Are You Trying Your DM or Testing

November 13, 2006


Aloha from the Boomerang Team~

We ran into an article recently in Target Marketing magazine (Oct. 2006) that reinforced the good practice of testing. We've been doing testing for a client recently, and have learned a lot about their different segments and which copy and offer they respond well to. While doing this, and then reading this article, it occurred to us that we haven't been hearing a lot about testing, in its truest sense, in the marketplace lately. We think it's a powerful tool that will yield significant success and measurement metrics to your business, so we're sending a condensed version of that article in this edition of Broadcast Boomerang.

We're happy to provide you with a full copy of the article, at your request.

Success stories boost everyone's creative juices and we found one in a recent Peppers and Rogers e-broadcast that we are also sending to you. It uses some tools that have been around for awhile, and the relatively new tool we've just introduced to the market, i-URLs tm (individualized urls). The industry often refers to them as personalized urls as well.

Consider whether you're Trying or Testing in your direct marketing, based on the refresher points in the excerpt below, and whether you are able to add enough knowledge about your customers into your campaigns to make the most of them. And please enjoy the success story we've also included, from the Portola Plaza Hotel.

As 2007 approaches, all too quickly we might add, we hope this information will be helpful to you and possibly even inspirational.

Enjoy your Thanksgiving, and we'll be back in touch when we feel we have relevant and helpful information for you.

To Your Success,

Matt Heim, Lora Williams and Alex Daniels

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"Are You Really Doing Direct Marketing?" excerpt from an article in Target Marketing (10/06) by John Miglautsch

We can't just ask what direct marketing is, but what it could and should (and perhaps used to) be.

The Key Element of Direct Marketing is testing, testing, testing. The pioneers of this industry assumed everyone doing direct marketing would know and practice this.

Obviously it's possible to mail offers without tracking or even selling anything. It's also possible to measure results without any comparison. And general advertising is always trying to measure, though because of the ubiquitous nature of mass media, its measurements tend to lean on focus groups, attitudinal surveys and test markets. None of which have the capability of precisely isolating causal variables.

In the most basic A/B test, we send half our list "50% off" and the other half "Save $9.95" and see which one not only gets more orders, but after we've paid the cost of goods, mailing costs and order processing, which one makes more money. If the total price is the same, I'd bet on the second offer every time (people don't like figuring out what 50 percent comes to).

I explained proper testing to a client who made golf accessories: "Suppose you wanted to compare golfers, see who was the best. You told golfer A to play course X on Monday and golfer B to play course Y on Wednesday; you measured their scores and picked the winner." "That wouldn't be fair!" he responded, "One course could be easier, the weather would be different - they should play head to head." Exactly!

My colleagues point to the important common and necessary elements that all direct marketers have: your database, your direct "interactive" system and your "measurable" results. But your ability to measure because of these does not mean you use them properly and qualify as a direct marketer. You still must properly set up the test from the start.

(our emphasis through underlining in this paragraph)
Field valid scientific experimentation through isolation of causal variables allows you to actually test and prove the impact of changes in your copy, creative, offer, list, timing, etc. It's possible to accomplish this through most media; it's helpful to have a database you measure; but most importantly, you must correctly design the experiment before you launch it. This and this alone, is what sets apart the practice of direct marketing. You can see whether it's better to charge $10 or $9.95, take credit cards, allow three easy payments or only c.o.d., market to high income or low, and even see if it's worth the trouble to put a thank-you note in the box. Yet with every year that goes by, I see fewer and fewer practitioners standing firm on the principle of testing.

"Try" is so much easier than "test." You probably think "We do lots of different things and compare the results." Yes, you're probably overwhelmed with all the "trials." And I'm not saying that you don't draw conclusions. You might be right - but with real testing you know.

True direct marketing offers the greatest opportunity to attain marketing certainty, but only if you test. Until we reclaim that message, we're just another piece of the ad mix. And without testing, we're not nearly the most important piece.

--end--

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LUXURY HOTEL LOCKS IN LOYALTY
By Jason Compton, Contributing Writer, Peppers and Rogers 1 to 1 e-newsletter

The Portola Plaza Hotel at Monterey Bay (California) doesn't have the comfort and constraint of a corporate chain partner guiding its marketing strategies. So the hotel has found new ways to attract loyal guests for more frequent stays during slow business periods, and is leaning heavily on customized one-to-one messaging to put more heads on its pillows.

"In the past, our campaigns were very generic, with no personalization or variable data," says Wade Bryant, director of sales and marketing at Portola Plaza. "Now, as an independent property, with a budget that's not huge, we had to find some cost-effective ways to attract people." The Plaza's campaigns never returned much more than a 2 percent response rate. "Nothing stellar," Bryant shrugs.

-- Personalization performs --
After researching its customer base and finding that nearly half of its business comes from a steady leisure travel business in the Northern California area, Portola decided to reach out to those core customers with a custom print campaign. It was designed to catch the eye with an attractive appeal for a mid-summer stay. Working with custom print campaign specialist L2 Inc., Portola sent out postcards depicting the Monterey beach, with a welcome message featuring the recipient's first name digitally scribed in the sand.

Although it was the first attempt at something so leading edge for Portola, Bryant was confident the campaign would be a winner among his loyal customers. The finished campaign featured the customer's name custom-printed multiple times, along with a unique Web address encouraging reply and booking. "We had looked at some case studies from non-hotel organizations that had done variable data like this with personalized URLs, and results were in the five to 15 percent response rate," he says. "That piqued our interest as to how we could do it cost effectively."

-- Results --
The campaign was sent out in early summer to roughly 20,000 recipients, offering discounted rates on stays two to three weeks out from the delivery date. Responses were extremely strong, with better than a 7 percent overall response rate, and better than 10 percent conversion from the respondents. In simple revenue terms, the campaign returned better than 300 percent to Portola Plaza, far in excess of its typical campaigns.

Bryant is confident that the strong performance of this targeted campaign was no fluke, nor was it the result of an unusually strong discount. "We've done [lower] rates, we've had some with much more value-add in them, and to a lot of the same people as in this campaign, and still had those one to two percent returns," he says.

-- Next steps --
The hotel is working additional personalized print campaigns into its 2007 budget as a result of the strong performance of this initial one. "The goal now is to use variable data images that suit some of the likes and dislikes these customers told us they wanted" through responses to the first campaign, Bryant says about planning the four variable print campaigns slated for the new year. "The campaign was still pricey compared to [traditional] direct mail, but given the response, it was absolutely worth it."

Portola Plaza won't transform its entire marketing organization overnight to exclusively use custom-print pieces. "It was a learning process for all of us setting up the personal Web site, reminder emails, and making sure printed images matched up to personal Web sites," Bryant says. "It requires a lot of pre-planning. But we know people like to see their name in print."