Pushing the envelope.

Woody Allen said, "Eighty percent of success is showing up." Unfortunately, this isn't the case for direct mail. If a piece of direct mail simply and randomly "shows up" in the mailbox, it is most likely classified as junk mail and retired, unopened, to the garbage can--at which point it is not going to do a lot of good for your bank.

Luckily, there is another formula that can help bank marketers when it comes to direct mail. This old rule of thumb states that 50 percent of the success of any direct mail program is attributable to the mailing list; 30 percent, to the offer; and 20 percent, to the creative. The equation is also a good guide both for planning and executing the direct mail piece.

Let's look at each of these direct-mail success factors in greater detail.

The list

What would happen if you decided to throw a Super Bowl party, and you only mailed invitations to people who didn't know you, didn't like football and lived more than 100 miles away? Chances are that you'd have a pretty low turnout. Why? Because you started with a bad mailing list. And you'll end up with similarly poor results if you use a bad list in mailing to your bank's prospective customers.

So what exactly constitutes a good list? In a nutshell, a good list is one that is targeted, relevant and clean.

Unfortunately, these qualities can be difficult to uncover, so the best approach is usually to test different lists and list types (see the table of list types on page 42) to find out which ones are the most promising. Banks have a head start in the form of their MCIF (marketing customer information file), which is an in-house list that not only contains customer names and addresses, but also a wealth of information in terms of current financial product usage.

The individuals and businesses in the MCIF form an audience that has already chosen to fulfill some of their financial needs at the bank, so the list is relevant--and the bank mails statements to them frequently, so the names and addresses are relatively clean, accurate and up-to-date. For cross selling efforts, the MCIF is an excellent starting point. And because customer lists typically generate at least two times the response of rented prospect lists, a majority of bank direct marketing falls into this category.

When considering lists for new customer acquisition, the goal is still to be targeted, relevant and clean. In addition, here are some more recommendations:

* Look for a recent NCOA (national change of address) service so that contact information will be up-to-date.

* Ask customers for referrals--these tend to be relevant prospects with accurate contact information.

* Coordinate with advertising--for example, rent the direct response list of subscribers to a newspaper or magazine in which you will be advertising.

* Look into geo-mapping, which is a method that allows you to specifically target those customers from a list that fall within a certain radius of your branches. Research shows that a distance of three to five miles is typically the farthest that customers want to travel to do their banking, but this may vary between rural and urban locations.

* Append additional data elements to your list so that you can segment or target your list more effectively. Or investigate lists that have more selection criteria in the first place.

* Use modeling to identify those specific customers that have a greater propensity to buy.

The offer

The offer answers the question: What's in it for me? Sure, your bank is reputable, has good service and provides many different types of accounts and loans. But frankly, so do most other banks. When I come home and open a bank direct mail piece that has "shown up" without an offer, them is little incentive for me to get back in the car, drive to your bank and switch my accounts. A direct mail piece with an offer, on the other hand, provides that incentive and pushes a prospect to action. There are four basic types of offers:

Product features. The "product feature as offer" is a great option when your budget is limited and your product has a differentiating feature. Taking that product feature--an incredibly low rate on a home equity loan or free online banking with a checking account--and spinning it into an offer increases the perceived value of that financial product, or service.

Monetary offers. Money is almost always an effective offer. There are "money-off" offers such as $250 off mortgage closing costs. Money gifts can also be enticing: "Open a checking account and we'll deposit $10 into your account."

Giveaways. Gifts such as duffle bags, folding beach chairs, car safety kits, and free toasters might also be good offers. The perceived value of these items is often more than their actual cost when purchased in large quantities, making it more effective than an equivalent money offer.

Information offers. When selling a more complex or expensive product or service, an informational offer may be appropriate. Consider an investment strategy book when marketing wealth management services or an exclusive business report to boost response among small businesses.

Whenever possible, offers should have some connection to your bank, its products, its character and its brand. This will make it a more memorable offer--one that may linger in the mind of your prospect and cause him or her to act the next day or even the next week.

The creative

Creative is the Final part of the equation. While it is said that creative accounts for only 20 percent of the success of direct mail, it is still a very important ingredient. The creative, "after all, is what your prospect sees. By using personalization, variable copy, compelling messaging and relevant graphics, marketers can create a piece that will connect personally with the prospects on the targeted list. And the creative will also serve to frame the offer--and the bank itself--in a positive way that will generate response.

Good direct mail creative should set up a problem and then offer a solution. Some direct marketers explain this strategy by describing five P's: picture, problem, promise, proof and push. First, the creative should paint a picture for the recipient--a picture in which there is a problem or something missing. Then, lo and behold, the bank makes a promise to solve that problem. But marketing claims may ring hollow, so you provide proof in the form of past results, a guarantee or a customer testimonial. Then, just when the customer is starting to believe that your bank can solve his or her particular financial problem, you push an offer and give that customer an irresistible reason to visit your branch and open an account.

