Postage costs still make direct mail a very expensive marketing tactic. Let’s look at elements that remain the same for mail strategies in these unexpected times.
1) Building Contribution Business Models
The strategies for mailing marketing content must still be based on cash contribution to overhead and profit. We need visibility of where the breakeven line is when putting anything into the mail. The model remains the same relative to using a fully loaded financial tool that includes all variable costs. Most mailers have this tool in place and simply need to plug in updated cost and revenue assumptions.
Once the breakeven metrics are established, strategic decisions can made. In cases where there is a loss for any particular segment in a mailing, the ROI on that investment over time must be evaluated. It is the ROI element that may be very different in Covid-19 times. Once the contribution intelligence is established, making strategic sense for mailing content must be evaluated in the context of how Covid-19 times are affecting your specific business model and merchandise.
2) Housefile versus Prospecting Decisions Must Be Made Separately
Customer retention and acquisition mailings have different math and strategic value within any mailing campaign. One size does NOT fit all segments when mailing and the importance of this distinction remains as important as ever. Most business contribution models have the appropriate pieces of the puzzle present to make this distinction. The math remains the same relative to producing value from existing customers and acceptable cost per acquisition of new customers.
In these Covid-19 times, the strategic value around both customers and prospects may be very different and must be revisited. The risk of losing customers to the completion is more real than ever if you stop mailing. Direct mail can be very successful in making sure your best customers hand in there with you.
The entire value of prospecting must be re-evaluated and most likely tested carefully before making any significant investments. While the results of the past are out there, be careful of making sweeping assumptions that these results will repeat themselves. The one thing that we have learned about Covid-19 times is that everything is a moving target and can change quickly. These are truly uncharted waters we are moving through and must be treated with respect.
3) Top-Of-Mind Awareness it Still Critical
The neuroscience of consumer behavior has the same basic tenant. Feelings and unconscious elements still drive purchasing decisions. While those feelings themselves may have changed, they still determine who consumers will buy from. The predominant emotion for all consumers right now is fear. Any decision to purchase will have a component to address with this strong feeling.
Customers still have to be reminded, regularly, that your brand is out there and open for business. Hopefully, your marketing will be designed to keep its Pre-Covid-19 awareness levels in place. The neuroscience is very clear on this reality. We simply have to stay top-of-mind with our marketplace and be there ahead of the competition.
Geoff Wolf offers 35 years of executive and entrepreneurial experience gained from creating success for his own businesses and for his consulting clients. Geoff founded two of his own businesses guiding both to profitability and successful acquisitions. He understands what it takes for a business to succeed.
T: 970-236-2336 |
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