Attitude Adjustment: Using Behavioral Data to Boost Direct Mail Response
Since the dawn of direct marketing, companies have tried to determine what will entice prospects to buy. While demographic and financial data have been a trusted resource, behavioral data is taking direct mail to new heights. The explanation is fairly simple: What customers and prospects actually do is much more enlightening than what they say they will do. In direct marketing, it is far better to build a campaign around truth than conjecture, and customer behavior is one of the best sources of "truth" you can get.
Behavioral data is the result of measuring and recording prospect or customer behavior. As marketers, we constantly measure the behavior of our customers in the form of response rates, inquiries, web pages viewed or new sales. We look at percentages such as close rate (the percentage of new customers resulting from a gross volume of response). Acronyms such as GRR (Gross Response Rate, the total number of respondents to a promotional effort such as a direct mail piece), NRR (Net Response Rate) and many others are a standard part of our business.
Most of us know that testing is a critical part of what we do, and that improvement in results is directly tied to our ability to understand what is working and what is not. That means measuring what our prospects and customers do with the direct mail packages we send.
We commonly use behavioral data to determine when other specific behaviors are most likely to occur. We build models based on this data to answer questions such as: How often will a group of people respond to a promotion? How many will respond, and how many will buy? We use past performance and statistics to project the likely response to future promotions. All of this is dependent upon proper collection of data, and specifically, the most basic behavioral data: Response and sales data. So here is a quick primer on how we as marketers can use this information to improve response, provide greater testing capabilities, reduce risk and perhaps even create longer customer tenure.
Eliminating the Guesswork and Improving Response
Have you ever wondered how prospects interact with your pieces? Have you considered using direct observation in a series of one-on-one interviews to observe how someone opens your direct mail package or views your website? This type of behavioral data can yield actionable information that effects how you structure a creative piece or design a landing page.
I remember one such observational study where we learned that 20 percent of our sample immediately looked at the brochure in our direct mail package prior to looking at anything else. Another 30 percent of our sample opened the package upside down and consequently viewed the elements in the package in reverse order from how they were intended. This of course helped us to place the offer in strategic places in the package to make sure that these people saw it correctly upon opening the package.
You may be familiar with web page "heat maps" that showcase where prospects eyes go on a page. Placing your offer on the page in a way that works with the viewing pattern can help you improve time on site as well as click through and conversion rates.
Providing Greater Testing Opportunities
An obvious way in which we use behavioral data is measuring response and designing tests that focus on specific variables. When we see prospects reacting to one single variable test at a statistically significant (and greater) rate than another, we are able to understand the prospects interest and react accordingly. For example: An offer can be presented as a percentage savings, a total dollar amount saved over time or a monthly savings amount. While the offer may be technically the same in terms of its cost to the company, it is presented differently to the prospect. (e.g. $10 off for 10 Months, Save $100, and 10 percent off a $1000 product). The prospects may respond more favorably to one presentation of the offer over another.
Response data is a very common use of behavioral data. The behavior is response. The data collected is the amount or quantity of response to each specific test piece. The difference in the response indicates a preference. If you take a look at an ongoing mailing program and ask yourself the question, "What do I want to learn," you may find extensive opportunity for testing.
The key to using behavioral data to improve targeting, reduce risk and increase tenure is to develop test designs on an ongoing basis that allow you to build predictive models, test those models and craft more effective offers and creative executions. The end result is that you will deliver a stronger, more effective message to your customers.