Setting Expectations and Direct Mail Tests

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This week, while tucking my son into bed after his first day of kindergarten (which he loved) I was reminded why understanding and setting expectations is important especially when starting something new.  After two attempts to keep the little guy in bed, I reminded him he needs to get a good night sleep for tomorrow, to which he excitedly responded “what do we get to do tomorrow?”, after informing him that he would be headed back to school he pops up, shocked, and shouts ”WHAT!?”.
This is the response you want to avoid as you begin the necessary and exciting task of executing a direct marketing test.  Making sure you have the correct expectations set within the marketing team and other stakeholders in the company is absolutely necessary to executing a successful test.  Addressing scope, expectations and goals of your marketing test on the front end will help your internal audience know how to evaluate the results and will increase your likelihood of continued efforts and access to that ever so limited “pot of resources” that management talks about.   This becomes especially true when trying to justify or analyze the financial results of a marketing test.[/vc_column_text][/vc_column][vc_column width=”1/3″][mk_padding_divider size=”40″][mk_image src=”” image_width=”800″ image_height=”350″ crop=”false” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”center” margin_bottom=”10″][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]
The truth is in the numbers right? And everyone wants to know what the ROI of the test is, but that can become tricky when analyzing a test campaign.  The variables needed to calculate or forecast results include the basic direct costs and direct responses, but understanding the cost of conversion for a new customer and the lifetime value of a customer becomes very important when analyzing acquisition campaign results.  Understanding how economies of scale play into your analysis and forecasts is vitally important.  For example, increasing volume from 5,000 to 50,000, will significantly affect the price per piece. It can be tempting to look at a test as an under-performer, but when closely examining  response  data using analytics, there can be clusters of customers that perform exceptionally well within a test that didn’t provide a ROI.  The lifetime value of these exceptional customers can be worth the initial investment and turn a positive ROI in the future.
While it can be overwhelming, keep on testing and remember to set expectations carefully so you will have the freedom to find the moments where your customers are applauding your efforts and your son is looking forward to going back to kindergarten tomorrow.  Celebrate a great first day in kindergarten and celebrate direct marketing success, be excited about what you have learned and what you will learn tomorrow.[/vc_column_text][/vc_column][/vc_row]

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