Is mail still effective for acquisition?

George Michie

Co-founder and principal, search marketing division, Rimm-Kaufman Grp.
Former manager at Crutchfield Corp.

Wise investment requires moving money to where it has the most impact and, for many catalogers, that may be away from prospect mailings and into more cost-effective channels. But, beware the false precision of numbers.

Marketers need to blow up any vesti­gial budget silos. It makes no sense to have different ROI standards for cata­log acquisition and search marketing acquisition unless those metrics are tied to observed lifetime value differences. Money should be free to move between channels as opportunity dictates.

It’s worth scrutinizing your credit allocation mechanisms. Prospect mailings look artificially unprofitable if they’re only credited with sales that take place over the phone or through entering catalog codes. Match-back data is an important piece of the puzzle — many folks simply type the name of the catalog into a search bar and buy, meaning that traditional tracking mechanisms aren’t sufficient anymore.

To complicate matters further, if someone receives a prospect piece, searches for the catalog Web site by name and clicks a natural or paid search link or an affiliate coupon site link, what marketing program should get the credit? The catalog should. However, if they got the catalog, searched for a product using a competi­tive search phrase, clicked on a search ad, then bought, which channel drove that acquisition? What if they signed up for e-mail after the search click?

Spend acquisition dollars on the most cost-effective drivers, but be sure you know what’s driving what.

John Papalia
President and CEO, Statlistics
Former VP of list management at Walter Karl and Mal Dunn Associates

As a lifelong member of the direct mail community, you’d probably expect me to defend our methods and practices as the best, time-tested, and proven strate­gies for customer acquisition. Well, if so, you’d be right. Years of experience in this industry have done nothing but strengthen my beliefs in direct mail.

In today’s economic climate, it’s more important than ever to measure ROI. With direct mail, the ROI analysis is based on hard results that have been proven over an extended period of test­ing and retesting.

When compared to other methods of acquisition, direct mail offers the specific measurements and precise tools necessary to determine the value of your marketing efforts. With every company looking to maximize in all departments, the return of direct mail is both visible and tangible.

We live in a society driven by infor­mation and data, and this is reflected in almost everything we do. When was the last time you weren’t asked for a ZIP code, phone number or member­ship card when making a retail pur­chase? Consumers are more aware of our marketing efforts than ever before.

Our industry is faced with chal­lenges, including proposed do-not-mail legislation and continuing postal and paper cost increases. Also, there’s more attention paid to privacy legislation than we’ve seen at any time in the past. This is the time for us to embrace our customers by showing them the ben­efits of our unique tools, our modeling techniques, and our lifetime value and recency-frequency analyses.

DMNews’ decision
Our experts agree that it all comes down to measurement and metrics. Crediting the correct channel with a sale and calculating a customer’s lifetime value are essential, and this challenge is growing increasingly complex as marketing programs break out of their silos to collaborate on customer acquisition efforts.

For more views on the this debate, see DMNews Direct Line.

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