SPC Overhauls DM StrategySoftware Publishing Corp. Holdings Inc., Fairfield, NJ, this month launched a new direct mail strategy for its Serif line of products that it expects will improve its response rate and lower its mailing costs.
The company, which makes the Harvard and Serif lines of desktop publishing and graphics software, has kicked off a direct mail campaign dubbed Five Free, in which it is offering five of its basic Serif software titles at no cost in order to build up its database of more than 500,000 customers. The company traditionally offers free versions of its Serif products, then markets more advanced versions and ancillary programs to those customers who accept the free offers.
Sandy Fox, who joined the company in December as director of direct marketing, said extensive weekly testing during February and March led her to overhaul the company's direct mail strategy.
"What I saw when I came was that there was not enough testing, which as we know in direct marketing is the heart of what makes it work," she said. "There was not enough list testing, not enough package testing and not enough offer testing, and we've really done all three and managed to achieve significant results."
The company switched to a postcard-style self-mailer from a direct mail piece that included product brochures in an envelope. In addition, the company expanded the offer to include five free products, up from the two free that the company previously had offered.
"What was interesting was that quantity doesn't always mean anything," she said, noting in the tests, offering one free title garnered better response rates than offering two. "Sometimes people say, 'If you're giving five of them away for free, it must mean that they are not that good.' But that's not what's happening in this case."
Upping the offer to include five software titles also gave the company a better base for future cross-sell opportunities," she said. Expanding the product offerings also helped to invigorate the company's lead-generation efforts. The previous product offerings had gotten stale, she said.
In the tests, the offer generated response rates of about 1.5 percent, which is a 27-percent improvement over the company's previous efforts. In addition, she said, using the self-mailer also cut costs by about 10 percent to 15 percent over the use of envelopes.
"That's a significant gain," she said. "It makes the difference between profitability and non-profitability."
Fox said she also worked closely with list broker World Data, Boca Raton, FL, to try to uncover some new lists to mail to. She said the company had "essentially been going to the same lists again and again."
The company has begun mailing about 100,000 pieces per week touting the offer.
"We really tested into it," said Fox. "Every week, we tested different product configurations and tested different formats, but now that I know what works, I'm really rolling it out."
The direct mail piece gives brief product descriptions of the five products offered, but devotes more space to showcasing splashy graphics and explaining that there really are no further obligations or "hidden gimmicks."
The mailer does not have a mail-reply form, but instead displays a toll-free number (1-800-55-Serif), which reaches the company's 75-seat call center in Nashua, NH. The company also uses the center for outbound calling to upsell customers who have ordered the free products.
In addition to the Serif line of software products, the Serif Inc. subsidiary of Software Publishing Corp. also markets related products made by third-party manufacturers, including digital cameras.
The company's revamped direct marketing efforts follow a year in which it was able to increase its sales and reduce its expenses, but was still unable to achieve profitability. Earlier this month, the company reported a loss for the year ended Dec. 31, 1998, of $2.41 million on sales of $18.27 million, compared with a loss of $9.77 million on sales of $17.16 million in the preceding year.
Mark E. Leninger, president and chief operating officer, described 1998 as a "turnaround year" which provided a foundation for gains expected this year.