Testing Takes Guts ... but it Pays Off

By Grant A. Johnson, Johnson Direct

"Testing new ideas against your control package is essential when you are looking to
improve response rates. The key word here is “testing.” Testing allows us to
determine, in a real world setting, what works, what doesn't work and why.
Like direct marketing itself, testing is about numbers, ROI and data."

This story was reported on by Inside Direct Marketing, the June 2004 issue.

This 2,000 word article is worth your time - especially if you're planning to test a control package (or should be testing your control package). It demonstrates the why, what and how testing can help you improve your lists, your offer, your creative and ultimately your response rate. Learn how our proven testing techniques helped Lutheran Social Services and then call us to apply them to your direct marketing program.

What Makes Testing Worthwhile?

It’s true, there is a risk involved in testing new ideas in an effort to “beat the control” and increase response rates. Testing takes an investment in time, money and resources. However, the outcome is often worth the risk.

We test not only to increase our ROI, but also to learn. The more we learn, the better we can market to segments that emerge as we move our marketing programs forward. As the late direct marketing guru Dick Benson said, "You've got to determine if the information you can reasonably expect to gain is really worth the expenditure."

When we proposed testing a different approach to help Lutheran Social Services of Wisconsin and Upper Michigan (LSS) increase its donors’ contributions and to reach brand new prospects, we had experience and proven successes to back up our proposition. In fact, we’ve seen an increase in results for almost all of our client’s campaigns that included a freemium and/or frequency of mailings, so we applied both of these methods to the LSS 2003 holiday campaign.

Testing a new two-part campaign, including a “freemium,” resulted in a happy ending for LSS, and ultimately the more than 100,000 people the organization serves each year. In fact, not only did our campaign beat the control, but it also garnered an almost $25 increase in the average holiday gift compared to the control package.

Modest Hopes for LSS

LSS is a nonprofit group that acts as the social ministry arm for more than 800 Lutheran churches in Wisconsin and Upper Michigan. The charity provides adoption services as well as programs on mental health, abuse, older adults and troubled teens.

Each year, LSS depends on its end-of-the-year holiday campaign to raise awareness and generate donations for its Adoptive and Birth Parent Services. Nine percent of the people served in 2003 received Adoptive and Birth Parent Services, providing adoptive family services, domestic and international adoptive placements, special needs placement, infant foster care and birth parent counseling. More than 10,000 children have been placed with families in Wisconsin and Upper Michigan through its domestic and international adoption program.

LSS’s number one goal for the 2003 holiday campaign was modest: to at least cover their production expenses and hopefully exceed the costs of the appeal. After several years of sending a control package consisting of a No. 10 window envelope and appeal letter, LSS agreed to allow us to test a new appeal.

Beating the control for a very worthy charitable organization is a great feeling. Especially when the majority of our business revolves around marketing insurance, software and technology, consumer products and a multitude of manufactured goods. However, we approached this challenge with the same strategies as we would for any client, non-profit, consumer or business-to-business.

Guidelines for Beating the Control

When we set out to beat a client’s control package, we keep in mind that:

• 40% of success is predicated by the lists used
• 25% on the offers made
• 20% on the creative
• 15% on other factors, including timing and relevance, among others

It is also critical to remember the basic obstacles of attempting to get the skeptical, busy, overwhelmed, disinterested prospect to stop, read what you have to say, and consider saying “yes.”

Here are a few of the guidelines we follow to build a control-beating campaign:

1. We imagine the prospect holding the mail piece over the trash bin.

• The prospect’s first thought is simply, “should I read or open this?” In seconds, their mind is evaluating whether or not this mailing has any relevance to them, or any promise of meeting their needs and making their job or life easier or better.
• If the decision to open is made, it is a matter of seconds before they make the next critical decision, “should I read this any further?”
• If enticed to read further, the prospect then makes the ultimate decision: “Should I say yes?” This decision may lead to more time reading and evaluating the mail piece. However, it often leads to it being set aside.

2. “What’s in it for me?” The fact is, no prospect will say “yes” to any offer that doesn't meet a basic need of his or her own.

Whether these needs include protecting and providing for their families, making their lives easier, making them money, or getting a really great deal, offers must be positioned to answer the basic question, “what’s in it for me?” Therefore, direct marketers must avoid the temptation to tell “all about us,” a tendency that can lead to complicated, ineffective campaigns.

We often recommend that mailings incorporate a test of offers and offer positioning. One version of the mailing would build on known winning approaches used in the past. A test offer would then be pitted against that approach, with the goal of increasing response.

When using a freemium in non-profit appeals, the offer is the exchange of the gift for a contribution. Statistics show that a freemium will generate more contributions, however, many are $5 or 10$ denominations.

3. In direct marketing, list selection is the single most important determiner of success.

Most programs fail because not enough time is spent on researching the best lists to use and not enough proper list testing is done. Programs also fail because the lists become fatigued from over mailing or mailing creative that’s too similar, thus discarded as something that has already been seen.

