Digital marketers are spoiled. We have the capability to target audiences, tailor campaigns, and track results with more detail than anyone would have thought possible 20 years ago. Before Facebook commoditized your every whim and fancy, good data was expensive. The expense made marketers rigorous and wise — two qualities we could use more of in the digital space.
Direct response is, simply put, a form of marketing designed to elicit an immediate and measurable response. Some forms of direct response marketing you’ll recognize include:
- Magazine ads with campaign-specific codes or phone numbers, and
- Direct mail with a return coupon enclosed.
Though we can measure more components of our marketing campaigns in the digital space, I think there are insights to garner from the direct mail houses of the world (many of which are getting their clients amazing results today). Let’s explore a few.
Effective marketing sometimes requires taking a short-term loss
Direct marketers often expect campaigns to result in a loss. (Printing and postage is expensive!) But direct marketers live for LTV (lifetime value of a customer / donor). They are willing to lose in the short term, knowing that their cultivation campaigns (which are far more efficient than their acquisition campaigns) will result in more purchases or donations.
We don’t often hear digital marketers bragging about the net loss of their last campaign. But they should — if they were able to acquire enough new customers to recover the loss within a timeframe that makes sense for their business or organization. Achieving a 10:1 ROI is less impressive if your customer base shrank while you did it.
Segment based on behavior, not just demographic
When building segmentation plans, many of the digital marketers (this seems especially common amongst the inbound crowd) with whom we interact favor demographic data. Direct marketers live and die by behavioral data.
- Has the target purchased recently?
- What is the target’s preferred channel?
- How much does the target usually spend / donate?
- What is the target’s purchase frequency?
At Magneti, we take a blended approach as often as possible (considering demographics and behavior), structuring segments on behavior and then applying demographic data (or using marketing personas as a filter) to refine creative.
Messaged lapsed customers appropriately
Good direct response marketers are constantly experimenting with and refining strategies to re-engage their lapsed (or pre-lapsed) customers. It’s not something we see people obsessing over in the digital space. Again, I think that’s because of the high cost of printing and postage.
Direct response marketers know that customers who haven’t made any purchases after X amount of time are X percent less likely to respond to a given campaign. They know how many of those customers they’ll have at the beginning of the campaign, how much (or, in this case, how little) money to expect from them, and how much it will cost to mail them all. Economy drives the decision to try something new. For most, that means sending only cheaper, high-response campaigns at key times of the year. Others develop thoughtful, creative strategies to reengage customers through new channels or with new communication types.
Digital marketers can happily send emails for little cost ad infinitum. But when I get an email from an organization to whom I haven’t donated in two years telling me they miss me, value me, and want to welcome me back, I suspect there’s a marketer with experience in direct mail behind the message.
So, while it’s true that direct mail response rates aren’t what they once were, we can still learn from its practitioners. Do you implement strategies you learned working in direct response? If you do, share them with us! We look forward to hearing from you.