Case Highlights________________________        
Challenge                                                                       
A Los Angeles daily newspaper’s circulation marketing department wanted to diversify its marketing promotions mix to include direct marketing channels, especially direct mail. The newspaper’s circulation director wanted to explore and test a direct mail program for new customer acquisition. He knew it was effective for competitors, but had never done direct mail marketing and did not know where or how to start.
 
The objectives were to generate sales (new newspaper subscriptions), increase retention (decrease churn) and lower cost per acquisition (CPA). Additionally, they wanted to gather as much data as possible about what offers, formats, designs, taglines and calls-to-action would generate the highest response rates. A secondary objective was to do some A/B testing in order to learn more about customer preferences.
 
All direct mail tests must consider offer, audience, creative and format. A simple small-scale test mailing was designed to achieve two objectives: to get a baseline read or benchmark for response rate and cost per acquisition (CPA) for direct mail marketing of the newspaper; and to gather some response and CPA data on one variable--format.
 
 
Solution                                                                         
A/B Testing & Audience
An A/B test was created to determine which of two direct mail formats was more effective in terms of response rate and cost per acquisition. A simple two-sided postcard and a slightly more complex, two-sided tri-fold flyer with a perforated bounce back card. The audience list was created using the total geographical market with a handful of data selects layered on top of it, including Claritas PRIZM data. The list was then split randomly 50/50 for the A/B format test.
 
 
Creative, Format & Cost
The newspaper had recently upgraded its printing presses and was now offering a cleaner, brighter product. Both formats featured hero artwork designed to highlight the sharpness and quality of the new product.
 
 
The postcard was a standard medium-format postcard size. The front was printed with four colors and the back with two (4/2) on standard white postcard stock.The postcard was inexpensive to produce and mail.
 
The tri-fold flyer was also 4/2 colors with a similar layout as the postcard but with an additional component of a perforated, postage-paid bounce back reply card. The tri-fold cost more to produce because of its larger size, scoring, folding and perforation; and postage was more expensive when the postage of the bounce back reply cards was factored into the piece’s postage expense (expected response rate x quantity mailed x bulk card postage rate). In total, the tri-fold cost close to three time (272%) more to produce and mail per piece than the postcard ($.98 and $.36 respectively).
 
 
Offer, Call-to-Action & Tracking Mechanisms
 
Both formats were designed with a strong offer and direct response call-to-action. The offer on both formats was a very appealing, low-price Sunday only offer. For the postcard, the action requested was to call the circulation department to request a subscription. The tracking replied on the call-center staff to ask the caller how they had heard about the offer and note that the source was the direct mail postcard. (Margin of error and other issues with self-reporting data were considered.) For the tri-fold, the call to action was to detach and return the postage-paid bounce-back card. Tracking did not reply on call center staff to report, and responses were easily determined by hard counts of cards mailed back.
 
 
 
 
 
 

Key Findings__________     __________