Acquisition: Direct Mail Testing – Part 1
Tom’s post on the Obama campaign’s email testing prompts me to weigh in on one of the least understood and woefully mis-practiced skills in the direct response fundraiser’s repertoire – direct mail testing.
Recognize any of these symptoms in your organization or among your clients?
- The test ideas that make it into the mail steam are almost all incremental and seldom (perhaps even never) beat the control;
- Lots of time and money are spent coming up with test ideas, executing them and managing the logistics, only to be confronted with the same poor results year after year;
- Truly creative or innovative ideas tend to get discarded out of fear and the risk-adverse need to stick with the mostly known;
- Even if you do manage to test big ideas, the results are muddled at best since EVERYTHING changed, instead of one element. Consequently, while there may be many good ideas in the new package, they are forever lost amid the bad ones.
You’re not alone. Almost universally there are three, interconnected and very BIG PROBLEMS with how most nonprofit direct mail testing is done.
1. Incrementalism to nowhere.
Denny Hatch, one of the best copywriters in the biz and Editor of the must-read Business Common Sense reminded Tom and me yesterday of the late Ed Mayer’s admonition, “Don’t test whispers.”
Ed’s advice should be tattooed somewhere on every direct response fundraiser. Why? Because, small, incremental changes (“whispers”) produce, well … incremental results usually not even worth whispering about. Whether up or down, these tiny changes hardly matter.
While it’s certainly true that small changes in the response can yield meaningful changes on the top or bottom revenue line of large-volume mailers, it’s equally true that the vast, vast majority of these tests do not beat the control.
Sadly, most testing becomes more habitual than strategic or purposeful.
2. The A/B road to infinity.
The bread and butter of testing methodology has long been the A/B split test. And while the logic is sound, it is incredibly inefficient.
In fact, even with a ridiculously over-simplified example of a direct mail package with 3 components – outer envelope, letter and reply form – and 6 choices for each component, there are 729 possible combinations. If a nonprofit does 15 tests a year it will take 48 years to test all the possibilities!
Then, if you’re into front-end or back-end premiums (or both) and want to add those to the testing plan, the possible combinations quickly go, for all intents and purposes, to infinity.
What does this mean? Does anybody believe that with a nearly infinite number of choices to make on a direct mail package, that the control, which is really hard to beat, is the proverbial needle in the haystack – the winning combination among countless possibilities?
3. Lack of wisdom in conventional wisdom.
Most organizations and their consultants will or should acknowledge that the process to determine what gets tested is anything but empirical, rigorous or efficient. More typically the process borders on the haphazard, with an abundance of caution and conventional wisdom thrown in.
It doesn’t have to be this way. Fortunately, our commercial product development brethren can point to the solution. Using a multivariate, survey-based methodology, nonprofits can pre-identify the best test ideas … those most likely to compete with and beat the control.
By taking this scientific, disciplined route, nonprofits can greatly reduce cost by NOT mailing test packages likely to perform poorly and increase net revenue by increasing volume on likely winners.
HOW PRE-IDENTIFICATION WORKS
The pre-identification of likely winners and losers is done in two parts:
1) First, surveying donors who are representative of those who will receive the actual mailing, showing them visuals of the direct mail package and measuring preferences using a very specific and battle-tested methodology.
2) Next, using the survey data to build a statistical model to assign a score to every single element that was evaluated.
This methodology is well established and used by large, consumer companies (e.g., Coca Cola, General Mills, Proctor & Gamble) to guide product development for many of the sodas, cereals and detergents on grocery store shelves.
I know it works in the nonprofit sector as well, because our sister company DonorVoice has successfully used it for a number of large and small nonprofits. You can see a short video of how the process works and download some case histories by clicking here.
Given the ever-worsening problems with acquisition and the long-term stakes involved in dwindling donor files, the time has come to drastically change the way direct mail testing is done.
Please share your experiences and solutions.
P.S. In Acquisition: Direct Mail Testing – Part 2, we’ll look at the Importance of Avoiding the Baby and the Bath Water.
P.P.S. As for our own subject line testing, in one day, our ‘Hey’ post from Monday has been opened by more readers than all but three posts entered in the last 30 days! Does that speak to the power of “Hey”… or do Tom and I just write lousy headlines?! More detail to follow.
This article was posted in: Acquisition, database marketing, Denny Hatch, direct mail, direct marketing, Don't Miss these Posts, DonorVoice, fundraising, marketing metrics, nonprofits.
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