Turning Direct mail into a performance channel

In the past 16 years of building and scaling brands, I've leveraged direct mail as a performance channel to increase local penetration.

I failed and spent a lot during that time, but learned a TON. ??

In this cheatsheet - I'll dive into the five most important learnings/tactics to ensure your direct mail spend/campaign is set up for success.

Here's a quick summary of what data/experience I'm working from.

1. Total spend on the channel: $5 - $7M
2. Total number of sends: 40 - 50
3. Total markets tested: 25 (Canada + US)
4. Total Audience size tested: 200,000,000
5. Total Brands tested: 10 (B2C + B2B)

Now that we have a baseline of the size and scale of my tests, let's dive into the step-by-step guide to scaling this channel's profitability.

1?? Rent, don't buy your list

ACTION: Yes, renting a list will be more expensive, but it also ensures your list is up-to-date and with direct mail, which has a direct impact on your conversion rate (also known as your response rate - the percentage of people who will take action on your mailer). The other key benefit of renting is that the company or consultant who manages the list will often have better insights into which demo will make the most sense for your product/service.

2?? Seasonality matters; don't send it at the wrong time

ACTION: Like other channels in your marketing mix, it's important to understand your peak times and the customer journey length. This will allow you to determine not only when you send but how many sends you should do over a period that correlates to the average customer journey. I've seen the response rate increase by 10 - 20% when hitting the same list three times over 90 days.

3?? Create a simple A/B test for all sends

ACTION: I've made the mistake of budgeting $50,000 for one big send and hoped it would drive effective conversions. I can tell you from experience that it won't.

Instead, take a smaller test budget of $20,000 and break your list into 2 test lists.

Try testing the following variables:

• Type of mailer (addressed vs unaddressed)
• Style of design (simple - black and white - copy only - full colour)
• Try different offers (cash, gift cards, limited-time deals)
• Audience (age, profession, city area)
• Pro tip: If your rented list provides it, look to test the audience that has made recent transactions vs the one that hasn't.

Once you have a clear signal of what works, add more budget, go bigger and continue to test. The goal is to beat your winning variation.

4?? Model before you send

ACTION: Once you find your list rental company and work with the right sender of your mailer, it's important to model out different performance scenarios. The numbers you will likely need to model are:

• CPM (cost per thousand - should range from $0.50 - $1)
• Response rate (I usually model with a 1% RR)
• Landing page conversion rate (your current LP conversion rate)
• Funnel rate (I model mine with the Facebook performance %)
• CPA/CAC (with the numbers above, where will you land on costs)

You should do a good, better, best model so that you can get a sense internally of your level of risk.

5?? Setup tracking before you send

ACTION: One of the biggest misses with any channel, but mainly offline, is the lack of planning for tracking and reporting. For direct mail, specifically, plan to track the following:

• Incremental lift: The % of lift during the period you send your campaign (within the location) that is above any average lift. I would keep an eye on "direct," "organic," and "paid channels" as a traffic source. Each of those channels could show signs of lift when your campaign is active.
• Post reg/sign-up survey: On top of a lift study, I would also add a survey after the user converts to ask them, "How did you hear about us?". With that data, you can see if the link tracking also matches the survey data. People will likely have touched more than one channel before converting if it doesn't. This makes sense knowing you will have people at every stage of your conversion funnel.
• Cohort tracking: Similar to channels like TV and OOH, you will see that the cohort of users from channels like this will behave differently over time, and it's essential to monitor that outside of the real-time actions taken.

? Quick summary: When you send, how you send, and what you send will determine the performance of your direct mail campaign.

If you have any questions, please feel free to message me directly! ??