A wise pundit once said: “Junk mail is only junk mail if it's junk.” Direct mail, if used wisely, is an ideal source for building leads. However, it is a method that must be approached with much caution. Issues such as to whom you will mail (property owners), when you will mail (timing is a major factor), how often you will mail (one-shot programs are seldom effective), how you will tie this into other advertising campaigns (TV, print, shows, canvassing), what you will mail (yours has to stand out from the hundreds of other pieces homeowners are likely receiving each month) are all critical. Each must be considered, separately and together.

Who and How On the positive side, a well-designed piece by a home improvement company sent to targeted markets, such as property owners in the vicinity of completed jobs, past prospects, and previous customers, or a lead list produced as an aftermath of a show, can be effective even if they return only a small percentage of the mailing as leads.

Don't believe it? Let's look at an example. Say we send 15,000 pieces of mail at an average of $1 per piece including creative, production, and postage costs. That could produce as few as 100 leads (90 workable leads) grossing 16 sales and a net of 12 sold jobs, at an average cost of $8,000, after rescission and credit rejection.

Marketing Cost The marketing cost would be 16%. Yet the gross lead return, 100, versus 15,000 pieces mailed is less than seven-tenths of 1% (0.0066). That's because the unit sale is approximately $8,000. If the unit sale was $4,000, marketing costs would be at 32%. If the average sale was $16,000, the marketing costs would be about 8%.

Using effective database management allows you to target leads not presented to, or those presented and not sold. They're still prospects and worthy of a strong follow-up. —Dave Yoho is president of the oldest and largest consulting group serving the home improvement industry. His recently published book, Have A Great Year Every Year, is available through most major bookstores. For information go to www.daveyoho.com or phone 703.591.2490.