40 40 20 Rule - Definition & Meaning

Published in Marketing and Strategy Terms by MBA Skool Team

What is 40 40 20 Rule?

The term “40 40 20 Rule” was coined by Ed Mayer, the online marketing maven. 40 40 20 rule of direct marketing emphasizes on the importance of three factors for a marketing campaign to succeed. These factors are target audience, offer and creative execution. The 40 40 20 rule states that 40% of the success of your direct mail marketing campaign would depend on the target audience selected, 40% on what do you offer them and the rest 20% on the plan you execute to reach out to the selected audience.

Audience: The audience shall be highly targeted. The mailers should be directed to prospective customers and consumers with high probability of buying. The consumers can be segmented on the basis of demographics, psychographics or through any other segmentation methods. All in all, a well-defined mailing list is the key to success of a marketing campaign.

Offer: Buyers are often intrigued by the offers on several products given by a company. For example, in the FMCG category, where consumer choice fluctuates rapidly and brand loyalty is weak, offers act as binders to retain and strengthen repeat buying. High sales conversions can be achieved by offering value-added incentives to consumers, often on a limited-time basis. The offers must be designed and promoted keeping consumers’ needs in mind.

Communication: Once you have defined your target audience, and have determined the offer that would pique their interest, the next step is how to communicate the message to the audience. The last 20 per cent comprises of the presentation, the effectiveness and the cost incurred over communication. Since, the campaign here in consideration is a mail marketing campaign, the communication design can range from greeting card format to advertorials or brochures. The mails can be both offline and online. This would also be a determinant factor of the cost incurred.

Ultimately, each subsequent step of the 40 40 20 direct mail marketing rule depends on the previous step. Influential and attractive offers can be designed only when the target audience is defined with clarity. Furthermore, communication has its value only when it communicates the right message (offers) to right people (audience) in the right manner (campaign).

Hence, this concludes the definition of 40 40 20 Rule along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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