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Preserving ROI with Promotions and Offers

Editor’s Note: Today’s post on how to create a compelling offer while keeping ROI in mind was written by Mark Hasland and originally appeared on the Overnight Prints blog. It is reprinted here with permission. Enjoy!

The promotions businesses offer consumers is one of the three pillars on which successful direct mail campaigns stand. By utilizing lucrative offers, entrepreneurs may be able to encourage customers to make purchases they wouldn’t have made otherwise.

A recent article from Direct Magazine discusses the use of the four basic types of offers: free shipping, promotional items, flat dollar discounts and percentage discounts. When used wisely, each one of these promotions can help business owners generate sales and manage return on investment.

Free shipping is often the most effective offer, especially for online businesses. According to Direct Magazine, free shipping can generate 20 percent lifts in sales. The second-best promotion is flat dollars off, followed by percentage discounts and free merchandise.

No matter which offer companies pick, it’s critical they determine the goal of a direct mail campaign first. If customer acquisition and brand awareness are primary objectives, entrepreneurs may want to consider promotions they will only break even or even lose money on. Conversely, if bottom line is an issue, organizations should use more conservative offers.

This is especially the case when using the least effective offer, promotional merchandise. Direct Magazine says that offers of this type can generate returns of 5 percent. However, for many direct mail campaigns, response rates hover around 3 percent. The potential customers acquired and 2 percent sales lifts generated by a promotion should be carefully weighed against the cost of the actual items.

Additionally, the source suggests considering whether discounts are needed at all. For example, seasonal businesses may pull respectable numbers during peak times of the year and don’t need subsequent deals to encourage sales. Once the company is out of season, though, then they may want to consider using promotions to attract customers.

Finally, Direct Magazine highlights the importance of observing both consumer response and competitors. Businesses should stay competitive with rivaling companies, offering discounts that make them a viable alternative. Entrepreneurs should also analyze direct mail recipients to determine which offers are successful and which are not.

A recent article from Target Marketing Magazine also recommends including time-sensitive calls to action with offers. Time-sensitive phrases including “hurry” and “buy now” may encourage consumers to act promptly and make purchases sooner rather than later.

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Direct Mail Still Effective, and Can Be Valuable Complement to Other Platforms

Editor’s Note: Today’s post was written by Mark Hasland and originally appeared on the Overnight Prints blog. It is reprinted here with permission.

Despite all the hype about social media, marketers seem not to be convinced of its effectiveness, and many are still relying on traditional marketing platforms such as direct mail, said a recent study.

According to a report from Massachusetts-based BluePoint Venture Marketing, just 19 percent of marketers surveyed said that establishing a social media presence was an important company marketing goal in 2009.

Meanwhile, more than half of respondents – 52 percent – said that direct mail was an effective branding and awareness vehicle.

Yet even the growing popularity of social media shouldn’t be a threat to the existence – or the effectiveness – of direct mail; experts say that integrated marketing campaigns – those that promote a consistent brand and message across a variety of platforms – are typically the most effective.

Scott Buresh, founder and CEO of organic search engine optimization company Medium Blue, agrees. In an article for Promotion World, Buresh said that using a combination of online and offline marketing can provide the best results.

“Nobody can deny that the advent of various internet marketing methods has been a game-changer,” he wrote. “Some forms of traditional advertising may even be on their last legs. Trade show attendance is down. Magazines and newspapers are in decline. I can’t remember the last time a door-to-door salesperson came up to my house.”

However, he added that some channels “still can provide exceptional returns.” Even Medium Blue, which is based entirely on online marketing, uses direct mail – Buresh admits that “direct mail, done properly, still works for us.”

Integrated marketing can be so effective because each platform essentially cross-promotes itself. For example, companies can add Facebook and LinkedIn links to their email campaigns, and can promote a Facebook campaign in their postcard mailings.

At its most basic, all companies should make sure to have a link to their website on all business cards, brochures and other printed materials.

Experts add that integrated marketing campaigns are only as successful as they are consistent – campaigns that promote different messages and feature different brand voices work separately at best (thereby negating the effects of cross-promotion) and against each other at worst.

At the very least, Buresh noted, using a variety of different marketing channels ensures that companies do not “put all of their eggs in the online basket.”

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Direct Mail Has Several Advantages Over Newer Forms of Marketing

Editor’s Note: Today’s post was written by Mark Hasland and originally appeared on the Overnight Prints blog. It is reprinted here with permission.

With the internet easily accessible to more than 200 million Americans, marketing trends are increasingly shifting to digital. However, even in today’s web-dependent world, direct mail still plays an integral role in reaching new audiences.

