Facing budget constraints compounded by the COVID-19 pandemic, the client’s direct mail campaigns were under increased scrutiny to deliver improved performance and help bridge the revenue shortfall from canceled fundraising events.
Knowing that the client needed innovation that moved the needle, we developed a two-pronged approach that included on both segmentation and package improvement.
While several internal stakeholders wanted to reduce overall mail volume (and thus costs) by decreasing the number of mailings, we worked with the client to implement a more strategic plan that refocused their approach. By examining the current mailing list and leveraging advanced analytics to dive deep into segment performance, we strategically selected the best segments to target for reducing mailings. With fewer mailings to less-profitable segments, we quickly reduced the cost outlay to the client.
With a more precisely-targeted audience, we then revised package creative to test against a control. The control package featured a four-color letter, reply, and brochure, all in a monarch envelope. It included a 3” x 5” window decal premium and cost $0.446 per package. By repurposing the window decal imagery into a comparable sticker and changing the carrier to a #10 envelope with two-color printing (to appear on-brand with red/white/blue colors), we lowered the cost-per-piece to $0.410.
The test was markedly successful. The test package increased the response rate from 5.05% to 5.23%, a difference of 3.6%. The test package also increased average gift from $23.50 to $24.43, a 4.0% lift. When rolled out to the entire audience, the new package and refined segmentation accounted for a 17% increase in net revenue.
We continue to work with the client on a focused and strategic approach to direct mail. After seeing the above results, the client has committed to relying on performance-based segmentation for all campaigns, ensuring that they make informed decisions about where they can reduce spend while still increasing net income.