The new year has begun. Now is the time to measure the success of your holiday campaigns. How did your campaigns perform? This is an opportunity to look at their effectiveness in terms of building awareness, generating revenue, increasing retention and aiding customer acquisition? How do your metrics compare to industry benchmarks as well as internal benchmarks? How much revenue did they generate and were they profitable? In addition, what worked and what didn’t? Now is the time to evaluate any tests that were done - date/time, subject line, creative, etc. Finally, compare the results of this past holiday campaign to the one before and analyze the differences. The insights from the holidays can inform your strategy for 2012.

Even though it still feels like summer outside, now is the time to start planning for the holidays.

The first step is to evaluate all of the tests that have been done throughout the year in order to put your best foot forward.  In addition, it involves reviewing the results from the prior holiday season.  That means determining the most effective:

• communication method (e.g., email, direct mail, multi-channel) by customer segment
• timing (both day of the week and time of day)
• creative (hero images, placement of links, etc.)
• subject lines (when and where to mention free shipping offers, brand or product offers, etc.)
• offers (discount percentages, dollars off, buy one get one free)

Next step is to evaluate any implementation issues from the prior holiday season.  Before coming up with your holiday strategy it is important to determine any limitations or challenges with respect to execution.  Your strategy cannot be developed in a vacuum.  Thus, I recommend that you review what has worked and what did not work with the entire team.

Once all of this information has been gathered, you can develop a holiday strategy.  It should incorporate the lessons from past tests and holiday campaigns as well as encompass:

1.  Start Date. The average holiday campaign begins in October.  Some retailers hold pre-holiday clearance sales and send informational emails to start their holiday campaigns.

2.  Black Friday. For Marketers, the holiday campaigns have been starting earlier and earlier on the calendar.  The same is true for Black Friday.  It is now beginning on Thanksgiving Day for some retailers.  When will yours start?

3.  Cyber Monday. While many digital sales are made on the Monday after Thanksgiving, digital sales are occurring earlier as consumer shop from home.  Will you wait for Cyber Monday or start earlier?

4.  Sequence. If you are using email, you can easily send at least an email a day.  It is important to determine the contact frequency and cadence.  Will all or a segment of your customers receive an email a day, every other day, every third day, etc.?  Will emails be sent only on weekdays or only weekends or a mix?  Will there be a resting period or a maximum number of emails that can be received?

5.  Free Shipping.  Many consumers expect to get free shipping online, especially during the holidays, and will not pay for shipping.

6.  Social Sharing.  Consider how to tie in Facebook, Twitter and other social sites with your campaign.

7.  After Christmas. Lastly, there is also the opportunity for follow on sales after Christmas.  It is the time to promote use of gift cards and purchases of parts or refills.

One of my clients was asking for my advice about trigger e-mails.  If you haven’t worked with trigger e-mails then you may not be familiar with the ability to set up e-mails that are automatically “triggered” by an event.  There are many behaviors that can trigger an e-mail and below is a selection of the types of trigger campaigns you can develop:

1.  Welcome Campaigns

If a customer makes a purchase or registers on your web site, this is a wonderful opportunity to thank them as well as up-sell existing customers and convert prospects into customers.

2.  Birthday Programs

Why not surprise and delight your customers with a special birthday promotion.  You can send a promotion or special offer in the month of their birthday.  For one of my clients, this program consistently generates among the highest response rates.

3.  Specific Product Promotions

You can leverage past purchase behavior to let customers know about products that might be of particular interest to them.  Amazon is a great example of this.  Based on books I have previously purchased, I receive e-mails about books on topics of interest to me as well as e-mails about new books from authors from who I have bought in the past.

4.  Reactivation Campaigns

If it has been a while since a customer has bought from you, a reactivation e-mail may be in order.  The purpose of a reactivation campaign is to remind customers about your products and services and encourage them to become an active customer again.   This is your chance to win back a lost or inactive customer.

Trigger campaigns are one key element of your communication strategy.  They provide relevant content based on customer behavior and enable you to speak to the particular needs and interests of your customers.

While Mark Twain was talking about his own death, there is another reported death that I am thinking about.  Back in January 2009 I included a quote about banner ads being the next direct mail.  I mean no offense to direct mail but the implication was that the value of a banner ad was diminishing.  The belief was that banner ads were being replaced by social media, which is a disruptive technology much in the same way that e-mail marketing has replaced direct mail in many industries and situations.  Direct mail still is a valuable channel but it is being used more selectively than it once was.

Well reports of the death of the banner ad might be premature.  A recent study by eMarketer predicts that banner ad spending in 2010 will be up 8.2%.

