We’re all familiar with the formula—the success of a direct mail package is 40% list, 40% offer, and 20% creative. So why do we spend 90% of our time on creative—edits, revisions, etc? Oh wait, that’s another blog topic. Today, let’s talk about direct mail offers—when they work, and when they don’t.
Delivering the right offer to the right customer is an art—I mean, a science.
How many times have you received the same direct mail package delivered to your home with different offers? It happens to me all the time—one offer for my husband and a different offer for me. While it’s a great example of testing—a different offer for a different target audience—as a marketer (and customer experience advocate,) it makes me crazy. Would you ever tell one of your customers, “Hey, you don’t deserve this great offer, but your friend/spouse does”? That experience is not a loyalty driver.
While it’s common practice to test different offers to find out which are most compelling and to evaluate how rich your offer needs to be to drive the desired customer behavior, you also need to consider the operational complexity of fulfilling your offer.
No offer? No way!
One of our clients was recently cross-selling life insurance to their customer base. They had developed a good control package and offer, but were challenged by having to decrease their cost per acquisition and to simplify their offer fulfillment complexity. They thought the simplest thing to do was to eliminate the offer. A win-win solution.
Our initial response was, “No way, offers drive lift in conversion.” But we believe in testing our way to strategy changes, so we incorporated a “no offer” test into our test strategy. Surprisingly the test results showed that the “no offer” package performed better than the “offer” package. We were surprised. They were ecstatic. No more fulfillment complexity and a lower cost per sale.
Nonetheless, it didn’t sit right with us. So we recommended that we dig deeper and understand why customers didn’t see value in the offer. Maybe there was a better offer we could test. Maybe there was a different way we could message the offer.
And the investigation begins…
We put on our detective hat and through our research discovered that the offer wasn’t what was unappealing; it was the process of taking advantage of the offer that was the problem. The offer was generating interest and action, but the independent agents weren’t following up with the leads generated from the response offer. They were more comfortable taking a call vs. making a call. So by removing the offer and driving calls directly to the agents, we increased the overall closing rate and drove incremental revenue for the business.
Making a decision to change a strategy is about evaluating all the data. Not just the marketing data. The marketing data told us to eliminate the offer. And that was the right move—not because the offer wasn’t doing its job, but because the process was getting in the way.
What customer experience changes have you made that significantly improved your marketing results?