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"He then contacted me wanting $ 1,800 to mail out 1,000 coconuts to business owners with some witty message referring to insurance on them."
What sort of response rate does he get from the coconut mailers?
I did see some interesting mailing pieces on:
http://www.lumpymail.com/product_start.htm
and I know of a guy named Mitch that does similar stuff out in L.A. I saw him speak at a marketing conference and Mitch used the trash can and the bottle.
There is no question that these unusual pieces will get you nearly 100% opened rate, but they do cost a fortune to purchase and mail. They're probably the way to go for high-ticket items to individuals that may be hard to reach with a simple phone call, such as doctors, for example. So, they may have some application for insurance purposes, but it would be very situational.