Appendix F: Direct Mail Test Grid

Transcription

1 Appendix F: Direct Mail Test Grid Direct Mail Test for Planned Magazine Measures the response to the basic concept of a magazine through a test of response Test Marketing Direct Mail * Magazines: Direct Mail Dry Test - the product is tested without being published - the first issue may be years away *

2 Also allows the magazine company to determine which combination of design, prices, offers, advertising copy, and mailing lists work the best. * Test Grid Several variables could be tested: - Copy (text of promos) - Price - Payment Offer Mailing lists Bests lists are the subscription list of a similar magazine - keep this in mind when choosing the mailing lists for a direct mail test Test Grid Create a grid to plot the variables tested Different permutations of various copy approaches, prices, payments, and mailing lists

3 Payment Offer Type Soft Payment offer: the subscriber receives a trial issue, can cancel anytime - ~60% chance of cancellation. Hard Payment offer: cash or credit card payment must be made, no cancellation 414 Sample Direct Mailing Test Mailing lists (of different qualities) 1-6 are lists generated from the subscription lists of similar magazines. - A total of 3x2x2 permutations - The lists test for different copy approaches, prices and offers. 416 Copy Approach Sample Test Mailing Grid Copy A Copy A Copy A Copy B Copy C Price $15 $17 $15 $15 $15 Offer Soft Soft Hard Soft Soft Mailing List (ML) ML #1 3,000 3,000 3,000 ML #2 3,000 3,000 3,000 ML #3 3,000 3,000 3,000 ML #4 3,000 3,000 3,000 ML#5 3,000 3,000 3,000 ML #6 3,000 3,000 3,000 ML #7-21 Control Lists (3,000 each) 45, Sample Direct Mailing Test The control package is Copy Approach A Price $15 and a soft offer. Copy Approach A is chosen as the control because it is very descriptive of the magazine

4 Sample Direct Mailing Test The control package will be sent out to as many lists as possible. The more funds available, the more packages can be produced. A people within a single mailing list can receive several packages. 418 ML #7 4.8% ML #8 2.1% ML #9 8.5% ML #10 3.7% ML#11 2.8% ML#12 4.6% ML#13 7.3% ML#14 1.5% ML#15 3.9% ML# % ML#17 2.9% ML#18 4.6% ML#19 6.2% ML#20 5.4% ML#21 9.2% 420 Sample Results: DMT Acceptance % Copy Approach Copy A Copy A Copy A Copy B Copy C Price $15 $17 $15 $15 $15 Offer Soft Soft Hard Soft Soft Mailing List (ML) ML #1 6.3% 5.6% 5.4% ML #2 7.4% 6.0% 5.9% 7.5% ML #3 4.3% 4.3% 5.0% 3.8% ML #4 5.5% 5.2% 3.8% 4.8% ML#5 6.8% 5.2% ML #6 5.4% 5.6% 419 In comparing the acceptance rates for the 2 different prices with the same copy approach and payment offer, sent to the same mailing lists, it was determined that the response to the price at $16.97 was only 10.2% less than the $

5 n i= 1 y x xi ( 100) = Difference i i % y= acceptance rate a x= acceptance rate b i= mailing list # 422 Similarly, one can determine the % difference between the acceptance rates for different payment offers (hard vs. soft) for Copy A. the hard offer for copy A was only 9.44% less than the soft offer for copy A 424 Example: % Difference between the two prices for Copy A. 4 i= 1 yi x xi i ( 100)= = 10.2% Recall that probability of cancellation of soft offer is 60% Hence, hard offers seem to be 30% stronger in net subscriptions. 3 y i xi ( 100)= i= 1 xi = 9.44%

6 Overall, Copy B has a better acceptance rate than Copy A Copy C had the worst results. 426 Lists Ranked by Response for Copy A List # Response % "Effective Response" Rate (accounting for cancellation probability) % 6.18% % 5.52% 9 8.5% 5.10% 2 7.5% 4.50% % 4.38% 5 6.8% 4.08% 1 6.3% 3.78% % 3.72% 4 5.5% 3.30% 6 5.4% 3.24% % 3.24% 428 After calculating the acceptance %, one should rank the lists in descending order. 427 Lists Ranked by Response for Copy A cont. List # Response % "Effective Response" Rate (accounting for cancellation probability) 7 4.8% 2.88% % 2.76% % 2.76% 3 4.3% 2.58% % 2.34% % 2.22% % 1.74% % 1.68% 8 2.1% 1.26% % 9.00% 429 6

7 Established companies can work with a smaller response rate because they already have a core circulation. Improving the Acceptance Rate A follow-up DMT with most favorable (profitable) variables can help confirm results. e/archive/covers/2004/ _400.jpg However, a new magazine must usually secure a higher demand projections about 6% to 8% in order to have a good chance of success. Improving the Acceptance Rate According to the sample test, Copy Approach B $17 Hard Offer is estimated as the most favorable for Golden

8 Improving the Acceptance Rate Market research companies provide socio-demographic information about every zip code. 434 Combining test results with demographic characteristics helps a magazine to determine best target zip code, and which other characteristics to focus on (Income? Race? Gender? Optimal Age?) 435 8