It's all very well producing the perfect creative, but as marketing budgets are squeezed, does it give you value for money? Mike Colling, managing director of Mike Colling & Company, finds ways to help you maximise the value of your production and creative.

There's a crucial aspect of direct mail that should drive you to make careful investment in production and creative – addressed fixed mail is a very high fixed-cost medium. It's difficult to do cheap direct mail because you’ve got to factor in the cost of postage and of data.

Get ROI on your data and delivery

So if you’re investing in expensive delivery and data it doesn’t make commercial sense to skimp on production. If you skimp on production and creative you’ll end up getting a poor response rate and you won’t be able to get the return on the investment you’ve already made on data and delivery.

So when you're planning and developing your campaign, consider the following:

What’s the maximum response rate we might achieve from this audience?

Instead of considering ‘what response rate would we need on a cheap pack to break even’, think about the maximum response rate you could possibly achieve from this mailing. That should help you work out what can you afford to invest in terms of production and creative.

Often, the standard marketing approach is 'how can we minimise costs?' With direct mail, try  thinking ‘how can we maximise the amount we can afford to spend to get the maximum response?’.

Campaign costs

With a cheap mailing campaign typical costs could be: 30% data, 50% postage and 20% creative and production. This may give you a response rate of 0.5% or less.

If you invest in creative, your data costs stay the same so the data cost proportion falls to about 12%, mailing costs will go up a bit because it's pricing in proportion, but they will fall to represent about 25% of total costs, leaving production costs at about 63%. So the overall costs of mailing have gone up by about two and a half times but your response rates have gone up by more than four times.

Most importantly you're spending money on the things that consumers really value (creative and production) as opposed to on fixed things (delivery and data) which they don't.

DMA award winner Southern Electric used an expensive pack but got a 44% response rate and this is a benchmark that can be achieved. Similarly Morgan Lovell used fabulous production values to market a relatively dull product (office furniture) and made it interesting and engaging.

Tip Look for industry benchmarks. Award winners are often good sources of benchmarking and you can see what the best of the best achieve. So often media planners set themselves a 1% response rate target for direct mail, but raise the bar and set a 10% response rate. Then you can consider ‘what do we need to invest in creative and production to achieve that?’.

Plan how you use your data

Think about how you use data within the mailing. Whether it’s your own, or you’re buying it in, don’t just use it for addressing. True personalisation means you’re using the data you’ve got available to give the reader a really tailored personal experience of your product; showing how it’s relevant to them.

So for a charity we’d be thanking them for the support over the number of years they’ve supported the organisation, for the total amount of money they’ve given over that time, then illustrate how we use that money. You can even reference one of the projects they’ve previously supported or appeals they’ve responded to, to give them an update.

So you’re not just sending out a Dear John letter, you’ve got a piece of creative thinking that is executed at the individual level.

Warm customers

If you're mailing your own customers, it’s about understanding the transaction that they've previously had with you, as well as the different facets of the relationship the customer currently has with you. You can show you understand them by feeding it back to them.

Cold customers

If it’s cold mail, think about how your product or service is more relevant to them. So tailoring it to a group they belong to, area they live, their age, their family structure, all of which is available from data sets you’re using.

The value of everything in the pack

People often approach putting together a pack from a cost point of view; they’ll put in an extra item to be able to change the VAT status on the pack. But do you want to put four or five separate items in this pack, or would you be better off with a highly personalised one-page letter?  

Can you do something simply in a letter that’s data driven? Or can you create something that involves and engages your audience with four or five different pieces? A more complex pack might contain audio-visual – DVD or CD, a personalised mini-brochure; or a peel-off voucher could be the device that gets your audience involved.

Tip Ask yourself, 'What have you got to say to the customer that’s interesting?' If you can refer to an event or purchase from their past relationship, go with that. If you’ve got a myriad of dimensions to your service – a range of product lines or different regional distribution – the pack can reflect that choice and sophistication.

Latest production techniques

Look for new formats and techniques that will stand out with consumers. Direct mail has been criticised in the past for not being strategically driven – and accused of being format or technique-driven. But there’s nothing wrong with adding a layer of production technique to a solid strategic foundation.

The biggest advance in this is with digital printing. It allows you to put a sheet of white paper into a machine and for a unique, fully personalised letter to come out of the other side. Every copy can be different.

For example, Carphone Warehouse produces regular mailings with digitally printed booklets. Typically, it uses these as an after-sales service or to encourage customers to trade up. So it sends personalised pieces with your name on the front, your phone model, the network and plan you're signed up with, the number of minutes and texts you've use. It's highly personalised.

Holiday companies make a similar use of the same technology: they put tickets in a booklet, there's a diagram of where your seat is on the aeroplane, they send you parking information, personalised excursion details for the resort, specific hotel information and personalised luggage labels. All of this is designed to engender loyalty and also maximise revenue from you.

Tip Attend trade shows. Go to FEDMA, look overseas – or in MMC's Creative Showreel or Case studies section and root out the award winners for inspiration.

Back in the 1980s, if you created a proper plastic credit card and personalised it with the recipient’s name, it generated a huge uplift in response. It was pure technique – it added no value whatsoever – but while it was new, the consumer perceived this piece of plastic to have some real value.

Value for money

A number of clients are now using Eastern Europe and China to hand-assemble quite complex packs. It's more cost effective if boxes with some form of incentive, toy or involvement device are hand-assembled offshore and then shipped back into the UK.

Also take advantage of Royal Mail's sustainable mail service. All of us should be using recycled materials or materials from sustainable producers: not just paper, but ink, the window element and padded envelopes. Royal Mail is introducing a discount for those using sustainable products.

Time your arrival

There are few opportunities in the day where you can get a consumer to stop and spend time with you. Opening the post is one of them. If you invest in creative and production, so you’ve got a highly personalised piece or one that is creatively engaging, you can make the most of that time the consumer spends with you.

Please note, you should obtain advice from a specialist data protection solicitor before embarking on any direct mailing using personal data.