A new service called Leadstash is boasting that it can make professional-quality direct mail campaigns that are financially feasible for even the smallest of small businesses. The company claims a database of over 50 million American addresses, with a localized search engine that allows entrepreneurs access to see how many addresses are available in their zip code. The catch: the site looks a little shady.
The service sounds well-conceived in theory; users can use online wizards to create letters, postcards and mailing labels, which are then mailed directly to customers in a designated zip code. For this privilege, small business owners pay a small monthly subscription fee of $50, with no cancellation penalty. Oddly, this fee is collected by PayPal, which (while obviously trustworthy in and of itself) seems amateurish, and doesn’t inspire much confidence. To make matters worse, the site (which is rendered in drab Web 1.0) has a generic, clip-art logo of two hands exchanging cash. Does that signify me stupidly forking over my ad budget to some sketchy, faceless entity?
Still, $50 a month is pretty cheap for an entire direct mail campaign. However, they’d be smarter to charge a small fee per address, to make the service more practical for businesses operating in less populated areas, who might see a smaller return than say, a Boston or New York-based business. As the model works now, it would have the best value for city businesses, who can presumably access more addresses — but who are also likely to have the lowest response rates due to competition and brand confusion, among other factors. In sum, the idea seems a little half-baked.
Apparently, business owners never see the addresses of the folks they’re direct-mailing; wise enough on the part of Leadstash, who would be stupid to give away their biggest asset. That said, there’s no guarantee that the information Leadstash is using is accurate, or even obtained legally. I plead ignorance on the latter issue — do any readers have expertise on the legality of collecting and using this information? Better yet, has anyone used this service for their small business?
The company, an LLC registered in Arizona, is in good standing with the Arizona Corporation Commission. According to the state database, Leadstash has been around since 2001, but only under its current moniker since June 2007.
Direct mail is seeming increasingly like an anachronism in the age of search engine advertisting, which usually offers detailed feedback on clicks and impressions, and a good sense of your ROI. Even in the days pre-AdWords, direct mail campaigns were understood to have a response rate far under around 2% in many applications (save non-profit campaigns, which fare better). Questions of legitimacy aside: depending on your business and your area, you might end up spending $600 in a year with Leadstash, only to get a handful of responses. Is direct mail a method worth revisiting for $50 a month, and if so, is it best left to entrepreneurs in metropolitan areas?