Is Direct Mail part of your solution?
Here is the story of a provider of credit card processing solutions. (To protect confidentiality, I am not including their name.)
They were prospecting for new accounts mainly through paid search. But they found the costs associated with paid searches were rising sharply.
The CEO decided it was time to reexamine their search marketing strategy. During this reassessment, the CEO held discussions with an agency that brought up the subject of including direct mail (specifically direct mail postcards) to the campaign.
At first the CEO hesitated. His concern was the “high cost of direct mail, making it prohibitive to add to the mix.” But he discovered that if the piece was put together in a cost-effective way, the pricing was very comparable to the paid search component.
Here’s what they did together. The agency built an 11-by-18-inch tri-fold mailer. Working with the CEO’s team they tested two offers. Version A was for a “package-deal” of services for startups. The B Version made a simpler offer of credit processing services. Both mailings targeted newly incorporated businesses. A further test sought the difference in ROI between First-Class and Third-Class postage.
The CEO’s team segmented the mailing list into several business groups, including recently listed limited liability corporations. It also segmented by the SIC (Standard Industry Codes) used by the credit industry to identify businesses in sectors more likely to seek the services offered by the credit processing company.
The calls-to-action in all test segments included both a mirror website and several toll-free numbers, to track results more accurately.
What did the testing show?
The simpler offer got double the response rate of the bundled offer. The simple offer generated far better ROI than paid search, according to both the agency and the CEO.
They also found that First-Class postage pulled better response than Third Class. It was simply a matter of speed: "If other providers mail First Class, their card or offer will get to the merchant one to two weeks before a Third-Class offer."
Let’s look at some numbers.
A six-month test of monthly 12,000-piece mailings generated a slightly better than 1% response rate at a cost of $9,000 to $10,000 per mailing. With each client having a value of $50,000 to the company, the ROI was comparable to search advertising.
The campaign then rolled out.
The credit card processing company now mails 85,000 to 110,000 pieces a month.
That brings in 200 to 250 clients a month from direct mail. The CEO reports, "That number is growing. Now, we're exploring new lists and new data, and little tweaks to the campaign."
Is Direct Mail part of your solution?
It should be!
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Peter T. Britton
Idea Generator. Wordsmith. Resultant.
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