This contrast can most clearly be seen in the political realm. While President Barack Obama used social media platforms, like YouTube and Facebook, to connect with many Americans, countless other politicians utilize direct mail to appeal to potential voters.

This is the case with many of this year’s gubernatorial campaigns for candidates in Minnesota. Members of both Democratic Farmers Labor and Independence parties are launching direct mail campaigns leading up to the August 10th primaries, reports Politics in Minnesota.

“If you’re looking at the different mediums to talk to voters, by far the most effective is direct voter contact, door to door and on the phones. Direct mail fits into that as well, because it’s a very targeted message to specific voters,” Jaime Tincher, campaign manager for DFL’s Margaret Kelliher.

Targeting largely factors into why direct mail is so popular among many candidates. Direct mail allows campaigners to target certain demographics with relevant messages, maximizing the impact a message can have among distinct groups.

In addition to that, direct mail can also target specific voters, creating personal connections that broadcast marketing often can’t generate. With direct mail, campaigners can reduce the amount of marketing dollars spent on people that are likely not to vote and more efficiently target those who will.

Because it’s such a direct platform, many candidates also use mail for fundraising initiatives. With the exception of holding an event with the candidate in attendance, direct mail is the best way of finding people that agree with a position that would make a contribution, says Tincher.

Expense is another large part of why direct mail is so popular among politicians. Direct mail is a fraction of the price of television campaigns. While a TV message could cost hundreds of thousands of dollars, direct mail initiatives are often no more than a few thousand dollars.

So what can a savvy small business owner take away from these politicians? There are certain advantages that physical envelopes and brochures have over intangible digital messages. Direct mail can often be used to create personal relationships and cement a brand’s reputation among consumers. Additionally, targeting different segments of potential customers with specific messages is also an advantage that direct mail has over other channels, like TV.

At Dukky, we recognize that both direct mail and digitial marketing have unique advantages. In our view, an integrated approach is the way to go because it provides marketers with the best of both worlds.

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Twitter, Facebook May Enhance Direct Mail Marketing Campaigns

Editor’s Note: Today’s post was written by Mark Hasland and originally appeared on the Overnight Prints blog. It is reprinted here with permission.

Despite the growing divide between social media and other forms of marketing, several of the top marketing firms are still finding uses for direct marketing campaigns. With the economic downturn hitting small businesses the hardest, it’s important for small business owners to integrate their different marketing platforms, and also make sure that their campaigns are engaging their consumers.

Business consultants maintain that distributing your marketing budget equally over all of your platforms is the best way to approach a campaign. As the popularity of social media marketing skyrockets, many firms get caught up favoring one form of marketing over the other. That could be a potential downfall, Gyro HSR Chief Operating Officer Richard Perry told Marketing Magazine. With the introduction of social media marketing, many businesses are forgetting to integrate both of their marketing arms into one campaign.

“A lot don’t integrate their marketing. The marketing departments are still organized how they were five years ago,” Perry says. “It is time for brands to reorganize internally.”

The key is to make sure that a small business owner’s marketing campaign is not only relevant to their intended audience, but that it actively engages them, says Mike Welsh, chief executive of Publicis Dialog. Social media relies heavily on the “participation nation,” as Welsh calls social media-ites, but tuned-out tweeters could be completely missing the message.

“Engage has become a buzzword, with direct and sales promotion agency bosses using it liberally,” Welsh told Marketing Magazine. “This could be dismissed as new business-seeking jargon, but, in fairness, it usefully describes the requirement for marketing messages to be a relevant and useful part of consumers’ lives.”

The takeaway here for a savvy small business owner is that a direct mail marketing campaign should be used to enhance a social media campaign, and vice versa. Small business owners can do this by reaching out to potential clients through direct mail marketing, but also including calls to action that reinforce their social media campaign.

For example, a promotional brochure could encourage prospects to follow them on Twitter, or become a fan of their product on Facebook. Likewise, social media should be leveraged in a way that would spur potential clients to request additional product information.

At Dukky, we’ve also seen that adding social sharing options to direct mail campaigns consistently results in dramatically improved response rates.

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Neuromarketing Study Supports the Effectiveness of Direct Mail

Editor’s note: Today’s post was written by Sharon Markovsky and was originally posted on her blog, Practical Discussions of Marketing. It is reprinted here with permission.

I was reading an article summarizing the findings of a new neuromarketing study conducted by Royal Mail through Millward Brown, employing the University of Bangor’s psychology department and fMRI (functional Magnetic Resonance Imaging), which sheds some light on how the marketing medium used can be just as important as the message when it comes to building an emotional connection with consumers.

