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A Proper Direct Mail Testing Strategy Helps You Determine Which Packages Are Really Winning

Brent Doering

If you’re like me, the summer has certainly been welcome. Along with the return of warmer weather, school is out and kids are brimming with excitement about attending camps, sports, and other activities. I know I feel a bit like my nine-year-old daughter’s activities director (or, more accurately, her chauffeur). Ava’s schedule is jam-packed with camps and sporting activities.

She’s at that point where she’s become quite competitive, concerned not just with “Who wins and who loses?” and “Who’s better than whom?” but also “How much did we beat them by?” Of course, these questions especially need to be asked when the score isn’t being kept and participation trophies are in full bloom.

Direct Mail Testing Cuts Through the Confusion

I’m probably showing my hand a little too much, but regardless of how you feel about being rewarded for “just showing up,” it raises an interesting question: How do you know how you’re doing if you’re not measuring your results and looking to do better? Similarly, how do you improve your direct mail efforts if you’re not continually testing your current control packages?

IWCO Direct utilizes a number of key elements to help define winners and losers and ultimately determine the creative package(s) that earns the trophy. So, what is so hard about that? It should be simple—the package that generates the greatest gross response rate (GRR) is dubbed the “winner,” right? Well, sometimes yes, and sometimes no.

Here are few “what if” scenarios to help you think of it in more concrete terms:

  • What if response to one direct mail package is .03% lower than another package, but costs about 25% less to produce?
  • What if you create a high-end direct mail package that may double your costs over the current control to produce, but provides a 30% response lift? And what if each customer is worth $10,000 to your organization?

In the first example, you can clearly see why GRR is but one of the many factors that need to be considered when evaluating success. In the second example, the extra costs needed to produce the premium package may very well be a pittance compared to the new customer revenue generated. We’re very familiar with scenarios like these and many more at IWCO Direct, and with proper direct mail testing and analysis, we give our clients a clear picture of what options will help them achieve their goals.

Seeing the Best Path to Your End Goal with the “Hurdle Sheet”

In fact, we plug a wide variety of variables into a tool we like to call a “hurdle sheet.” A hurdle sheet essentially captures the current control package metrics (viewed as the “hurdle” on the way to a goal) and helps illustrate package cost and response rate variations required to overtake the current control. These projections and extrapolations are based on various test and roll out quantities and provide our clients with the measurement means to specifically define improvement—in other words, it shows you what success will look like.

At the end of the day, it all comes down to helping you understand the choices that may lead to the best return on your marketing investment (ROMI), which plain and simple cannot be accomplished without keeping score along the way.

How are you currently measuring your results? Please reach out if you’re thinking about testing the waters, would like to see a hurdle sheet in action, or even if you would just like to share your thoughts on that closet of participation trophies.

link https://www.iwco.com/blog/2018/06/22/direct-mail-testing-plans/
Brent Doering

Author

Brent Doering

Senior Customer Engagement Manager and graduate of Saint John’s University. Marketing veteran with more than 15 years of leadership experience. Recognized with an Asters Judge’s Choice Healthcare Marketing Award for his efforts to make a difference in people’s lives. Bringing the philosophy of “business is all about relationships,” he approaches each project with inspiration and enthusiasm that empowers his teammates to be their best. Proud dad, fisherman, hockey enthusiast (North Stars followed by the MN Wild), and tri-athlete.

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