You’ve segmented your market and developed your mail piece. Now what? It’s time to test your campaign! As you plan your campaign, it is wise to develop a test to ensure you’re maximizing your ROI. Targeting the right audience is critical. You also need to deliver the best offer. This will help you determine which format will make you the best return on your investment.
Whether targeting an audience of 10,000 or 100,000, you need to segment a portion of your intended recipients for testing. The U.S. Postal Service’s (USPS) Certified Direct Mail Professional (CDMP) guide advises testing about 10 percent of your total prospects in order “to receive statistically accurate results. This information will be able to show you a cross-section of information to make the call to proceed as planned or make changes as necessary.”
It is very easy to determine the exact return on investment or response rate from a direct mail test. You should also get a roll out quantity price so that you can properly evaluate the test results. The data you gather from this test will help you adjust current or future campaigns, and implement changes that can increase your ROI. That is how you increase your ROI!
After you’ve randomly chosen who to sample and identified what you want to test, determine the response rate percentage you would need to achieve a return on investment. The CDMP suggests “getting below 1 percent usually indicates that something is off…If you happen to get a response rate over 3 percent, you’re doing fantastic and should move right along.”
Before you begin testing, consult any previously collected data. If your last campaign was a success, identify the factors that made it great and those that could make it better. If your last campaign was not effective, determine which elements were missing or could have been improved.
When the cost per acquisition is higher than its revenue, you may need to mail fewer pieces to a more targeted list. If response rates are low, check your target list to ensure you’re reaching the right audience for your product and the correct offers are included. When response rates are high but conversion rates are low, the offer and product didn’t persuade the consumer to take action.
Once you’ve analyzed your past data, choose which item to test, such as the:
The 40-40-20 rule states 40 percent of campaign success comes from the list, 40 percent from the offer, and 20 percent from the creative. With this in mind, you may want to start your trials with your offer and list.
To do so, you’ll want to use an A/B test, which requires you to create two versions of one mail piece, with changes to a single variable. There are two types of A/B tests, an existing control group test or a single-variable split test. The one you choose depends on the type of campaign you’re running.
The single-variable split test requires you to create a mail piece such as a postcard, letter, or self-mailer (the “A” mailer), clone it, and change one variable in another (the “B” mailer). This single edit can be any of the items listed above. For example, you can change your call to action. On mailer A, your call to action may say, “Visit our website for 50 percent off today!” while mailer B may read, “Text 555-555-6978 for your 50 percent off discount code.” Split your sample down the middle randomly, and send the A mailer to one and B to the other.
If it’s an ongoing campaign, you’ll want to use the existing control group test. This way, you can test a new mail piece (B) against a previously successful one (A). For example, if your A mailer offer reads, “50 percent off,” you may change B mailer to say, “Two for One Sale.” Split your sample, and send 90 percent of the A mailer and 10 percent of the B. You can also have multiple tests, but again, only testing one variable.
Ensure all tests include a tracking method such as an Intelligent Mail Barcode, trackable phone number, trackable URL, personalized URL, coupon code or QR code. These will enable you to measure how many consumers responded or took action based on the mailer they received.
If your test falls below the 1 percent response rate, you’ll want to identify the factor that’s unappealing to clients. Here are a several questions to ask:
Was the offer appealing?
It’s possible you did everything right: You had a great call to action, an eye-catching design, and some fantastic copy, but your offer wasn’t that appealing to consumers. Up the ante a bit and make an offer they can’t refuse—as long as it doesn’t mean your cost of acquisition is higher than your revenue.
Was the call to action prominent?
Consumers wanted to take advantage of your offer, but didn’t know how. Either your call to action was too small, hidden or nonexistent. Ensure it explains what you're offering, the benefit they’ll receive, and how they can take advantage.
Did the design or messaging miss the mark?
The last of the 40-40-20 rule, the creative, may be the culprit. You want your design to match your branding, what you’re offering, and to be clear.
Was the overall piece eye-catching?
You want to choose and design a mail piece that will stand out amongst the rest. Pick a larger size than what’s most often found in mailboxes or use a bold color.
It’s important to remember that testing isn’t just a one-time experiment. For sustainable results, you need to continuously test your campaigns, even if they’ve been successful in the past. Consumers' habits, likes, and dislikes are constantly evolving, so it’s important you modify your direct mail pieces to keep up with them.