Q: Currently we are distributing our catalog by inserting it in our local paper which from the research I have done isn’t working. The Des Moines Register Subscriber demographics don’t match our demographics. We also distribute to all of our students within our school district, and then we direct mail to our mailing list which is about 2,000 people which include people that have taken our classes over the past three years. Our return rate on the catalog is about 70:1. What I would like to do is direct mail the catalog (as suggested by LERN) to our carrier routes which you provided to us. I have obtained printing and mail quotes in order to make this happen, and to be honest it is significantly higher than what we are paying to insert it into the paper. I am not surprised by this, but I am needing to convince my program manager that taking the risk is worth it. She is also looking at LERN’s suggested budget breakdown, and sees that promotion should only be 10-15% of the current budget. And at this time I would be drastically over spending if we went by that model. However, I am assuming that when you do this for the first time you have to take the risk and the hope would then be that your return would be higher thus justifying the risk. I am somewhat looking at it like we are starting a new program that it will take a year or two to rebuild. Our income averages per session around $100,000 currently. I have figured that it will cost us around $15,000-$20,000 to do the direct mailing portion – 80% carrier route. Please let me know if there is any other information you would like to know.

A: You have done a good job of analyzing your marketing. First, you are correct that newspaper inserts are not as effective as direct mail. You have already noted that the demographics of the newspaper readers do not match the demographics of your participants. This means that you are marketing to a lot of people who will never be your customers. It is very wasteful of your marketing dollars to market to people who are NOT your target audience.

In general, we also know that newspaper inserts are less effective as a means of distribution. People often discard the inserts without looking at them. The newspaper is seen as something to read and discard, so your insert has a much shorter shelf-life than a direct mail brochure is likely to have. In addition, the design and format of the insert are less effective in generating registrations than the design and format of a well-designed direct mail brochure. We also know that sending the brochure home with school children is effective for children in grades 1-5. After that, the brochures reach parents in significantly smaller numbers and are not an effective way to distribute the information.

While you are correct that it is more expensive to do direct mail, you are also correct that the potential exists to generate much higher response rates and thus generate enough income to offset the added cost and increase your operating margin as well. One thing that LERN recommends is that whenever you make a change in your marketing strategy, you test your new strategy and retain your existing one. That way, you eliminate the risk of having the new strategy fail and leave you in a worse position than if you had not changed anything.

In your case, we would recommend that you look at your carrier routes. Select some routes where you have a high number of participants and mail only to these routes. This would constitute a small percentage of your overall distribution. Initially, could simply do an overrun of your current brochure and mail it to the selected areas. When you have done this, you need to track the response to direct mail to your test areas and compare it with your response from the traditional distribution methods you have used. I am absolutely certain that your response rate will be higher from the direct mail brochures than from those inserted in the paper.

By conducting this test, which can be done relatively inexpensively, you will have data to show to your manager that will reinforce your point that direct mail option is more effective for brochure distribution. Ultimately, you will want to work with LERN to redesign your brochure so that you have a direct mail piece that generates the maximum enrollment.