Direct mail budgets continue to deflate. But the intense pressure to deliver results remains high. In response, some marketers start playing to their best customers, giving up on targets that don’t score as well. This may help stretch a budget, but shrinking your potential audience is not a recipe for long-term success. A better way forward is to think differently about how you test direct mail.
There are five elements essential for direct mail success: List segmentation; offer; messaging; imagery; and format. How well each of these elements performs depends on how good your testing is.
Segmentation is the first, and arguably the most important step marketers take when developing a direct mail campaign. Traditionally it involves segmenting lists according to demographic, geographic, household income and transactional data. This is useful up to a point, that point being the “why’s” of consumer behavior. Traditional segmentation misses the emotional and cultural factors that influence purchase decisions. Including emotional insights in your customer data, then using it to create personas that represent your best targets, enables a better testing model. It allows you to identify the imagery, messaging and offers that will motivate your targets to respond.
The second key element for direct mail success is the right offer. Ten percent off, plus free shipping; 20 percent off but no free shipping – what’s going to lead consumers to act? Too often marketers under budget and time pressure assemble multiple mail packages with different offers, designs and formats, then test them each with a different slice of their name file. One package will probably perform better than the others, but the testing process makes it unclear what element prompted the higher response. Not knowing which offer is truly the strongest can sabotage direct mail success.
How you frame the benefits statement is also crucial. You can do a better job of it when you have emotional data on your target customers. Are they impulse buyers focused on convenience? Do they care about corporate social responsibility? Are they brand loyal? Perhaps each of these characteristics applies to one segment of your target list. Testing different messaging for these target groups provides a big competitive advantage.
Emotional data also play a key role in choosing effective imagery. Well-defined personas that incorporate emotional insights tell you whether the target will respond better to images of individuals in a home/family setting or on the road in an open convertible or hiking on a beautiful mountainside. Preferences for each of those cut across demographic, household income and geographic categories. They are shaped by emotional characteristics.
Suppose a marketer wants to use a postcard because of cost considerations, but feels s/he should also test a self-mailer? In fact, the self-mailer produces a better response rate, but that shouldn’t be the end of it. Is the response high enough to offset the higher cost of the self-mailer? Especially in this time of tight budgets, you need to test formats in a way that measures total return on marketing investment.
While some of these testing “should’s” might sound impossible to accomplish with limited budgets, advances in predictive analytic technology have put them within reach. Quad offers a proprietary testing platform, Accelerated Insights, that lets you cost-effectively and time-efficiently test multiple variables with virtual panels grouped according to demographic, psychographic and emotional characteristics. The Accelerated Insights platform reveals how different variables perform alone and in combination, factoring in all production expenses. And it delivers results for one-tenth the cost of typical testing in only 60 days.