And, I have to say I am pretty excited with the findings. They support the case I made in a prior blog, Direct Mail Is a Viable Option for Small Business, that direct mail can be an effective part of a company’s marketing mix—thus, direct mail is not dead!

While the research conducted was qualitative in nature, only 20 subjects studied, the results are nonetheless very important. Without getting into my “research geek” mode, which I am apt to do, here’s the crux of what they found:

Physical media—direct mail based material—generated more activity in the parietal cortex, an area closely associated with the integration of visual and spatial information; suggesting that print-based material is more ‘concrete’ for the brain, and can act as a cue for memory. The print marketing methods were “seen” as more “real” by the brain because of the multisensory nature of the materials.
Direct mail-based material was also associated with responses which suggest greater ‘internal’ thinking – suggesting that this material is processed more in relation to subjects’ own feelings and memories.
Online materials on the other hand elicited responses associated with greater difficulty in maintaining attention on the task. Researchers noted that online materials proved harder to focus on; and engaged areas of the brain associated with greater filtering of irrelevant information in order to attend to the task, such as the temporo-parietal junction.

So what?

As a marketer, you need to choose wisely when it comes to the media you use for customer and, more importantly, prospect communications.

Print media may be more effective for complicated or detailed messages; online seems better suited for short, easy to read and less comprehensive messages.
Print media may be more effective for the first or introductory communication from a brand campaign, an online message appears better suited as brand awareness/consideration reinforcement tool.

Thanks to Royal Mail, Millward Brown and the University of Bangor’s psychology department for putting together such a great and useful neuromarketing study!

Editor’s note: With Dukky’s integrated platform and shareable PURLS, you get the best of both worlds- the deeper engagement of direct mail and the viral reach of digital.

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Direct Mail Case Study Shows Unbelievable Response Rates

From Static to Viral- Direct Mail Marketing will never be the same.

The rising popularity of Social Networks has opened to marketers an entirely new arena to pursue. In a recent study by Nielson Group they found, Two-thirds of the world’s internet population visits a social network or blogging site and the sector now accounts for almost 10% of all internet usage time.1 As new dynamics in this industry are emerging, the basic questions as to how to effectively merge traditional marketing mediums with social networks has not been answered……until now that is.

Let’s look at the numbers:

You are sending a traditional direct mail advertisement to a database (10,000 records). This means the absolute maximum reach potential of your campaign will be those 10,000 customers who may or may not be interested in your campaign.
Maximum Reach: 10,000

Normal Response rates for Direct Mail Marketing are between 1-3%

Consider this… with the integration of social sharing into your direct mail marketing campaign you are not just gaining access to your current customer database, but you are now gaining access through your existing marketing strategy to an entire new segment of the market- your Customer’s Friend List. Whether their friends on Facebook, Twitter, or any other social networking site, integrating this simple step into your marketing mediums will expand your reach exponentially.

With the simple theory of multiplication, your reach has the potential to double, triple, and beyond by accessing your customer’s friends, who are engaged to respond.

New Maximum Reach: Exponential
Cost increase: $0

Social Networks add powerful benefits to traditional direct mail campaigns
1. Company Awareness Increases
2. Customer base is identified & expanded
3. Friend-to-Friend Sharing on social networks is more powerful than Company to Customer sharing.

With the release of Dukky’s Software, Direct Mail Marketing has been revolutionized and taken to the next level.

CAFE’ EXPRESS

Café Express is a Texas owned local restaurant chain with 17 locations spreading from Houston to Dallas. With a Direct Mail Marketing strategy, they were focused on growing awareness in the Dallas area, and promoting their breakfast menu. Having already gained success during lunchtime, they were looking to expand their breakfast customers. After some research, they discovered most people were not aware they served breakfast, which led them to their need for a successful direct mail campaign.

Campaign Goal: Grow Awareness & Promote Breakfast Traffic

With standard response rates of 1-2% being insufficient to the response they wanted, Café’ Express brought in Dukky to manage their entire campaign with desired results of 10-15%. Dukky developed all creative, target list, web infrastructure and managed printing and mail fulfillment.

Process: A special offer was mailed on a postcard size piece of direct mail with a detachable card displaying the Cafe Express offer. Each card was labeled with the homeowner’s name and with a PURL (Personalized URL) was mailed to 20,000 recipients in the surrounding area offering a free Breakfast upon activation of the card online through the owner’s PURL.

PURL Example: www.freeAMexpress.com/johnsmith

Poll: Customer’s were brought through a fast survey process in order to activate their offer, gathering Café Express’ highly valuable information for future marketing. Recipients were asked:

• How often do you eat out for breakfast?
• What items do you prefer to eat for breakfast?
• What do you look for when you eat out for breakfast?
• How often do you eat Café Express?

