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Direct Marketing Letter Design

Your group, as a marketing team have to provide a direct marketing letter (with no enclosed leaflet) selling Life Insurance for the company of Planet Zogg Ltd. The managing director has already decided that too many leaflets go out with a letter, which are then just discarded. Therefore the aims of the letter are as follows;

1 The letter will serve as an introduction to make consumers aware of the company "Planet Zogg Ltd"

2 The letter design will have a "non intrusive feel".

3 The letter will encourage customers to seek further information, but the quicker the customer response time the better.

4 The letter must be coded in some way in order to analyse response.

5 The pricing structure of the product is as follows:

Single person Family (4 persons) Family (8 persons) Family (>8 persons) ?14pm ?34 pm ?54 pm ?89 pm (pm=per month)

Your role is to design this letter and provide a report justifying its layout, style and content from a direct marketing perspective.Discounts are available if a customer signs up for the following periods:

Direct Marketing Letter Design

Report

To: Ivor Claim, Managing Director

From: May Linglist, Marketing Manager

Date: 8^th August 2005

Re.: Direct Marketing Campaign Letter

1 Introduction

This report proposes a text and layout for a direct marketing letter using techniques to maximise the response rate.

It is important to note that the letter will be competing for attention with many other items of direct mail: the average UK household receives 14.1 items every 4 weeks, with households in AB socioecomonic groups receiving 370 (www.dmis.co.uk). On average, 60% of such letters are opened, and 40% of letters read (www.dmis.co.uk: these up-to-date figures show a fall from those from the DMIS quoted in Brassington & Pettitt 2005: p366). To maximise the first figure, consideration should be given to the envelope design and messaging in addition to the letter.

The DMIS research shows direct sales from mailshots of complex insurance products like life policies are still relatively low, at 2% (www.dmis.co.uk). However, the value of the mailshot is more than the generation of sales in the short term. It may also:

• help raise awareness of Planet Zogg Ltd as a provider of life insurance
• open an ongoing relationship with prospects and customers
• provide marketing data such as response rates, cost per sale, and if the market aimed at is segmented, comparative figures for different segments

The proposed letter follows, with an explanation of elements of layout, style and content after.

2 Letter

Mr A Somebody 31^st August 2005

1 Any Street Ref: DB1

Somewheretown

AB1 2YZ

Dear Mr Somebody,

Peace of Mind: A Special Discount for You

Wouldn't you like to be sure that, if the worst happens, your loved ones will be financially secure?

That's why I want to introduce you to Planet Zogg life cover. Allow me to show you how we go that bit further than other insurers to give you complete reassurance.

We pride ourselves on combining some of the best rates and policies available with our friendly, jargon-free service.

• Life insurance from Planet Zogg gives you
• reassuring full cover, with no nasty surprises in the small print
• competitive prices to save you shopping around
• UK-based Planet Zogg customer service advisers to help you whenever you have any questions - we don't outsource to call centres, so you get the expertise you want

How do our prices look? You can get an even better deal by signing up for 2 or 3 years and there's a 10% early bird discount if you call us within 3 weeks of receiving this letter.

Of course, you'll want to know more about our policies before buying. We're ready to answer any questions you might have about Planet Zogg or our products, whether you want to take out new cover or change your current insurance. Why not call today?

Peace of mind is just a phone call away. Ring us on 01234 567890 within 3 weeks of the date on this letter, and you'll qualify for an extra 10% discount if you decide to take out a policy.

We look forward to hearing from you.

Yours sincerely,

Ivor Claim

Managing Director

PS Don't forget - you have only 3 weeks to claim your extra 10% Early Bird discount.

Call us today on 01234 567890 to find out more

3 Layout

The layout of the letter has several functions. It helps make the message clear and easy to read, and to draw the reader into the letter through its structure, ensuring that even if the letter is not read in full, important messages are still delivered.

The address in the top left hand corner of the letter must fit the window of the envelope and careful checks must be made that this is the case prior to printing the letters. It also serves to personalise the letter. The Direct Marketing Information Service's research found that 73% recipients rate correct addressing as very important, so the address functions as an indicator of attention to detail.

