Lee Marc Stein

Article Summary:

Testing is a crucial factor in the success of any direct marketing initiative.

Direct Marketing Test

Testing is a more important factor in direct marketing success than ever. Why?

  • Increased pressures on revenue expansion while holding expense budgets steady.
  • More rapid changes in the marketplace that can be monitored by testing.
  • Greater choices and (therefore decision-making) about media and combinations of media, types of offers, creative strategies and executions

Yet we've seen marketer after marketer limiting or eliminating the amount of testing they do. And major marketers failing to look at issues that can have the largest impacts on their businesses. Hence, this Test Test. It's not meant to be exhaustive, just diagnostic.

Media - Lists
1. Have you run head-to-head tests of mass compilers? In your particular markets, the best known isn't always the best. Quality and selectibility of data can change in just a few months' time.

2. Do you look for out-of-category winners? In the second mortgage/re-fi arena, everyone uses the same data sources. So when we were involved in work for The Money Store, we tested TV Guide subscribers and found a big winner. Why? We were thinking about how to capitalize on the fact that the company had spent some $50 million in five years on television. Similarly, for a client marketing timeshares in Bermuda, we insisted on testing "lifestyle" lists against the previously used Bermuda Department of Tourism list. House & Garden, Inc. Magazine, and Boston Magazine subs all beat the tourist list.

3. Are you using modeling to help you carve out segments of previously unprofitable lists? We've run into two cases of negligence recently. One is an investment newsletter publisher that has given up on the personal finance magazines without matching its active subscriber base against such files as Money, Smart Money, and the Bloomberg entry. We know modeling will work because a decade ago just a simple age/income zip screen produced acceptable results. The second is an upscale food magazine that can't make other food lists work.

Media - The Internet
4. Are you testing key pages to determine click-ons and stickiness? Seth Godin of Yoyodyne said at times he might have 250 different tests going on a single site.

5. What media have you tested to get people to your site? You have more competition every day so you may need support of other media. Depending on circumstances, it could be an ad on Super Bowl Sunday, or small space print, or even mail. And of course there's a way you can measure.

Offers
6. Now that you can't sell a Sweeps approach to management, you may have to come up with something else to engender interest. Have you tested cause-related marketing? Consumers want to deal with "good" companies. It would seem to us that spending the money you might devote to sweeps prizes on donations might get some response in some circles.

7. Have you tested offering an incentive for prospects to click on? In addition to helping you evaluate the lead-generation powers of supporting media, it could actually boost response. It's the cyberspace version of the old Columbia House Gold Mailbox.

8. What are you doing about speed? Have you considered offering it as a premium? It's our old bugaboo updated for the Internet - you order a magazine online and it still takes 6-8 weeks to get the first issue. Are you going to get more orders if you promise delivery in a week? You bet. And the cost could be less than a conventional premium. And have you tested the offer of speed against NOT promising speed, but just doing it? What do you think the effect of the latter will be on collections, second orders and lifetime value?

9. Can you turn your product or service into a club or association situation? It's easier to renew a membership than a subscription, for example. And affinity marketing is still hot.

10. Have you looked at continuity propositions? Negative option clubs may be on their way out, but the countertrend is 'til forbid subscriptions.

Creative Strategies and Tactics
11. And speaking about trends, have you tested capitalizing on one or more key societal trends? For example, how does your product or service fulfill the desire for connectivity? Will it satisfy the need for "little indulgences"?

12. Are you sure people have stopped reading long letters? You haven't been looking at what the investment newsletter publishers are doing. Bob Hacker related a highly-successful case of a 4 page letter he did for PriceWaterhouse/et al. to CEOs.

13. Try leaving out the brochure? This is particularly important in lead generation. You may be trying to sell the product instead of the next step in the sales process. Also, if you have a Web site, that's your brochure - use the mail piece to get people to click on.

14. Experience the joys of UPsizing?… Yah, you pay more postage and more lettershop among other things… but upsizing to a 9x12" envelope can help you break through clutter. And when you add appropriate bells and whistles, you can really drive up response rates and lower cost per response.

In situations where you have a severally limited universe and a high ticket product or service, you have to do more than upsize - you have to DIMENSIONalize. A 2% response rate may mean nothing if you're mailing to 2,000 people. You may need 20% or 30% and the only way you'll get it is with something utterly intrusive.

15. … and DOWNsizing? One of our new clients is a newsletter publisher. She has had an extremely strong control which is a 9x12 package with a 6-page letter, brochure, and L-shaped response form. We suggested a down-sized version in which copy would be exactly the same.

In the quantities she mailings, the savings are about $125/M. Her newsletter sells for $16. That means with the smaller package, she would attain the same cost per order with 8 orders less per thousand mailed, or .8%. That could amount to a significant bump to her bottom line.

16. Are you testing your response device? Some second mortgage/re-fi people have eliminated the response form in favor of a phone-only response without testing. Frankly, that's insanity. The same thing has happened in auto insurance - leaving out the Request for Quote. And, as has been suggested previously in this newsletter, test including a freemium on your response device - stamps, stickers, how to tips, etc.

Of Time and the Stream
17. What's your season, month, week, day? What difference does it make? Traditionally, there was a "mail order" seasonality - e.g., never mail in the summer months. But timing tests need to go way beyond that. For example, Bob Hacker says his tests show that the best time to get mail into the office is on a Tuesday or Wednesday. Our contents insurance client, serving lower-income residents, times solicitations to arrive a few days before Social Security checks… and their mailings do best only in the months in which fires are prevalent.

18. Have you tested time between efforts? With prospects, do you really know whether to time the second effort at two weeks, four weeks or six weeks? It is really important that you do know. (And have you tested whether the second effort should be the same as the first or if they should get a different package?). With customers, what's the best frequency for renewal, re-sell, or activation promotions?

19. How long should the stream of efforts be? Have you tested adding on additional billing
and renewal efforts? How long does it pay to keep mailing to a prospect?

And Don't Forget
20. When did you last test postage class? Many find going first class pays - faster response, of course, but also more response and lower cost per response. (But, please, if you're testing first class, test taking the teaser copy off the envelope. Don't even say "Personal," "Confidential," or "First Class Mail.")

21. Did you ever test merge-purge services? If you're a volume mailer, this can really pay off. Imagine learning that your current vendor isn't catching 10% of the dupes someone else can find. If your mail quantity is 10MM, your current dupe rate is 10%, the new vendor is saving you 100,000 pieces.

At a modest $350/M including postage, your savings are $35,000.

If you have the answers to every one of these questions, we feel sorry for you - it means you may have little room for improvement.

If you don't have answers to a few questions, good! You can look for improved results if you slate tests in these areas.

Lee Marc Stein is a direct marketing consultant and copywriter with 40+ years experience in strategy and creative development. Lee creates lead generation programs, writes direct response advertising that generates orders and traffic, and advises clients on how to increased lifetime value of a customer. He has extensive experience in insurance and financial services, publishing, software and nonprofit marketing. Lee taught at NYU and Hofstra, and has spoken at 100+ industry conferences. His web site www.leemarcstein.com offers a free eletter and additional articles.

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