When marketers discuss how direct mail fits into their overall campaign efforts, it is often described as the “workhorse” — dependable, reliable and effective; the channel that guarantees a tactile piece of marketing material will reach a prospect’s mailbox. For Kurt Konow, a Chicago marketing strategist at Ricoh, a global technology company, that is certainly true.
Konow says that direct mail remains a vital component of every marketing campaign he works on. But as the economy has struggled over the last few years and budgets have been squeezed, marketers like Konow are more pressed than ever to prove the viability of direct marketing and its many channels. And marketers these days, more than ever, are rising to the test. Literally.
In an age of multiple mailings, integrated campaigns and shifting audiences, some marketers are finding it more essential than ever to test the efficacy of their marketing. And they are leveraging a wide array of tools to figure out just how well their campaigns are faring and how to refine those campaigns along the way.
“It’s more important than ever to show the physical piece is still bringing in returns, that you’re getting people to respond and converting people with your message and offer — because it’s often the first thing to be eliminated,” says Konow, who estimates that he sends out a half-dozen direct mail campaigns each month to both B-to-C and B-to-B prospects.
Testing has been central to the direct marketer’s role for decades, of course, as companies work to ideally attain the highest response and conversion rates possible without maxing their budgets. Any number of testing tactics persist, from database and reporting interfaces and data analysis to test mailings that gauge the response of everything from the mailing list, the offer, the messaging, the type of package and even the kind of stamp.
Classic testing techniques include A/B splits (in which a baseline control mail sample is tested against several single-variable changed options), and multivariate testing (in which multiple design elements are changed at the same time), as well as list segment testing.
And all of it may be going on at the same time for various campaigns, says Renee Mezzanotte, executive vice president of client services at DMW Direct, a direct response advertising agency in Chesterbrook, Pa.
“We’re always testing variables with our clients — we’re never satisfied with the status quo,” Mezzanotte explains. “There’s an expense tied to testing, and marketers can be fearful of that, but you need to prove the performance of a piece because there’s definitely more eyes on DM than practically any other part of the budget.”
Changes to the test
With a proliferation of other marketing channels, some of which are still in a nascent evolution (such as social media and mobile) and others which have matured in recent years (such as e-mail and online advertising), today’s campaigns tend to be multichannel and holistic with a variety of response options — from e-mail, QR Codes and PURLs to simple toll-free numbers and in-person walk-ins, not to mention social media communications and text messaging.
When it comes to testing the success or failure of such multilayered campaigns, however, the vast possibilities have amplified confusion among marketers regarding the what, why and how of direct mail tests and created what experts describe as a combined sense of opportunity and a feeling of being completely overwhelmed.
“The variables have broadened, with far more channels to look at,” says David Henkel, president of Johnson & Quin, a full-service direct mail production company based near Chicago. “There is just so much more to test, and without discipline by the entire organization, there can be a lot of missed opportunities in terms of understanding response.”
And that includes the success of both the direct mail piece and the overall campaign.
Taking action in response to test results can be challenging as well, Henkel adds, as marketing staffs have been downsized in response to budget cuts. “There’s a pressure to show evidence of direct mail success, but there are fewer of the folks who would traditionally be able to analyze and take action on the information,” he says.
However, sophisticated and creative marketers willing to invest the money and manpower are doing innovative tests and experiments that take an out-of-the-box approach to measuring response and results, says DMW’s Mezzanotte.
“We’re testing in terms of creative positioning, different incentives, one-step packages versus lead generation, and even taking chances on concept testing,” Mezzanotte explains. “For instance, a national insurance company we work with had a sales force trying to connect with a small audience of credit union C-suite executives such as vice presidents of membership benefits and CFOs. We developed a warming campaign that included something oversized but not over-the-top in terms of budget. It had a little tactile-ness, but it cost only $5 in the mail.”
A personalized postcard was sent as a follow-up, and the company evaluated both soft and hard measurements. “Because the messaging was strong and a little different, the salespeople said every person they called and spoke to knew of the piece and it helped them a bit more,” adds Mezzanotte.
