Direct Mail and Telemarketing: A Perfect Pair?
Have you ever noticed that things just seem better in pairs? Peanut butter and jelly. Yin and yang. Abbott and Costello. Salt and pepper.
Direct mail has had its fair share of partners over the years, but one channel marketers keep pairing it with time and time againand with great successis telemarketing.
Here's a look at how three direct marketers have matched these two channels to end up with a whole that really is greater than the sum of its parts.
Lawrence Ragan Communications
Lawrence Ragan Communications is a Chicago-based, B-to-B publisher of communication-focused newsletters and a host of conferences, webinars, workshops and forums across the United States.
Direct mail long has been at the center of the company's direct marketing efforts, but according to Frank Bleers, director of marketing for Ragan's seven-title employee communications group, over the last year Ragan has been testing additions to its program, including the use of telemarketing to follow up mail efforts sent to existing customers, conference attendees, webinar subscribers and the like.
"We needed to be a little bit more aggressive," explains Bleers. "We could do that by mailing more, but it's not necessarily about mailing more. ... So, now we follow some of [these mailings] with phone calls."
Those phone calls are made by a telemarketing staff of four representativeswith two reps dedicated to outbound and one other rep split between inbound and outboundwho, on average, have about 3,000 customer interactions each month.
The reps are given copies of the mail package they're calling about and a list of talking points, but not a standard telemarketing script. They then are empowered to make the decisions that will best lead to a sale, such as how to structure the call, which additional products to cross-sell, whether or not to leave messages and when to follow up the call with an e-mail. "They are on the phone, they know how a call is going, and they have a sense for it. And so I trust them," Bleers asserts.
Aside from incremental sales and additional product exposure, a secondary benefit of the telemarketing program is that these phone calls can act as a testing ground for offers and messages, which Ragan then can translate back into its direct mail and e-mail efforts.
Ragan has found this particularly effective in developing premiums that really interest customers. "We'll make a premium offer and we'll find out whether or not people cared for it," contends Bleers. "And that in turn will influence what we send in future direct mail campaigns."
Over the last year, Ragan has tested this multichannel approach across a number of titles and topics. Its results indicate that for specific topics, such as cross-selling a related newsletter to conference attendees or webinar participants, this two-prong (or three-prong when e-mail also is part of the mix) approach is what works best. Bleers is careful to add, however, that Ragan does not telemarket to prospects unless they have indicated a desire to be contacted via phone for more information, and it does maintain an internal suppression list of existing customers who prefer not to be called.
In addition to who it calls, Ragan also is mindful of how often it calls. "Our universe is only so big, and you can only call on someone so many times," explains Bleers.
Bleers and his team feel that this multichannel approach is the right way to go, and they intend to continue testing and refining the program.
The two biggest questions Bleers is testing at the moment are whether including a response device in the
direct mail effort hinders the effectiveness of the phone call, and how much time to wait between the mail drop and making that first phone call.
"There's got to be that right mix of somewhere between a week and a month, and that always seems to vary. We've had success and failure with both," explains Bleers. "It all depends on the offer, the publication, the list, the topic that you're following up on. But is it worth it to keep testing? Yes."
Keeping the sales reps empowered probably is the best solution to this challenge, according to Bleers, who adds that the current process is to make a few random phone calls on a list to test the waters. If response indicates that it's too early, the reps will wait before calling on the rest of the list. "They are as valuable a resource as any you will find, because they actually are on the phone with [customers] and know what works and what doesn't."
Habitat for Humanity
Because telemarketing is a higher-cost-per-touch channel, marketers must carefully manage their calling budgets. Americus, Ga.-based nonprofit Habitat for Humanity, accomplishes this task first by paying close attention to who it calls and second by using direct mail as a cost-effective follow-up for donors who express an interest in giving, but not over the phone.
As Tim Daugherty, the organization's senior director of direct marketing, explains, for each of Habitat's major annual campaigns, donors are selected for the telemarketing program based on a number of factors, including an RFM analysis, their giving history and their responsiveness to past telemarketing campaigns. Only the best candidates, such as those who have given by phone in the past or those who highly mimic telephone donors, will be called.
