The Importance of Testing in Direct Mail Campaigns | Taradel

Direct mail marketing is one of the most effective promotion tools in a modern marketer's arsenal. However, there's far more to it than doing market research and sending out direct mail campaigns.

You also need to know how well your campaign is doing, which is why direct mail testing is essential. Below, we'll take a closer look at how to develop a direct mail testing strategy, and how it can help your campaign performance.

Why Is Direct Mail Testing Important?

In the advertising and promotion industry, we all recognize the importance of testing your marketing channel regularly. However, if you're just trying to ensure direct mail success with your advertising campaign, you may not realize the importance of direct mail testing.

Many useful benefits come from testing direct mail pieces, so let's take a closer look at what it can offer your company.

1. It Saves Time and Money

While running a regular direct mail test can seem like a waste of time, it will lead to less time spent in the longer term. As you change variables and find the optimal direct mail program for your targeted list, you'll spend less time on each campaign.

As your direct mailer becomes more effective, your response rate and conversion rates will also improve. Naturally, as these types of Key Performance Indicators (KPIs) improve, your bounce rate will decrease.

A decrease in the bounce rate, or amount of ineffectual direct mail, will in turn lead to less financial loss. Because more of your direct mail list is responding to your campaign, you're getting a better return on investment (ROI).

You can finetune your direct mail to a usable point, and then use it as it is. However, most direct marketers keep changing the test variable and using different test cells, to see if they can continually improve response rates.

2. It Allows You to Improve Your Direct Mail Campaign Performance

As we've already mentioned, running a direct mail test regularly can help improve your campaign's performance. The whole idea behind obtaining direct mail test results is to help you improve your campaigns.

Just a few of the areas where testing strategies can help you improve include:

• Response rates - Split tests, and other test types, improve response rates by helping you identify the elements and techniques that your target audience finds appealing.
• Bounce rate - By finding elements that your target audience doesn't find appealing, and helping you to replace them, testing decreases the bounce rate. It can also help narrow down your optimal audience, thereby reducing bounce rate by improving targeting
• Return on investment (ROI) - Campaign testing allows you to begin testing a specific hypothesis, or certain elements, and draw conclusions from the results. This leads to future campaigns, running after the test period, having better results. 
• Every successful campaign yields some form of ROI. However, if you continuously test and keep making adjustments to improve direct mail campaigns, it will lead to a much better ROI.

3. It Helps You to Identify Key Campaign Aspects

Direct mail testing can have some surprising results. One of those is that it doesn't just help streamline the process, but the planning process as well.

By running single variable tests, you can learn which campaign aspects are key for specific market segments.

Sometimes, you'll have two groups of people whose campaigns run more or less the same way. In specific segments, you'll learn to incorporate other aspects, like digital ads.

Whenever you gain new contacts, or a new target audience, in a specific area, start testing. It will start teaching you which aspects are essential for these new people.

Whether it's the coupon code for one group or the design for another, every campaign is unique. Split tests can help you find that one variable that matters to your new markets.

4. It Can Help Improve Audience Targeting

Sometimes, you run a perfectly good campaign, but the results are underwhelming. The response rate is low, you don't get much ROI, and the campaign seems like a waste.

Does that mean there's something wrong with your last campaign? Not necessarily. Perhaps, the campaign is great but you're targeting the wrong audience.

If you test your direct mail campaign regularly, it can help to narrow down the right target audience as well.

For example, take the few results you had from your last campaign, and study the type of person who responded. Perhaps most of the responses came from elderly Latina ladies, or young, sporty teens.

You can then send out one mailer to people matching that profile. By comparing your test mailer to your last campaign, you can narrow down which aspects truly affected the campaign.

Some of the characteristics that might affect the target audience, and are worth testing, include:

• Age
• Gender
• Marital status
• Cultural background
• Family size
• Size of income

Best Direct Mail Testing Strategies

Knowing that you need to test your campaign performance is only the first step. As you saw above, testing has an array of benefits. However, to test successfully, you need a proven direct mail testing strategy.

Below, we'll take a quick look at some of the most commonly used strategies. In some cases, we'll also detail some of the ways you can use that type of testing strategy.

A/B Testing

One of the common direct mail testing strategies, A/B testing relies on making a single difference between two versions of the same direct mail campaign. It may also use the change between past data and current data.

By splitting your mailing lists in half at random, you can see how the difference affects your campaign performance. In some cases, the change you make will have little to no effect. Other times you'll discover a major difference, allowing you to implement the results of your direct mail test, and improve your next direct mail campaign.

