Increasing Return on Marketing Dollars

A Newsletter Published by
Lee Marc Stein, Ltd.
July 2007 Issue

CONTENTS

• Playing with a Full Deck (Part IV)
• Car Talk
• The Shakespeare Strategy for Reducing Cost per Response

Playing with a Full Deck (Part IV)
52 Testable Factors That Impact Your Direct Marketing Results

This is the last in our four-part series on factors that influence the success of direct marketing programs.  For a PDF of the entire series click here. 

More Strategic Stuff

40. Can you mix direct sell and lead generation in a single package? That’s extremely difficult to do, but you may be forced to attempt it.  The test should be to go out with the hybrid package vs. a direct sell package only.  Then see whether you can convert the buyers to a higher-priced service.  Or make it a hybrid packages vs. pure lead generation and measure revenue per dollar spent on both packages.  In the hybrid package, make sure that you have one phone number, fax number and web site for both orders and leads.  A second test: in the hybrid package, see what happens when you leave out the response form you would normally use for direct orders. 

41. When does segmentation pay off?  With digital print technologies, it is paying off more frequently.  However, you still need to be mindful of driving up costs beyond what increased response can cover.  Always distinguish between prospects and customers, first-time buyers vs. good customers.  Look at the needs and hot buttons of the prospect/customer.  CEOs of large companies should not get the same creative as sales managers in small to mid-sized companies, for example. 

42. Does it ever make sense to use direct mail to build brand or even awareness?  Yes, but only when other media (print, broadcast, online) are too broad to each your specific target audience.  If you’re seeking to reach the Facilities Managers of 150 retail chains, even something like Chain Store Age is going to waste a lot of money on non-prospects. 

The difficulty here is testing to see the effect of the brand-building on response.  You can’t really TEST direct mail against other media (but you can research it, of course).  What you can do is determine by follow up phone calls awareness and recognition levels after one, two, or more efforts to the same targets.

Email Marketing

43. What kind of subject line tests should you be doing?  Of course, the subject line is the most important thing to test in an email.  You want to determine the effects of using a respond by date, personalizing the line, hyping the offer (discount, savings, bonus), or simply offering a solution to a problem.  Length of subject line is another factor to test.  I’ve seen some longer ones work recently.

44. What else in the email should be tested?  “From” lines are being tested with great frequency now.  They have to be anti-spam compliant, but you can certainly test person’s name vs. corporate name only.  Many still test text vs. HTML and with good cause.  Text is contrarian now, and in b2b situations that can be good.  It gives emails a more personal touch.  Within the HTML format, you’ll want to test use of photos vs. type only.

45. How long should copy be?  There’s no real rule here.  Health and investment newsletter marketers like Agora make extremely long emails (the equivalent of 6-8 single-spaced pages of copy) work.  And they don’t have any links until near the end.  With lead generation, free trials offers, or well-known brands, test making the email as short as you can, with the emphasis on the offer.  Test putting links right after the headline and then after the second short paragraph of text.

46. How much should you rely on the landing page?  The landing page is a passageway between the email and the transaction.  Don’t clog up the passageway with too much sell copy or too many choices.  In a few cases, I’ve seen even well-executed landing pages depress response and clients doing better linking the email directly to their web site’s store.

Insert Media

47. What types of programs should you look at?  That will depend on how broad your product appeal is.  If it is a consumer product with an extremely broad audience, look at bank statements first.  You have big numbers, low cost per M, and relatively little competition.  This can be tested against broad-based cooperative mailings.  For narrower appeal products, look to package inserts – literature in shipments of other people’s products.  You can also test bind-in response cards in catalogs.  As postage rates have increased and solo direct mail becomes more expensive, there are an increasing number of insert media programs.

48. What kind of offers work?  Since you have relatively little room, compared to solo direct mail, print ads or even mail, you need to have either a lead-generation offer, or a low-priced item.  More and more, insert media are being used to drive prospects to web sites, although generating phone calls still works.  Magazine offers can work, particularly for subscriptions under $10.   Don’t expect insert media to generate a lot of cash upfront.

49. How does insert media creative different from that in other channels?  For one thing, it’s much more offer-oriented than direct mail.  The deal should dominate since you don’t have much room to sell product or build credibility.  Don’t make the mistake, as I did early in my career, of jamming inserts with copy.

Direct Mail Package Component Testing

50. How can you cut package costs without losing response?  If you have a big brochure (11x17”), test down-sizing it to 8½ x 11”.  If your brochure is already the smaller size, test replacing it with a buck slip.  Mailers have been experiencing increasing success with buck slips.  You can also test down-sizing (but not eliminating), the letter.  But be careful – I’ve seen such tests save money and lose more response. 

51. What are the two highest-potential tests you should do within a letter?  The key areas are the Johnson box (or headline) and the P.S.  In b2b situations, particularly in mailing to Presidents/CEOs, test a strong (and short) first paragraph in place of the Johnson box.  If you’re retaining the Johnson box, test revealing the offer vs. teasing the offer.  Test a provocative quotation vs. news-type copy.  The P.S. should either contain a repeat of the offer (with a reply by date or a re-statement of the major benefit.  This is what should be tested head-to-head. 