The Institute of Direct Marketing (www.theidm.com) suggests a number of approaches to layout that will increase response rate. Use of a heading encapsulating the offer and benefit stands out to the reader and encourages them to continue reading. After the opening, a 'PS' is the second most-read part of the letter, therefore is a tool to make an important point to anyone who might skim through the body of the letter.

The IDM also recommends creating visual interest through indented paragraphs, tables, bullet points and using variants of text such as italics and underlines. There are additional benefits to bullet points and tables: both can clarify information that if laid out within a paragraph, could be confusing for the reader.

As this letter is relatively short, there is a danger of making the layout too busy through excessive use of these techniques, so not all have been incorporated.

The text has been justified to the left. Fully-justified text, although giving a clean, aesthetically-pleasing margin on the right-hand side of the page, can also lead to uneven word spacing which makes the text harder to read, and the different line lengths of text justified only on the left make it easier for the eye to keep its place.

The font used is 12 point, recommended as a minimum under Disability Discrimination guidelines. Serif fonts (the serif is the small horizontal line at the bottom of the vertical line of an f or l) are easier to read than non-serif fonts (sometimes referred to as 'sans serif'), and the Times New Roman used for the letter is a serif font.

The letter keeps to one side of a page of A4. There is no reason why it should not be longer, but it is important that if the text is run over onto a second page, the break is mid-sentence to ensure the recipient turns the page and continues reading.

4 Style

The style in which the letter is written should take account of the recipient and be appropriate to their individual profile and circumstances, to the extent to which we are aware of them.

The use of names helps establish the letter as part of a potential dialogue between the recipient and Planet Zogg. Addressing a letter 'Dear Reader' or using some other generic term creates a feeling of an impersonal, untargeted mass mailing and may result in the recipient not reading further. Using the title and surname of the recipient rather than their first name conveys respect. Use of the name of a member of Planet Zogg staff as the sender of the letter is important to give the letter a more personal feel than being from an unnamed 'team' or individual. Using the name of the most senior person at the company implies that the recipient of the letter is important enough for the Managing Director to want to write to them.

Also creating a more personal feeling is the use of the first person singular (I/me/my), which underlines the writer of the letter as an individual addressing the recipient. There is some use of plurals (we/us/our), but these are to refer to the Planet Zogg team where necessary. Also important is the use of the word 'you': for example, 'A policy gives you' rather than 'A policy gives the insured' or 'A policy gives a person'; the word 'you' makes the letter more personally-addressed, again implying one person talking to another.

A non-intrusive feel has been stipulated as important for the letter. Intrusive marketing could be defined as that which reduces the control of the recipient by being overly 'pushy', or even threatening. Non-intrusive marketing seeks to establish a dialogue, talking with the recipient rather than at them. While a letter is a difficult medium to use to do this, it is important not to dictate to the consumer. Instead, several techniques are used to give the recipient a sense of control. Rather than telling him or her to look at the prices, the question is asked 'How do our prices look?' inviting the individual to form their own opinion. The description of Planet Zogg staff ready to answer questions again puts the recipient in control. It is up to them to decide to call the company and instigate further dialogue.

The style of the letter is short and to the point. Paragraphs are brief, containing one idea only. Sentences are short, and points are made impactfully as a result. Short words are used in preference to more complicated language; they are easier to take in because they don't take as long to read and they pack more emotional punch (Bird 1994: 223).

5 Content

The content of the letter includes the offer and the information surrounding it that can compel the recipient to respond to the letter.

As mentioned with regard to layout, the correct name and address is very important, and can have a significant effect on response rates. Initially, this is dependent on the list provider, but as the Planet Zogg database grows, it is important that name and address details are checked in conversation with respondents, or by inviting recipients to contact us in the event of their details being incorrect. The list provider should also check lists against those from the mailing preference service. Individuals register with the MPS if they do not wish to receive unsolicited mail. They are unlikely to respond to it, and by removing them from the list, the costs of the mailing are reduced and the letters that do go out are better targeted.

