Marketing in any form is not an exact science. However, “test marketing” will allow us to take some of the guesswork out of the process. This is especially true with direct mail marketing because our success is ROI-driven – which is easily to measure.
Historically the additional cost and time involved could make it infeasible to test in advance with all but the most strategic promotions or campaigns. Of course, for most small and medium enterprises every dollar spent on marketing is critical. Today, with the existence of online mail-on-demand tools, it is fast, easy, and extremely inexpensive, to test various messages, offers, and packages; find a winning formula; and then turn up the volume on some larger campaigns.
When should you test? Well, the general rule of thumb is “test early, and test often”. Even when you have a winner, an “old reliable” that always produces predictable results; we should continue to look for ways to improve even further. Plus, all marketing campaigns have a natural life-cycle. When the environment changes, and the returns start to trail off, we need to be ready with the next winner long before we are in the hole.
This is the general rule of thumb. There are also some specific situations that always warrant at test:
- Falling response rates or an unacceptably high cost per lead
- Change in the target market or expanding into new markets
- Adjustments to product, price, terms, or channel strategy
- Unproven or fresh creative, messaging, or offers
- New product introduction
A direct mail package consists of three key elements: the list, the offer, and the creative. Thus, each element provides an opportunity for tuning and testing.
Test Mailing List
The mailing list is a crucial step in the element of your direct mail campaign. In fact, when we assign weights to these ingredients for a successful direct mail campaign, the rule of thumb is 70% is the list, 20% is the offer, and the remainder is creative.
Industry experience tells us that when we put the right offer, in front of the right prospect, good things happen. On the other hand, the most amazing offer in the world, in the hands of the wrong person, will not make the phones ring or keep the lights on.
So, if the list is so important, this begs the question, what is the best type of list? Look at your own in house mailing list. What are the characteristics of that list? What do your customers look like? What are their common characteristics? Unless you are a brand new company, or you are expanding into a new market, this should provide a blueprint for new lists when you start looking outside.
There are more than 50,000 lists out there – available from a wide variety of sources. The main categories of lists are compiled lists, response lists, subscription lists, and controlled lists. Choosing the right one – with its corresponding benefits and features – has the potential to make or break your campaign. Here is a little more detail on each category:
- Compiled lists are databases collected from a variety of directories, credit files, and other resources. They are generated for marketing purposes, updated regularly, and give broad coverage of the market, including basic demographics. These lists work best for broad offers and are available at our website (www.zairmail.com).
- In some cases we may have products that can only be purchased by clients with minimum qualifications (like a mortgage loan that requires a FICO score of 620 or greater). In this case we may choose a special form of compiled list known as credit scored data. The reason for this is that the majority of the cost in a direct mail campaign is not the data, or the mail piece, it is the postage. So we don’t want to fork over the postage to reach a prospect we can’t possibly close.Credit scored data usually comes from one of the big three credit reporting agencies (Experian, Equifax, or TransUnion) or their licensed agents. There are special rules regarding who can use credit scored data, the type of offers, and opt-out messaging. In the case where we have specific minimum criteria, and we can’t use credit score data, a middle ground can be modeled credit score data. This is less expensive than credit scored data, and easier to access, but much less reliable.
- Response lists are generated from another company’s sales records. They can include data about what was purchased, the price, the date of purchase, and frequency. However, response lists are often less complete, and depending on the purchase procedure, may not include the name and title of the purchaser – which would make them much less useful for direct mail. In addition, response lists may not be updated as frequently as other types of lists. Of course, we don’t want to spend our precious postage funds on prospects who aren’t there either!
- Subscription lists have the advantage of compiling recipients who are proven readers, having subscribed to a specific publication and, therefore demonstrating their interest in a given industry or field. They tend to have fewer bad addresses (because the list is validated every time a publication is delivered) and can provide a targeted audience; however, they may not provide complete demographics. Sometimes data is also available on historical purchases which are compiled from the sales results of advertisers in the publication.
- The result of free magazine subscriptions offered to qualified subscribers who agree to provide detailed demographic information about their companies and purchasing authorities, controlled circulation lists are, as a rule, very niche-oriented. They offer rich demographics and are highly selectable, but may cover only a portion of your entire target market. Often the demographics, although rich, are not as accurate as we find in compiled lists.
As stated before, the mailing list is the most important factor in determining the effectiveness of any direct mail campaign, so it should be selected carefully. Direct mailers can greatly reduce costs and improve response rates by using a more recently updated list. Lists are like produce, they do suffer from spoilage, and they need to be constantly refreshed – high quality compiled lists are updated constantly.