52. Which involvement devices will work best for you?  Achieving involvement is one of the keys to direct mail success.  Involvement devices include personalization, quizzes, and hand-eye coordination tasks related to the response form.  Many mailers are still using stickers, stamps and tokens with success.  You can also consider scratch-offs and other “reveals.”

Car Talk

I’m in the car listening to WCBS News Radio and there’s a marvelous spot asking readers to call for a test drive of a Bentley.  The copy talks about the car, of course, but the tone is British tweedy, snob appeal at its very best.

The thing is that radio has never been known for its direct responsiveness.  Yes, it’s far more effective for lead gen than direct sell, but on a cost per lead basis, historically it falls far short of what direct mail can do.  And today, paid SEM beats them both.

Does direct mail have a place here?  Certainly, it can do a better job targeting the right demographics.  WCBS News reaches out in at least a 75 mile radius, and listeners from even 50 miles away are not going to go into Manhattan for a test drive. 

From an income level standpoint, listenership goes much further down the income scale than the Bentley prospect base.  With direct mail, we can target households with a minimum $150,000 income.  I’d also like to target Angliophiles.  Otherwise, the moneyed may opt for a German or Italian luxury car.  You can rent lists of U.S. subscribers to British magazines, for example, or simply test an ethnic database. 

Creatively, the package can be just as British tweedy as the radio spot.  You could even deliver the invite by sound chip within the package.

You have to figure the Manhattan Bentley dealer is spending $5,000 a week on WCBS.  For two weeks worth, you could mail a great package to the 5,000 top prospects in the NY metro area and get more test drives booked.

Of course, if the objective is to build brand awareness, radio has it all over direct mail.  And PR, especially event marketing, probably has it all over advertising.  But that’s the subject of someone else’s talk.

The Shakespeare Strategy for Reducing
Cost per Response

We’ve heard a lot of different strategies for dealing with the May postage increase including stop mailing, beat up your printers, and increase your prices.  Your best bet for increasing profitability, though, is to buy the best creative talent available. 

OK, that is not altruistic.  In fact, it isn’t even the truth in many situations.  Your best bet is to use the Shakespeare Strategy.  That’s right, borrow from the Bard and bellow “The first thing we do, we kill all the lawyers.”

You’re laughing, perhaps because you haven’t been a victim, but there are three distinct ways that lawyers can negatively affect cost per response. 

Appropriately, before I continue, a disclaimer*

* I am not advocating that you break the law or deceive anyone reading your direct mail.  I’ve written and spoken extensively against deception.  If federal or state law mandates that particular language appear in the mailing, by all means follow the mandate.

Now to the three destructors:

1. Death by footnote

You’re trying to build trust and rapport in the headline and first few paragraphs of your letter and brochure.  If you have footnote designators in the headline and first few paragraphs of your letter or brochure, instead of nodding their heads in agreement, readers are doing to start worrying and be distracted.  You are going to lower response significantly.  I can’t give you figures because I’ve never been allowed to test with and without, but maybe if your profits are hurting, you can test. 

And what if your lawyers insist on eight footnotes within an 8½ x 11” flyer that carry some 350 words?  What do you think that does to response, particularly when the marketing manager is concerned about the piece being copy-heavy?  And what if the lawyers then tell you that the letter in the package must carry the exact same footnotes?  I can tell you that I am not making this up.  What makes it worse is that part of this package’s purpose was to generate leads, not to sell directly. 

For another product for this client, where there appeared to be many fewer footnotes, I tried to incorporate the spirit of the footnotes into the body copy, and that tactic was rejected. 

2. Driving up costs

With most of my clients, I expect to go through one round of legal revisions.  Sometimes I fight back against suggested wording.  The increases in costs come when the client’s legal department makes changes on every round of revisions.  Often we come back to the starting point – the revisions made on the initial round. 

Extra charges for copywriting aren’t the expensive part of this seesawing.  It is on the design side that the AAs mount up.  If your mailing is a million pieces, it doesn’t matter too much if you incur additional charges of $2,000.  On a b2b mailing of 25,000 pieces, though, that’s $80/M.

• So if you’re reducing response by 25% with all the footnotes, let’s say from .8% to .6%, and
• You’re driving up your costs by $80/M (from $800 to $880/M),
• You’ve increased cost/order from $100 to $147.

3. Causing lateness and/or mistakes

Most marketing managers are savvy enough to build in sufficient time for legal review.  However, I’ve been involved in situations in which the lawyers took an extra week or two and mailing schedules were thrown off.  This may have a marked effect on response, depending on what opportunities you want to cash in on with your mailing.

For example, a delay in mailing between November 1st and November 15th can be detrimental to almost any mailer.  More generally, a delay in a b2b mailing can a) leave sales people with no leads for two weeks; and b) blow a chance to get a leg up on a competitor.

The more serious consequence of legal tomfoolery is that it causes mistakes.  Marketing personnel become so constricted that they forget to focus on their prospects and customers, and their job becomes pleasing the lawyers.  Footnotes become more important than headlines; disclaiming more important than proclaiming.

There is a more humanistic alternative to the Shakespeare Strategy.  Sit down with your company’s CFO and explain why you can’t make your numbers.  These days marketing people have the strangest bedfellows.

2007 by Lee Marc Stein, Ltd.

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