Increasing Return on Marketing Dollars

A Newsletter Published by
Lee Marc Stein, LTD.
April 2006 Issue

Contents

• Beauty and the Beast
• A Rose by Any Other Name
• The Control Package: Friend or Enemy

Beauty and the Beast

Years ago, in the pages of Target Marketing, there was a raging debate between Lois Geller and Bob Hacker about brand vs. response.

My contention is that if your primary objective of your direct mail is branding (and I'll get to the few circumstances in which that makes sense), you are surely going to reduce your response. If, on the other hand, the objective is generating response, you can still achieve some branding from your efforts.

Why do I say that? Because in efforts primarily concerned with branding, you necessarily have to de-emphasize the offer and that's the main reason why you lose response. Used properly, premiums, freemiums, meaningful discounts, and sweeps all heighten response… but if you focus the recipient's attention on these motivators, you spend less time on the product and its benefits.

In branding efforts, you also lose proven copy and graphics techniques designed solely to get packages opened and read. So when you go for branding, you get the beauty AND the beast that eats budgets in big gulps and destroys ROI in a single swipe.

When does it make sense to use direct mail for branding? When you have a relatively small universe and the cost of communicating with that audience doesn't matter. And/or, when direct mail is influencing the climate for a telephone or personal follow-up. Example: you are a relatively unknown company that is marketing to CFOs of Fortune 2000 companies. You are better off using your mail to address the needs of your target, doing some credibility building, and beginning to educate than you are gunning for an immediate response.

Nightmare in Never Never Land
Here's where it gets tough. Let's say you're given a creative brief by a marketer of popular business software. In the brief, which focuses on selling the latest and greatest upgrade to current and past users, you are told unequivocally that the objectives are to generate as much revenue as possible in a three-month period preceding product availability.

You do your homework. You look at the packages other business software marketers are mailing; you look at what's worked for this marketer on past upgrade mailings. You realize only two types of packages have any chance of beating the control.

The sure bet is the "Official" package. Maybe a snap pack, maybe the carrier has just the address without a logo, a sticker of some kind, and a "response requested" date. And inside, there's an official looking memo, and then the glamour brochure (yea for branding). You know this is going to get opened, because as you read the trade publications and talk to clients, and other writers, "Official" trounces "Promotional."

You can try kind of a quiz/survey package. You know, "answer these questions to determine whether you should upgrade now…" Quizzes and tests are also great response builders. Savvy writers can build brand by the way they ask the questions, but too obvious branding ruins the effect of the quiz.

Maybe you try something wackier to break through. Your recipients have been beat over the head for years with the urgency of upgrading. Suppose you tell them up front that it's OK if they don't.

Now it's time to present the concepts. You give rationales for each. The client's first comments are "The snap pack is out. There's no branding. Where's the 'announcing' or 'introducing'? on the outside? Where's the name of the product on the envelope?"

Hmm. It's a concept shoot-out. Do you want to write the package for this client or not? You clear your throat and say "Sorry, I thought the objective was to drive revenue and the snap pack offers the best chance to do it." You well know that if the client moves ahead with you, it will be with another package.

Seeing how things are, you decide to keep mum about the weak offer. Remember, this is business software. Telling a prospect they'll save $10 off the upgrade price if they order immediately is not going to motivate anyone.

The Brand That Didn't Need to Be
Maybe the best lesson learned about response vs. branding was writing lots of packages for American Express Publishing. Management (and legal) loved my initial attempts. They were focused on the magazines and the sweeps copy was tied in with edit. They did not fare well from a response perspective.

My envelopes then became very official looking and gimmicky, and inside the packages I barely mentioned the magazines. It was all straight sweeps copy. And response rates went up. And everyone lived happily ever after.

To the client's credit, they would have even allowed us to remove the American Express logo from the corner card of the outer envelope. I declined… because tests showed that response fell off some outrageous amount when they did that.

Just as American Express Publishing understands that their mailings are about the sweepstakes, auto insurance mailers understand their focal point is premium rates. You do not see branding interfering with that rate message.

So what's it to be for you? Branding (the Beauty and the Beast) or Response?

A Rose by Any Other Name

When I started in direct marketing in 1964, not only were there no blogs and Internet, but there wasn't even "direct marketing." You didn't tell people you did "direct mail," as that didn't smell so sweet. And there was something dank and dark about being involved in "mail order."

As the decades passed, we started to use other terms to describe what we did. Among them are "Target (or "Targeted") Marketing" and "Relationship Marketing." I haven't heard those terms used too much recently (though there is, of course, Target Marketing Magazine), but they came into mind as I was reading through a document emailed to me.

The document is a creative strategies presentation put together by Danny Flamberg of Prescients, a technology-driven marketing company specializing in prospect nurturing. Among many other points, Danny urges his client to…

• Eliminate anything that distracts from clicking through
• Make it easy, fast and worth it to transact with us
• Engage the reader by making everything about the reader (see "Direct Mail as the Supreme Fiction")
• Focus copy on reasons to take a single intended action – click on the personalizing landing page

So here "Target/Targeted Marketing" takes on a much broader meaning. We're not only talking about list/media selection, about "narrowcasting," but also about the message being targeted or focused. And the most important point of focus is on the prospect or customer.

