Guest Blog By Art Hall
How do you take an exclusively online marketing strategy and reap extraordinary results with the introduction of direct mail? The answer lies in a company’s data. When one of the nation’s fastest growing online retailers of healthy living products established success with its digital marketing efforts, the company looked to direct mail as a new channel in its marketing mix to reach more customers and drive growth.
Designing the Right Media Mix
When a company’s commitment is to stay at the forefront of its industry to benefit customers with high performance, affordable and safe products, its marketing strategy should replicate that excellence in its approach to customer engagement.
When the online retailer engaged directly with consumers, it was exclusively through its website, email campaigns, paid search and other digital platforms. Its digital marketing efforts had been also solely focused on communications to two key groups – look-a-like prospects and new movers. Their data contained some geographic and promotional history about their core customer, but that wasn’t enough. They came to validate that using other channels would allow them to spend effectively and ultimately grow and extend the business.
The marketing team also quickly realized that true strategic insights were lacking, so the company turned to Quad/Graphics for support in developing an insights-driven marketing approach necessary to build a successful direct mail campaign.
The program launched with the application of Quad/Graphics’ proprietary consumer research, along with data and market analysis in combination with tailored messaging and creative. Immediately, they discovered that adding direct mail to their media mix would optimize customer response and maximize ROI.
Applying an Insights-Driven Approach
The partners’ foray into an insights-driven approach to direct mail began with the overlay of demographic, lifestyle, and proprietary survey data to model customers who had bought a product for the home at one time and recently moved. This data combined with the tracing of new residential addresses enabled them to deliver highly personalized direct mail pieces that resonated with those target customers.
Historically, their customers had come from online advertising, so early on they had to model from people purchasing online as opposed to those who purchase from direct mail. It was a challenge they overcame when they concentrated on areas that had the highest penetration of customers.
This customer profiling strategy enabled the retailer to reach the correct customers with creative that resonated. The result was eye opening and the marketing team was quick to determine that they wanted to move their direct mail efforts beyond only mover customers.
The team continued to use data to glean insight on how prospective customers might consume media, as well as their attitudinal preferences, in order to identify new prospective customer groups, recommend data driven creative, and develop a contact strategy. Specific segmentation strategies combining a tailored format and messaging approach were rolled out in phases targeting look-a-like households, relocated customers, and new mover prospects.
Achieving Measurable Success
Since early 2014 when the retailer began to blend its digital and direct marketing, the company has drastically reduced test and learn times compared to traditional testing methods and recognized direct mail results in half the time.
They also avoided incurring operational costs to support limited test responders, and combined conjoint analysis including quantitative with qualitative insights to commission the ‘best of the best’ in optimization.
In calculating their return on advertising spend, the company was able to measure gross revenue realized for every dollar spent, which was $1.50 for modeled prospects, $4.00 for new movers, $13.00 for relocated customers, and $5.00 for customer upgrades.
The measurable success of adding direct mail to its marketing mix demonstrates that the application of new multichannel approaches can drive continuous growth for an online organization.
Art Hall is Multichannel Sales Consultant of Integrated Data Solutions at Quad/Graphics