Proven Strategies for Better Direct Marketing Tests
by Dean Rieck
One of the central strengths of direct marketing is your ability to test, calculate the results, and make adjustments to boost profits and lower costs. And no matter how creative your company or ads might be, you must approach the testing process with logic and discipline.
Here are a few tips for getting the full value out of your tests in any medium, including direct mail, print, and broadcast:
- Make knowledge your #1 goal. Yes, you want to boost response and increase net income now. However, building a body of knowledge about what people want and what they respond to is ultimately more important. Testing is about gaining knowledge. Profits come from the application of that knowledge. But don't just look for "what" works. Try to figure out "why" things work. This allows you to apply your knowledge intelligently.
- Don't rely too heavily on what others are doing. You must always run your own tests because every company, market, product, and offer is in some way unique. Learn from others, but consider it a starting point, anecdotal information at best. Most people don't test as carefully as they should, so just because you frequently see a particular direct mail piece, ad, or broadcast spot doesn't mean you can count on it being a winner.
- Establish a solid control first. This allows you to confidently test lists, media, offers, prices, product configurations, and other big issues. Then you move on to control testing to boost results. Usually this means you should stick to the basics at first and try more creative ideas only after you have some solid response data and a record of success.
- Run statistically valid tests. A change in results and a statistically valid change in results are two different things. If you don't know the mathematics of testing, hire someone who does. When you do get a statistically valid difference (positive or negative), retest to confirm your results.
- Have a goal for every test. What do you want to learn? Write down the questions you would like answered and run a test for each. Ideally, every test should answer one specific question.
- Test one element at a time. Testing more than one element will make it impossible for you to know what makes a difference in results. If you're testing price, change only the price in your ad. Don't change anything else. If you constantly test elements to refine a control, you are taking what I call the "Evolutionary Approach," slowly and methodically growing a stronger and stronger control over time.
- Test an all-new approach. This is good if you don't have the patience to test single elements or you want to try for a big boost in response all at once. The more different your approach, the better. Reworking the same approach may change results but won't give you the breakthrough you're looking for. This is what I call the "Revolutionary Approach," going for the big win all at once.
- Track results meticulously. Keep detailed reports on the number of pieces mailed, number of responses you get, response source, conversion percentage, income those responses generate, average order, percentage response, income per thousand, cost per order or cost per response, net dollar return, returns, bad debt, and every other fact that you need to calculate specifically how your ad performs. Over time, this will be a gold mine of information.
- Use your tests to determine strategy. Mathematical results are the best way to end debates on issues such as creative approaches, formats, and offers. (If you're afraid of results that don't match your ideas, then you should look for another line of work.) Never assume. Always test. No one knows better what will work than your own prospects and customers.
- Keep using your control until you beat it. Never, ever shelve a control just because you're tired of it. If it's making money, keep using it. Your control isn't there to entertain you or win you awards. It's there to generate income. Until you have the figures in black and white that conclusively demonstrate you have a new control, keep that old one going.
- Keep testing. Testing is a long-term commitment. It's not something you do once and forget. It's not something you do only when you have a little extra in your budget. Testing should be part of your routine, everyday business. You want to follow what I call the Testing Loop: 1. Run a test. 2. Analyze the results. 3. Act based on the results. 4. Repeat.
Copyright © 2003 Dean Rieck. All Rights Reserved.
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