Why Direct Mail No Longer Converts, and How to Fix It
To some of our friends in this industry, be warned. What we’re about to say may ruffle some feathers. Direct mail is deeply flawed. For advisors like ourselves, it’s a stand-by. Yet we’ve all struggled with the direct mail question. You dump thousands of dollars into a campaign because you don’t know how else to market your practice, and it just doesn’t convert.
Why is that? After years of studying marketing, sales funnels and client acquisition, we believe we finally understand the reasons behind low direct mail conversion. In fact, the problem isn’t direct mail itself – it’s how we’re using it.
In fact, we spent six years focusing exclusively on seminar marketing, spending six figures a year on direct mail. This experience taught us two important lessons:
- Direct mail companies have no vested interest in helping you solve your marketing problem. In fact, quite the opposite. Sending more mail builds their profits, whether or not it ever improves yours.
- The solution isn’t going to come from an IMO, RIA or the like. Broker dealers are paid on our production. If we advisors send out enough direct mail, some of us are going to write business, and the broker dealer will make money. For them, the risk is diversified across hundreds of advisors, whereas for us, it’s on our shoulders.
For us, these lessons were “aha” moments. We realized we weren’t going to find the answers within the industry, so we started looking outside it. What we found changed the entire picture. It’s called the pyramid of engagement.
Understanding the pyramid of engagement
Buying isn’t an isolated event. It’s a process. In fact, it’s a process that every client you’ve ever worked with has gone through. As a consumer, you’ve gone through it too. Sometimes it takes moments, sometimes years, but the steps of the process are the same.
To understand the process, imagine your market as a pyramid. Most of your prospects live at the bottom layer. People in this space don’t know that they need what you offer; they may not even know you exist. When your direct mail lands in their inbox, they don’t recognize its value, so they immediately throw it in the trash.
But if they realize they have a need, they climb to the next level up on the pyramid. On the level above that, they move into the research phase, usually going online to gather information and self-educate. From there, they climb into the analysis and comparison phase, which leads in turn to the interview and evaluation phase. Finally, they get to the very top of the pyramid: the point of decision-making.
Now, in the old-school way of doing business, we were told it doesn’t matter where someone is, to begin with – because you’re going to use your closing skills to warp them to the top. Your techniques and sales pressure are supposed to be enough to push them to a decision.
The problem is, it doesn’t work. Sure, you’ll close some business this way. But you’ll probably only be able to convert those who are already hanging out on those top couple levels. The lower levels, the colder leads, remain untapped; or worse, they leave your office frustrated, saying, “We’re not going to deal with someone who’s trying to sell us something.” But there is a different approach that does work. Let’s talk about the new-school way of doing business.
It comes down to commitment: high, medium, low
Remember, people on the bottom of the pyramid aren’t going to show up for a seminar. They’re cold. Those who are warmer may be ready to do something, but probably not something as intensive as that. Those at the top, the hot ones, are ready to sign up today.
If you send the same direct mail to all three groups, you’re going to get a few conversions from the top level, and not much else. That’s because your invitation is really only appropriate for those who are ready to make a big commitment. But what if you started to speak to the others as well?
The secret is in the calls to action (CTA). A high-level CTA requires a big commitment; it’s appropriate for a hot lead. A low-level CTA requires very little action; it’s appropriate for a cold or lukewarm lead. Now ask yourself, do the following CTAs require a high, medium or low level of commitment?
- Download this 20-page report
- Read this two-page case study
- RSVP for this seminar
- Visit our website
- Call our office
That’s a question you should being asking with every CTA you put out there. Instead of treating everyone as if they’re ready to buy today, we need to create unique offers for prospects based on their different buying temperatures.
Let’s say you pull into your driveway after work. You go to your mailbox and find an invitation to a dinner seminar. You look at the sender and see it’s someone you’ve never heard of. You have no idea who they are, if they’re credible, if they even know what they’re talking about, but here they are asking you to give an hour of your evening, really two or three hours door to door, to sit through their presentation.
But what if you opened your mail and found a piece that said, “Hey, visit this website and get this free report.” That’s very hands-off. It doesn’t require a lot. You might even go inside and do it.