If prospects on this segmented telemarketing list pledge money over the phone but prefer not to give out a credit card number, or hedge, i.e. express an interest but aren't quite ready to commit to making a pledge, the phone call will be followed almost immediatelywithin 48 to 72 hoursby a direct mail effort that is much simpler than the package sent to mail-only donors.
Instead of reiterating Habitat's mission and needan argument they've already heard on the phonethese packages instead focus on taking that next step and making an actual donation.
As Daugherty explains, this focus is the result of years of testing: "While [longer letters] got more in response, the additional cost hurt net income. So we went to a simpler format. The response isn't quite as great, it's not that far off, and from a net income perspective, we are in a better position."
This system of following up a phone call with a mail effort works very well for Habitat, pulling strong response across the board and proving more cost effective than placing a follow-up call.
Daugherty is reticent to test the system by just mailing a segment of the telephone-responsive donors, because he feels it would be a loser. However, Habitat has done some similar testing with donors who fit the criteria for the telemarketing program, and according to Daugherty, the segments that received both a phone call and a direct mail package had better ROI than those that received direct mail only.
Looking forward, Daugherty is considering a test to see if a pre-call mailing to alert donors that a representative will be calling would boost response, but he's not quite at that point yet because a new script and a new firm have helped boost rates recently. "Over the past year, our response rates ... have gotten better, so we are hesitant to throw anything into the mix just yet," explains Daugherty. "But if we start seeing a plateau or a decline, we're going to start looking at methods like this to see if there are things outside of changing firms or changing scripts that might help boost response."
The Field Museum
"For a nonprofit, telemarketing is very expensive ... and a bit of a risk," asserts Susan Webb Rawls, director of membership for Chicago's Field Museum. Traditionally, this nonprofit has managed that risk by using telemarketing only as a last-ditch effort to renew about-to-lapse members. However, the results of a tandem telemarketing/ direct mail program late last year may be changing how this natural history museum reaches out to its donors, both old and new.
In November 2004, the museum opened an exhibit about former first lady Jacqueline Kennedy. This exhibit seemed to be a good time to try something new with its direct marketing program. "We thought there would be wide enough interest in the exhibition that we could go back in our list and find some former members and talk to them about coming back. We also wanted to change the mix a bit in how we use the telephone," Webb Rawls recounts. "So instead of just using it as a retention tool, we thought that we would like to try it as an acquisition tool."
So, working with Mitch Lieber, of Chicago-based contact center consultancy Lieber and Associates, the museum reached out to former members who had been expired for two or more years with a reactivation direct mail package followed by a telemarketing call. That call was designed to remind them about the mailing they received, tell them more about the special exhibit and ask them to come back as members.
As Webb Rawls explains, however, the call was not scripted to coincide exactly with the package because the museum also used this campaign as an opportunity to try out two new telemarketing firms, and she wanted each firm to develop its own messaging as part of the head-to-head test. While each firm was given a copy of the accompanying direct mail package on which to base its message, they both developed different approaches. "One had a very exhibition-oriented conversation. ... The other took more of a 'you used to be a supporter and we would like you to come back' approach," explains Webb Rawls. "And for this particular push, the exhibition-oriented one did better."
Overall, the program was a success. According to Webb Rawls, rates for reactivation were roughly 8 percent higher than when a letter was sent out solo. But because the telemarketing and direct mail efforts were not closely aligned, she attributes those numbers more to the multiple touches than the strategy behind them.
Webb Rawls expects that while it will not become the centerpiece of the museum's direct marketing efforts, she will use this tactic again, possibly in support of the King Tut exhibit scheduled for 2006.
"We are definitely considering it for next year. ... Telemarketing is expensive. It's a bit more of a lark, it's a bit more risk," reasons Webb Rawls. "So it's some-thing that we will do, but we will hold it as a tactic to use only when we have something extremely special to offer."
In order to reduce some of that risk next time around, there are a few changes Webb Rawls would like implement.
"We might make the telemarketing scripts and the language of the letters match or support each other [through] a more integrated message and similar language and tone," forecasts Webb Rawls. "Also, in the letter, we didn't reference that a call would be coming down the line. That's a technique I've seen some marketers use, and one we might consider so that people expect the call."