When it comes to achieving big sales volumes the best direct marketing tool continues to be direct mail. It clearly outperforms all other tools. But, postage costs alone have risen 40% in the last 10 years. And all indications are they're going to continue to climb exponentially. So, how do you create an efficient, cost effective direct marketing plan for your retail business that lessens the impact of rising postage costs? At Yaffe, we've developed some new tactics and added some new direct marketing tools that help do just that.
First, we take our client's transactional data and run it through our predictive model to extrapolate which are your best customers and eliminate those least likely to buy. This allows you to send out fewer mailers while getting the same or better results, cutting down your postage and production costs right there. But, we've been doing that successfully for many years. Part of the changing tactics is what we're able to do with that data now.
Use of demographic appends and digital hand raiser indicators. We continue to refine our predictive model using new data points and new tools. Lately, we've taken the raw transactional data and overlaid it with various demographic data, including age, income, presence of kids, likelihood of moving and others. We've also taken hand raiser indicators – those that show people are actively engaged – such as email opens and click-throughs from various digital marketing sources.
This created a 25% lift in response from customers contacted. After adding these data points to our predictive model, we found a significant increase in response across the board, including customers receiving direct mail only and customers receiving both mail and email. Both were higher than our historical data by 25%.
So, what does this have to do with rising postal rates? We can use the model to reduce mailed quantities further, achieve big sales volume that only comes from direct mail and improve your ROI. The extra processing of data does cost more, but the reduction of costs for the overall direct marketing and the increases in response rates more than make up for it.
And that is just one way you can make your retail direct marketing more efficient. Adding other digital tools and tactics into the mix can further enhance your efficiency. For instance, we're one of only four agencies in the U.S. targeting individual homes by IP address. But, that's another post for another time.