It was a good year for direct mail last year. With a national spend of more than $51 billion and general acceptance as the ROI leader among all direct marketing channels (telemarketing, DRTV, Internet Search & Internet Display), direct mail remains a very relevant and effective marketing channel, poised for growth this year and beyond.
In a recent “channel preference study” sponsored by ExactTarget, consumers stated that direct mail was by far their preferred method of messaging from companies that they had not previously heard from. In essence, consumers have spoken: “If you want to sell me something and I’ve not done business with you before, please send me a direct mail piece.”
The outcome of this survey explains why many marketers refer to direct mail as their “conversion channel.” Television, radio, print and online advertising are of great value in providing product exposure and brand awareness, as well as some conversions. In our opinion, these channels are especially effective at “greasing the skids” for the consumer to more carefully consider an offer in the mail–first by helping to compel them to open the package, and then hopefully to read it & respond. We’ve found that direct mail is fully optimized when dropped in conjunction with a variety of alternative media.
SeQuel Response serves a number of clients who invest heavily into an integrated marketing approach–spreading their spend strategically across multiple channels in order to maximize conversion. In other cases, SeQuel customers are using mail as their primary marketing tool, with their only other significant investment into online advertising. In both scenarios we’ve seen noteworthy campaign volume increases over the last two years due to consistently improving sales rates and a reduction in the cost-per-acquisition (CPA) through ongoing testing.
We expect this trend to continue this year. We’re planning to refine the methods we’ve been using to get our clients’ campaigns where they are today, and we will explore numerous alternative angles to try to add a few percentage points to the sales rate and/or extract another $5-$10 from the CPA.
In our annual client planning & budgeting sessions for this year, we have emphasized the following strategies in hopes of taking their direct mail campaigns to the next level. Compare and contrast these “Direct Marketing Resolutions” to your resolutions for this year–are you missing anything?
Direct Marketing Resolutions for SeQuel Response this new year:
- Model Maximization. If you have an existing model, don’t fall in love with it. Test against your control model with alternative data platforms. Last year we saw a 30% lift in response for one client simply through the incorporation of a new model. Another good discipline is to regularly rebuild your current model based on its most recent performance trends.
- Tenacious Testing. Whether your campaign is improving or declining, testing must be a staple within each program you drop. We can never relax in our testing as we know that every control package eventually starts to dip in performance. It may take three months, 12 months or three years, but the lifespan of every control is usually measured in months–not years. Therefore, dedicate a portion of your budget each month (5% – 10%) so that you can continually test creative, offer & data. Your next 25% lift might be just around the corner!
- Responsible Resting. Be sure to examine the frequency & timing of each of your campaigns. How many times will a prospect or current customer see an offer from you this year? Measure the impact of one touch vs. two touches vs. three touches, etc. Determine whether or not the same package & offer to the same consumer works better than rotating creative packages or offers. Fatigue can bring an early demise to the creative, offer or list if we’re not careful to track how often we mail a consumer and how much rest we’re giving them in between drops.
- Prudent Postage. Our friends at the USPS just hit the industry with one of the most aggressive price increases we’ve seen in decades (a 4.3% – 6% increase for standard mail this year.) That was an unexpected punch to the gut! Rather than lick our wounds and reduce mail volume or frequency, it’s time to fight back with even more efficient postal strategies. BMC & SCF shipping techniques–along with co-mingling your mail–can help to offset as much as 50% of the planned price increase (depending on your mail volume).