Test, Test, Test to Boost Your Direct Mail Efforts
As I’ve mentioned before, now more than ever it is critical to consider direct mail an important component of a modern marketing strategy. With the deluge of email, social and digital marketing, you may have noticed that your mailbox, if it is anything like mine, is light on meaningful, targeted marketing messages. In its 2017 Response Rate Report, the Data and Marketing Association (DMA) found that email is used in 92 percent of campaigns, AND 50 percent of marketers will increase their email usage in 2018. Combine that with the decrease in direct mail used in 79 percent of campaigns in 2012 to just 59 percent in 2017, the potential to strike response gold with direct mail in 2018 is strong.
Direct Mail Testing
Best practices and industry averages can help shape your direct mail strategy and expectations, but only through real-life testing to your customers or prospects will you be able to set response goals that meet your business objectives. It is important to understand that testing is not a one-time event, but rather an ongoing, long-term strategy. Once you have identified a control (through past performance or other means), you should be regularly testing the variables to determine the best performing mailer.
A/B testing is the most commonly used test method for our clients. By changing only one variable in otherwise identical mailers, you can read the results with more confidence. A test does not need to be limited to two groups. You can split the mailing into three or more groups (ex. A/B/C) and still read the results compared to the control. Whether using A/B testing or multi-variable testing, the possibilities for testing are endless. From subtle changes like the color of text on the outer envelope to complex prospect data profiles, we’ve seen and tested it all.
For the majority of our direct mail campaign testing, list and offer play the most critical role in the test results. List and offer tend to require less of a financial commitment, while design testing can add more to the cost per piece. Here are some more common variables to consider testing:
Mail List
If you have 1,000 or 100,000 records in your database, there are valuable insights to pull from and test. Depending on how robust your database is, you can test selects such as:
- Demographic
- Purchase history
- Quantity and/or frequency of marketing communications
Offer
Getting your customers or prospects to take action is the ultimate goal. Does a $99.99 price outperform $100? Who knows? Oh wait – you can find out by testing the offer. In addition to price, offer tests may include:
- Coupon value or other incentive
- Term of service (ex. 5 years vs. 10 years of furnace warranty)
- Expiration date or other urgency message
Design
Perhaps less scientific than list select or offer testing – but just as much fun (for the art director) – is testing design and creative. Along with the list and the offer, design rounds out the big three test options for our clients. Design testing can include:
- Graphic design (images, colors, fonts, etc.)
- Format (self-mailer, postcard, letter)
- Paper stock or print techniques
Campaign Execution
There is no set standard for determining how much you should test, but to have more confidence in your findings, a general rule of thumb is to consider keeping the minimum test quantity a number that can generate 100 responses. For example, if your average response rate is 5 percent (good for you!), then you should mail a minimum of 2,000 test mailers. If you average a 0.5 percent response rate, you would need to mail 20,000 to get a statistically valid result. In general, the larger the number of records, the greater validity in your results.
With your testing variables and quantities determined, you will need to set up proper tracking mechanisms to accurately measure response rate, determine test results and ultimately, a winning performer. Having the ability to exclusively track the population that received your mailer is critical. If the general public can find the phone number or website, your results may be compromised. Along with a strong call to action comes the response channel. Every direct marketing campaign should include campaign-specific ways to identify responders. Common examples of tracking response can include:
- Dedicated phone number
- Custom URL or landing page
- Promotion code to mention on phone response or reply mail device
- Coupon with unique code
By tracking the desired action of your audience, you should be able to determine the response rate for each mail group. Consider the following A/B list test where the audience was asked to respond by completing an online survey. Without changing variables beyond the list select, it can be determined that Group B outperformed group A.
Group A
Quantity: 50,000
Number of responses: 1,142
Response rate: 2.3%
Group B
Quantity: 50,000
Number of responses: 1,733
Response rate: 3.5%
It is clear that Mailer B was the winning performer and could be used as a future baseline for testing. Remember, testing is not a one-time event, but rather an ongoing, long-term strategy. Once you have identified a control (through past performance or other means), you should be regularly testing the variables to determine the best performing mailer.
