4 Tips for Optimizing Your Direct Mail Acquisition

And what your data can tell you

NERD ALERT!  

It’s true, I have a T-shirt that says, “I heart data,” and I am PROUD OF IT! Allow this self-professed data nerd to guide you into your direct mail acquisition program and uncover cost saving and performance-boosting optimizations that have been “buried” in data.

Want to improve your acquisition program? Then put on your Inspector Gadget jacket and glasses, and conduct an acquisition audit! Here are 4 tips for optimizing your direct mail acquisition…

1. Study your list mix

Determine what lists are driving strong upfront performance, but also retain. This may seem like an obvious statement, but be sure to look at list costs as part of the equation. Your best ROI lists are going to be a combination of performance and cost efficiencies.

Study which lists have strong online conversions – list level match back is critical! We are seeing more and more that our direct mail efforts are driving prospects to give online (we can thank COVID and the resurgence of QR codes for this trend). If you are only looking at list performance on the front end, you may be missing the full equity that list is generating for your program. Review online and upfront results together when considering what lists should stay in the mail plan!

2. Don’t overlook audience performance

If you are mailing multiple acquisition packages, be sure to review list-to-package results. Some lists work better for non-premium based offers, some lists respond better to more conservative messaging – all lists are not created equal! In addition, if you are using a Cooperative Database (co-op), talk with your co-op team to see if package specific models could be created to improve performance. (More on co-ops below!)

3. Increase use of co-op sources

Co-ops are more affordable, modeled names that often outperform outside lists. In addition, the use of co-ops helps to eliminate expensive duplication in the merge. While co-op use requires participation, the co-op models are created for your program to help you meet your Acquisition KPIs. For example, if you need to build your donor base and acquire more donors, they can create models focused heavily on response. On the flip side, if you need strong ROI, gift floors can be added to ensure you are getting stronger average gifts and ultimately stronger ROI.

If you have not discussed balance modeling with your co-op partners, do so today! Balance models offer names to be added at a net/net pricing model, meaning if you order 75,000 names, you are going to mail 75,000 names.

How does it work? A post merge file is created and sent to your co-op partner, and they in turn will only send you names that do not already exist in the campaign. While many people assume you are gathering bottom-of-the-barrel co-op names through this process, we have seen very strong performance from these segments and incredible cost savings!

4. Dive into your merge purge reports!

List duplication is expensive and can weigh down an acquisition program. As a reminder, list costs are calculated by the input to the merge purge – the more names you order, the more expensive it is to mail. Studying the duplication will help you reduce input quantities and improve costs.

What to look for:

1. If you see several lists that have high duplication with each other, try mailing the source with the best pricing and eliminate the others from the mail plan.
2. Review how lists are interacting with your house and suppression files. We want lists with high affinity, but if you are losing 70-80% of that source to your house and suppression files, those sources should probably be removed from your list plan.
3. Be sure to keep an eye on pre-merge estimated list costs and post merge costs.  Duplication within the merge can drive list costs up or down. Determine if the lists still make sense to keep in your list mix given the interaction within the merge.

In addition, review your business rules for merge purge. These instructions and rules should never be a “set it and forget it” process. On an annual basis, you should review the business rules and determine who is on your suppression files, if they still need to be there and why they were put there in the first place.

It is important to remove specific donors or no mail audiences, but the more names you lose, the more expensive your acquisition becomes. Revisit these rules to ensure you are using the cleanest suppression logic possible.

Finally, don’t forget about something as simple as your merge priority can also be a “set it and forget it” process, but don’t let it be! Your merge priority can offer significant savings when the less expensive lists are prioritized at the top of merge. For example, co-op lists tend to be less expensive and should go above the more expensive outside list sources.

Wrapping it up

While many of these suggestions require you to roll up your sleeves and dive into the data, I promise you it is worth it! Optimizing your direct mail acquisition program can be a daunting task at first, but once you get comfortable in the data and the trends across campaigns, you will soon become an acquisition expert, officially and fully capable of owning and wearing your “I HEART DATA” T-shirt as well!