Go Inspire Group’s latest research offers marketers evidence based on objective data showing how to improve campaign results through targeted direct mail. The study, entitled “Optimal lift” is the second in a three-part series of randomised control trials (RCT) aimed at providing unbiased evidence on net revenue uplift derived from personalised direct marketing.
There is a great need for more objective evidence about how the wide range of available marketing channels should be combined into a holistic approach in order to generate incremental revenue. With a plethora of claims from the supply-side about increased revenue resulting from personalised direct mail, it was clear there existed little evidence in the public domain.
In its first RCT, Go Inspire Group revealed that direct mail generally outperforms direct email in terms of incremental revenue generated, however, when the two channels are used collectively that is when truly optimised results can be achieved. The RCT conducted for this second study provides objective evidence about the results which can be reached through optimising the direct mail channel – specifically through personalised and segmented variants.
In order to avoid any bias in the RCT a product range which appeals widely across the population (regardless of age, gender, wealth or geography) was chosen. Two levels of variability were tested in sequential months against a control: different levels of design ‘vibrancy’ with no segmentation variants as well as, photographic and messaging creative variants tailored to the recipients’ areas of product interest and available historic behaviour were applied.
- Increased design vibrancy produced an overall incremental revenue increase of 20%. However, for the high-value, high-loyal segment of customers, this vibrancy was a disincentive and reduced incremental revenue by 50%.
- Imagery tailored to the recipients’ individual area(s) of product interest produced a 128% uplift, overall, in incremental revenue. This varied between product categories from 72% to 197%, a range that confirms the criticality of distinguishing between different customer segment behaviours and potentials to develop a prioritisation strategy.
Paul Sumner, Communications Director at Go Inspire Insight, noted: “The trial was enlightening; the results 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. 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. Just as important is the finding that high-volume, high-loyalty customers don’t want to be visually ‘shouted at’ as they find this off-putting- marketers take note.
“It is important to remember that performance levels will differ between products which have a greater or lesser emotional appeal to the consumers, however the general evidence for overall increase in net incremental revenue is likely to be replicated across the board. The next and final RCT will aim to complement this study with an examination of parallel optimisation through the email marketing channel.”