The impact of personalised direct mail

Today, only 18% of retail purchases are made online – yet we are told that the high street is dying in favour of online shopping. Whilst we do live in an increasingly virtual world, the value of traditional sales channels should not be underestimated nor undermined in the marketer’s mind, notably the role of offline marketing channels in driving an uplift in transactions – often in combination with online marketing.

Although the accessibility and low cost of electronic messaging has pushed many marketing campaigns online, direct mail often plays a major (and cost-effective) role in inspiring customers to spend in-store and online. Jostling among crowds of competing emails in a noisy inbox, the lifespan of today’s marketing email is a mere two seconds. In this fast-paced context, the power of ‘snail mail’ remains very significant, as its longevity and physical nature allows it to stand-out from the digital cacophony.

With 87% of consumers reportedly influenced to make online purchases after receiving a piece of direct mail, it is clear that targeted direct mail should remain at the forefront of marketer’s toolkit – standing shoulder to shoulder with electronic marketing.

To underline the complementary nature of offline and online marketing, the results of the first in a series randomised controlled trial (RCT) carried out by Go Inspire Group underlined the sterility of trying to choose between direct mail and email, since optimal campaign results were achieved by using the two in tandem.

The real marketing challenge, then, is to optimise the performance of each medium in the context of this partnership, in order to achieve the highest scaling of net revenue results when they are combined. Many unopened emails are deleted based on subject-line alone whereas, on average, each piece of addressed mail is looked at 4.2 times. That’s four opportunities to appeal to the reader – but how?

Whether it’s the “snap me up before I’m gone” offer which uses data from your online ‘window shopping’ session to lure you into turning perused items into purchases, or a customised voucher that you received on your birthday – personalisation of sales channels is taking place everywhere. Retail marketers hope a customised communication will grab the reader’s attention, improve customer satisfaction, sales and, ultimately, customer value and share of customer wallet.

There is much published data on mechanical metrics around direct mail – open rates, consideration times, response rates, etc. However, there is much less objective evidence available to marketers on the hard commercial results generated by personalised direct mail – specifically the incremental revenue it generates. Go Inspire Group has therefore conducted the second in its latest series of RCTs, which aims to measure the net revenue uplift from optimising direct mail through personalisation.

The results of this RCT must be viewed in context though. Optimising direct mail, and then combining it with integrated, optimised direct email, provides the ultimate scaling of return on campaign investment.

Two levels of personalisation variability were tested in sequential months against a control: firstly, the impact of different levels of design vibrancy with no segmentation variants; secondly, the outcome of photographic and creative variants tailored to the recipients product interest, historical behaviour and propensity.

The results of these trials demonstrated that increased design ‘vibrancy’ of direct mail produced an overall incremental revenue uplift of 20%. Interestingly, the effect of this vibrancy was reversed for the high-value, high-loyal customer segment, reducing incremental revenue by 50%. This goes to show that variable creative may not be an effective blanked strategy for all customer groups; any strategy needs to be first tested before roll-out, and no assumptions made.

Although this RCT strictly limited itself to measuring the commercial imperative of incremental revenue, there may be positive results to measuring success beyond immediate financial return. ‘Softer’ outcomes such as brand perception and customer satisfaction are receiving more attention in a world where customer retention is increasingly important, since the possibilities for prospect have been legally and ethically restricted in recent years.

Today, almost every detail of direct mail piece can be personalised at a cost per print that is not far removed from traditional mass printing techniques. Features that are typically varied include the envelope external, individual name insertion and variable imagery and messaging.

Taking this a step further, some retail marketers will include personalised barcodes or QR codes that trigger tailored offers, personalised offer periods based on loyalty profile, and even segmented event invitations that gather people of similar profile. In the Go Inspire RCT, the use of personalised creative imagery produced a 128% uplift which varied between product categories from 72% to 197%. This range of results confirms the criticality of distinguishing between different customer segment behaviours and potentials – allowing an organisation with limited resources to prioritise campaign spend where it is likely to produce the greatest commercial uplift.

The results of this RCT clearly provide compelling evidence of overall uplift resulting from the use of personalised direct mail, where messages and imagery are varied to be relevant to the recipient. Given that 27% of direct mail is still ‘live’ within the recipient’s household even after 28 days – tailored communications can be what takes a letter from ‘opened’ to ‘inspiring action’.

Interestingly, results show that traditional campaign measures – specifically response rates – were not significantly affected by personalised direct mail. Instead, it was more the behaviours that highly targeted direct mail achieved – resulting in greater incremental spending levels per respondent. The key takeaway from the RCT for marketers is that effort put into targeted direct mail is likely to deliver improved campaign results, measured not through inward-looking metrics such as response rates, but in ways that are meaningful to general business managers – namely net incremental revenue. Optimising the direct mail channel through personalisation allows the combined effect of email and direct mail to be improved by a square factor, rather than simply be the sum of their parts.

Paul Sumner, communications director at Go Inspire Group