In this second of a three-part series, we explain how to optimise direct mail campaigns to deliver a strong return on investment.
The first blog looks at why direct mail is enjoying a resurgence and how it can be a highly effective marketing tool. And the final blog in the series covers Datitude's direct mail optimisation and analysis solution. Here are the links.
How do you optimise direct mail campaigns?
The success of any marketing campaign, including direct mail, depends on the quality of your data and how well you know your target audience. The better your data, the far greater your chance of targeting the right recipients and influencing purchasing decisions. If your data is inaccurate, siloed, or incomplete your campaigns won’t be as successful.
Here are our top tips on how to leverage your technology and data to optimise direct mail campaigns.
1. Define your target audience using sophisticated segmentation
Segmentation ensures your campaign is relevant to your audience and supports more targeted and personalised messaging that resonates with your audience.
A platform, like Datitude's Retail & Customer Data Platform, that provides a true single customer view is the best tool for this purpose. You want to have a real-time view of all your customer and transaction data models, including purchase and returns history on and offline, lifetime value, recency, frequency and monetary value, and opt-in status.
Using the insights from your data, define and segment your target audience based on your campaign objectives. For example, you could segment using demographics, behaviour, location, and/or psychographics.
And for customer acquisition, use your customer data to profile the best lookalikes for your cold data selection targets. For example, who are your most loyal and profitable customers? Cold data selections have evolved significantly so the more you can understand your customer and segment your data, the greater your ability to acquire cold data that delivers.
2. Determine discounts and offers intelligently
No one likes to give away margin unnecessarily and you don’t have to! Control your offers and improve your ROI by using your data insights to understand the optimum discounts for each segment.
For example, look at customers who have a greater propensity to buy with an offer, and at what level, as well as those who typically purchase at full price and don’t need an incentive.
3. Control discounts with unique, personalised promotion codes
Generic promo codes can be easily shared and used multiple times; often masking who the real customer is. You may be ok with that if you're only interested in top-line sales but it's not sustainable. For smart retailers and brands who want to measure the true performance of marketing campaigns, obtain the benefit of customer data, and stop eroding margins, the answer is unique, single-use codes.
They're also a great way to personalise direct mail. Plus, if the codes are set up and integrated into all of your point of sale (POS) systems, including in-store, the recipient can choose the best channel for them. You can enhance the customer experience further by enabling in-store and customer service teams to look up codes for individuals who have lost or forgotten their unique code at the point of purchase.
4. Establish sound control and A/B test groups
Control and A/B test groups are key for understanding the true impact of direct mail campaigns including analysing the incremental uplift. There are different ways you can optimise these.
A control group (ie. individuals who will not be sent direct mail) should be selected based on a random, representative sample of customers from all segments used for your direct mail campaign. The size of the control group should be determined by the size and expected response rate of your test group. Typically, the higher the number of recipients and expected response rate, the smaller the control group is.
Similarly, A/B test groups can be optimised by split testing different variables. For example, different discount levels (including no discount) could be applied to different groups.
5. Use technology to enhance the customer experience and optimise direct mail
Advances in technology are making it much easier to blend digital content with a direct mail campaign and improve the overall customer experience. QR codes, as well as AR and VR, enable customers to more easily access content and purchase online (eg. product listing pages, delivery and returns information, sizing guides, and product visualisations). They add value to the customer journey and purchasing decision.
Marketing automation and ESP platforms should be used to create events-based campaigns to further engage with customers. For example, you could start with a teaser about the brochure campaign landing and personalised discount code, follow up with reminders about promotion code expiry dates, promote best-selling products or product combinations based on their purchases, and end with a thank-you note and ask for a product review post-purchase.
6. Measure & analyse results
Lastly, it's essential to measure and analyse results and act as needed whilst the campaign is still running to optimise the success of direct mail campaigns. Engaging with recipients whilst a campaign is live provides additional opportunities to increase conversion, average order value, and ultimately ROI.
You’ll want to be tracking key metrics and continually refining your direct mail strategy to improve overall marketing effectiveness. Response rates, conversion, average order values, ROAS, ROI, promo code redemptions, product performance, product page position, and cross-channel attribution are just some of the metrics to analyse. Naturally, the more advanced your analytics capabilities are, the more insightful and actionable your data is.
By following these strategies, retailers, and brands can optimise their direct mail campaigns to engage target audiences, drive better results and deliver a strong ROI.
Datitude's direct mail optimisation and analysis solution is targeted to perfection for marketers wanting to improve their investment in direct mail and have complete control of their campaign performance. If you're serious about direct mail, our final blog in this series looks at why smart retailers and brands choose Datitude for optimising their direct mail campaigns.
You can also download our complete guide to direct mail here.
Datitude is transforming how businesses connect, integrate, and unify their data. Whilst we made our name in omnichannel working with many retailers and brands over many years, as data experts we provide managed data platforms and solutions to a diverse range of businesses who need better access to their data and valuable intelligence and actionable insight they can trust.
Solutions for retailers and brands include systems integration, retail & customer data platform, and direct mail optimisation and analysis. Make your data work for you without having to master the underlying technology.