Following the 40/40/20 Rule in Direct Marketing

Last week, the FEI tribe learned how intelligent SEO tactics can increase O-site traffic and consequently improve sales. This week, the tribe shifts from a micro- to macro-marketing focus with a discussion on the important 40/40/20 rule for direct marketing campaigns. Remember, fire = print.

Org angrily slapped a piece of mail on the conference room table.

“My name is not Arg!” he roared.

“Apparently, nobody involved with this direct mail campaign bothered to run a merge/purge or any other data cleansing exercise to improve recipient accuracy,” Marka said. “Speaking of which, list creation and management is one component of the 40/40/20 rule.”

“Which is what?” Org asked, starting to calm down from the mail blunder.

“The 40/40/20 rule identifies the three main components of a direct marketing campaign and quantifies the importance each one plays in its success,” Marka explained, as she started writing on the whiteboard.

• 40% of your time and resources should go toward your list/database.

• 40% of your time and resources should go toward creating the most compelling offer you can.

• Only 20% of your time and resources should be focused on the creative.

“Think about our last few direct mail campaigns,” Marka said. “Where did half our time and resources go?”

“Into creating a nice design,” Zoot replied.

“And how did that turn out?” Marka asked.

“Response rates have been falling over the past six months,” Zoot admitted sheepishly.

“My point exactly,” Marka said. “Balance is important for marketing success. A direct marketing campaign crafted and implemented with the 40/40/20 rule in mind will be more effective. Let’s talk about how we can put each component of this rule to work for FEI.”

Back to the whiteboard for Marka:

40% | The List: Keep It Clean and Up-to-Date

“Maintaining an accurate and up-to-date in-house mailing list will help ensure our promotions arrive at the right address with the right information,” Marka continued. “List ‘cleansing’ activities include merge/purging and de-duping at the resident, household and individual level to remove duplicate contact information.”

“FEI’s sales database is gigantic,” Zoot pointed out. “I’m not sure if we have time to comb through our gigantic database on our hands and knees.”

“Then, maybe we should consider enlisting a data management services company to standardize and verify the accuracy of our list. Address correction resources can improve our mailing campaign’s efficiency by keeping our list’s contact information up-to-date,” Marka said.

“Next week we’ll talk more about the offer and the creative, two other important aspects of a direct marketing campaign,” she added.

“I can hardly wait,” Org enthused, tossing the wrongly-addressed piece of mail in the trash.

Today’s FIRE! Point
The 40/40/20 rule identifies the three main components of a direct marketing campaign and quantifies the import role each one plays in its success. Maintaining an accurate and up-to-date in-house mailing list will help ensure your promotions arrive at the right address with the right information. If internal time and resources for list management activities are scarce, consider enlisting a data management services company to standardize and verify list accuracy. Address correction resources can improve your mailing campaign’s efficiency by keeping your list’s contact information up-to-date.

FIRE! in Action
List Building Creates Better Marketing

The Maids International created a “demographic snapshot” of past customers and used the data to build a list of prospects with similar characteristics. When mailed to, the targeted households yielded a 49 percent higher response rate than non-targeted names, and the mailing achieved a 105 percent increase in ROI over the company’s previous mailing.

Next week: Discussion of the 40/40/20 Rule continues with suggested best practices for the offer and design components.