Retailers, are you thinking outside the “inbox”?

Using direct mail to make your tailored marketing strategy successful

By Paul Sumner, Communications Director at Go Inspire Group

Being an ambassador of traditional channels doesn’t necessarily mean a retailer is stuck in the past. Digital strategies – such as email or social media campaigns – are becoming increasingly popular as they are seen as a cost effective way to reach a wide audience in no time; however retailers can’t afford to ignore the power of direct mail and here’s why.

In the last few years retailers have been facing multiple challenges due to the growth of online shopping, with some of them struggling to adapt to the new digital marketing strategies. But what often gets forgotten is that traditional marketing methods and digital technologies can be mutually supportive. The results of the first in a series of randomised control trials (RCT) carried out by Go Inspire Group highlight the pitfalls of taking a one-sided approach to marketing, favouring digital over traditional direct mail for example. Successful campaigns, the trial revealed, are actually achieved by optimising the performance of each of these two mediums, in order to achieve the highest scaling of net revenue results when they are combined. Research shows that offers sent via post and email generate incremental revenue per customer of over £6; compared to the ones sent only via email which generates incremental revenue per customer of under £1[i].

The common denominator for success among these channels is personalisation; whether it’s a targeted email with personalised discounts to lure customers into turning their abandoned basket into a purchase, or a customised voucher for future purchases which a loyal customer receives with their latest order – personalisation therefore is a crucial element for retailers marketing strategies.

The cost of a personalised direct mail campaign is not far off from that of traditional mass printed direct mail, but yields entirely different results. Marketers can personalise each envelope with an individual name insertion and different imagery and messaging; innovative features – like personalised barcodes or QR codes that trigger tailored offers – can also be included. But what is the true impact of personalisation in direct mail? In the second series of RCTs, Go Inspire Group measured the net revenue uplift from optimising direct mail through personalisation; however, the outcome showed it’s only the combination with integrated, optimised direct email, which provides the best outcome for ROI.

Results demonstrate that increased design ‘vibrancy’ of direct mail produced an overall incremental revenue uplift of 20%. In the trials the impact of different levels of design vibrancy with no segmentation variants has been tested against the outcome of photographic and creative variants tailored to the recipients product interest, historical behaviour and propensity. However, the effect of this vibrancy was reversed for the valuable high-loyal customer segment, reducing incremental revenue by 50%.[ii] This shows that all strategies need to be carefully tested before implementation; the “one size fits all” approach can bring retailers little or no benefits.

Distinguishing between different customer segments and taking into consideration factors like behaviours and potential, is crucial for a campaign’s success. The impact that personalisation can have on marketing campaigns is huge but it can vary; the results of this RCT shows an overall uplift resulting from the use of personalised direct mail, however the efficacy of messages and imagery varies depending on the recipient. In fact the use of personalised creative imagery can produce 128% uplift but it varies between product categories from 72% to 197%[iii].

Retail marketers need to start thinking outside the ‘inbox’ and make the most out of what the combination of personalised direct mail and direct email has to offer. The success of a campaign is not only measured through response rates – net incremental revenue is a far more superior and meaningful figure to general business managers and provides a better idea of the value that the campaign is bringing to the business.

[i] Go Inspire Group, Hobson’s Choice, 2018 https://www.goinspire.co.uk/whitepapers-guides/hobson-s-choice

[ii] Go Inspire Group, Hobson’s Choice, 2018 https://www.goinspire.co.uk/whitepapers-guides/hobson-s-choice

[iii] Go Inspire Group, Optimal Lift, 2019 https://www.goinspire.co.uk/whitepapers-guides/optimal-lift

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