The challenge of generating high response rates is increasingly difficult for today's direct marketers, as mailbox clutter is thicker than ever. According to the U.S. Postal Service, last year's annual volume of direct mail reached 191 billion pieces — a 4.1 percent jump over 1996 and the highest growth rate in 10 years.
This barrage is a major reason why response rates are declining. In fact, direct mail studies conducted by BAIGlobal have found that on average only 30 percent of recipients ever remember getting a specific piece of direct mail — and that's within a few days of receiving it. Worse yet, just 12 percent take the time to read the mailings, while just over 3 percent read the mail in depth. No wonder many response rates today hover around 1 percent.
While most direct marketers try to improve performance by repeatedly testing new packages against their controls, testing has its limitations. It can identify which package got the higher response, but it doesn't reveal the specific elements that made the package succeed. Whether it was the new list, new outer envelope, creative, copy or enhanced offer that worked often remains a mystery. Direct marketers who can decipher which elements worked best and why, can increase response rates.
Research. The key to discovering which elements of your control package work best and why is quantitative research. Such research, for example, was of help to a business-equipment client whose surefire control package was suddenly performing poorly. It didn't know what was wrong. Was its offer no longer of value? Were competitors taking away its business?
After conducting a quick quantitative study of recipients of its last mailing, we found the problem wasn't in the package or the offer, but rather with the client's newly purchased mailing lists. Quantitative research had shown that, on average, 73 percent of the names purchased lists in that industry actually were among the target audience. But our telephone survey found that the new lists bought by our client contained only 58 percent of the target audience they wished to reach.
Once the client established that the new lists were at fault, it focused on improving its list selection and higher response rates followed.
Research complements testing. Quantitative research also can be used as a complement of testing to identify the most powerful attributes of multiple test packages. Such research, for example, revealed some interesting surprises for a client in the credit card industry. The client's original control used a plain manilla outer envelope. Later, a test package was created that included a new elegant outer envelope and shorter letter copy. The test drew a higher response than the control — 1.5 percent vs. 1.3 percent. Was the test worthy of becoming the new control?
A diagnostic telephone survey of recipients revealed a surprise: The original plain manilla envelope had a higher recall among recipients, but the shorter letter copy from the elegant envelope test was more easily understood and eventually drew the higher response for the test. As a result of the quantitative research, the credit card issuer combined the best of both packages for a more powerful result overall.
Comparing performance to industry norms. In addition to identifying the most powerful package elements, quantitative research can establish industry norms against which to judge the effectiveness of a specific mailing. Case in point: A direct mail client came to us with a control package that averaged 1.2 percent response. Its industry norm averaged 1.4 percent response. To improve its performance, a follow-up quantitative survey was conducted shortly after the next mailing.
The study revealed the client package's Achilles' heel. Its mail was reaching the right target, being noticed and opened, but only 10 percent of recipients would read it vs. 27 percent for its industry. The problem evidently lay inside the envelope, and the client took appropriate action. By enlivening its creative look, moving key customer benefits to the top of the letter copy and streamlining the design of response materials, its next mailing was able to command greater reader attention and generated higher response.
As these three examples illustrate, quantitative research can give direct marketers an edge in effectively improving response rates in today's cluttered environment. It's a powerful tool, too often overlooked, that can identify industry norms, pinpoint how to improve a control package and identify what to combine in test mailings to produce even higher response rates.
Claire Peerson Braverman is senior vice president at BAIGlobal Inc., Tarrytown, NY, a full-service market research firm.