Hail Caesar or Hail Mary?

Direct mail can prove its value and make you a hero—?if you avoid common pitfalls in favor of proven testing strategies.
by Brad Douglas

We've all been there—in the boardroom?, surrounded by a handful of well-meaning rising stars or high-level suits?—?when the topic of direct mail comes up. Usually the following comments are good at sucking the air right out of the room:

"We tried that once, didn't we? I don't think it worked."

"We could try a postcard; if it works, we could do more."

"Isn't direct mail dead? Everything's online now."

Any way you slice it, these are usually the final words spoken before the door is closed on direct mail forever.

But let's consider:

More and more money continues to find its way into DM budgets. According to The Winterberry Group, "The direct mail marketing industry enjoyed another year of robust growth in 2006 as total spending on U.S. direct mail services reached $60.6 billion, an increase of 7.5 percent from 2005 estimates."

As an acquisition medium that targets pure prospects, it's still the lowest-cost lead generator for complex products sold by salespeople—other media just don't work the same way.

And direct mail still allows more reach and a higher degree of targeting than any other medium—online and traditional mass media fall short when you use these two criteria.

So, there are a lot of reasons to not close the door on direct. Let's talk about how to prove it can work for your company and make you a hero in your organization.

Avoiding the "Hail Mary"
Hail Marys are the desperation efforts that try to overcome a lack of real strategy. Here are the common ones to avoid.

The quick-n-easy.
This is the "let's just throw 10,000 postcards out there and see what happens" approach. It is the kiss of death. It may be easy to execute, but being easy isn't the same as being effective.

First, we know (through testing) that postcards usually don't work as hard as envelope mailings. Sure, they're cheap, but if they don't make the phone ring or drive traffic to the Web site, who cares how much money you saved?

The do-it-yourselfer.
Desperation often leads to misdirected attempts to save time. The most dangerous of these is probably trying to do it all in-house.

DM is loaded with hundreds of details that are unique to the discipline, such as making offers in the copy, showcasing important calls to action, designing for cost-effective production, thorough data processing for postal optimization. Ignore the need for expertise and you'll probably end up with an effort that costs too much and doesn't work very well. It will probably take longer to complete, too.

The one-shot wonder.
This Hail Mary approach ignores everything direct marketers have learned about the importance of testing and replaces it with a one-shot effort based on a single offer and only one creative approach. The problem with this approach arises when the one-shot effort fails. What's next?

The idea that a one-list, one-offer, one-creative approach can find your mark and continue to pay off is short-sighted at best. Your target market is an ever changing, fickle organism. It can change shape, size, and location before you know it. To pin it down (and keep it pinned down), you need to test different ideas.

In the end, it is better not to try direct mail than to take one of these "Hail Mary" approaches. The cost is not only measured in dollars and time: Poor results and half-baked marketing efforts have a way of taking a toll on a marketer's reputation.

So, what can be done to avoid making a CLM (career limiting move)?

Become the conquering hero—trade "Hail Mary" for "Hail Caesar!"
The bolder, better strategy is to cast a wider net and test multiple lists, multiple offers, and multiple creative versions all at the same time.

With multivariate testing, you learn more, you learn faster, and you increase the likelihood of finding a winner.

Common objections to multivariate testing are that it costs too much, that it's too complicated, or that you have to mail too much to get statistically reliable results. But, with the help of an experienced DM agency, these objections are easily overcome.

First, multivariate testing doesn't have to be expensive. With planning, all the offer testing and versioning can often be accomplished with laser splits. And an agency that understands testing and production will know how to gang materials together for maximum efficiency.

Second, while a multivariate test is by definition more complex than a one-shot effort, it doesn't have to be unmanageable. A solid DM agency will handle all front-end complexity for you. And they will ask questions about any back-end constraints to ensure that the test works with your lead-handling and fulfillment systems.

Finally, individual cells within a multi-variate test may or may not be statistically valid—that's a function of cell size and response rates. But, by aggregating data within each variable, you can achieve statistically significant results.

So, what does a well-designed direct mail test look like?

The table below shows an example of a test plan that includes 12 distinct lists in three market segments, two different offers, and two creative variations. In all, it creates 48 unique end-point cells but, remember, for analysis purposes, we'll roll up data across each variable to keep things manageable and raise the level of statistical reliability.

The most compelling reason for this type of testing is the amount of learning that is produced in a relatively short time period—as opposed to a typical champion vs. challenger approach, where testing this many variables could take years!

The real payoff—results!
In the short term, you'll learn which lists, offers, and creative packages to pursue and—just as important—which to eliminate. Your follow-up tests and validation mailings will be guided by results rather than a series of shots in the dark.

In the longer term (as your empire grows), you'll find that this kind of testing always puts you one step ahead of market changes. You won't need to gamble on Hail Marys because you'll be ready for anything.

A well executed, wider-net approach to testing provides a dependable way to make intelligent decisions about the direction of your future marketing efforts. It puts you in charge of your destiny.

Hail Caesar!

Brad Douglas is Vice President of Business Development at Direct Resources Group, a Seattle-based direct marketing agency. He has nearly 20 years of experience creating and managing successful direct marketing programs for a variety of clients. Contact brad@drg.com.