Change the Rules on Direct Marketing Responses

When it comes to direct marketing there is clearly a distinction between approaches to how you spend your marketing dollar and the return you expect to obtain. Few have the budget to follow multiple paths. I am talking about Reach or Frequency. Both are wonderful examples of the Law of Averages and depending on the path you choose (Reach or Frequency) will determine the expected return based on the Law of Averages. I say change the rules by deploying some cross-channel marketing campaigns that create a new bell curve on expected returns on the direct marketing dollar. Let me explain…

The Law of Averages is defined as a law affirming that in the long run probabilities will determine performance; the statistical tendency toward a fixed proportion in the results when an experiment is repeated a large number of times; the law of large numbers. So let’s see how this works between the two approaches.

A “Reach” approach means to target a larger audience with less frequent marketing messages. The law of averages says that the probability of the recipient wanting to rid themselves of the problem that you can solve at the time they receive your marketing message decreases rapidly the fewer the messages you send. Many companies use the reach method. For example, a typical reach campaign may broadcast out 10,000 messages in the hopes that some have that perfect timing. In the direct mail world, that perfect timing yields a response rate from 1.5 to 3% at best. 10,000 mailings at $0.35/piece is $3,500. With a response rate of 2% (200 responses) equates to a cost per response of $17.50.

The “Frequency” approach proves for better returns based on the same Law of Averages. Send more frequent, more relevant, more personalized marketing messages to a smaller recipient list. Instead of 10,000, send 1,000 personalized messages once a month for 6 months combined with a Personal URL (vip.ABCCompany.com/JohnTarget). 6,000 combined messages at $1.00/piece costs $6,000. More relevance, more personalization, along with better call to action tools such as PURL’s, generates response rates that range from 6% to 10%. If using 6% as a response rate for the life of the campaign, this translates to a 50% increase in conversion opportunities (200 to 360) and a 5% reduction in the cost per response ($17.50 to $16.67). Personalization makes the per piece cost more expensive but the higher response rate results in a lower cost per response and substantially more opportunities to convert the response to an actual sell.

Now here comes the game changer. Combine the frequency approach with targeted personalized emails and follow on SMS (text messages) as part of the same campaign and move the response rate and the conversion rate needles to the outer edges of the bell curve. Only cross-channel marketing campaigns allow you to achieve this. It is possible without creating a labor intensive wrinkle generator. Use a cross-channel campaign provider, like MediaDyme to build better campaigns.