The date of the letter needs to be accurate because of the discount available for responding within three weeks. Careful co-ordination with the mailing house is therefore important. The use of phrases such as 'date as postmark' create an impersonal, 'mass mailing' feel to the letter. The reader is more likely to retain the letter and throw away the envelope than to keep both, and referring to the postmark complicates the call to action within a prescribed time.

The letter should still incorporate a time limit for the discount, even though dating the letter becomes more complicated. A request to respond within a specific period can increase response by between 12% and 50% (Bird 1994: 207).

The reference is important so that responses can be coded, and it is important that all staff taking calls note the caller's code. Using different codes allows segmentation of a database according to demographics, for example, and can provide information on which segments are most profitable or have the best response rates.

It is worth briefly noting the potential of coding letters when trying contrasting approaches. Two different letters could be sent within the same segment to gauge which letter generates the best response. In the event that this mailing, without a leaflet, produced disappointing results, measuring responses in a future mailing by sending some letters with leaflets and some without would help establish whether this was due to the absence of a leaflet or whether some other factor had caused the low response rate.

The heading should outline the offer and the benefit: a 'special discount' and 'peace of mind' respectively. Use of the word 'you' helps make the letter more personalised at its opening, drawing the recipient in. It immediately raises questions in the reader's mind: firstly, what discount, and secondly, how will I get peace of mind? They are likely to read further to find out.

The first paragraph introduces the company and product. It is not threatening, but makes a subtle reference to a risk that a purchaser must be aware of in order to buy. It also addresses the reader's motivations: there can be few exceptions to the rule that those with a family have an instinct to protect them. The second sentence invites the recipient to read further to find out how Planet Zogg differ from other companies: in a market where there are many mailings selling life insurance, and many competitors, differentiation is a key factor in the success of a particular firm. This is also helped by the Planet Zogg name - unusual and distinctive within the life insurance market.

The bullet points list features and benefits. While these could be addressed within the body of the text, bullets draw attention through a clearer layout. It is important to give the benefit as well as the feature: WIIFM is a common anacronym in selling, and stands for 'what's in it for me?' There is nothing in it for the reader if the feature - e.g. the competitive pricing - does not have a benefit - e.g. saves shopping around - for them, so this must be made clear.

The table, like the bullet points above, makes disseminating information easier for the reader. The final line of the table has been formatted in bold to draw action we would most like the recipient to take: to respond quickly, committing to a 3-year policy. It also emphasises the difference a speedy response can make, as well as the cost advantage of signing up for a longer term. Giving prices for an extended family invites the recipient to consider buying a broader policy than they might have initially considered.

The next step is to invite the reader to find out more. It should be noted that a significant proportion of those receiving mailings will already have some kind of life insurance: 40% of 25-54 year olds have bought a policy in the last 2 years (www.dmis.co.uk). The letter therefore needs to engage those who currently have no cover and those who are looking to renew, or who might consider changing from their current insurer.

The letter draws to a close with a reiteration of the offer and a call to action - which is repeated in the PS. Urging the reader to respond leaves them in no doubt about what to do next.

6 Conclusion

The layout, style and content of a direct marketing letter are all important considerations to maximise the response rate of the mailing. The best practice suggested in books and by organisations such as the Institute of Direct Marketing is the result of information from countless campaigns over the years and the monitoring of response rates, looking to see which techniques generate the best results.

The value of information gained from monitoring a mailing such as that planned by Planet Zogg cannot be underestimated, as it gives us marketing intelligence that can be applied in future campaigns, making them increasingly cost-effective and efficient at generating business for the company.

It is advisable to segment the list of recipients and to tailor letters according to the recipient's profile. For example, mailing lists are available categorised by size of household, age and number of children. There is evidence that the more targeted the letter, the better the response rate, while badly-targeted letters are quickly discarded. If it helps targeting, several different letters should be used.

Once the letter design and text is decided, it is advisable to test it on a sample from the database to check response prior to sending out a larger-scale mailing.

The response is not wholly dependent on the letter: timing, packaging, list quality and the offer are all influential on whether a recipient decides to respond to the mailing. However, the letter is one of the main elements of potential success or failure, hence time spent researching techniques to improve response rates and applying them in the letter may have a considerable bearing on the success of the campaign.

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