Testing! A Direct Marketer's Strategic Advantage (1,075 words)

By Hallie Mummert Being able to measure response and pinpoint the reasons for success gives direct marketers a leg up against general advertisers. Testing is not an optional activity you can afford to cut out of your budget during lean times. When you look at testing as a luxury or an expense, you ignore the main advantage direct marketers can lord over brand-driven general advertisers: Concrete measurement that attributes response and sales to the campaigns responsible for generating these activities.Think about it: You don't need to spend money on magazines, television channels or billboards that don't work because you can't pinpoint which medium or message was most responsible for your spike in sales of orange juice, cell phones or minivans.You also don't have to stick with one offer or creative approach for every customer; careful segmentation and analysis of testing results allows you to identify the right message for the right person at the right time to produce the most economical sale.If you're looking for reasons to help you protect your testing budget from mid-year cutbacks, the following reasons for why you can never stop testing should give you ample argument.Reason No. 1: Testing builds your housefile.If you prospect by renting lists, you're part of a direct marketing ecosystem that depends on acquisition to keep housefiles healthy and attrition-proof.When enough marketers drastically cut back on prospecting, then housefiles shrink, the merge-purge produces fewer names, and the number of names to mail drops again. It's no wonder response is down: Everybody is mailing the same names time and again.Also consider that your list rental income can be negatively impacted by a smaller housefile; fewer names to rent and more duplicates that match up against competitors' lists means less revenue in your pocket.While it may not be prudent for every company to test lists aggressively in a down market, you need to protect your customer base with strong list research and as much testing of new sources as possible.Reason No. 2: Testing identifies new messaging strategies.During economic shifts from a boom to a period of market correction (and in some cases, an economic bust), the same old message may not ring true with your target audience any more.If you don't test new copy platforms or offer structures, you could be operating on borrowed time with your current controls.For Rob Carter, vice president of marketing, Soundview Executive Book Summaries, testing allows him to see if his marketing team and freelancers are missing some way in which his products might be perceived in the marketplace.Beyond keeping marketing efforts relevant and effective, this practice also helps find new audiences that could be interested in your product—if the benefits were tweaked in a different direction.Reason No. 3: Testing tells you the best months to be in the mail.Just because your company has always mailed certain offers and messaging at specific times of the year doesn't mean those principles are set in stone forever.It's important to know why you mail heavily around some months and not at all in others. If the logic that was developed decades ago does not fit the current mailing environment, it's time for a test.Reason No. 4: Testing helps you improve results across multiple media.The great thing about new ideas is that they tend to inspire more success in the other areas of your direct response programs."We increase testing when we work with a new copywriter or designer who comes up with a new way of thinking about our product," says Carter. "We do a lot of testing in space advertising, and if the new concept works there we get right on [applying] it to other media."Reason No. 5: Testing keeps you competitive.As Hart bluntly puts it, "Testing is our lifeblood. Without testing, we wouldn't be able to stay ahead of our competition."Consultant Donald Libey has been joined by a host of direct marketing veterans—as well as those on the general advertising side of the table—in pointing out that successful companies are those that view economic downturns as ripe opportunities for stealing market share.Max Hart, director of fund raising for Disabled American Veterans, concurs, adding that testing will prevent the nonprofit from losing any ground during this period so that it will be in a better position to attain growth when the economy rebounds.To help stay the course on continual improvement of Disabled American Veterans' direct mail programs, Hart uses a series of checklists to review what he's tested before as well as everything he's heard that other nonprofits test. With these tools, he insures his team is not overlooking potential productivity breakthroughs.Reason No. 6: Testing improves your productivity.Put another way, testing saves you money by enabling you to maximize your return on investment (ROI).According to Hart, testing helps his organization maintain its service levels in the face of increasing costs. "Without the improvements in productivity that result from testing, the impact of a tough economy means our gross and net would decline, and we would have to cut back further on our programs."For example: Disabled American Veterans continuously tests the use of live postage on its return envelopes. Since it spends $6 million annually on live postage, Hart needs to know at the first possible moment when segments are not bringing in the ROI required to justify the use of live stamps. At the present, the investment delivers a return of two-and-a-half times the investment—but Hart knows that could change."I've heard people say they can't test something because it's too expensive," says Hart. "I don't buy that." He explains that the expense of a test should be judged on its potential to lift response or cut costs. If the change can deliver enough return to cover investment, then expense is moot.For example, Hart remembers a creative test that just didn't work the first time out. But the marketing team was convinced the idea had merit, so it kept inserting a test panel on mail drops whenever possible. Finally, says Hart, this test won—and with amazing results. Within two years of rollout, the change to the new mailing increased gross income by 60 percent and produced a profound impact on net income for the nonprofit.Hart does not expect to see such a breakthrough again in his lifetime, but that doesn't mean he'll stop trying.

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Testing! A Direct Marketer's Strategic Advantage (1,075 words)

Hallie Mummert

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Hallie Mummert