The 40-40-20 Rule
Recently, I read a blog post written by a social media promoter where he bashed direct mail marketing and the USPS. The backlash to his post was impressive. Many, many comments from marketers and business owners alike criticized the writer. They said they know direct mail marketing works and they gave reasons why.
One business owner raised the 40-40-20 Rule as evidence of the importance of list work to counter the blogger’s contention that mail doesn’t produce results.
Yes, the old, old 40-40-20 Rule. I was a novice worker at a big insurance company years ago when I read my first magazine article about the 40-40-20 Rule. (Still have a copy.)
If this is the first you’ve heard of the Rule, I’ll explain it. If you’ve read about it before, now is a good time to review what it means.
The Rule says a successful direct marketing campaign is made up of these components:
- 40% offer
- 40% list
- 20% everything else
You’d think, as a copywriter I’d be offended to have my work shuffled into that 20% “other” category. But no. Good creative is important, but I’ve seen the Rule work. I’ve seen projects fail when clients spend 100% of their efforts on the 20%.
I know for a fact, people who are not professional copywriters or designers like to fiddle with and fuss over the creative. Instead, you should concentrate on your offer. That’s what you really have control over, and as the Rule says it’s 40% of your campaign. Regular readers of this blog know I’ve stated many times, you product (checking account, loan, whatever) is NOT your offer. It’s simply your product.
An offer is the enticement that gets people to consider your product. The age-old financial industry standby is free checking and a FREE GIFT. I emphasize the free gift in that sentence because it’s the offer. But your offer doesn’t need to be a gift or premium. For a financial product, you can make a rate offer. An opportunity to save money is an offer. Whatever special incentive you use, make it attractive and desirable. Remember, it’s worth 40% of your campaign.
You have somewhat less control over your list than you do your offer, but it still counts 40% toward your success. Ask for the most targeted list you can get. An obvious example and easy way to illustrate this idea is a homeowner list for a home equity campaign. You certainly want to exclude apartment dwellers from the promotion.
Here’s another, less obvious example of targeting. A few years ago, an ACTON Marketing client wanted to market a software package to colleges, universities and high schools. The product allowed schools to communicate news with students and parents and easily create an online newsletter. The savvy client wanted the mailing list to exclude intermediate school administrators because they had neither the authority to purchase the software nor the inclination to pass the information to someone who did. That’s targeted list work.
Talk to your list provider or your marketing agency and see how targeted you can make your list.
Your direct marketing campaigns, or any marketing efforts, will be more successful, generate more account openings, bring in more new customers, build deposits, and increase collateral successes if you follow the 40-40-20 Rule.
The 40-40-20 Rule was devised by respected direct marketing expert Ed Mayer (1907-1975). His marketing career spanned 50 years, beginning in 1928. Each year at the Direct Marketing Association (DMA) annual conference, the Direct Marketing Educational Foundation presents the DMEF Educational Leadership Award, a.k.a. the Edward N. Mayer, Jr. Award.
Here’s the system we use to compile lists of the best prospects for all sorts of projects.