Direct mail is booming among high-tech marketers
 
* Marketing Logistics, a research firm that monitors the direct- marketing industry, reports that mail-order sales of personal computers, consumer electronics and related products reached $1.5 billion in 1985. Business-to-business mail-order sales for computer software and data-processing supplies for the same year were $1.7 billion.
 
* According to a survey as long ago as in the July 1986 issue of Family Computing, 72 percent of personal computer owners said they had purchased computer equipment or software by mail. Half of these buyers cited lower prices as the most important reason they buy through the mail. Imagine what the numbers would be today!
 
* The Direct Marketing Association, a trade group, reports that revenue from direct marketing for all product categories, now around $44 billion, is growing 10 percent a year--about twice as fast as retail.
 
But despite direct mail's appeal to the high-tech industry--it allows marketers to target their select audiences without spending big advertising dollars, and is a natural for products that face stiff competition for dealer attention--direct mail remains a mystery to many high-tech marketers. They view it as an advertising medium filled with more unknowns than knowns, and are reluctant to commit to large-scale programs.
 
What works, they ask, in high-tech direct mail? What doesn't? Is high-tech fundamentally different from regular direct mail? Or do the basics of good direct mail apply equally to all product categories? Can sophisticated products and systems be sold directly through the mail? Or is direct mail appropriate for lead-generation only?
 
HIGH-TECH MARKETING bounced these and other questions off nearly a    dozen high-tech marketers experienced in direct mail. Although their answers were as varied as their products, they did provide some general guiding principles. Boiled down, their advice was simple Never underestimate the importance of testing and tracking, of stressing benefits and offering guarantees, and of sticking to your "best-shot" mailing lists.
 
  A sampling of the formulas these direct marketers use follows.
 
The price is right. According to Ken Sullivan, marketing manager of Soft Logic Solutions Inc. of Manchester, NH, price is a key element in selling software through the mail. For the past two years, Sullivan's company has used direct mail to sell microcomputer software packages priced at approximately $50 per program.
   
"In microcomputer software, any product priced at $100 or under is basically an impulse buy," explains Sullivan. "Over $100, it becomes a major decision that the customer has to think about. At $50 to $100, it's less of a decision.
 
Sullivan's basic message Get the reader to respond today. The longer he takes to think it over, the less likely he is to respond at all.
 
Soft Logic mails 250,000 to 300,000 pieces a month, and Sullivan considers each mailing a "test." That is, he expects to gain specific knowledge that will help him improve his response rate every time he mails a new package.
 
Soft Logic has tested many variations and offers, including mailings that offer one, two, three and four products. Sullivan says that mailings offering two related products, with a discount on the second product if a customer buys the first, seem to work best for him. He considers a mailing successful if it pulls 1.2-1.3 percent response.
 
Soft Logic uses a "standard" direct-mail package consisting of a sales letter, brochure and reply card. Sullivan is very particular about the way his mailings are written and designed.


"To begin with, don't use a teaser on the outer envelope," he says. "This makes it look like junk mail. People will throw it away.
 
Use a short letter, with short paragraphs. The longer the letter, the less appeal. People don't want to read. They will breeze through your package very quickly.
 
"On the front of the brochure, put a simple explanation of what the product does. Put a lot of information on the back page, including technical specifications and features."
 
Repetition is as important in direct mail as it is in space advertising. Sullivan says. Soft Logic mails repeatedly to the same list of software buyers, continually testing new letters and new offers.
 
Direct mail has been so successful for Soft Logic that every promotion the firm does is designed to generate a direct sale by mail. Even ads, once used to build image, now carry a toll-free number and copy that asks for the order up front. "For a $50 to $100 software package, it's better to get mail orders than leads," Sullivan says. "For us, mail order is very profitable, while leads are a waste of time."
 
Testing, testing. Eugene M. Schwartz, president of Bi-Intelligence Inc. of New York, has also had great success selling inexpensive microcomputer software directly through the mail. But unlike Sullivan, who has strong notions about how to structure a mailing, Schwartz tests many different approaches.

"You have to test everything--price, offer, headline, copy, format, theme,"    he says. "There are no answers in direct mail except test answers. You don't know whether something will work until you test it. And you cannot predict test results based on past experience."
 
Schwartz is something of a mail-order maven. In addition to running a successful company that sell health books by mail, he serves as a freelance consultant to major publishers and direct marketing clients. He has 35 years' experience in mail order and is the author of a book on the subject.
 
"The essential rules of direct mail are the same no matter what you are selling--including high-tech." Schwartz says. "A product is just a bundle of benefits; your direct-mail copy lets the consumer 'sample' the product's benefits before he buys it.
 
"Most marketers are very much in love with their product--and they    shouldn't be. The customers don't care about you and your product. All they care about is what the product can do for them."
 
Although Schwartz is known in the industry for his long copy ads and letters, he says that content, not length for length's sake, is what makes for successful direct mail. "If a person wants to know what you're saying, he'll read a 20-page letter, blurred, in 2-point type," he says, half joking. "Copy should be as long as is needed to make it complete and interesting."
 
Schwartz also contends that percentage of response--the yardstick by    which most companies measure direct-mail results--is a meaningless statistic. He says the real test of whether a mailing works is the profit it makes. Schwartz considers a mailing successful if it generates revenue 150 percent above "break even"--the point where the income from sales equals the cost of doing the mailing.