Direct mail has resurged in recent years. Here's how to get a good ROI on your campaign.
Successful construction businesses consistently generate new leads. This article discusses the pros and cons and how you can determine if direct mail is a good fit for your construction business.
With potential projects that are substantial enough to sustain a construction business for months to years, having a steady queue of available work is a must – and going dry at the end of a project can cause your high overhead to eat into profitability.
There are a number of marketing and advertising strategies you can try to generate more leads for your sales team, and among them is direct mail – a tactic seen as outdated by brands that prefer the higher-tech tactics of online marketing. But is direct mail still viable for construction companies, and if so, what's the best way to go about it?
The advantages of direct mail
You can't argue with results. Some construction companies have generated hundreds of thousands of dollars in new business by using a simple direct mail campaign. So what are the advantages that make it worth it?
- Immediate brand recognition. When people see your material, they'll immediately gain exposure to your brand. Even if they throw away the first or second postcard they get, you'll earn the benefits of repeated brand exposure. Then, if that customer needs to find a construction partner for a specific project, your brand is likely to come to mind.
- High targeting potential. Because you'll be hand-picking each address that receives your ad (or using highly specific criteria to automatically sort potential recipients), direct mail is a highly targeted marketing strategy. That means the people who are exposed to your ad will be more likely to take action in response to it.
- Information density. Direct mail affords you more information density than other forms of advertising. On a billboard, or in a magazine ad, you have a finite amount of space to work with. With a direct mail piece, you can include as much information as you'd like, such as a brochure with multiple pages.
- Easy tracking. A marketing campaign is only successful if you can prove its effectiveness. Proving the value of a direct mail campaign is relatively easy. You can use a custom 800 number or even a personalized URL to track exactly how many of your direct mail leads you converted. You can therefore easily tell whether your investment was worth it and what changes you'll need to make to your campaign in the future.
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The disadvantages of direct mail
There are some disadvantages to using direct mail. Some of the drawbacks include the following:
- The need for reliable lists. If you don't have a strong mailing list of recipients, your campaign isn't going to be effective. You can purchase lists from a provider, but it will typically add hundreds to thousands of dollars to the overall cost of your campaign. Your audience needs to be highly targeted and relevant to your business and the type of construction you do.
- High costs. Depending on what you're printing, direct mail can be costly, especially when compared to digital marketing strategies that don't require the production of tangible goods. Purchasing a list can cost anywhere from $0.01 to $1.00 per name, and the printing itself can cost up to several dollars per piece. On top of that, the cost for shipping is usually between $0.40 and $1.00 per piece (more for heavier pieces). Overall, that's a cost of a few dollars for each name on your list.
- Short-term returns. Direct mail isn't a long-term strategy. The pieces you send out will either end up in the trash or in somebody's Rolodex, and it's unlikely that your finished pieces will earn you more than a one-time value.
- Exhaustible resources. About 44 percent of direct mail pieces are thrown away without being opened or read. It's unlikely that those people will ever give you a return on your investment, meaning the more you use a specific mailing list, the lower your return will eventually be.
Is direct mail a good fit for your brand?
In addition to the advantages and disadvantages listed above, you need to consider some factors unique to your business to determine if direct mail is a good fit. Some examples include:
- Do you have a strong digital presence? If you're relying on traditional advertising tactics, direct mail could be a good fit for your business.
- Do you have access to prospective customer data? If you already have a strong mailing list, you can instantly increase the relevance of your campaign and cut the cost of buying names from a purchased list.
- Will you be printing in high volumes? Generally, the costs of each piece decrease with the more pieces you print. Direct mail becomes more cost-effective on a per-piece basis when you print tens of thousands of pieces (or more).
Direct mail isn't right for every construction company, but it can be effective if planned and executed properly. Spend time researching multiple marketing and advertising campaigns. If you pursue direct mail, make enough of an investment to make your investment and strategy count.