VoIP Provider Calls on Cohorts to Double Mail Response
Time Warner Cable is the nation's leading provider of digital telephone service, or Voice over Internet Protocol. Using direct mail to promote this service, Time Warner Cable-Charlotte's typical response rates ranged from 0.6 percent to 0.8 percent.
The company wanted new marketing techniques that would improve upon these numbers and drive digital phone sales. In July 2004, management turned to Cohorts for a new approach, using segmentation of its database to send versioned messages for its digital phone offer.
Cohorts, Denver, offers a household-based segmentation tool that divides all U.S. households into 30 cohesive groups (or Cohorts segments) that share distinct demographic, lifestyle and consumer behavior characteristics.
A Cohorts analysis of a client's database blends client-gathered customer knowledge with behavioral information from market research providers such as Equifax, Experian, MRI, Scarborough Research and Simmons Market Research Bureau.
Using a Cohorts analysis, Time Warner Cable-Charlotte identified subscribers who most likely would be interested in a digital phone package. A look at the distribution of Cohorts segments within the Time Warner Cable-Charlotte database revealed the segments with the greatest affinity for certain cable and telephone services. Once identified, these Cohorts segments were combined into three mega-segments for direct mail purposes. The segments were defined mainly by age and whether the household had children.
Time Warner Cable-Charlotte then developed three mail pieces, each presenting the same digital phone offer but targeting a different mega-segment. Designed as an oversized postcard, each piece was versioned with text and imagery that would appeal to a particular mega-segment, based on the understanding of those segments enabled by Cohorts.
The three mailers, which were sent in fall 2005, were called "Dog," "Frog" and "Lottery," reflecting their creative and messaging.
The "Lottery" mailer, directed to adults ages 46-58 with no children in the home, resulted in a 1.47 percent response rate -- a 126 percent increase over previous rates.
"Dog," directed to adults ages 26-33 with no children in the home, produced a response rate of 1.31 percent, a 102 percent increase. And "Frog," directed to parents with children at home, yielded a response rate of 1.27 percent, up 95 percent.
Higher-than-average returns more than offset the nominal increase in costs (about $200 overall) for creating versioned mailers, thanks to the cost efficiencies of digital printing.
"These results are remarkable," said Brian Schmidt, director of marketing, acquisition at Time Warner Cable-Charlotte. "Based on this success, we will continue to use Cohorts to tailor our messages and creative to specific target markets."
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters