Direct Marketing Strategy: Testing

By Tim Little

Testing Before You Buy Lists Can Reduce Your Risks Exponentially

The measure ability of direct marketing is such an important element of this business that the word “testing” is commonly used. Direct marketing is about testing, testing copies, testing campaigns, dry tests, testing the offer, and testing the list. If you email to an entire list for the first time to see if the results fulfill your expectations, you are gambling and this is the opposite of testing.

“I’ve got a list to write”, can be said by everyone because everyone of us compiles lists of friends in Facebook, Twitter, Outlook contact lists as well of lists of favorite songs, cell phone numbers, and books.

Prospecting for new customers is a science as far as list selection is concerned and measurement of response is absolutely essential because this is a field unique among all fields in marketing.

Understanding Direct Response Math: The difference between success and failure can be something as small as a fraction in 1% of a 100,000 mail or email blast mailing. Prospecting in direct mail and email comes down to large differences in small numbers 1/10 of 1% in relation to a 100% whole.

The defining characteristic of testing in direct response advertising is the reduction of risk since in direct mail campaign mailing of 100,000 piece could cost your company at least $20,000 dollars when factoring postage, print, paper, lists and mail preparation. E-mail marketing list costs maybe reduced by the postage and paper costs but the list and preparation costs can still be expensive.

The universe for e-mail and mailing lists are hundreds of millions for consumers in the US only verses millions for business-to-business lists.  Why Test?

• To determine which activities will produce more profit

• To determine which activities will produce less profit

There is never and end to testing in direct marketing since everything is always changing. Much of direct mail testing relates to prospecting for new customers and there are some basic ways to improve response when testing:

• Increase response per thousand

• Increase average sale

• Increase order margin

• Decrease credit loss

• Decrease the cost to mail

• Decrease the cost for fulfillment

The rules to consider when planning a mail campaign:

• Always split every mailing that is meaningful to you, test a group of new lists by demographic data

• Only test one element at a time in a series of experiments like one offer is made to one list

• Concentrate tests first on markets (lists) and then offers

• Do not set a price for the market – the price is the single most important element in the offer let the market decide on price by testing

• In split testing test prices both high and low where you think the market will determine the right price for you.

• Always remember it is better to send a poor mailing to a good list than a good mailing to a poor list.

Most of these direct marketing techniques have been tested and perfected over the last 100 years and they will guarantee you success in your direct email online or direct mail offline.

Tim Little’s professional direct marketing experience began in magazine circulation management from this he honed his skills in direct mailing list purchasing, testing, and analyzing. He learned the importance of direct response planning and direct marketing strategies and most importantly, providing a follow-up with back-end analysis, fulfillment of orders and inquiries. He also gained some valuable job experience with Jackson National Life Insurance as Marketing Database/Direct Mail area and with Alumni Association of the University in strategic marketing consulting.

[Contact the author for permission to republish or reuse this article.]