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Predicting the success of an ad campaign:

“Hi, Eddie,” Kim said.

“Hey, Kim.”

Kim Krause Schwalm is among the best direct-response copywriters in the world. I’ve been studying Kim’s work for years—transcribing her ads, analyzing her logic—and now I had a chance to speak with her one-on-one. She had reached out to me, interested in my marketing process and how I spread my writing around the internet.

“Oh,” she said, “you look just like your picture—same hat.” We laughed.

The conversation was easy with Kim, comfortable. On that first call, we talked about our goals. We talked about copywriting. We talked about content marketing and growth. It was very productive.

“Maybe it makes sense to do this again?” Kim said. “We can meet on an ongoing basis, if you like? You’ll help me get my writing out there, and I’ll help you get even better at direct response.”

“Yes, please,” I said.

And so started our mutual mentorship. Now, every few weeks, Kim and I get on a call to share knowledge, trading stories and “secrets” and being completely transparent.

“Do you wanna focus on anything specific today?” Kim asked me.

“Actually, yeah,” I said. “I’m writing an article about the 40/40/20 rule. Maybe you can give me your take?”

“Sure,” Kim said. “I mean, do you want me to just speak extemporaneously about it?”

“Sure,” I said—and so started a masterclass on one of the most important principles in direct marketing, one that can help you actually predict the success of any ad campaign you run.

Now, I’m sharing everything we discussed on that call with you.

I’ve done my best to condense a 55-minute conversation into a clear, concise, digestible breakdown, complete with quotes, color, and context from Kim Krause Schwalm herself.

The 40/40/20 Rule of Direct Marketing:

Some people think copywriting and design will make or break an ad campaign. They think the creative is the most consequential element. Not true.

Over a century of conventional wisdom tells us the success of any direct-response advertising effort depends:

In other words, if your list and your offer are excellent, but your creative is abysmal, then technically, you still have a roughly 80 percent chance of success. Or if your list and your creative are excellent, but your offer is abysmal, then you have a roughly 60 percent chance of success. Etcetera.

You can use this 40/40/20 rule to help you project (beforehand) or evaluate (after the fact) the success of any direct-marketing promotion. So, let’s break each element down, one by one, starting with the most straightforward.

List (40%):

Forty percent of your advertising depends on the strength of your list, the people seeing your message. Your list should not be your entire market. Ideally, it should be a segment of your market, people who:

1) Have bought similar products to what you’re selling.
2) Have bought via similar ways of buying.

For example, let’s say you’re selling a prostate supplement (a common direct-marketing product) via Facebook Ads. Technically, your “market” is all men over the age of 50. However, your list should be men over the age of 50 who:

1) Have bought supplements in the past.
2) Have bought them via Facebook.

If you can secure a list like this, your response rate will invariably improve because you’re speaking to a group of people with a proven desire for your product, which is what makes a good, strong list. A bad, weak list, on the other hand, is usually blindly compiled based on surface-level characteristics, like the age, sex, and location of the prospects.

“You risk so much less of your marketing budget,” Kim said, “when you’re spending it on people who’ve already bought your product or who have bought similar products.”

Offer (40%):

Forty percent of your advertising depends on the strength of your offer, which is a combination of several elements, including desire, price, and incentives. Let’s examine each one.

Desire: is this product even something people want?

Kim told me a story about how, over several years, she wrote more than 20 successful promotions for a client, a supplement company.

“Except we had this one, which we ran first as a newsletter insert,” she said, “just to test how it would do. And it was this new ‘Eastern’ formula for cholesterol, blood pressure, and blood sugar. And it flopped! It’s the only one that ever did. But even at one point, after we initially tested it, my own mentor—a legendary copywriter in his own right—reviewed the promotion and made some changes, and it still didn’t improve the results enough to be able to roll out to direct mail.”

“So it was not the copy?” I said.

