Just a Test? Hardly

The year 2002 inspired many direct marketers to throw up their hands and yell "do over!" But would you really want to go through all that again?

2002—a perfect storm of sorts, where post-9/11 paranoia and an Anthrax scare converged on an already slumping economy—was terrible for many direct marketers. 2003 couldn't possibly be worse, could it?

But simply turning the page on a bad year is not enough to exorcise its demons. As response rates to mailings once thought of as old standbys plummeted, direct marketers experienced something along the lines of vertigo. They were forced to think and rethink what works and what's likely to work moving forward.

Thankfully, that's always been part of the direct marketing process.

"If there's any science in this business at all, it's in testing," says consultant Malcolm Decker of Malcolm Decker Associates. "If there is any heart, or soul, or core to this business, it's testing. Everything else is application."

He's right. With marketers crying "hard times!" we reply "test harder!"

With that in mind, Inside Direct Mail asked several industry experts about how testing budgets should be allocated in the brave new world that is 2003.

Why Test

Before we get into the hows and what-fors, let's emphasize just how important it is to keep testing, especially in hard times.

"No one should ever guess what will work," says Elaine Tyson, president, Tyson Associates. "Smart marketers always let their customers and prospects vote in a test. If you listen to the voters, you'll always know the most productive lists, the hottest offer and the best price to use for selling your products."

It's elementary, really, but some marketers have dared contemplate the cardinal sin of eliminating testing from the equation.

"It's tempting for new direct marketers or for those under stress (and aren't we all under stress in this economy?) to try to rationalize not testing," says Susan K. Jones, professor of marketing at Ferris State University and partner, The Callahan Group, LLC. "'We've got all we can do just to get one promotion out, let alone developing a testing plan,' they'll say."

She continues: "I once gave a B-to-B direct marketing seminar to about 100 individuals and when I asked, 'How many of you test?' only one person raised his hand! That's a tremendous mistake! If the three most important factors in real estate success are 'location, location, location,' in direct marketing it's 'test, test, test.'"

"Direct marketing is expensive," offers Bill Babcock, CEO of direct marketing agency Babcock & Jenkins. "If you make a mistake, it's expensive."

So think of testing as a cheap insurance policy against losing your shirt on a roll-out or, as the Oregon-based Babcock puts it, "driving the Mercedes into the Willamette [river]."

Media Bias

Each of the experts we polled felt that tough times call for list testing as an inexpensive way to breathe new life into direct marketing efforts. If you're prospecting, you'll be spending on lists anyway, so why not send a small test to a new one?

"The key elements in any direct mail program are lists (most sensitive), offers, price, seasonality and creative," reasons Tyson. "In years when response is soft and cost goes up, I'd urge mailers to concentrate on testing lists, offers and price. A winner will give you the biggest bang for the test dollars spent—it is not terribly difficult or expensive to test these elements."

With new lists constantly hitting the market, it's important to be ever-vigilant in your search for new names who might be receptive to your products. And since the economic landscape has changed so much in the last year, you might reconsider lists that have tested unsuccessfully in the past. After all, we've all learned a thing or two about the phrase "past performance is not necessarily indicative of future results."

List companies and brokers are feeling the squeeze, too, so you may be able to work out a deal for reduced-rate or even free testing.

But while new lists are always attractive, it's important that you maximize the potential of your house list—your proven customers—without wearing it out.

"In addition to testing various mail-responsive lists on the market, it's a good idea to test various segments in your own house list and also to find out if overlaying more sophisticated, analytical models can help increase response," explains Jones.

After all, retention is something all marketers would do well to focus more on, in good and lean times.

"Much greater effort is going into marketing to current customers ... with a strong inbound telesales team doing cross-selling and upselling," says George Duncan of Duncan Direct Associates. "Holding on to your customer base is especially important during a time when prospecting is yielding such poor results."

But that doesn't mean you should ignore prospecting until the economy picks up. A balance needs to be struck.

"Don't make the mistake of milking your house list at the expense of prospecting for new business," Jones continues. "That house list will wear out more quickly if you mail it to the hilt and don't replenish it with new names."

Offer Around

Changing your offer is another quick and easy way to shake up your response.

Test a change of premium, terms, price, add-ins, delivery options (remember what free shipping did for Amazon last year?). Though your product may be exactly the same, a new offer may force your pros-pects to think about it differently.

"It's important to remember that what works in direct marketing often defies logic," says Jones. "I once saw a price of $29.95 radically outpull a price of $19.95. The reason, we discovered, was that the perceived value of this type of product made prospects suspicious of the quality when this item was tagged at 'only' $19.95."

Get Creative

The idea of testing creative elements—format, design, color, etc.—received mixed reviews by those we contacted.

Thoughts ranged from only tweaking little things to overhauling your package completely.

Elaine Tyson urges caution. "Save the splashy new package tests for less lean times," she says. "You might want to test some new outer envelopes, though. A better outer can revitalize a stale control package."

Indeed, a new outer—changing copy, color or even envelope size—can boost response without changing much of anything inside your package.

"While it may be tempting to test nuances such as copy tone or typeface," offers Jones, "the big money here is often focused on more visible format tests such as envelope package versus self-mailer, bulky package versus traditional flat mailer, including a premium, including a 'gimmick' like a quarter or dollar bill, etc."

There are quick and easy options that can be made inside the package as well.

"With one client we've had astounding success in testing color," says Malcolm Decker. ""I don't mean pink vs. blue, but the addition of color."

Decker has been experimenting with color with one of his clients, moving from black & white to two-color, to four-color flat and finally four-color process.

"The results have been, to me, astounding," he marvels. "Results I would never have expected. ... Color has tremendous impact."

If you feel that making more wholesale changes to your creative is in order, take a look at your control.

"One of the keys is the age of the control," explains Decker. "If you've had a control, like the Wall Street Journal's which is a copy control that's been running for 28 years, that's got a lot of age, and very few propositions last that long."

Look at the control and determine which of its elements is the oldest. "Is it the design? Is it the format?" asks Decker. "If you've been running a #10 envelope for years, is it time to test a 6" x 9" or a 9" x 12" or a double postcard?"

Of course, Decker recalls that direct marketing legend Dick Benson was in favor of complete overhauls. "He was more inclined [toward] whole new packages," recalls Decker. "You'd give a copy assignment to someone and say 'Give me a new package. Here's the control. Do it.'"

If the package is successful, you can then pull it apart and test each of the new elements separately to see where the improvement came from.

"A lot of it is style, determining how you want to go about skinning the cat," offers Decker. "Do you want to take all the skin off, or just the tail?"

Outside the Envelope

It's important to consider all of your options. You may not think much of package inserts or space advertising, for instance. But could a test in a new medium really hurt that much?

"We've been working a lot with statement stuffers," says Decker. "They're very inexpensive, highly testable, very flexible and we test six things at once."

Tyson echoes this, suggesting that anything you can test in the mail you can test in "space advertising, e-mail and most other formats as well."

As the market adjusts, you might catch a bargain from a vendor having as hard a time as you are.

"You may be able to arrange for some low-cost, low-risk tests in areas such as e-mail, online banners, search engine priority spots, and so on," says Jones. "Be a tough negotiator on media costs and you can lower your risk as well. ... Maybe it's time for you to try to negotiate some per-inquiry deals if you haven't already."