the last 12 months.
FIFTH: On the last line, I simply add up all the "% of Total" entries above and divide by the number of mailings listed. This gives me the client's average "% of Total" number for each day in his promotion cycle.
SIXTH: I simply look across the bottom line until I find the day when "% of Total" is closest to 50%. That day will be our doubling date until this sheet is updated six months to a year from now.
IMPORTANT: 3 things …
Thing One: As you prepare this spreadsheet, pay attention to how your doubling dates change at different times of the year – particularly during major holidays like Christmas/New Years, during tax time and in the height of the vacation season in July.
It's a good idea to average these mailings separately, as doubling dates will be farther out when the mail is slow or when prospects are slow to read your promotion.
Thing Two: If you use a variety of formats, be sure to average your mailings again by format. See, some types of mailers have greater perceived value than others and prospects hang onto them longer.
While plain vanilla #10 packages are often round-filed immediately, self-mailers that look like magazines (magalogs) often get tossed onto a coffee table or next to the privy for later reference. When I first began using magalogs in the 1980s, for example, Doubling Dates jumped 33% – from an average of 14 days to 21 days!
So after you've established an overall Doubling Date, it's a good idea to group your promotions by format type and compare how the Doubling Dates vary.
Thing Three: If a major news event broke while one or more of your promotions was in the mail, it may have pushed your Doubling Date w-a-y out – or even killed response altogether.
When folks are obsessed with a current event – the OJ Simpson trial, 9/11, or the build-up and actual fighting of the Iraq War, for example, they're watching TV and NOT reading their mail.
So take that into consideration, too. What to do about it? In these days, when sensational news stories seem to be breaking almost weekly, probably not much. Just keep it in mind as you review your Doubling Dates.
18. Customer Lifetime Value: This is arguably the single most important number in your company. It tells you how much each new customer is worth to you – and how much you can comfortably spend to generate one.
See, Smart Companies don't do promotions to non-customers to make sales. They do them to make customers. And then they work their customer file (where you get by far the highest Response Rates and Average Sale at the lowest Cost Per Sale) like crazy.
To determine average customer value, you must first define what an "active" customer is. Usually, I begin by saying, "An active customer is someone who has made a purchase in the last 12 months."
Depending upon the type of product you sell – onesies and twosies … or subscription/membership offers … or continuity/negative option offers … or combinations of all of the above – you may want to define "active" in your own way.
Once you know what an active customer is, it's time to look at the history of every customer on your file and determine how long each one stayed "active." This is probably going to be too complex a task to do yourself; my guess is you'll have to get the IT guys involved.
Typically, they'll tell you that your average customer stayed active for some number of years after his or her first purchase. In my industry, the number usually turns out to be somewhere in the vicinity of six or seven years.
Next, you need to determine how much Net Revenue your average active customer generates for you during his lifetime. Again, this is a job for the IT guys, and the resulting number will be your Customer Lifetime Value.
You can also look at how much Net Revenue the average customer generates in each year of his life. This is a crucial benchmark that lets you gauge how good a job you're doing at increasing Customer Lifetime Value during your customers' lifetime.
And you especially need to know how much your average new customer brings you in his or her first 30, 60 and 90 days on your file. This number is your "New To File Net Revenues." It's important because if you want to put the pedal to the metal – trigger maximum growth – you may want to "borrow" part of this number to subsidize your new customer acquisition mailings. |