Too often (and here's another passé term) "one-to-one marketing" selects out individual prospects and then presents a message that's about the product. Too often – even in emails – copy moves away from getting the reader to take the next step in the relationship. These are basics that carry through decades, no matter what you call direct marketing.

The Control Package: Friend or Enemy

I didn't need a sociologist or psychologist to tell me that having a "feeling of control" was a good thing. My mother, from the time I left the house at 21 until she passed away 30 years later, injected the question "Is everything under CONTROL?" into virtually every conversation. She never realized how much of my business life revolves around the concept of CONTROL.

When I was on the client side, just about the most exciting thing in the world was to come into a new position, develop new creative, and have the first or second package mailed become the new CONTROL. As a direct marketing manager, THE CONTROL PACKAGE WAS YOUR FRIEND.

If you took care of your friend, it would stand by you. That meant mailing it to core category lists with just the right frequency, and not abusing it with test offers that would twist it out of shape. Oh, you could do some format testing maybe – taking your #10 envelope and trading it for a 6x9 or even 9x12. Or inserting or removing a lift note or buck slip. That wasn't being disloyal.

Your rewards for loyalty to the CONTROL: a job, maybe even a raise for making budget, and certainly less agita. And if you were really lucky, a write up in Inside Direct Mail and recognition as a "Grand Control" (package mailed three or more years).

If THE CONTROL PACKAGE is the direct marketing manager's good friend, it's the copywriter's soul mate. Write what becomes a control package and you are viewed as a god. Put on your web site that you've created XX controls (and no one knows whether that's true but everyone believes you) and you have work forever.

Is Your CONTROL PACKAGE Controlling You?
First, the notion of having a single control package is absolutely absurd for a majority of mailers. Here's what I wrote in my print newsletter over 7 years ago,before digital printing was refined and sophisticated –

"THIS IS A WAKE-UP CALL. Hey, quantity mailers – you with the sophisticated customer base segmented six ways to Sunday; and you whose list rental orders request every sub-segment available – it's time to get smart.

You spend all this time and money finding out who your best prospects are… you track every response and purchase of your customers or super-analyze how many leads convert to sales. You know that computer and production technology make versioning easier and less expensive than ever before. You've also heard the talk about "One-to-One Marketing." And yet you continue to search for THE "one fits all" control package. Hey, give yourself a break.

Let's say you're an automobile insurer and you mail some 20 million pieces a year. Your market is the age 40+ safe driver. You might ask why, since this is already a segmented market, should you be mailing more than a single control? Because people who are 40 and 50 often view their cars and their insurance much differently than those who are 60 and 70 years old; because people in California may react to different creative appeals and packages than people in New Jersey or in Minnesota.

Or suppose you're circulation manager for The Economist. Again, you're mailing in the millions. Maybe corporate managers in Minnesota don't react any differently than managers in Manhattan. But the corporate world has different needs and uses for information than the academic world has, so why shouldn't there be controls for both groups? And, knowing that it's so tough to get through to the CEOs and presidents any business magazine covets, why shouldn't there be a separate control for this segment of the market?"

What I hadn't thought about this past year is the reality that "THE CONTROL PACKAGE IS YOUR ENEMY"! Brian Kurtz, Executive VP at Boardroom Reports, has been talking about this for awhile, but I only heard him mention it briefly during a phone seminar. How can the man who mailed "What Never to Eat on an Airplane" for what seemed like decades say this?

Brian started on the list side of the business. His first point reflects that: THE CONTROL PACKAGE IS YOUR ENEMY because it limits your list testing and your list universe. As soon as you move away from your core audience, THE CONTROL PACKAGE is no longer predictable and probably won't work as well.

Example: health newsletter acquisition packages do best when mail to actives and expires of other health newsletters. If you mail THE CONTROL to, for example, subscribers of business magazines it won't work well. If you say, however, "two friends are better than one" and you develop a package specifically for managers and executives and even venture forth with "If you've never thought about subscribing to a health newsletter before…"

THE CONTROL PACKAGE IS YOUR ENEMY because every new test package you commission looks more and more like the CONTROL with each revision. When you have a CONTROL that's meeting or even beating budget, you tend to play it safe on new tests. That can really hurt the upside potential of your business.

As a corollary, when you have a CONTROL you tend to hire writers who have packages like the CONTROL, or who did packages specifically for you that lost narrowly to the CONTROL. Really want something out of the box? Go to top-notch writers of previous packages for you that missed by 50%. They're more capable of beating the CONTROL by 50% than the ones who barely missed.

THE CONTROL PACKAGE IS YOUR ENEMY because it often leads to complacency. Do not treat it like a friend; treat it for what it is – a step in the right direction.

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