Overall Campaign Results: The campaign reached a total response rate of 23.64%, with almost 40% generated through Social Sharing. Most customers shared their offer on Facebook and Twitter, with the greatest amount of incoming customers coming from Shares on Twitter.

Results

Total Response: 4,728 23.64%

From Mail: 2,941 62.20%

From Social: 1,787 37.80%

Activations: 3,677 18.39%

From Mail: 2,282 62.06%

From Social: 1,395 37.94%

Networks Shared On: 650 %

Facebook: 510 78.46%

Twitter: 126 19.38%

Other: 14 2.96%

Redemptions: 1,500 7.50%

It’s all about Conversion

Dukky’s cutting edge software is leading the way in the industry to establish a new normal for conversion. The goal of every marketing campaign is ultimately to turn your advertising dollars into revenue. Until now, no other marketing mediums provided the means to track and engage customers in order to maximize a retailers customer base through sharing on social networks.

By simply adding Dukky’s PURLS to a traditional direct mail advertisements retailers can 1) Engage customers, 2) Encourage social interaction, 3) Promote Business Offers and Specials, 4) Gather highly valuable information, and 5) Track each step of the process.

How does it work?

A compelling offer equipped with a PURL will be sent to your customer driving them to a custom microsite for card activation. Through a quick, survey process, they will be guided to activate their card and receive the offer. They are then given the opportunity through Dukky’s “one click” broadcast to share the offer with friends on up to 233 social networks! Dukky’s platform captures valuable information during the process: a growing customized database of interested customers with accurate demographic information and intelligent feedback from your customers.

Reach maximization leads to increased conversion, which ultimately generates higher profits. Dukky’s software was designed with two things in mind: Conversion and Results.

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Social Media Marketing Complements Direct Mail, But Doesn’t Replace It

Should you ditch your direct mailing program in favor of marketing via email or social media? Not so fast, says the Wall Street Journal, which recently did a story about the decline of direct mail and the potential consequences for businesses.

According to the article, small business owners have been slashing direct mailing campaigns in an attempt to save money, only to find that their online campaigns aren’t producing the same amount of business.

For example,the article profiled Alicia Settle, president of Pro Annum Inc., who dropped a $20,000 direct mail loyalty campaign in favor of marketing through email only to find that the business’ orders dropped a whopping 25% from the previous year. Her company was able to recover the lost business by sending out the postcards to customers over the summer. The direct mail campaign, which had seemed like an indulgence, was actually an important investment.

Instead of dropping direct mail altogether, the Wall Street Journal notes that savvy marketers are working smarter, creating more personalized campaigns that catch recipients’ attention and generate higher response rates.

In the article, Eric Anderson, a professor of marketing at Northwestern University’s Kellogg School of Management, said that the ideal direct mail campaign for 2010 is “something that’s more appealing than “junk” mail and potentially more noticeable than an email message.”

Targeted direct mail campaigns may still be indispensable for many businesses, but that doesn’t mean that you can ignore social media, either. For 2010, many companies are trying to integrate the two. From the Wall Street Journal:

Prof. Anderson says other business owners are trying to figure out how to integrate Web marketing—such as email campaigns, banner ads and social-networking sites—with direct mail. “The introduction of new media has forced [business owners] to go back and revisit the whole playbook on what’s the best way to communicate with customers,” Mr. Anderson says.

Dukky’s platform offers an easy and effective way to integrate traditional direct response with social media. Our platform lets you send personalized offers to recipients using personalized URLs, either by direct mail or email. These offers can then be shared via email and social media sites like Twitter and Facebook.

With just a few clicks, customers can share your discounts and promotions with family and friends, helping them spread like wildfire. Dukky lets you harness the power of personalization and social media, improving ROI so that you get more out of every dollar you spend.

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What Can We Do to Reduce the Carbon Footprint of Direct Mailing Campaigns?

This post was written by Greg Barber, an experienced eco-friendly printer, and is part of a series of green printing tips originally published on the Eco-libris blog. It is reprinted here with permission.

In the post, Greg talks about the dramatic impact personalization can have on response rates, and how the power of personalization can be used to create greener direct mail campaigns. Dukky’s personal, PURL-based campaigns are an effective way to achieve the increased response rates Greg discusses below.

Direct mailing is considered by many a very not sustainable marketing channel, as it can be very wasteful and have a significant carbon footprint, while at the same time it often generates poor results. Today, in a tip dedicated to the Hopenhagen campaign, Greg is offering another option that combines greater effectiveness and a reduced carbon footprint.

What can we do to reduce the carbon footprint of direct mailing campaigns?