Because people are intimately involved with their money, bank direct mail tends to be read more thoroughly than other direct mail, provided, of court, that the recipient is interested. People want to know all the details, and so copywriting, which is always important, becomes even more critical when it comes to banking. Here are some tried-and-tree tips that you may want to consider for your direct mail copy:

* The first sentence of the letter and the P.S. are the most important because they are the most frequently read.

* Effective copywriters use the words "you" and "yours"--especially in banking--after all, it's "your" money.

* Consider teaser copy on the outer envelope as a way to increase the likelihood that prospers will actually open the piece.

* Take advantage of the HID Factor (fear, urgency and doubt) as a way to boost response. If customers are afraid that they don't have enough life insurance; if they feel a sense of urgency to lock into that low rate on their refinance; or if they begin to doubt that they have the best possible yield on their money market account, they will be more likely to act.

* Capitalize even more on the urgency factor by using "reply by" dates or specifying that a particular offer is available for a limited time only.

* Use testimonials as a compelling way to offer proof of your marketing claims.

* Question and answer formats are also an effective way to provide details about services such as debit card purchases or online bill paying.

When developing creative for your direct mail, remember that the goal is to maximize response. "Showing up" and making a good first impression may be important, but it doesn't help the bank's bottom line. With this in mind, make it easy for customers to respond and purchase your products by offering several response vehicles (i.e. mail, phone, Web, branch visit, etc.) that are convenient for them.

So, to recap, 50 percent list plus 30 percent offer plus 20 percent creative equals 100 percent success. You're done, right? Not so fast. Direct mail is an integral piece of a bank's marketing plan, and no campaign should be deemed complete until the results are measured and analyzed. First of all, you will need to have the results to enable benchmarking and forecasting. More important, however, is the fact that you will need to understand the results so that you can consistently improve your success over time.

Many banks turn to vendors, such as direct marketing agencies, printers, list brokers and modeling companies, for their expertise in developing, executing and measuring direct mail campaigns. But regardless of whether or not a bank uses out side partners, bank marketers need to manage the process and plan for success. After all, Woody Mien is a comic director, not a bank marketer, and in the direct mail game, "showing up" simply doesn't cut it.

RELATED ARTICLE: Make your direct mail stand out.

By Debora Haskel

Attract attention, generate interest and create a sense of urgency for your direct, mail by thinking creatively about what type of impression your mail makes in the mailbox.

Outer envelopes are the most important component. If the envelope doesn't get noticed, it Will not get opened. Your envelope has to attract attention in that pile of mail, generate interest for the recipient, and create a sense of urgency so it doesn't get put aside, or worse, thrown away unopened.

Change the size of your package to attract attention. Three out of the four envelopes in your prospect's daily "mail moment" will be 24-pound, white-wove, #10 envelopes. Envelopes that are bigger, smaller, bulkier or shaped differently than a standard #10 will attract attention. A large, clear window or a second window can be used to show off a colorful brochure, a plastic card or special offer to generate interest. Leading the reader inside with a provocative statement, question, promise of a benefit or limited time offer, creates a sense of urgency that gets your package opened immediately.

Interactive devices on your envelope also attract attention. These devices include side pulls, double windows, zip strips, labels and stickers, perfed reveals, and repositionable notes. Repositionable notes look like Post-It notes on your outer envelope. The USPS reports no operational problems getting these notes through the mail and surveyed customers report increases in response rates of up to 45 percent from this interactive device. Ask suppliers about interactive devices available for your program.

Lester Wunderman, the father of direct mail, says there are 19 things all successful direct marketing companies know. Three of the most important include:

The consumer, not the product, must be the hero. Talk about the consumer, not about your product. Use "you" and "your" not "I" or "we" when talking about your product or service.

Communicate with each customer as a prospect of one. Everyone wants to be appreciated. Make your offer and message relevant to your customer. If selling to women, show a woman using your product. Prospects should see themselves in your offer.

Answer the question, "Why should I?" Know your target's main objections and overcome them in your message and your offer. Remove the barriers to responding and reduce any perceived risk by showing your product or service is guaranteed and that it's the best offer for them.

Mail that gets noticed is mail that gets opened. Make your direct mail piece the highlight of the "mail moment" with a singular message, an intriguing way to get to it and an easy way to respond.

Debora Haskel is vice president of marketing with The Instant Web Companies (IWCO) in Chanhassen, Minn. www.iwco.com

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Mike Garret is vice president of business development at CPS Direct, a direct marketing agency located in Woburn, Mass. E-mail: [e-mail].