One of the challenges in marketing to a large customer base for a particular product is that the file is comprised of many different segments, with each group possessing different characteristics and reasons for buying your goods. But what if your product comes in a couple versions plus offers an annual upgrade option?
That’s the case for business management software company Sage Software, and its contact management product, ACT! According to Ian Oxman, vice president of direct marketing, more than 1 million people have purchased one of the two primary ACT! models: standard or premium. The customer base also is segmented by the version purchased; some have ACT! 2006 and are clamoring for the next release, but others have older versions and need some coaxing to upgrade.
To address such a diverse market, Oxman says the direct mail team uses modeling to better match the right messaging to its various customer segments and to identify older targets that have the most potential to deliver a positive ROI for a mailing.
“ACT! customers are almost like consumers—a lot of them are individual, at-home SOHO-type businesses,” says Oxman. “It’s very difficult to get a lot of detailed data on these folks, so by analyzing past purchase patterns and developing models and looking at predictive patterns, we’ve been able to dramatically increase our response rate in the older customer segments that we mail to make it much more profitable.”
For example, to promote the recent release of ACT! 2007, the marketing team developed a campaign that features 6˝ x 8-1⁄4˝ envelope mailings that go out in 10 waves during the course of the yearlong promotion. Each mailing is targeted to the recipient’s current software model and version as well as to which wave is being dropped; this dictates the key features and benefits promoted. From this foundation, personalization is employed to customize the copy and offer to the particular customer; this variable messaging includes the target’s name, company name, customer ID code, priority code, offer, offer expiration date and any outer envelope copy that can be versioned.
Although there are 10 packages that drop in this annual promotion, Oxman says the campaign boasts several controls that are rotated and tested against different creative and list pull techniques. In general, efforts dropping early in the promotion focus more on announcing the new product release (Archive code #836-173710-0607A). “As the campaign continues … if the customer has not yet responded, we’re trying to take more of a customer-specific benefit approach,” he explains. This approach results in some of ACT!’s more “official-looking” efforts that don’t talk much about product features or benefits until the recipient opens the package, says Janet Cleworth, Sage’s director of marketing. One such “official” effort used deadline-oriented copy, faux mailing labels and meters, and the ACT! brand (Archive code #836-173710-0607B). Oxman and Cleworth say the “official” look creative platform is a strong response driver.
Sage’s next step is to better identify which precise elements in its controls—besides branding—are most valuable. Rather than mail many A/B tests, it has taken a control effort and broken it down into its individual components to create a matrix of 10 different test packages. Oxman says, “What we’ve transitioned to, and are in the midst of right now, is a multivariate test … trying to isolate what are the actual drivers within the control package to respond. Is it a fact sheet versus a brochure? Is it an indicia versus a stamp? Is it the color of the outer envelope or is it the size of the outer envelope?”
Armed with this insight, Sage plans to push the envelope on finding its most profitable customers while maintaining an efficient cost per piece.