Price is one of the five key ways of selling in direct mail (the others being benefits, interesting questions, humour and emotions).

Price is the most widely used of the five ways of selling - and is often used by default.  Whenever I challenge someone on price they always answers, "Ah yes but in our industry we have no choice - every one buys on price."

I have never found this to be true.   I believe that industries get into the habit of selling on price, and so everyone sells on price.  Then the customers get the hang of the idea that everyone sells on price and so go around just asking the price.    You only have to have one person say, "Oh no I can get it cheaper at x" to send you spinning back to your mailshot, urgently cutting the prices to compete.

Yet price cutting is usually a disaster.   The sums are invariably straight forward enough.

You sell a product for £10 and get £5 profit.   To get £30 profit you must sell 6 items.

You sell a product for £8 and get £3 profit.  To get £30 profit you must sell 10 items.

Which means to get the same profit as before (not more but the same) you must increase sales by 66%.  The question is, will a cut in price increase sales by 66%?   The answer is normally no, especially when everyone else is selling on price too.

But the fact is that customers do not have to think about price only.  If you tell them about price, they will think price.  If you tell them about quality, speed of delivery, uniqueness, add-ons, extras, style or anything else, they will reconsider.  Not all of them of course - some will stay say, you are more expensive.  But if you can give a reason why you are more expensive, then you have your answer.

My own company, Hamilton House, has never hidden the fact that we are more expensive than many of our rivals in the direct mail business.  And people do sometimes phone us up and ask why.  The answer is immediate and clear - we give you higher response rates to your direct mail.  Of course some people walk away - all they want to measure is cost.   But some quickly realise that if paying £50 more for a mailshot will give them an extra 0.5% response rate, they will be £500 better off rather than £50 worse off.

Selling on price can work - but never believe it is the only way forward.   I will conclude with one simple example from the publisher First and Best   - part of the Hamilton House group.   First and Best was selling books at £14.95 and worried about low sales - noting particularly that there was a rival selling at £12.95.   F&B considered going down to £12.95 or even lower, but finally decided on the opposite approach.   They took a forthcoming title, made the cover thicker, the paper thicker, the margins wider.  They called it a report rather than a book.  And sold it for £49.95.

Sales went down, of course, but profits per sale went up dramatically.   In fact sales were cut in half, but since the profit went up four fold this was a good deal.  The report was no longer seen as a rival to the £12.95 volume, the advertising was changed to reflect this, and everything was set fair.

Free analysis of your mailshot

This article is written by Tony Attwood, Chairman of Hamilton House Mailings Ltd.  If you would like to discuss the writing or design of your mailing campaign, or indeed a single mailshot, with Tony, without cost or obligation, just call 01536 399 000, or email Creative@hamilton-house.com   You can also send Tony a copy of your latest advert and he will call you back with his thoughts on how your response rate could be raised - again without cost or obligation.