If you’re thinking, that’s great, but it won’t pay the bills, you’re right. If a prospect downloads a resource, good for them, but you’re not closing business. What you’re doing, rather, is warming them up. The key here is to nudge people up the pyramid step by step until they’re ready to buy, instead of treating them all the same and inadvertently losing most of them.
Convert the hot leads, warm the cold ones
Every time you give a call to action, consider if you are asking a lot or a little. There is a time for both, but the vast majority of us ignore the opportunity hiding in low-level CTAs, and get fractional, half-a-percent response rates as a result. People don’t get married on the first date. They start with coffee, then dinner. As the connection builds, it evolves into a deeper relationship that deserves a larger commitment.
In other words, start with a two-minute video or a free report. Move on to a short e-course, build from there to an online seminar, then a live event. As your prospects’ buying temperature increases, they move up the pyramid, and you can keep them moving up and warming up by building in an offer at each stage.
Here’s an example:
- Level one. Make them aware of their need. Use a minimal commitment CTA such as read this blog, watch this video, read this case study.
- Level two. Help them gather info and compare options using a small commitment CTA such as give us your email and you can download this report. (You can follow up with them afterward.)
- Level three. Give them a chance to interview you with a larger commitment CTA such as attend our webinar, subscribe to an online video course or get a free analysis.
- Level four. Invite them to buy with a high commitment CTA such as attend a seminar or schedule an appointment.
You get the idea. And it makes sense, right? Still, it’s a dramatic shift from the way most of us have been using direct mail, and we’ve been doing it for years.
How to build direct mail campaigns that convert
To solve the direct mail problem, we need to match the offer to the buying temperature. The same goes for any other marketing channel we use. To generate a large list of interested prospects, first understand that most of them are in the middle or bottom of your pyramid. Give them a temperature-appropriate call to action, and you’ll generate five or 10 times more leads than before.
Add automation to that, and the results will be even better. If you know how to use technology, you can set up an automated nurture campaign to bring those prospects up the pyramid while you’re not even looking. When they’re ready to come to your seminar, you’ll see them there.
That’s the key to breaking free of this low-response direct mail marketing problem. Here are five actionable steps that sum it up.
- Create high value. Free reports, case studies and videos must be high-quality. You’re making a first impression and proving your own value. You want them to think, “If the free stuff is this good, how much better will the paid service be?”
- Educate, educate, educate. Make your website a hub of quality information to help prospects do their homework and to build their trust, demonstrating that you’re going to deliver value in your market.
- Make temperature-appropriate calls to action. The offer has the fit the segment you’re talking to.
- Nurture relationships and develop your list. By collecting emails in exchange for content, you can begin to build your own list instead of renting someone else’s. Once you’ve got a list, you can harvest seminar prospects from it over and over, and it costs you nothing.
- Follow up with further calls to action. Once prospects are in your funnel, you can periodically invite them to future workshops. We have advisors who consistently fill workshops with 25 to30 buying units from their own list this way.
How to maximize seminar attendance and solve direct mail challenges
If you want help achieving these goals, join us for a free online training and workshop called MaxResponse.
You’ll learn how to attract your ideal prospects with appropriate calls to action. We’ll talk about driving response to seminars with secondary offers, putting low-level commitments alongside high-level ones, so you can reach two audiences with the same direct mail piece and get twice the value for what you’re spending.
We’re also going to help you master the seminar conversion funnel, figuring out where the inefficiencies and opportunities are currently getting lost in your practice, and identifying how you can use automation to solve those.
Then we’ll talk about eliminating seminar and appointment no-shows. We’ll identify the momentum-killers that prevent people from moving forward in your sales process.
Finally, we’ll share our automated seminar marketing blueprint, which you can use to make sure you’re maximizing response all the way from invitation to appointment and every point in between. This will position you to spend confidently on direct mail, if that’s the medium you choose, knowing there’s no leakage in your funnel.
If that sounds helpful, click here and get registered today. Once you secure your spot, we’ll send some additional materials leading up to the call, so you can get the most value out of it. See you there!