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May 2007
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Results Suffer from Static

IT HAS become commonly accepted that adding variable data to a direct marketing program significantly increases response rates. However, a true control group has often been missing from the evidence cited. Results are typically compared to previous mailings or industry averages, not a static mailing with the same design and message.

Alerus Financial, a North Dakota-based banking institution, decided to include very systematic testing as part of its first application of variable data in a program designed to obtain new loan customers. The company wanted to compare variable data marketing to static methods and establish a baseline for its future marketing efforts.

[ The Proposition ]

With interest rates rising, Alerus noticed a decline in the number of credit card debt consolidation loan applications that it was receiving. For several years, the company had discussed offering pre-approved customer loans to a targeted group of customers and prospects, but it had yet to put the plan into action.

Alerus’ marketing manager had been talking with nDialogue, a direct marketing firm, about the option of doing a variable data campaign with a personalized URL and tracking. To enable a comparison of the results from a variable data vs. static mailing, nDialogue recommended dividing the pool of 7,500 prospects (provided by the financial firm) in half, choosing the names at random.

[ The Solution ]

The first piece sent was a variable data self-mailer that contained a personalized URL (PURL) for each recipient. People who didn’t respond to the initial offer were then sent a print-on-demand postcard with a different set of PURLs. nDialogue tracked phone calls, visits to each landing page, submitted contact forms and click-throughs.

The target audience was segmented via age demographics into three ranges—25-35, 36-45 and 46-55 year olds. The creative team at nDialogue created personalized messaging and images designed to appeal to the core needs of each group. At his or her personalized URL, a respondent discovered more information on the credit card loan consolidation offer, was able to submit an auto-populated contact form, and use an interactive calculator on the page to estimate their monthly loan payment.

Because Alerus had not used tracking mechanisms for its previous direct marketing efforts, nDialogue created a test segment similar to the kinds of mailings the financial institution had done in the past. This static program involved sending one self-mailer that employed the same creative used for the middle age group of the variable data segment. The same offer was made to the static and variable data segments, but only a single toll-free number was offered as the response device.

[ Producing the Job ]

For outputting the pieces, nDialogue enlisted the services of AlphaGraphics in Minneapolis. The company bills itself as a complete visual communications provider, offering design services to mailing from two locations in the Twin Cities area. AlphaGraphics produced the mailers on a Xerox DocuColor 6060 digital color press driven by a Creo Spire RIP, with Printable FusionPro software used to generate the variable data pieces.

The initial mailing drop included 3,750 pieces. Thereafter, 30 more mailers were sent out per week to follow up with people on the mailing list who didn’t respond to the initial piece they received.

[ The Results ]

The response rate for the static group was less than 1 percent, while nearly 4 percent (3.67 percent) of the people on the variable data mailing list responded by visiting their personalized URL or contacting Alerus directly. Plus, nearly 60 percent of those who applied for a loan were new customers. The breakdown of response rates by age group was: 25-36 year olds—3.98 percent; 37-45 year olds—3.23 percent; and 46-55 year olds—2.64 percent.

Alerus was not able to directly measure the response rate of the static piece, since its normal practice was to send out direct mail without incorporating any tracking mechanisms. Even though there was a toll-free number on the mailer, the number of calls coming in specifically as a result of the static piece could not be tracked directly. nDialogue estimated the response by matching the names on the applications and loans secured to those on the mailing lists for the static vs. variable pieces.

Along with looking at response rates in broad terms, nDialogue sought to test two marketing propositions.

1.) Would creating a different look for each demographic be more effective (produce better response rates) than using a common design/message for the whole group? The results showed that varying the creative for each demographic was more effective.

2.) How useful would it be for Alerus if results were tracked in detail, or not tracked at all? The fact that the 25-36 year old age segment had a higher response rate than the other variable segments, as well as the static mailer, would seem to indicate that detailed results tracking could enable the company to get a better ROI on its future marketing efforts. PI

This case study was derived from PODi’s Best Practices in Digital Print collection. With more than 300 case studies, it is the largest collection ever assembled of successful digital print projects. PODi is an industry initiative with hundreds of member companies, including executive board members EFI, HP, Pitney Bowes, Quark and Xerox. PODi members receive free access to the case studies as well as other resources including presentations, reports and online seminars. Membership in PODi is open to companies and organizations involved in digital printing. For more information on joining PODi or submitting your own case study, visit www.podi.org.
 

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