“No, it wasn’t the copy,” she said. “And it wasn’t the list because we were selling to known buyers—”

“—it was the angle,” I said, “the whole ‘Eastern’ thing?”

“Essentially, yes,” she said. “It was a product that wasn’t tested. And maybe the positioning angle was old news. Sometimes, no matter how good the copy is, no matter how good the list is—it’s a product people just don’t want, and you’ve got a flop.”

Price: is this product priced appropriately and competitively for what it is?

This boils down to your positioning. Usually, in direct marketing, you’re either positioning your product as the “economical” option or the “premium” option. If you’re selling a premium product, you can only command a higher price point through differentiation.

“Let’s say you’re selling fish oil,” said Kim. “You need to have some kind of unique ingredient or delivery system or proof—an endorsement, perhaps—if you want to charge more.”

But if you’re selling an economical product, you typically have to create incentives to compete on price.

Incentives: is this ad giving people a reason to buy now?

Incentivizing your list is imperative if you’re competing on price. In fact, it’s necessary for any type of direct-response promotion because if you give people time to make a decision, they’ll usually take it. And you don’t want The Reader to take their time, to feel comfortable. You want her to feel tension, pressure. These feelings compel action, which is the goal.

Here are a few ways to incentivize your list to buy immediately:

1) Dimensionalize the savings:

✓ “Buy 2, get 1 free”
✓ “Get 3 for the price of 2”
✓ “Save $40…it’s like getting another bottle FREE!”

2) Create urgency:

✓ Timing deadlines: “Save 50%, offer ends at midnight”
✓ Trial deadlines: “Start for just $1, today only”
✓ Scarcity deadlines: “Only 30 units left”

3) Remove the risk of ordering:

✓ “Money-back guarantee”
✓ “Double-your-money-back guarantee”
✓ “Order now, pay later”

“We’ve all been in situations where you think the ad is definitely going to work,” Kim said, “because it sounds like such a great product, you know?”

“Yeah,” I said.

“But then, it’s like, the market doesn’t want it,” she sipped some water. “Or maybe the offer wasn’t right—maybe one of the elements was off—and so there are many things that can cause a promotion to fail. And nine out of ten times, it had nothing to do with the creative. The ad just had all of these other things going on.”

Creative (20%):

Twenty percent of your advertising depends on the strength of your creative, which is a combination of three things: copy, design, and format. Let’s examine each one.

Copy.

“In terms of those 20 percent, copy isn’t the only component of creative,” Kim said, “but it is the most important—and this is why smart marketers and companies really invest in the time it takes to write good copy.”

I nodded.

“And so much of that is the research you put into it,” Kim went on. “Getting to know the market, their biggest pain points and frustrations and hopes. And what are the alternatives they’ve seen? And what hasn’t worked for them? And why will this work now? And why should they believe that? All that work you do with research makes up the bulk of the copy.”

Design.

Ideally, the copywriter and the designer are working together from the start, collaborating. And if the copywriter’s job is to connect with The Reader, then the designer’s work is all about getting the copy read.

“Good designers know it’s all about getting the prospect to actually read the copy,” Kim said. “It’s not about achieving a cool look or an award-winning design. If you wanna create cool looks, go be an artist or work for a magazine or something. Because direct marketing is, first and foremost, about getting the copy read. It’s the only chance you have at getting the prospect to respond.”

Format.

This refers to how an ad is arranged and presented, how the copy and design come together. For example, in direct mail, you can take a “magalog” (a 16-page, 8 ½” x 11” ad) and condense it and make it into a “bookalog” (a 32-page, 5 ½” x 8 ¼” ad), where everything is shrunken down and spread out across twice as many pages.

“One reason to test formats is, simply, to see if people respond better,” Kim said. “You can also test formats that save you money, either with printing or, more importantly, if it’s something you’re sending in the mail, with postage.”

Advertising is rarely one-size-fits-all. It almost always depends on the circumstances, which is why testing—early and often—is so important.

“Thank you, Kim,” I said.

“This was fascinating.”