Direct marketing provides you with a way to conduct a test of this market relatively quickly, at a reasonable cost, and with convincing certitude. You'll know whether this is indeed the gold mine you hope it is. Perhaps the most common use of a marketing database is to generate a target list for a direct-mail campaign. Of course, direct mail also works with purchased lists. Direct mail provides giant companies with the ability to target defined markets with specialized offers. For smaller companies, using direct mail has a number of attractive advantages:

+You can target recipients very precisely.

+You can protect against overwhelming response.

If you run an advertisement, you can't know whether you're going to get 10 responses or 10,000. For a small company, a powerful response to an ad can be even more disastrous than no response at all, since a poor reaction to a prospect's response will likely damage your relationship even before it's begun. With direct mail, you can start out with a modest-size mailing to study the response and make sure you can handle it expeditiously.

+Costs can be modest.

Or, more accurately, you can create a campaign to fit large or small budgets.

+Direct mail can happen fast.

With a modest campaign to a known target audience, you can acquire a mailing list, develop mailing materials (including direct-mail letter, flier, reply card), launch a mailing and start to receive results in just a few months. This is faster than the typical advertising campaign--and a lot faster than waiting for the phone to ring.

+You can test different appeals, called "offers" in the trade, to reveal the most potent message.

By making a different offer to randomly different portions of your mailing list, you can see which offer pulls best. Go with your best puller until you find a better draw. As you try different offers and different letters, you'll find one does better than another. Use the better one, and then try to beat that in your next mailing. Eventually, you should get better and better response rates.

+You can mail to the same list again with a slightly different mailing and still garner worthwhile results.

Most direct-mail experts say that companies don't get enough mileage out of their materials. Use them until they no longer pay their way.

+You can never run out of prospects.

Use your imagination to find new niche direct-mail markets for your products, whether retail or business-to-business.