The (relative) noiseless beauty of junk mail

I will forever be grateful that during my first years as a marketing guy, one of my roles was as a direct marketing manager. That included direct mail, coupons, direct advertising (promotional, time-sensitive stuff vs. brand ads), and even some direct TV... which was a lot of fun and worth a post of its own sometime.

Now, "direct mail" is a fancy way of saying "junk mail." I admit this. And as a recipient, I'm sure that you -- like me -- aren't a big fan. Until you get an offer for something you like. And then you carry the coupon down to the store like everybody else. In fact, recent years have seen a resurgence of direct mail marketing because people are responding less to phone marketing (or blocking calls) and are opting out of a lot of email/social ad opportunities. And a lot of people don't mind coupon books, print catalogs, etc.

It's only "junk," in fact, when it's done badly and for products that there's no way you'd ever purchase...

In the mid 90's, I did a lot of postcards, coupons and bill inserts for Cellular One, which became AirTouch Cellular which became Verizon Wireless / Vodaphone. Which, when you put them all together, I refer to as "My decade with Cellutouchavoderizaphone." My job was to drive traffic to our "inside sales" department. That means "people on telephones waiting to take your call." My team designed, printed and mailed these simple paper pieces and when people called the number, someone on the phone would take over and try to complete the sale.

I was thinking back to this segment of my marketing career today while reading an ArsTechnica article about a new book by Daniel Kahneman, Noise: A Flaw in Human Judgement (Amazon, WorldCat). I very much liked Kahneman's early book, Thinking, Fast and Slow, and will probably read this one. But just in reading the Ars' article, I was struck by this:

In Thinking, Fast and Slow, Kahneman described the Nobel Prize-winning work he did with Amos Tversky about the many cognitive biases that often shape individuals' decisions and cause them to err. Noise expands on those ideas to explore why groups of people make errors and how to deal with it when they do.

The longest section of the book is devoted to defining and identifying noise—a justification for the measures outlined in the rest of the text. "Noise is variability in judgments that should be identical," the authors explain...

To reduce noise, the authors prescribe a regimen they call "decision hygiene," which is about as unsexy as it sounds. And they named it that for precisely that reason. They liken it to hand-washing, which is widely known to do wonders to prevent the spread of pathogens—although when you do it, you don't know exactly which pathogens you are preventing from spreading, and you'll never know.

The authors posit that decision hygiene will reduce noise-induced errors, but we'll never know which ones. The analogy doesn't end there; they note that hand-washing is also known to be kind of an annoying hassle, so even though it is simple and extremely effective, many people who are aware that they should be doing it all too often don't. Decision hygiene is similar.

Now... before we get to junk mail...

"Decision hygiene" reminded me of the TED talk by Atul Gawande about "The Importance and Value of the Checklist." In it, he talks about how a hospital checklist "...reduced complication rates in surgery by 35%, death rates by 47% and saved the health industry hundreds of millions of dollars."

That's some hygiene.

What Gawande had noticed (in brief) was that many doctors had very different ways of doing the same standard hospital tasks. So he simply had them all write down how they did them and then collected the ones that had the best outcomes and made that into "the list" that everyone had to follow. When you do everything the way that the people with the best results do things, you improve the results for everyone.

Back to junk mail.

In marketing, we call it "A/B" testing

And we've been doing it forever. And it's why I was grateful to have direct marketing as part of my early experience, because there is so much less "noise" in the mix for direct mail, and applying "marketing hygiene" is much easier than in many other areas.

If you don't know what an "A/B test" is, no big deal. It's simple:

1. You mail out one postcard. Call that "A."
2. You mail out another postcard. Call that "B."
3. You see which does better.
4. You do that one more.

Now, in many cases, we did a lot more than two tests. Our standard routine when doing a mailing to several million people was to do a 3x3 grid with a total of nine tests, using a small sample of the total market we were hitting up. So, let's say we were eventually going to send out 2 million postcards. We'd break off a random sample of 45,000 and send 5,000 each to nine different groups based on 3 different creative ideas and 3 slightly different offers.

It's important when doing A/B testing to only change one thing, so if you're going to have a different offer and a different creative treatment, you need to do four tests, not two. If you want 3 of each... You get a grid of nine.

So we might have 3 creatives where one was a fun message, one was an "act now" message and one was a value message. Then we'd have 3 offers where one was an equipment discount, one was a service discount and one was a coupon for free accessories. So you'd end up with a total of 9 postcards of 5,000 each with the following:

1) Fun + equipment. 2) Fun + service. 3) Fun + accessories. 

4) Act now + equipment. 5) Act now + service. 6) Act now + accessories. 

7) Value + equipment. 8) Value + service. 9) Value + accessories. 

Each with a different phone number, so we could track which did better.

That may seem like a lot of work to determine the best "hygiene" for a postcard. But we'd regularly see a difference between the best/worst "pull" on a direct mail piece of nearly a 1% response rate. So let's say #3 got the best results with a 1.85% response rate, and #7 got the worst, with a .95% response rate.

Doesn't sound like that big a deal, does it? Except that when you send out the rest of those 2 million postcards, the difference between 1.85% and .95% is 18,000 more calls to my counterpart's team sitting on the inside sales phones waiting for them to ring. That's almost twice as many calls for the same cost of the overall mailing. And all it really cost us was some time, some planning and a few extra hours of creative service.

Compared to what the earnings potential on 18,000 more inbound calls was? Peanuts.

Marketing hygiene should never stop

When the calls came in, my guy in charge of the inside sales team had a script that they used. Guess what? During the A/B testing of the mailers, they did some A/B tests on the scripts, too, so that by the time the main mailing dropped, they'd narrowed down that text, too. And they did that again and again during the month where we spread out the postcards.

Then, each month, we took what we learned the month before and applied it to the next month. If, for example, we found that month-after-month, "safety" messages were starting to pull less hard? We'd just take them out of the matrix. If people called in based on accessory offers, but the close rate was garbage? Boom. That never hit the A/B grid again.

Three overall points here:

1. Probably you should buy this book.
2. Whatever you do, look for ways where the process is already routinized and see how you can apply "hygiene" or lists or A/B tests to improve outcomes by doing the best things over-and-over and limiting mistakes and less effective processes.
3. Don't think so unkindly of direct mail, "big advertising's" little, grubby sibling. It feels like junk, to you, because you're probably/usually one of the 98.5% who isn't looking at that postcard or bill insert or coupon and thinking, "Hmmm... Interesting." But it's a good bet that a lot more "hygiene" went into that piece of marketing than a lot of high-end, expensive, glossy TV ads.

Now go wash your hands. ;-)