We live in an age of information overload
Each day we’re exposed to thousands of communication messages; our media channel options are exploding; and we always seem to be “connected.” So how do you make your promotional messages stand apart and get noticed, and have your customers and prospects take action? In a word: Test.
It is amazing how few companies understand and actually do enough marketing testing. The only logical explanation is that test is a four-letter word — and people don’t like to use four-letter words, right?
From a marketing standpoint, we can test the list(s), the offer, the package creative, components of the direct mail package, the format and so on. We can test Web sites, e-mails, banner ads and just about everything that’s electronic or in the e-communications realm. The ability to test and measure results is what differentiates direct marketing from all other communications. Testing, when done correctly, will help a company decrease its marketing spend and intentionally increase its return on investment.
More specifically, you need to test your messaging and offers in order to get the best results possible. Keep in mind that the promotional offer with the highest return often defies logic.
Whatever you market, your goal is to create interest and then action. This is where basic psychology comes into play. If you are offering a coupon and you test $3 off, $1 off and $.75 cents off for a $5 item, which will perform best?
Did you guess $3? If so, you’re likely incorrect. Why? To the customers and prospects, the offer seems too good to be true; they will assume that there must be a reason for the steep discount, and probably not a good one. The best offer, from my experience, would be the $1 off. It typically would get you the best results.
SPEAKING OF THE BOTTOM LINE
Testing allows marketers to determine, in a real world setting, what works, what doesn’t work, and why. Like direct marketing itself, testing is about numbers, ROI and data.
We test not only to increase ROI, but also to learn. The more we learn, the better we can market to segments that emerge as we move our marketing programs forward. As the late direct marketing guru Dick Benson said, “You’ve got to determine if the information you can reasonably expect to gain is really worth the expenditure.”
MYTHS AND MISUNDERSTANDINGS
Testing is expensive. True or false?
Answer: It depends on how you look at it. Is it an investment in the future success of your marketing efforts?
In his book “Selling the Invisible,” Harry Beckwith says focus groups determined that fat-free pizza at Pizza Hut, skinless chicken at KFC and the McLean sandwich at McDonald’s would all be hugely successful. These companies undoubtedly spent millions of dollars on proposals and on planning and marketing the launch of these products. Today, none of these items are on the menu. In-store testing, if done at all, should have been more extensive. I argue that an investment in testing would have saved these companies money — and lots of it.
KEEPING IT SIMPLE
The concept of a grid, or matrix, is based on the direct marketer’s ability to test and track several lists, creative approaches and offers at once.
The results? A big picture that involves nearly every possible scenario that could make or break the campaign.
It’s important to set up a testing matrix and test within budget parameters. The goal is to break even, or to make money on your testing while simultaneously learning as much as possible. A word of caution, though — make sure that the test cells implemented are meaningful. If they’re not, you will waste money. For example, testing outer envelope teaser copy seldom produces significant lifts in response rates for prospecting, but testing subject lines in e-mail can pay huge dividends.
A DIRECT MAIL MATRIX EXAMPLE
A nonprofit client had been mailing a fundraising appeal to the same house file of 220,000 names for almost 15 years. Of the 220,000 names, 80,000 continually donated to the cause. The remaining 140,000 people were unresponsive. Nonetheless, year after year the same package was sent to the entire database.
Complicating the situation was the absence of a donor profile and the lack of a budget to rent overlay information.
The matrix solution involved four test cells: two different letters, the addition of a buckslip, and an alternative piece to the brochure. Testing generated more than 4,500 new donors with an average gift of $35, not including the clients’ lifetime value. As a result, the testing investment more than paid for itself.
BACK TO THE BOTTOM LINE
Testing does not have to be complicated. On the contrary, the practice of testing involves simple techniques to collect data. Data in turn becomes knowledge, which you need to succeed, move forward and grow.
Testing is a progressive art and can help make marginal programs more successful, and successful programs more profitable. For more information on testing, look to the published works of industry professionals such as Dick Benson, Ed McLean and Bob Stone.
Remember, test is a four-letter word. But then again, so are these words: Make more cash.
Grant A. Johnson ([email protected]) is CEO of Johnson Direct LLC, Brookfield, WI.
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For more articles on incentive marketing, go to http://www.promomagazine.com/incentives.com.
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