For too many marketers, the primary metric behind their direct mail decisions is not calls, website visits, or store traffic. It’s not cost per acquisition, customer lifetime value, or return on marketing investment.
It’s cost per unit.
To be effective, direct mail must be affordable. But when you let CPU alone drive critical direct mail decisions such as format, engagement device, and messaging, you allow cost to dictate strategy, handicapping your ability to maximize results.
To ensure a successful direct mail effort, there are five things you need to do prior to pricing.
Customer data is at the heart of direct marketing. But data is only as effective as the insights you glean from it. Successful marketers are the ones who can creatively apply data-based learnings into actionable strategies. Marketers who use data-driven insights to guide their campaigns typically achieve five to eight times higher ROI than those who don’t.1
These audience insights will determine all other strategic decisions, from targeting to tactics, creative message to mail format.
After audience insight, message is the most important factor in determining direct mail success. Yet, little time and effort are spent developing an effective messaging strategy. Marketers tend to spend more time being clever than being clear. They prefer to blow their own horn rather than address the needs of their prospective customers.
The messaging architecture is an analytical approach to developing marketing messages that truly resonate with your audiences. It helps you identify core objections to choosing your products or services and craft compelling, meaningful answers to those objections. Both rational and emotional appeals are incorporated, providing a foundation for speaking to audiences across all marketing, sales, and corporate communications.
Too many marketers think in terms of a single tactic. Consumers, however, respond best when receiving a unified message across multiple channels, both digital and non-digital. The best omnichannel strategies acknowledge that consumers have definite preferences for certain channels and tactics – especially when it’s time to take action. Allow your audience to determine the channels through which they prefer to communicate with your brand.
Direct mail is an effective tactic for generating immediate action by the consumer, but it is even more effective when teamed with complementary digital or print channels. In fact, studies have shown that adopting an omnichannel strategy can increase campaign performance by up to 20%.2
Studies show that even a moderate increase in creative spend produces an 18% higher ROI for direct mail.3 It’s important to understand, however, that the most creative concept is rarely the most effective.
Creativity can help you develop engaging and attention-getting direct mail executions. However, creativity without discipline is a recipe for failure. Decades of testing and retesting have identified that core direct response principles and best practices — such as the use of strong engagement devices and reader/scanner design — can dramatically improve direct mail performance.
Testing improves conversion rates and reduces costs by eliminating ineffective targeting, offers, and executions before applying them across your entire market footprint. A small investment in testing can reap huge benefits. Our own experience has shown that a solid testing strategy can improve direct mail ROI by as much as 100%.
Remember, CPU does not drive ROI. Before pricing your next direct mail campaign, give some thought to the strategic factors that determine success or failure. When you see the results, you’ll be glad you did.
3 Harvard Business Review