2 close-ups on direct mail
1. Direct mail allows for precise testing
The Goal
The Dallas Morning News of Texas (528,379; 755,912) experienced moderate success from a direct mail/FSIs promotion. The main objective was to test certain sales tactics. They also wanted to test two discounted price points to measure response, retention, and cost per unit. Additionally, the paper wanted to discover the response to a repeat mailing of the same offer. The Dallas Morning News also asked for prepayment, which had previously not been done, to gauge the market’s willingness to prepay.
The Story
“From previous creative testing we had determined a creative look that pulled in the highest response and treated is as our control piece. A four-color tri-fold placed into a #10 carrier with a #9 BRE. We produced two mailings with the same creative format, but with different price points. We targeted a high demographic county that receives a live local edition (same target that produced the control). We made two mailing lists, mailing half of second list to those who had received a previous mailing and the other half to those who had not,” said Circulation Director Acquisition/Retention Mick Cohen.
It took the Dallas Morning News only two weeks to complete the mailing from conception to completion.
“This control produced a 1.76 percent response with the same price point as one of our price point test mailings. As we were mailing the same piece with the same offer to the same demographic, we were targeting similar results. However, we were not sure what impact would be created due to the fact that 25 percent of the same households would be receiving this repeat mailing. We actually attained a 2.03 percent response on this second mailing. The higher price point piece pulled a 1.43 percent response. Sixty-six percent of the new subscribers were pre-paid. We had no benchmark for this as we had not asked for payment in the past,” says Cohen.
The Dallas Morning News is in an early stage of testing the direct mail program. The Dallas Morning News considers this test to be a success and is currently is the process of developing detailed results analysis to gain knowledge from these mailings to help plan future mailings.
The News attained a significant increase in response/starts by offering a deep discount. The historical direct mail response rate had been two-tenths percent due to a limited offer (two weeks free). The increase in response from two-tenths percent to 1.5-2 percent significantly reduced the cost per order, even with the discount subsidy required. In seven weeks the Dallas Morning News attained 1,383 starts between the two test mailings at an overall $67.13 cost per order, including discount subsidy. Historically, direct mail CPO’s were over $100. As far as price point, the lower price point pulled in 810 starts at a $67.40 CPO (2.03 percent response) and the higher price point pulled in 573 starts at a $66.75 CPO (1.43 percent response).
The Moral of the Story
Direct Mail can reduce CPO costs even at discounted rates. Also it can pay to go back to already-mailed people.
A $10 gift card and 4 weeks free
The Goal
The Tennessean, located in Nashville, Tenn. (181,343; 250,575) wanted to target non-subscribing households based on PRIZM demographics as well as non-subscribing households who currently subscribe to newspapers in surrounding market counties.
The Story
Two key market counties were targeted for the project. PRIZM data was analyzed for all non-subscribers in the counties and three similar groups were selected within each county. Based on the similar demographics, letters were targeted by county emphasizing the features and benefits of the main product and also the specialized sections distributed only in those counties. A letter was developed emphasizing the way the product compliments the local coverage received by the customer who only subscribes to the community product.
Both groups received a letter with a perforated reply voucher and a postage-paid reply envelope to ease the response process. The offer was for a $10 Wal-Mart gift card and four-weeks-free with the purchase of eight weeks.
The mailing was outsourced due to production restrictions.
“In-home quantity vs. response count was used to measure success,” said Circulation Sales and Marketing Manager Tim Baumgartner.
The response rate was 0.79 percent collectively. Out of 51,712 in-home letters mailed, 409 responses/new subscriptions were acquired.
Future offers will need to be more finely crafted for one of the targeted counties. Response in that county alone was 0.48 percent, while the other two garnered 1.06 percent and 1.26 percent individually.
The Moral of the Story
Offering a subscription and a gift card may boost home-delivery sales.