03 April 2006

Direct mail - testing a campaign

Direct Mail can be profitable – personal fortunes have been built on that simple truth - and the very best direct mail is a work of art which professional Marketers can admire. The key to understanding whether direct mail can work in your environment is to work out what success would look like. Given the costs of the proposed mailing, the brochure, the list, the time, what level of sales response would be required to make this mailshot profitable? If the answer isn’t unrealistically high, then you are in with a solid chance that you can make it work. I have deliberately avoided talking about specific response rates because truthfully, response rates differ depending on the product or service, the price and the attractiveness of the offer. However, if it looks as though you need a very high response rate then you should ask yourself the question about whether you will be able to achieve that or whether there is anything you can do to the cost base to drive the required response rate down. The next stage is to test the mailshot live on part of your data.

The importance of testing is that whatever your response rate – 0.1% or 5%, scaling up to larger numbers of targets probably won’t impact it significantly. So, if you can demonstrate to your satisfaction that a test sample delivers a satisfactory response in economic terms then go ahead and run the campaign. If the trial mailing fails that primary hurdle, then be prepared to extend the experiment, by changing the offer, the stratification of the targets or the copy itself – but be careful not to change too many variables simultaneously and keep the trial sample small. These days, digital printing has made this kind of low volume experimentation relatively low cost.

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