Start Small and Test
If you're new to VDP, it's important to start small and test. Work with your direct marketing production company to design a test run that will determine whether or not to roll out a larger project.
Consider testing not only aspects of the VDP campaign itself, but also a test against a control group of a conventional direct mail campaign. It's much better to find out at this point whether your test provides ROI that makes the additional investment feasible.
With the higher per-unit cost of VDP pieces, breakeven points for response rates are inherently higher, so also examine your number of mailing cycles and number of pieces with a view toward tweaking those elements of the campaign.
Calculate Return on Investment
Though they generate better ROI, VDP projects are more complex and cost more than generic non-personalized direct mail. Undertake a standard cost-benefit analysis to ensure that the potential ROI justifies a VDP investment [Note: The ROI is the number generated when you divide the gross receipts from the mailing by the total cost of the mailing].
Remember, depending on your campaign, ROI is not the only measure of success. Projects launched to raise brand awareness, for example, may not show tangible results for some time to come, if ever. ROI analysis is, therefore, well suited to many types of campaigns, but should not be considered the be-all and end-all of your direct marketing project.
Crystal Uppercue is the marketing manager for EU Services, a 330-employee direct marketing production facility based in Rockville, MD. Download EU's free white paper, "A Marketing Manager's Guide to VDP Project Management," at www.euservices.com. You can reach her at email@example.com.