Do you find yourself asking questions about
your promotional offers? Would this promotional
offer work better than our current offer? Does
personalization make a difference? Are recipients
more likely to respond to a coupon? The questions
go on and on, but how do you answer them? The
answer is simple. Testing, testing,
testing!
Your marketing promotions may be
based on a gut feeling or intuition about what
will work best for your product or service. You
can use your marketing database to confirm these
assumptions or to learn what changes are
necessary to increase response rates for
your current marketing campaigns. The
following is an example of the steps you
might take to test one or
more promotional offers.
-
Decide how
many different promotional offers you want to
test. For this example, let's assume you want to
test three offers.
-
Using your
universe of leads, pull a list of prospects to
use for your test.
-
Randomly divide your list into
four segments—the number of records in each
segment does not have to be the same. Use three
segments to test each promotional offer and one
segment as a control segment.
-
Assign a promotional code to
each segment. This code will let you
differentiate your marketing pieces and help you
track responses to your campaign.
-
Send a different promotional
offer to each non-control segment.
-
Compare the responses for each
segment, including your control segment, to
determine which promotion had the highest
response rate and created the largest return on
your investment.
There are many variables to
testing promotional offers. You may also want to
consider the following items when
testing:
- Following up a marketing campaign with an
email or phone call
- Including or excluding previous campaign
lists or segments
- Timing—testing campaigns during different
seasons or holidays
- Frequency—how often you send out a
marketing campaign or how many marketing pieces
you have to send to get an action or
response
- Type of
piece—self-mailer, postcard, letter,
etc.
To determine which offer created
the most revenue or received the most response,
you can track your campaign responses in a Return
on Investment (ROI) analysis report. Use your
original marketing campaign list to create your
ROI report. Add information about how much you
spent on each marketing piece or add additional
criteria to your ROI report to learn more about
your respondents. Typically, an ROI report
displays information about the respondents that
acted on your offer. You can also create a report
that includes anyone in your marketing database
who acted similarly to your respondents even
though they did not receive a marketing piece and
you can compare your results with your control
group.
The bottom line is to fully
utilize your marketing database to test
promotional offers by creating targeted lists,
coding your marketing pieces, gathering
information about your responders and creating ROI
analysis to help you measure your different
promotional offers. This valuable information will
help you answer those nagging direct marketing
questions and you’ll be able to optimize the
effectiveness of your direct marketing
campaigns.