Carolyn Goodman — president of Goodman Marketing Partners, a multichannel direct response company in San Rafael, Calif. — says clients are beginning to turn their attention to testing communication nuances such as color, and addressing predictive modeling. Both areas are common in online campaign testing but far less common off-line because of the increased cost.
“Sophisticated marketers are learning and growing all the time and testing more subtle variables while seeing dramatic gains in results,” Goodman says. “I definitely think testing should be a staple in the direct marketing arsenal, regardless of channel.”
Staying disciplined and following up
Penny Ransom, vice president of strategic planning and brand management for Network Health, a Wisconsin-based health insurance provider that offers a wide variety of Medicare plans, constantly strives to test and improve the company’s mailings that peak in the fall selling season.
“We’ve become sensitive to that fact that one message might be appropriate for one county but they might not respond to it in another area,” she explains. For example, a travel benefit might be important to one population that tends to get away from Wisconsin winters, but another less affluent area might respond more to what doctors are in the network. Testing allows Ransom and her colleagues to determine which copy points have the most influence and which offers work best for which audiences.
For Tim Bannon, head of sales and marketing for Meemic — a Michigan-based insurance company that provides auto, homeowner and other coverage to teachers and other educational employees — the biggest overall challenge in terms of direct mail testing is how to follow up on successful results.
“We’re all focused on bringing in business, but for the most part we don’t have a way to go back to those households to welcome them, to cross-sell, or to seek a referral,” Bannon says. “We are testing prescribed, cross-channel contact to new households by customer segment so we retain and grow these new relationships.”
Kurt Konow of Ricoh says Ricoh’s integrated, multichannel campaigns — including e-mail, Facebook and mobile — add the complications of proper campaign sequencing and channel-response testing layered on top of the challenging variables of lists, copy and offers.
“I’m a big believer in integrated campaigns, but you need to test your sequence as well as ensure that you’re varying the message for each piece,” Konow says. “Perhaps one time you push the e-mail out first followed by the direct mail piece, or another time you push the mobile marketing message first. The problem is that marketers will typically begin every campaign with the direct mail piece. However, when the sequence is changed, then you need to change the message on the direct mail piece slightly to test which channel and message is working best.”
While modern marketers may face new challenges in today’s multichannel universe, however, all-too-common mistakes still plague mailers when it comes to testing. One of the most common missteps, says DMW’s Mezzanotte, is not keeping your attention on why you’re testing in the first place.
“You can get really tied up in minutiae, so you have to think about whether what you’re testing is really going to move the needle,” she says.
Leaping to wrong conclusions is also a classic direct mail testing error, explains Goodman, of Goodman Marketing Partners: “Someone will look at two mail campaigns and insist one type of creative did better than the other, but it turned out they were mailed at different times of the year. So how do you know it was the creative and not the timing?”
She also cites the example of a marketer insisting a postcard did better than a No. 10 envelope. However, the creative strategy was different for each piece. “It all goes back to setting up the test properly,” she says.
Refining the approach
Direct marketing experts agree that mailers have a long way to go in terms of elevating testing into a true feedback loop that moves toward true long-term, one-to-one marketing with personalization and relevance and that takes full advantage of testing results. “So much depends on the size and resources and sophistication of the company, as well as the intentions of the marketing leadership and whether they are really operating more instinctively than scientifically,” says Johnson & Quin’s Henkel.
“We’re learning and get better with each campaign we do,” says Meemic’s Bannon. “Have all of them been home run balls? No — but that’s why you test in the first place.”
For Ricoh’s Konow, that striving for improvement has turned into a resolution to do more campaign testing in 2012. “I’m going to continue integrated campaigns but be more critical about how many channels and paths I take — you don’t have to push everything out in every channel,” he says. “I want to stand back and be more selective.”
In the meantime, marketers will continue testing their lists, copy, offers and mailers, because, Mezzanotte points out: “Direct mail remains the channel that often has the best ROI. Because it works, we test to make sure it works its hardest.”Data Management, List Management, Marketing Tips, Measurement, Prospecting