I attended a sustainable meeting at NYU last week and came away with a few good Green tips on direct marketing – how to make it effective and minimize its footprint at the same time.

There is no secret here and it’s actually quite simple – if you look at your clients and really decide to target what it is they really want, you can create a direct mail program that will give you better results, be environmental, and save trees, paper, energy, water and money.

First step: Make your list of names targeted to these best clients, or the ones that can do you the most. Look at their history of their buying. What did they buy, and when did they buy, and how much did they spend? Make a new print campaign that targets those wants and desires.

It’s all about personalizing your marketing. Personalize by name, products, time frame, and do a mailing that might be 20% of your present mailing list, but targeted to their past history of buying.

Second step: Even though you already eliminate waste by sending this printing only to past customers, don’t forget to use 100% recycled paper that is 100% processed chlorine free for the materials you’re sending.

Third step: You can also an email to this targeted audience on a second run, that will not only help you to minimize your campaign’s footprint, but can also be an helpful tool to estimate the effectiveness of your campaign and even further personalize your database for future campaigns. Read more

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Is Direct Mail Making a Comeback?

Editor’s Note: This post was written by Damon Samuel and was originally posted on his blog, Broadcast Thoughts. It is reprinted here with permission. In the post, Damon explains how better targeting, among other factors, has helped improve direct mail response rates at the marketing agency he works for. At Dukky, we integrate social and viral sharing with direct response campaigns through the use of social PURLs, and use the information gathered to help improve targeting and response in future campaigns.

For years people have derided junk mail. It is the bastard step child of marketing. No one likes receiving junk mail. But the fact is, it works.

Now I’m the first to admit that response rates are poor. Last DMA stat I saw was 1.8%. But the fact remains, it can be highly profitable. And in a time where my mail box is the emptiest I can ever remember I believe Direct Mail is showing strong signs of life.

Here are a few reasons I think DM is gaining strength.

First has to do with a direct mail campaign we have done for a client. In interests of not violating confidentiality all I’ll say is the response rate this year is nearly double from 2 years ago and up 50% from last year. Revenues are also way up. Granted we had better targeting which drove a lot of the positive change.

Second, the offers and pieces I do receive are more valuable. With rising costs of doing campaigns the companies that continue to use direct mail are investing heavily in it. When I get a credit offer it always has very generous terms with extravagant perks. Or in the case of the Porsche Panamera launch piece, the creative cost a fortune. It was a well designed box shipped overnight with color samples and design documents and probably cost $20-$40 to mail all told. Of course a single response is worth thousands for them.

Third, companies are using analytics more effectively. See point 1, my client utilized better targeting. Example 2, my wife and I both received offers from a credit issuer on the same day. I usually round file my direct mail pieces unless I am specifically looking for that product. I opened both of these since they obviously had different creatives. The offer and message treatments were equal but I could tell you which creative would have been more likely to generate a response. Here’s a hint, it was the one with the value proposition clearly displayed at the top of the messaging.

Last, direct mail stands out in a world of email spam. I have 5 email accounts and can also receive communication through two social networking sites. I also have a blog that accepts comments. I am inundated with electronic communication. I also believe many companies over communicate via email when consumers opt in. I just don’t need 2 emails a week. In fact I typically opt out after a few weeks at that rate. Share of active attention is a premium. I can delete an email in seconds along with 30 others in the same click. It takes me 20 seconds to walk from the mail box to the garage while I am purposely sorting through my mail before I reach a trash can. The DM piece guarantees I will at least see its shell.

E-marketing is fantastic and is here to stay. Just don’t write off direct mail just yet. There is still plenty of evidence that when the right piece with the right offer hits the right consumer a company can make millions.

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Our Direct Mail to Web API Integrates Social Media Tools

by the Dukky Team | September 3, 2009

Why does Dukky’s direct response platform combine traditional direct mail with new media technology? Based on a study conducted by the DMA, 42% of interested direct mail recipients prefer to respond to offers online. So Shawn Burst, founder and direct mail pioneer, developed a suite of products to capitalize on this finding by providing a stimulating online user experience combining gift cards and coupons.

A psychologically validated phenomenon, “coupon stigma,” partially explains the generally low usage rates of less than 2% of the traditional direct mail coupon offers. A Journal of Consumer Research study demonstrated that coupon users are stigmatized by others as “cheap.” The study confirms longstanding common knowledge that coupons are, in many cases, not socially acceptable. The Dukky Platform sees higher-than-normal redemption rates because both its offline and online distribution methods avoid this “coupon stigma” by completely changing the frame of reference: both physical and online coupons are reinvented as personalized gift cards.

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