It’s a challenge that plays out daily in marketing departments. Create a winning direct mail postcard or mailer that generates leads, drives the sale and builds loyalty with target customers. It’s a quest for the direct mail “holy grail,” but one that is filled with obstacles.
Months or even years of A/B split and multi-variable testing typically end with minimal engagement and dwindling response rates: traditional mailbox testing fails at a rate of 80 to 90 percent. While most marketers know who to target, offers and creative are often tested using top-line demographic and transactional insights, leaving marketers without a way to speak to diverse segments about the things that matter to them. For years, direct mail professionals have relied on a one-size-fits-all testing approach, playing it safe with packages that blend elements from each persona but don’t make an impact with any one audience. It’s no secret that strong direct mail performance really lies in successful audience segmentation.
The key to getting segmentation right is to identify an emotional component that tells a story to connect with prospective customers in a meaningful way. Going beyond demographic and geographic criteria to use sociocultural targeting – add in social, psychological and cultural characteristics to identify underlying behaviors and determine what motivates a purchase.
Why are emotional connections important? According to Gerald Zaltman, Harvard Business School professor and author of How Customers Think: Essential Insights into the Mind of the Market, 95 percent of purchase decision-making takes place subconsciously, driven by feelings more so than logic. Marketers need to tap into that emotion and understand what’s important and what’s not to individual audience segments. For example, two vastly different types of people will buy the same exact BMW, but one does so for the thrill and the other for practicality.
Considering sociocultural factors as you develop messaging, creative and the offer will help lead to increased response rates.
Message: Know When More is Less and Less Is More
Each consumer is unique and their reasons for choosing brands vary greatly. While some are interested in company history, testimonials and product endorsements, others are turned off by too much information. Marketers need to better understand just how much conversation is required for a particular audience and develop behavior-driven messaging that will close the sale and maintain the relationship.
Creative: Deep Dive into Emotional Content
Compelling creative breaks through the advertising clutter and is imperative for a must-open direct mail piece. Photos, fonts, layouts and colors all have an impact and their importance varies by industry. In financial services, a simple letter layout with charts, tables and iconography seem to be more effective, while in retail, lifestyle and product shots are the focus. But in any industry, marketers should also look at how sociocultural factors will impact creative. Will the target be more interested in an image of a happy family or should the piece spotlight a single person having fun?
Offer: Loyalty vs. Price
One of the most important contributors to response is the offer. Knowing what emotion drives the consumer to purchase will help determine what type of offer will be the most effective: percentage off, dollars off, BOGO or free gift with purchase. Is the target consumer one who thrives on a good deal, or are they driven by loyalty and a good product? It’s crucial to shape the offer appropriately for each target segment.
Virtual Testing Can Help
Marketers spend a good portion of their testing budget to figure out the most effective package for their target audience. Many use an A/B split method to identify a new control. This generally involves numerous attempts to find a winning package, which can take years and is expensive, making the process arduous. And despite the effort and cost, the results are often only marginally rewarding.
But now there’s an alternative approach that is likely to address these challenges. Without mailing a single piece, new testing technology makes it possible to learn what set of variables will work more successfully for people who are, for example, aged 60 and up versus those aged 40 to 59.
Accelerated Insights is a virtual testing platform developed by Quad, a leading provider of multichannel marketing solutions. The platform uses a sophisticated persona matrix that combines demographics with sociocultural characteristics to predict which factors motivate someone to act. From a vetted pool of millions of survey respondents, the technology creates “look-alike” panels representing every possible iteration of the target audience for a campaign. The platform can test 20 elements and attributes at a time, evaluating not only each variable individually, but how they interact with one another. The platform actually can compare up to 1,200 possible combinations.
After four years of trials, the results have been impressive. Total testing time has been reduced from an average of two years to 60 days. The system can accurately predict the best performing audience segment and format using a proprietary algorithm, lifting response rates by 18 to 27 percent and reducing costs by up to 90 percent.
Now more than ever, marketers can be encouraged that direct mail technology is getting them closer and closer to that ever-elusive holy grail – a loyal customer.
Art Hall, Ph.D, is a Senior Marketing Consultant for Quad/Graphics. He works hand-in-hand with marketers and publishers to develop integrated marketing solutions based on print that connect the clients’ content to multiple media channels. A direct marketing veteran with expertise in marketing, technology and finance, he educates and encourages Quad/Graphics direct marketing clients to leverage the power of their customer data into highly personalized life-stage and personal marketing solutions. Art is an active member of and speaker for the Direct Marketing Association, and has won several DMA ECHO awards on behalf of his clients. For more information on virtual direct mail testing, visit https://accelerated-insights.com/