Revitalizing DIRECT MAIL - Statistical Data Included

Circulation Management, Nov, 1999 by Lisa Paul

A round-up of response-boosting, cost-reducing ideas from direct mail pros.

Circulators are striving harder than ever to improve CPO's by wringing every fraction of response out of their direct mail, as well as finding new ways to shave production and mailing costs. Here, circulation executives, consultants and suppliers offer techniques and strategies to help you leverage direct mail resources to the max.

TESTING STRATEGIES

* Run a P&L scenario before testing any new creative or offer. "This will force you to identify leverage points within your business," says Evan Balzer, director of new business for Guideposts. "If a new piece is going to cost twice as much as your control, it's going to need to produce a big lift just to break even on the P&L. Know this before you test. If your gut says that the necessary lift is probably too big of a stretch, you may want to put something into that test slot that has a better shot at winning on profitability."

* Watch sample sizes. Are your test panels really large enough to be statistically significant? Insufficient attention to this basic accounts for many a failed roll-out, warns Balzer, who stresses that it's better to err on the safe side than try to cut corners. In price testing, in particular, year-one sample sizes must be large enough to allow for reading the impact on conversions and subsequent renewals.

* Don't lose sight of the longer term. Comparative conversion rates for test pieces and controls shouldn't be forgotten in the rush to make rate base. "You need to keep looking at the conversion rates on the new control and back-testing the old control, or you may find that your net is really suffering three years down the road," cautions Balzer.

* Conduct a timing test. "Sometimes, even a difference of a week or two can make a significant difference in an effort's effectiveness," points out Balzer.

* Make time for formal, off-site brainstorming sessions. "We frequently go off-site, in an environment free from office distractions, to focus totally on testing ideas," Balzer reports. "In two or three days, we'll come up with testing strategies for an entire year. We also do an exercise called 'chew it up and spit it out,' in which source managers evaluate and critique one another's controls. This kind of honesty helps ensure that all of the bases are covered--that no idea has been left untried."

* Monitor the competition. Make sure that you, your list manager or list broker are purchasing the competition's product to monitor promotion creative, mailing patterns, product delivery, customer service and other key factors, advises D.J. Collins, brokerage VP for Acxiom Direct Media.

LISTS

* Develop a strategic plan for list test maximization. Category analysis is key in maximizing list test dollars, stresses Balzer. Use past performance to create list categories (primary, secondary, expansion, etc.), then create a plan in which each category is allotted a specific percentage of overall list test dollars. Always include at least one new list category in your tests, and try at least two, but no more than three, lists from that category. Testing multiple lists ensures that you've given the category a fair shot--that you're not giving up on a potentially promising group on the basis of one list's failure.

* Build "usage trees" to plan list test selections. Make sure that your broker is carefully tracking continuation usage for companies that market products similar to your own, to spot lists that may also be of value to you. Also, remember that if "List A" works for you, there's a good chance that the lists of companies that also use "List A" are good list test candidates for you.

* Review your own list continuation history. "Lists that were dropped from your continuations years ago, probably because they began to fatigue, may now be sufficiently rested to test again," Balzer says.

* Create and consistently use a non-responder file. Although new names are increasingly scarce because of the decline in sweepstakes business, beating names to death is a major waste of money that could be spent on more promising prospects. A growing number of marketers report dramatic savings and response improvements through suppression of non-responders.

For example, at Weider Publications, senior vice president of consumer marketing Bobbi Gutman reports that flagging multiple prior mail hits and keying them out separately during merge/purge to analyze response has significantly improved response rates. And at Guideposts, use of the promotion history file as a suppression tool has become an integral part of mailing strategy, and is currently the biggest factor in response gain, according to Balzer. "We're all experiencing list fatigue, but mailing people over and over isn't the answer," he says.

* Use a zip code tape. At Guideposts, using a zip code analysis to suppress unproductive geographic areas and zeroing in on strong areas often produces a 50- to 75-percent net response lift on a given list.

* Test a "friend-get-a-friend" program. Remembering the old saw "birds of a feather flock together" is particularly important for smaller, more vertical titles. Balzer suggests offering an extra premium or incentive to respondents who supply the names and addresses of a few friends, as a means of building up the prospecting list.