How to use response analytics to measure the success of direct mail.
I dream about direct marketing. I must be sick.
This morning I woke up and had a vivid memory of my dream last night. No, I didn’t fall off a cliff and wake up just before I landed.
Instead I was dreaming about response analytics. I wish I landed.
In the dream my friend asked me what software program I used to do response analytics for my client’s direct mail campaigns. And I told him that the software program is not what is important. The crucial element is the business process.
My other friend nodded his head in agreement, acknowledging that I am indeed an exalted direct marketing guru (clearly “in my dreams”). Then I woke up.
But it is true. In order to accurately measure the response rate and ROI of your direct mail campaign and get a true “dashboard view”, you need a solid business process in place.
So I am sharing with you the deepest and most profound secrets from my subconscious dream state… Here is your 5 Step Response Analytics Business Process to help you track results:
1. Keycode. It starts with a strategy to keycode each direct mail piece with a unique number that links the mail piece back to the master database. With that keycode, you can ultimately tell who responded, what offer they responded to and what their demographic profile is. If you are a B2C marketer it may contain info such as their age/income/ethnicity/homevalue/# of children/etc. If you are a B2B marketer, it may contain info such SIC/number of employees/revenue/type of computers installed at the site/etc. Linking your keycode back to these demographics will ultimately give you the intelligence to understand how your campaign is working and which demographic segments are responding to which offer.
2. Coupon. The mail piece MUST have a coupon. Because without the coupon, there is no accountable documentation that proves that they are responding to the direct mail piece. It is also crucial that the coupon include a location where the sales person can write in the amount of purchase (thus allowing revenue to be tracked to the direct mail campaign). Bonus points if you put a barcode representation of the keycode in the coupon to make the scanning of the keycodes that much easier after the coupons are redeemed.
3. Offer. Your offer must be presented in the coupon and the coupon MUST be redeemed at the point of sale or with the sales person. This way the recipient has a compelling reason (the offer) to turn in that coupon. Because if there is no compelling reason to turn in the coupon then the coupon becomes a nice-to-have rather than a mandatory. And without the mandatory you will not have the accountable evidence that the mailing is working. Further, the offer in the coupon must be exclusive to your direct mail campaign and can not be acquired for any other customer that visits your store or calls in…. otherwise people may be responding but you can not track their response.
4. Disciplined Business Process. This is huge. And this is often where it breaks down for customers. You must have the discipline to insist that customers provide a coupon in order to get the offer. If they don’t have the coupon, then you MUST get their name & contact info so you can create a “manual response” and then position your marketing nerd to sync their name back to the original database. This is very, very important. Often marketers will give their clients the offer without the coupon and then the direct mail program does get fair and accurate results.
5. Simplified Reporting. Once the coupons are collected and scanned, a reporting system needs to be created that can show response rates and return on investment ratios for the mailing. And because your keycoding is done intelligently linking them back to the original database with the demographic data, then you can also report on which offer/demographic cells respond best (the sweet spots) and which respond worst (the dogs). These reports will give you the intelligence to enhance your campaign, mail less, spend less, and earn more ROI. Your CFO will love you.
A few addendums to the above:
a. There are some instances where a coupon does not make sense because the entire transaction is done over the phone. Mail order catalog companies are a great example of this. Therefore you must have the discipline to follow the rule of these mail order guys… put your keycode above their name in the mailing address area and then INSIST that the client give you that keycode when they are calling in their order. And… make sure you have the internal discipline to log this keycode along with the amount of purchase and deliver this log to your marketing nerd so he can crunch the numbers.
b. Direct mail, by its very nature, is prone to the weaknesses of humans. Humans may forget or resist. That is why the Disciplined Process is so important. However, if you do your marketing strictly through email then you have an opportunity to build a closed loop system that covers for human weakness and ensures that every order has an electronic keycode attached. Of course, that means that you are swimming in the pool of spammers and battling with challenges of anti-spam software…. but your reporting has an opportunity to be a perfect reflection of the reality of your campaign provided it is built correctly.
…. now I want to go back to sleep.