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Collection agencies are relentless about generating response.  It’s their business.  They’ll send letters and call you to get you to pay.  They’ll even send Luigi to your house to re-possess your car if they have to.

You see, they have a system.  A process.  And it works.  In this article we’ll show you how to use these secrets of collection agencies to get response rates as high as 17% from your direct marketing campaigns.  It can be done, and it is remarkably easy.

Collection agencies are famous for sending a 3-step letter sequence to get your attention to respond.  The first letter arrives from the junior collection agent, is professional, and requests payment with a deadline.  If you don’t respond to the first letter, the manager sends off a letter with more terse language, a deadline and a penalty if you fail to respond.  Finally, if you still don’t respond you get the dreaded Final Notice letter where if you don’t respond a fleet of muscles and moving trucks will be hauling away that big screen TV of yours.

Imagine flipping this 3-step letter sequence used by collection agencies 180 degrees.  Negative karma becomes positive karma.  Now you have a winning marketing strategy to get your prospects to respond at unbelievable rates.

Here’s how it works:

Your Target Audience
First you need to have a very narrowly defined list to work from.  Ideally 1,000 – 2,000 names max as anything more than this will make the project challenging to manage.

If you live in the B2B world, recommend you select a specific SIC code in your market to target.  For example, all attorneys or furniture stores.  With this strategy you can select a vertical market, extract maximum response from that vertical and then re-apply this strategy to a new vertical market.

If you are a B2C marketer, recommend you select a specific demographic to focus upon in your market.  For example, if you are a family restaurant you might want to target all families with children in a specific zip code.  Or if you are a window coverings company, a list of brand new home owners in your county.

The 3-Step Letter Sequence
Now that your list is solid, you can launch the 3-step letter sequence using the following strategy of offers and messaging:

1.    Letter #1 is a solid personalized letter to your target audience using Direct Marketing 101 fundamentals and contains:
a.    A compelling headline that showcases your key benefit to your prospect
b.    A strong offer to entice response
c.    A clear and simple call to action
d.    An expiration date in approximately 14 days.
e.    A signature from one of your sales reps
2.    For all of those that do not respond to Letter #1, they would receive Letter #2.  Letter # 2 would create more urgency and contains
a.    Another benefit-laden headline but with more amplified language
b.    Copy similar to “A few weeks ago we sent you a letter offering you <Offer #1> and frankly we are shocked you did not respond.  <Offer #1> offers you tremendous value such as <List of Benefits>.  Because we know you will get tremendous value in doing business with us, we’ll also include <Offer #2> on top of <Offer #1> but you need to respond by <deadline>.”  Of course, this would be wordsmithed as appropriate, but the essence is to link letter #2 back to letter #1 and then layer another compelling offer on top.
i.    Side note:  Another very famous marketer uses this strategy well.  You see it over and over again on television because it works.  Do you remember the Ginzu Knife?
c.    Language in Letter #2 would be much crisper, using shorter sentences and less text, and would be more “to the point”.
d.    Letter #2 would be signed by a more senior person (i.e. VP of Sales).
e.    Both offers would have an expiration date in approximately 14 days.
3.    For all of those that do not respond to Letter #1 or Letter #2 they would receive a very short memo style letter or postcard that contains:
a.    A “final notice” style of writing with a red stencil styled FINAL NOTICE stamp on the letter.  Bonus points if your letter is on pink stationary (like a pink slip).
b.    Language similar to “We have tried and we have tried and we can’t believe you are still not responding.  We offered <OFFER #1> and you didn’t respond.  Then we threw in <OFFER #2> and you still did not respond.   Because we know we can provide you <List of Benefits> we will throw in a FREE <OFFER #3> if you respond by <date>.”  Again, this can be wordsmithed further, but this is the essence.
c.    Letter #3 is only 1-2 paragraphs.  Very, very short.
d.    Letter #3 is signed by President.
e.    All offers would expire in approximately 14 days

When this 3-step sequence is complete, you can count on these prospects really understanding that you exist.  The rapid-fire repetition of 3 touches in a 45-day window will help you break through the clutter of direct mail that they receive each day.  And the incremental cascade of offers, especially if written in a fun and entertaining way, will create a mini buzz in the community where your prospects will talk to their friends (i.e. you won’t believe these letters I was getting from <company>).

In the world of direct marketing, a 1% response rate is generally considered good.  Clients that use this 3-step letter sequence have been able to generate response rates in the incredible 10-17% range.  There are cases where the response rate has reached unheard of 45% response rates.

This notion of sequencing your letters with tight expiration dates and prospect behavior observations is a fantastic example of “Marketing to the When”.

So how do you make this happen?
1.    Pick a narrow and manageable target audience of ideally 1,000 – 2,000 names.  If you are B2B, select a single vertical market (i.e. dentists).  If you are B2C focus on a specific geographic/demographic segment (homeowners with income above $75,000).
2.    Launch your 3-step sequence with military precision.
3.    Pay attention to who responds and who does not.  Keep your database up-to-date.
4.    Reap the rewards of your campaign and then move on to your next target audience.

Special thanks to marketing guru Dan Kennedy for sharing this 3-step letter sequence concept in one of his bootcamp seminars that I attended at the San Diego Convention Center in the mid-90’s.  Dan Kennedy is a very innovative marketer and copywriter and I encourage you to seek out his publications on the Internet.  I’ve tried this 3-Step Letter Sequence process both for clients and my own business and it works.  It really works.