Vary Your Offer
The second most influential factor in determining the success of a direct mail campaign is the offer – what customers who respond can expect and how it is presented. Mailers should make sure that they understand what the recipients want and the value proposition they can offer. In fact, the offer needs to be created with the specific needs of the list in mind. Some general tips to improve your offer are:
- Be as specific as possible.
- Offer something unique and valuable – impossible to resist.
- Reduce the level of risk as low as possible possibly. This can include incorporating elements such as a “no cost trial”, a “money back guarantee”, or testimonials.
- Have a deadline for responses (impending event) – don’t leave it open ended. The sooner you can get the client to respond, the more likely you will be to close a sale.
- Stress benefits rather than features. Then tie your offer to the most compelling benefit. This is covered in more detail in other articles here.
Some offer elements worth testing, include price points, quantity of volume discounts, the way you state your offer (e.g. “save 50 percent” versus “purchase for half price”), and the method of response.
Experiment With Your Mail Package (Creative)
When considering your mail package, begin with the customer-facing piece first, or you could miss out on a valuable selling opportunity. A consumer’s interaction with the typical direct mail piece is like their interaction with a door-to-door salesman. The key is to “get their attention and interest before the door is slammed in your face.” The average person spends three to five seconds deciding whether to act on your direct mail piece (or toss it), so start selling immediately.
When testing different mail packages, you can experiment with the package type (e.g. postcard, letter, self-mailer, snap-pack, “lumpy” mail, or others) In addition test the use of stamps versus indicia (printed postal permit). Even the use of pre-canceled stamps or stamps with different designs could produce a noticeable lift in response. We could also test a hand-written vs. typed recipient address.
If you are using a letter package, then you can test outside logos versus blind (no return address) envelope; single window vs. double window vs. close-face envelope; along with any teaser copy that is added to the outside. The inside of the mail package should be tested as well. The following suggestions apply the body of direct mail letters and solicitations:
- Use a strong lead. Recipients will likely scan the letter before deciding whether to read it, so seize this important opportunity to capture their attention.
- State your offer at the beginning and the end of your letter. Reinforce what you’re asking the recipient to do and why they should do it.
- Keep the letter short and simple. A maximum of two pages should be used and avoid busy graphics. One page is even better if the message is powerful.
- Highlight the solutions you can offer. Appeal to the recipient’s problems and daily challenges and offer a way to ease their “pain”.
- Use solid facts. Back up your claims with proof in the form of guarantees and testimonials.
- Make it easy to respond. Close with a call to action and make it as easy as possible for the customer to respond to you. Now. This can include a response card, a toll free number, or even a PURL (personal URL) tied to a website.
- Test different letter styles, graphic elements, and techniques. Experiment with different elements of your letter including use of color, signatures, personalization, bullets, aggressive versus non-aggressive tone, etc., to determine what combination of factors will pull the best.
Seasonality, Timing, and Frequency
When are your customers doing budgets? Will the mailing hit at the end of a quarter, when they have little money to spend? Is it best to market your product or service before or after the holidays? If you’re marketing to trade show attendees, how far out from the event do you market? Is it best to send e-mail before or after the direct mail piece to alert recipients of its arrival?
The effects of such factors generally vary by market, and are worth testing to determine the best approach for your product or service as they could have a significant effect on the response rate.
General Rules of Testing
There are several basic rules of testing to ensure success:
- Test one variable at a time. If you change too many elements, and there is a change in response, it can be hard to tell exactly which change is responsible.
- Test against a control. Without a “benchmark” we can’t tell if our responses are rising, falling, or about the same.
- Make sure the test and control batches mail at the same time to avoid any inconsistencies with timing.
- Randomize the list to assure that there are no geographic or socio-economic skew – unless, of course you are testing messages for a new geography or audience.
- Test sufficient quantities to get a meaningful response.
- Track your results EVERY single time that you mail.
- Test and test AGAIN. Your are never done!
When you find a piece that works, then ride it as long as you can; but continue to test, so that you are ready to catch the next wave when it arrives. Markets, customers, and moods are always changing…
Wilson Zehr was the original founder of Zairmail, the fastest and easiest way to send direct (postal) mail right from your desktop. Upload a document, select a list, approve an online proof, and you are in the mail, tomorrow or the next day, for 50% less. Zairmail pioneered this concept working with the USPS in 1999. Check out the website and the affiliate program at www.zairmail.com. Wilson is currently CEO of Cendix (www.cendix.com) the leading provider of Web-to-print solutions that increase sales both online and offline.