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Attracting new customers is five times more expensive than marketing to existing ones, and the competition for the dollars of each new customer is fiercer than ever. According to the Pareto rule (which has been proven by analysis of real consumer data), 80% of your revenue comes from 20% of your existing customers. And yet 44% of companies put more effort into acquisition campaigns than they do retention. Why? 

Because many companies are concerned with increasing their market share, and mistakenly perceive a wider customer base as a more lucrative customer base. But that assumption just doesn’t hold up when you look at the data.

According to consumer research, increasing your customer retention by just 5% can increase your profits by 25-95%, and repeat online shoppers tend to spend twice as much in the third year of their relationship with a brand as they do in the first 6 months.

In a nutshell: Not only do existing customers cost less, but they spend more. Which makes sense. It’s much easier to sell new products to customers who already have a relationship with your company and who trust the quality of your wares. Loyal customers are also more likely to refer new customers to your company.

Referrals = free acquisition. It’s a mistake to overlook the importance of retention tactics, or to lump them in with acquisition campaigns. Current customers and potential customers (prospects) are completely different audiences, and should therefore receive completely different messaging.

While there’s clearly a strong case to be made for increasing your retention tactics, both acquisition and retention have a role to play in your long-term marketing strategy. Before you put together your next campaign, take a few minutes to brush up on the difference between the two tactics, and how those differences should shape your direct mail piece.

Using Direct Mail for Acquisition

By definition, the audience of an acquisition campaign is most likely not familiar with your company. That means your direct mail piece will have to concisely describe who you are and what you do in addition to making a compelling offer that will motivate recipients to engage. An acquisition direct mail piece should seek to do the following:

- Get the recipient’s attention. Once a direct mail piece is picked up, 82% will receive at least a minute of attention, according to USPS data.

- Concisely summarize who you are and what you offer.

- Communicate what’s in it for the consumer. A brief list of benefits or differentiators will show prospects what they stand to gain from engaging with your business.

- Close with a strong call-to-action. According to the USPS, 79% of consumers will take immediate action from a mail piece. Make it clear what action you want them to take.

- Convey a sense of urgency. If the recipient feels there is a limited time to take advantage of the offer, they will be more likely to act.

Using Direct Mail for Retention

A direct mail campaign focused on retention is intended to strengthen the relationship you have with existing customers. This can be done by introducing them to new products, sending them exclusive offers, or suggesting relevant add-ons to products they have purchased in the past – anything that maintains a line of communication and encourages them to engage with you. You already have a leg up with a retention campaign because your audience is familiar with your company and is therefore more likely to stop and read your mail piece. Direct mail from a company a consumer has purchased from in the past receives a 14% higher response rate than a mailer from an unfamiliar sender.

A retention direct mail campaign should include: - Personalization. Over 90% of respondents to a USPS survey reported that personalization made them more likely to open a direct mail piece.

- Customize the offer. The largest benefit of an existing customer base is that you have past purchase history information, so use it! Use variable data fields to create customized offers for individual customers.

- Include a special promotion. People love being made to feel special. Including an “exclusive offer” for valued customers will make customers feel singled out and more likely to buy in to the offer. 

Learn more about why personalization matters in direct mail.A strong direct mail strategy combines acquisition and retention tactics. Tailor your campaigns to speak to their respective audiences, and your strategy will be even stronger.No matter what kind of campaign you’re sending, you’re going to need postage. Download our free 12-page USPS postal rate guide for information on rates, sizing, layout guidelines, and more.

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