Let's take a look at a few practical examples of how you can use A/B testing strategies:

• Single variable Split Test - The most common type of split test, it works by splitting the mailing list in half and then making a single change between the direct mail piece sent to each half. By comparing the results of each half of the campaign, you can see whether the variable you changed made a difference to your response rate.
• Existing Vs. Prior Split Test - While this testing method isn't as common as a single variable split test, it's a common direct mail testing strategy. It relies on the difference between previous campaigns and your current campaign to gauge whether the variables between the two made a difference.
• Medium Split Testing - Sometimes, you may want to gauge not only the effectiveness of your direct mail piece but also whether direct mail marketing is working best for you. Medium split testing still relies on a direct mail list that's been split in two. 
• However, half of the people get a mail piece and digital marketing, while the other half only gets marketing in digital format. This direct mail testing strategy allows you to see whether the inclusion of physical mail has a significant impact on your response rate.

A/B testing, or split testing, is one of the most versatile options for direct mail testing. Typically, it's an ongoing process with the test cell changing regularly. Some variables to use as direct mail testing ideas include:

• How long you give customers to redeem codes
• CTA length and wording
• Discount and promotion types (I.E., BOGO vs 50% off)
• Image type
• Color palette
• Which trigger you use if you're using direct mail automation tools
• Headline copy
• Font and formatting

Multiple Variable Testing

Multiple variable tests are much the same as split testing, but you change more than one thing at a time. While this can still be a useful way to gain information, the results are much harder to clarify.

For example, you change your campaign's design, the promotional offer value, and the redemption period. The campaign does much better than your previous one, with a response rate nearly 50% higher than before.

But, which of the elements caused the change? Was it the new eye-catching design, the extended redemption period, or the offer type that caused an increased response? Was it a combination of the three?

You know that something made a difference, but now you need to narrow down which.

Generally, this type of test is practiced by marketers embarking on a new campaign, or companies just starting to use direct mail campaigns. It gives you a broad idea of what works, allowing you to narrow down specific elements later on.

Testing Your Offers

Testing your campaign offers is one of the fundamental elements of finetuning your campaign. Small tweaks in wording can make all the difference to your target audience.

For example, one group of people may respond exceptionally well to a 50% off promotion, while others will prefer a "two for the price of one". In the same vein, another group of people may much prefer the concept of buy one get one, or BOGO.

Run a test on different offers, different types of offers, and different wording to see what works best for your target.

You might also want to run tests on the way you present the offer. Older target audiences are more likely to prefer a coupon code, for instance, while younger audiences may prefer a QR code or personalized URL.

You can even run a test offering the same discount with both a unique URL and a coupon code, to see if that improves your response.

Target Audience Testing

Apart from testing your campaign elements, your offers, and other individual aspects, it sometimes becomes necessary to test your target audience as well.

While certain direct mail campaigns may seem like they'll work exceptionally well for a specific target audience, they may turn out differently in execution. It's best to perform constant mail testing to find the optimal target audience.

You can do so by running campaigns in different neighborhoods, perhaps using Every Door Direct Mail (EDDM). This tool allows you to choose an area and then narrow it down to specific neighborhoods.

Some of the criteria you can use match exceptionally well with the criteria you study for target audiences, i.e.:

• Age
• Size of household
• Commercial vs. residential areas
• The average income per capita

By running the same direct mail campaign, but targeting different age groups, household sizes, and income brackets, you can get plenty of useful information.

For example, the responses may prove that your services are most desirable to large families where the primary purchaser is between 30 and 40 years old.

Or, you might do best with small families that have sporty teens. Everything is testable, and every test will help you progress.

Use an Ongoing Direct Mail Testing Strategy

Regularity is one of the most essential elements of any direct mail testing strategy. The more regularly you test, the sooner you'll find a campaign format that works.

For instance, if you run a split test once a semester, it would take more than a year to find a campaign format that works better than your original.

However, if you run a bi-weekly test, you could probably optimize your campaign within three to six months. The key is to test regularly, and never stop testing.

Final Thoughts

Direct mail testing programs can mean the difference between successful campaigning and throwing money to the wind.

Historically, marketers would send direct mail en masse and hope for the best. Today, we're seeing a refreshing revolution of thoughtful marketing.

From single variable split testing, or A/B testing, to multiple variable testing, testing for results is becoming a norm, and it shows.

Most companies that run tests regularly have a higher response rate than compatriots running the same offer without testing.

In short, if you want your direct mail campaign to be as successful as possible, run a regular control test. The percent saved on time and money alone will make it worth your while.

Get in touch with Taradel today and see how we can help boost your local marketing efforts!