Cross Country Mailer used Market Research to Increase Direct Mail Open Rate by 58%
Posted January 11, 2016, Clarocision Research & MarketingCase study
In 2015 a national direct marketing company wanted to get a sense of the thought patterns and decisions that allowed consumers to actually take action to open or not open the mail they received in their mail boxes daily. On average the US household receives 848 pieces of mail in their mailboxes each year according to the U.S postal service research. In a split second these pieces of mail are sorted in various categories, which will then prompt a decision whether to open or place them in the junk. Generally, people want to be in control of the content they receive: 86% of people skip TV commercials, 44% of direct mail is never opened and 91% of people have unsubscribed from company emails they previously opted into according to research found on CMO council website.
According to a study that was done by Direct Marketing Association (DMA), the median response rate for direct mail sent to house lists was 3.73% in 2014, up from mean averages of 3.4% in 2012 and 3.42% in 2010.While response rates for house campaigns have remained relatively steady over the years, they have decreased for prospect lists, with 2014’s median rate of 1% continuing a steady decline from a mean average of 2.14% in 2003.
Cross Country Mailer*, a national direct marketing company, needed to improve their ROI of their direct mail campaign. They needed to know which messages or layout on their envelopes would be appealing enough to the consumers to allow them to take the action of opening these envelopes. They knew that without consumers actually making the decision to open the direct mail their marketing message did not stand a chance of being seen. Lower open rate would produce much lower ROI. Hence, they went to great lengths to test their envelope designs and messages in order to improve their chances.
Clarocision Research & Marketing was commisioned to conduct this research. A sample of 100 people who fit the demographics of their target audience was selected randomly to participate in this test. The test subjects were handed a pile of 56 envelopes with varying messages and envelope layout and asked to sort the envelopes into two piles - 1. Would open and 2. Would not open. The researcher proceeded to record this information, and then continued the probe. The responses were recorded and the subjects were asked to further sort the mail into categories, top three from the “Would Open pile”. Further probe was done and results were recorded.
The results of the test gave the direct mail marketing company better intelligence on which envelopes would improve their chances of increasing their open rate. They were able to identify with more certainty how consumers perceived their marketing messages on the envelopes. They were able to see from the 56 messages that were tested, the ones which received market acceptance and prompted the desired action of opening the envelopes. The top three most opened mails received an open rate of 58%, 44%, 42% respectively compared to those that were placed in the junk. The envelopes that received top opening rates in the 1st, 2nd and 3rd ranking all had one thing in common. They all offered consumers some value e.g. “ $100 Value See inside”, Save $85 off a certain item, $75 Saving inside”.
Consumers love to receive value for their money but they also have to perceive the source as credible. Incidentally the envelopes that were blank (had only the mailing address) also enjoyed good open rates. Some of the other top reasons consumers gave for opening up the envelopes were:
- The message was believable
- The mailing seem to be coming from a reputable company
- It seemed to include important information
- I was curious because the envelope was blank and I did not know if it contained important information
As a result of the research done, Cross Country Mailer was able to determine which mailers would receive better open rates and hence yield them a better ROI.
Clarocision Research and Marketing has conducted many studies for national companies that needed to test the ad message before they were launched on TV or printed in magazines.
*The actual name of client was masked to protect their identity.