Test your lists for better campaign targets

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        14 | DMNEWS | April 6, 2009 | www.dmnews.com


        Test your lists for better campaign targets
        The right testing programs can make or break your marketing campaign efforts, particularly in a tight
        economy. Four list experts tackle which tests work and how to make them work for you

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                                VP, MeritDirect                                    Direct Marketing                                  VP, Statlistics                                  NextMark

        : Whenever I look at list test results, my          : In a tight economy, it is more prudent : Often, mailers that want to test new lists : Testing is not a perfect science, but it is a
        first reaction is usually that the winners          than ever to make sure marketing efforts           try to find lists that they have not previ-       scientific process. With 40% of campaign
        probably won’t do as well when remailed             are highly targeted — not only for the bot-        ously tested. Yet, their money may be better     success riding on list performance, it is
        in larger volume in the future. I used to           tom line, but to increase response rates,          spent by testing additional segments of lists    important to apply the right knowledge
        wonder if the list owner knew that this small       ultimately increasing top-line sales.              that they already know work for their offer.     when choosing the right lists to test.
        quantity order from a new mailer was a                 One of a company’s most valuable assets         Examples of these segments can include              Quantitative information is readily avail-
        test, so he stacked the deck by supplying           is their customer and prospect database. It        expires, older buyers, inquiries, sweepstakes    able for today’s direct marketers, but you
        his best names.                                     has been our experience that the traditional       entrants, or other names being filtered by        may just need to ask for it. There are three
           Today, I often work with names taken             40/40/20 rule applies not only to postal mail-     their current selections.                        key metrics to look at before finalizing the
        from a large and public prospecting database,                                                             While recency, frequency, and monetary        choices on your test matrix.
        where the mailer controls what names are             THE TAKEAWAY                                      (RFM) selections usually add value, at times        The first of these key metrics is the test-
        selected, yet the same “rollout falloff” still       Tracking codes, unique IDs or specific land-       they can be limiting names unnecessarily. I am   to-continuation ratio. In this case, a lower
        occurs. The true cause is a fundamental sta-         ing pages help identify e-mail list trends        aware of a mailer that was so enthralled with    ratio is better. This ratio measures the suc-
        tistical phenomenon.                                                                                   “hotline names” that they would only select      cess of a particular mailing list based on
           Every list test is a sample result from a uni-                                                      “quarterly hotline names,” at a premium price,
        verse of sample results that could be obtained      ing, but e-mail marketing as well. With suc-       from one of their best outside lists.             THE TAKEAWAY
        from the same list. The average of all of these     cess of a campaign riding on 40% list; 40%            Yet this mailer only mailed two times per
                                                                                                                                                                 The test-to-continuation ratio, mailer
        results will be the real, long-term response        offer; and 20% creative, there is an excellent     year, so they should have been mailing to
                                                                                                                                                                 usage, and the LPI are valuable metrics
        rate for the list. Any one result, however,         case to make sure all your marketing lists         the names from this list with six-month
        could deviate substantially from this long-         are as clean and accurate as possible.             recency — that is, the last two quarterly
        term response rate.                                    E-mail marketing campaign list testing          hotlines. This would have resulted in them       several mailers’ usage. The numerator is
                                                            increases your customer knowledge, fine             having nearly doubled the names available        the number of mailers who tested the list,
          THE TAKEAWAY                                      tunes lists and creates highly targeted seg-       from this list source, and the performance       and the denominator is the number of these
          Don’t cut corners on A/B testing just to          ments for tailored offers. There are several       for this list would have still been “better”     same mailers who placed a continuation
          save yourself time and money                      key, common-sense techniques for success-          than other lists in their campaign.              order for the same direct marketing offer
                                                            ful e-mail list testing.                              Another situation where “potentially          within 12 months.
                                                               For exa
Description: While recency, frequency, and monetary (RFM) selections usually add value, at times they can be limiting names unnecessarily. I am aware of a mailer that was so enthralled with "hotline names" that they would only select "quarterly hotline names," at a premium price, from one of their best outside lists.
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