4. The key to effective direct marketing usually does not hinge on the creative approach. Rather, creativity helps draw interest.

Creative techniques rarely impact response as much as list selection and effective positioning of the offer. Often, the temptation is to focus a disproportionate amount of time and energy on the creative approach in direct mail package development.

By starting with clear objectives for creative treatment, and reviewing this as the process is completed, your mailings should be optimally successful from a creative perspective. We recommend the criteria for effective direct mail creative include:

• Consistency with other media
• Attractive and appealing, conveying the essence of the offer
• Reinforce new and exciting happenings
• Break through mailbox clutter
• Multiple attempts
• Segmented copy to titles

Two-part Story Brings Emotional Appeal To Life

Following these and other proven guidelines like relevance and telling a compelling story, here’s how Johnson Direct’s new campaign came together.

Mailings must be visually appealing, and a picture is worth a thousand words. But a few passion-stirring, need-identifying phrases can be worth much more. To grab and hold the attention of LSS’s contributors, we utilized powerful, thought-provoking, action-demanding headlines, subheads, copy blocks and letters.

The 2003 holiday appeal for LSS was based on an “emotional copy platform.” The world's greatest authors, poets, screen and speechwriters have always made it a point to aim their words straight at the hearts and souls of their audiences. The most successful direct response marketers also know it's true … emotion will bring greater results than a dry statement of fact.

Our two-color letter package for LSS included playful imagery reminiscent of any child’s camp experience and bold meaningful headlines designed to make the coordinating images come to life. It focused on one boy, Deviatko, who touched the hearts of one particular couple.

The package contained a personalized letter from LSS president & CEO, Pastor David Larson that described the first time camp experience for a group of Russian orphans, including Deviatko.

The story continued, telling of Deviatko’s wish to stay in the U.S. with the Morgan’s – a real case of “love at first sight” -- and briefly describing the programs LSS offers to help thousands of kids like Deviatko and would-be parents like the Morgan’s. Pastor Larson concluded the letter by simply inviting prospective donors to contribute.

The LSS donor database of 33,000 names was comprised of 23,500 past donors and 9,500 new Lutheran names who would be first-time recipients of any LSS appeal. After rather lackluster results to their prospect base, Johnson Direct embarked on extensive list research to come up with new lists to test that turned out to be very worthwhile.

On November 21, the donor base received the first of the two-part mailing. This mail piece was a 6-by-9-inch window envelope containing the Pastor’s letter and perforated reply card and freemium – two-color personalized address labels.
Going to the same donor base, the second piece was a No. 10 window envelope that dropped December 12. It contained a new two-color personalized letter from Pastor Larson, with perforated reply card, updating prospective donors on the previous story and telling of the adoption of Deviatko.

A Happy Ending for All

A month following the final drop to the 33,000 prospective donors, the effort brought in more than $113,200, with responses still coming. At that time, overall response to both drops was 1,063 donations with an average gift of $106.55.

From the 9,500 new names, LSS received a 6% response rate and an average gift of just over $100.00. They consider this a great test success (and we agree) because this test justified their investment in a new list and now they can continue to solicit these new active donors.

Our campaign also helped LSS to reactivate donors who had not given in recent years. Our past experience indicates that freemiums tend to make prospective donors feel more obligated to make a donation.

For the 2002 holiday appeal, LSS mailed a single drop of 24,427 that produced 1,030 responses, an average gift of $82 and $84,455 in donations.

The 2002 campaign cost $0.50 per piece including postage. For the 2003 campaign, we were able to raise the response rate, significantly increase the average gift, reactivate past donors, justify the new list investment and spend $0.49 per piece, including postage.

The success of the new appeal is based on several criteria:

• We followed the basic guidelines of creating a control-beating direct mail campaign.
• People are more apt to donate if there is a freemium included.
• The use of the emotional copy platform brought a fairy tale story, and ending, to life.
• The two-part mailing kept Deviatko on the minds of donors twice as long as the typical one-time mailing.

The Moral of the Story

With a struggling economy and turmoil throughout the world, LSS continues to charge ahead, grateful to those individuals who join their efforts to help people improve the quality of their lives. The organization is encouraged by the 25% increase in individual giving for the 2003 holiday appeal. In fact, 2003 represented the fifth straight year of higher giving by individuals and families. Thanks to testing a new list, more than 500 individuals became first-time donors to LSS. Needless to say, LSS will invest in additional testing throughout 2004.

No two direct marketing campaigns are created equal, but many utilize the same ingredients, including: a targeted, qualified direct mail list; a strong offer; a clear call-to-action; and ongoing testing. It's how your campaign is executed, and the experience of the marketer, that will really make the difference between a successful or mediocre one-on-one communications effort. Remember, testing is essential to not only increase your Return on Investment, but also to learn. The more you learn, the better you can market to segments that emerge as your marketing programs move forward.

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