Sagging sales and weak response rates amid economic gloom means the time to deploy tests is now. Here are some rules to live by……
During rough economic times, it’s easy for those who control the budget to say that if response rates are down, they don’t want to invest in testing. Wise executives know that the time to spend more marketing dollars is when sales
are down. It’s true there is a risk involved in testing new ideas in an effort to “beat the control” and increase response rates. Testing takes an investment in time and resources, often including additional funds. However the outcome is
often worth the risk.
You want to test, not only to increase your ROI, but also to learn. The more you know about what works the best, the better you can market to segments that emerge as your marketing programs evolve.
1) Start With the Basics
It’s imperative to go back to the basics. Think about your business and marketing objectives and what you need to learn to improve. What variables will make the most difference in your results? Create a plan for your testing that will lead to methodical improvements. Test only one element at a time, and use appropriate quantities to provide statistical significance. Or, if you are testing multiple elements, add separate test cells to your testing matrix. While this seems obvious to direct mail veterans, time and again we have clients who are confused about this. For example, if you test lists and offers at the same time within the same test cells, you will never know which element provided a lift.
Recognize the importance of your lists, offers/positioning, creative and the timing of your touches, in that order. No matter what the current economic conditions are like, lists still make up the majority of your marketing success – 40 to 50%. Understanding this. along with the power of relevant offers (30 to 35% of your success) is critical to jump-start your response rates and lift your ROI. Don’t be lured into testing a new format or design unless you have done a better
than average job of testing lists (both house and prospect files), offers and message positioning/copy platform. Then, it will be prudent to develop some new creative tests to try to move the sales needle north.
2) House Databases Need Top Priority
In an economic downturn, data and its hygiene become even more critical to your ROI success. Understanding key segments and relying on your best customers will get your further ahead than almost anything else. Know who the buyer is and who the decision makers are. If you have a great understanding of your segments, test a referral program to your top customers and watch the results pour in. Combining segments with offers is also a wise idea. Focus on customer service and retention FIRST in economic downturns. To create raving fans, you need to prove that you care about your customers. If you do that, when you go to them and ask for additional business, referrals and testimonials, they will be more than happy to help. Far too many companies, even in this economy, assume that their customers will stick with them. Don’t assume! Actions speak volumes over words. Customer service and retention are areas that are quite testable, yet few firms test enough here. Segment and rank your customers in importance. All customers are not created equal. Considering channel preferences, offer motivators, RFM and other key factors
like geography and the aforementioned timing will help your testing efforts. When you hone in on specific market or audience, you can specialize your offer, messaging and tactics to specifically appeal to its wants and needs. You just may find your loyal regulars ready to spend extra for the something more you suddenly
have to offer them.
MORE THOUGHTS ON TESTING….NEXT POST!!
Source: Inside Direct Mail – Grant A. Johnson
Grant is a marketing maverick and founder of Brookfield, WI based
Johnson Direct. He is passionate about measurability and messaging
revelance in an over-communicated, multi-channel marketing world.
