How to Achieve More Profitable Direct Mail Testing
When you watch sports, you can see that practically every player has a certain pre-event ritual.
In baseball, major-league batters will go through their pre-event routines right before every pitch.
Watch them and you'll see some batters come to the plate, take two swings, pause, take another swing and then tap the edge of the plate with their bat right before each pitch.
The routines vary from player to player but nearly every major leaguer has an established pre-event routine.
You see something similar in basketball.
Whenever a player takes a foul shot, watch what they do.
The player may bounce the ball three times, hold the ball and then bounce twice more before taking the shot.
Whatever their ritual, the player will go through the same order of events each time they shoot a foul shot.
Professional athletes use a pre-event routine to prepare for success.
It gives them focus and helps them reach the highest level of performance.
Now, as direct mail professionals, we need our own pre-event routine to make our testing programs more profitable.
How direct marketers can use a pre-event routine As direct marketers, we understand the necessity of testing.
But exactly what do we test? In his book, Secrets of Successful Direct Mail, Dick Benson said, "Any idea you honestly believe can economically increase response is worth testing.
" Yet how can we know what idea gives us a reasonable chance of success? We start with the understanding that "success" means more than increasing the response rate or average order.
To succeed, we must generate more net income than the control.
And even though we cannot always foresee which test will succeed, we can use our pre-event routine to ensure that we don't squander money by testing things that have practically no hope of increasing profitability.
Several years ago, I worked with an individual whose previous agency designed a test mailing that everyone predicted would increase response.
And it did.
The test package had incredible graphics, a very creative design combined with an attention-getting format that was sure to stand out in a crowded mailbox.
The agency that produced the package was so impressed with their efforts that they even predicted that the mailing's recipients would display the package on his or her office bookshelf.
And maybe they did.
But sadly, the client lost a bundle of money--and the agency lost the account--because no one bothered to price the test package's rollout costs and evaluate out how much additional response would be required to justify its higher cost.
If they had, they would have realized that this lavish package needed a 476% increase in response to breakeven with the control.
It was a beautiful package--and it did increase response--but it had absolutely no chance of increasing the mailing's net income.
Perhaps you can outperform the control by virtually five to one.
But is this a reasonable expectation? Even if the test package doubles or triples the response rate, it's still a loser.
The value of a pre-event routine Do the math first.
Before spending our own money--or the client's money--we need to determine what response the test package must deliver to warrant its expense.
Only then can we make an educated decision on whether the test has a reasonable expectation of economically increasing our direct mail's response.
My pre-event routine is straightforward and simple.
Here's an example of how it works: If the test cost $100/M more than the control and currently averages $22 per order, then to breakeven with the control, the test must generate 4.
545 additional responses per thousand pieces mailed--more than 50% additional response.
Below, you'll find an easy-to-use worksheet that I use before launching a test.
This method may be too bare-bones to meet your needs but, regardless of your method, we all need a pre-event routine that leads us to ask, "Is this test a good investment?" Using a pre-event routine can save thousands of dollars and give you a greater return on your direct mail test dollars.
Like professional athletes, we'll achieve a higher level of performance with good preparation.
Direct Mail Testing Pre-Event Worksheet How much of a "lift" does the test mailing need to break even with the control? A.
Control's cost/M $ _____ B.
Control's average response rate: _____% C.
Control's number of responses per thousand pieces mailed (response rate x 1,000) _____ D.
Control's average order/contribution: $ _____ E.
Test package's rollout cost/M: $ _____ F.
Difference between the cost of control and the test package (E-A): $ _____ G.
Number of added responses per thousand pieces mailed that the test package requires to match the control's performance (F/D): _____ H.
Percentage lift necessary for your test package to break even with the control ([G C] x 10): _____ %
In baseball, major-league batters will go through their pre-event routines right before every pitch.
Watch them and you'll see some batters come to the plate, take two swings, pause, take another swing and then tap the edge of the plate with their bat right before each pitch.
The routines vary from player to player but nearly every major leaguer has an established pre-event routine.
You see something similar in basketball.
Whenever a player takes a foul shot, watch what they do.
The player may bounce the ball three times, hold the ball and then bounce twice more before taking the shot.
Whatever their ritual, the player will go through the same order of events each time they shoot a foul shot.
Professional athletes use a pre-event routine to prepare for success.
It gives them focus and helps them reach the highest level of performance.
Now, as direct mail professionals, we need our own pre-event routine to make our testing programs more profitable.
How direct marketers can use a pre-event routine As direct marketers, we understand the necessity of testing.
But exactly what do we test? In his book, Secrets of Successful Direct Mail, Dick Benson said, "Any idea you honestly believe can economically increase response is worth testing.
" Yet how can we know what idea gives us a reasonable chance of success? We start with the understanding that "success" means more than increasing the response rate or average order.
To succeed, we must generate more net income than the control.
And even though we cannot always foresee which test will succeed, we can use our pre-event routine to ensure that we don't squander money by testing things that have practically no hope of increasing profitability.
Several years ago, I worked with an individual whose previous agency designed a test mailing that everyone predicted would increase response.
And it did.
The test package had incredible graphics, a very creative design combined with an attention-getting format that was sure to stand out in a crowded mailbox.
The agency that produced the package was so impressed with their efforts that they even predicted that the mailing's recipients would display the package on his or her office bookshelf.
And maybe they did.
But sadly, the client lost a bundle of money--and the agency lost the account--because no one bothered to price the test package's rollout costs and evaluate out how much additional response would be required to justify its higher cost.
If they had, they would have realized that this lavish package needed a 476% increase in response to breakeven with the control.
It was a beautiful package--and it did increase response--but it had absolutely no chance of increasing the mailing's net income.
Perhaps you can outperform the control by virtually five to one.
But is this a reasonable expectation? Even if the test package doubles or triples the response rate, it's still a loser.
The value of a pre-event routine Do the math first.
Before spending our own money--or the client's money--we need to determine what response the test package must deliver to warrant its expense.
Only then can we make an educated decision on whether the test has a reasonable expectation of economically increasing our direct mail's response.
My pre-event routine is straightforward and simple.
Here's an example of how it works: If the test cost $100/M more than the control and currently averages $22 per order, then to breakeven with the control, the test must generate 4.
545 additional responses per thousand pieces mailed--more than 50% additional response.
Below, you'll find an easy-to-use worksheet that I use before launching a test.
This method may be too bare-bones to meet your needs but, regardless of your method, we all need a pre-event routine that leads us to ask, "Is this test a good investment?" Using a pre-event routine can save thousands of dollars and give you a greater return on your direct mail test dollars.
Like professional athletes, we'll achieve a higher level of performance with good preparation.
Direct Mail Testing Pre-Event Worksheet How much of a "lift" does the test mailing need to break even with the control? A.
Control's cost/M $ _____ B.
Control's average response rate: _____% C.
Control's number of responses per thousand pieces mailed (response rate x 1,000) _____ D.
Control's average order/contribution: $ _____ E.
Test package's rollout cost/M: $ _____ F.
Difference between the cost of control and the test package (E-A): $ _____ G.
Number of added responses per thousand pieces mailed that the test package requires to match the control's performance (F/D): _____ H.
Percentage lift necessary for your test package to break even with the control ([G C] x 10): _____ %