Direct mail marketers face several challenges. First and foremost, they get no respect. Almost everyone refers to direct mail as junk mail and many think it is bad for the environment. Second, their business has been negatively affected by the current economic conditions. The credit card companies who were responsible for mountains of solicitations have fallen on hard times and reduced their mail volume. Third, e-mail is replacing some direct mail as it is cheaper and offers the same measurability as direct mail. And now there is news of Postal Service carriers who did not deliver the mail entrusted to them.

According to a recent Associated Press article, one Postal Service carrier stored third class mail in his garage for six years. He was placed on probation and fined $3,000 but an e-mail marketing firm, MailChimp, paid the penalty. AP reported that Ben Chestnut of MailChimp said, “We’re doing everything we can to stop junk mail.”

During the holidays a friend of mine was complaining about the number of solicitations she received from one charity.  She had sponsored a friend who was raising money for a good cause.  Now, she received solicitations every few weeks from the same charity. 

I became excited thinking that she objected to the same things I did.  I assumed that she was angry because there appeared to be no communication strategy, no plan with respect to contact recency and frequency.  Immediately I wondered, did they provide a suggested donation amount based on her past gift?  Would they ask for a donation near the same time of year as her original gift, recognizing that some donors give at the same time every year?   Was she getting multiple mailings to increase the likelihood of a response, as some credit card companies do?

In fact, she was upset for a different reason.  She was concerned that so much of her gift (and others’ donations) went toward marketing.  By sending multiple mailings, it only diminished her likelihood of donating again.  After she first donated, the charity could have sent her a thank you letter and directed her to their on-line preference center.  By enabling her to provide feedback on the type of communication (e.g., e-mail or direct mail) and the frequency of contact, the charity saves money by avoiding superfluous mailings and increases the chances of a second donation.  In addition, it deepens the relationship because the charity has asked for her input and directed her to their website where she can learn more about their mission.

Creating a preference center and following customers’ preferences, one of my suggested new year’s resolutions for e-mail marketers, also applies to direct mail.

You probably already know that but, in this case, the United State Postal Service has announced that it will be raising its shipping rates on January 18, 2009.  There is a link on the home page of usps.com with the new shipping rates.  

Any price changes related to mailing services, which includes stamps, will be announced in February 2009 and will go into effect in May 2009, according to the USPS website.

I was catching up on Tangyslice’s blog and enjoying his 5 meaningless marketing metrics post, when I thought of another meaningless metric.  Last week I was reading a presentation which described the response rate of one group as slightly greater than the control group.  What does slightly greater mean in this context?  Well, it turns out the difference was statistically significant once I did the math.  What I find meaningless is when analysts do not look for statistical significance when comparing two groups.  This is known as A/B Testing.

Conceptually A/B testing is very simple.  You are comparing Group A to Group B.  A might be a control group and B the test group.  Alternatively, A and B might be two different offers, landing pages, e-mails, direct mail lists, or landing pages.  As the name suggests, this is a test which is why A/B testing is also known as split testing.  Ultimately, you want to know if A and B differ in a way that is statistically significant.

Here’s an example to make it concrete. Let’s say that you marketed to 50,000 customers encouraging them to purchase product A and 5,000 of them responded. That is a 10% response rate. In addition, there were 5,000 customers that you could have marketed to but that you did not.  Instead, you assigned them to the control group.  They look and act just like the 50,000 customers that you mailed. The reason for the control group is that some customers might buy product A regardless of whether you market to them or not.  In this example, 450 of them or 9% purchased the product. Is the difference between 10% and 9% statistically significant?  Was the campaign successful?

In this case, we perform the two-proportion z-test for equal variances using the following formula:

and

where…

p1=10% (response rate for Group A)

p2=9% (response rate for Group B)

x1=5,000 (number of responders in Group A)

X2=450 (number of responders in Group B)

n1=50,000 (quantity mailed in Group A)

n2=5,000 (quantity mailed in Group B)

If the value of z is greater than 1.96 then the difference is significant at 95% confidence.  In this case, the z value is 2.26 so the difference is statistically significant.

In order for the test to be valid a few assumptions must be met:
1. Your control group needs to contain customers or prospects that look and behave like the treatment group
2. You need to have sufficient numbers of direct mail recipients and responders such that n₁ p₁ > 5 AND n₁(1 − p₁) > 5 and n₂ p₂ > 5 and n₂(1 − p₂) > 5 and n2>29 and the groups contain independent observations

The math might look scary but really the hard part is making sure that the test is done properly.  It is vital that the control contains a random selection of customers who are similar to the treatment group.  If not, you could end up with very strange results

Limeduck sent me this excellent comic strip about direct mail and targeted marketing.  Hope you enjoy it as much as I did.

The United States Postal Service has announced its third quarter results for Fiscal Year 2008.  It reported a 5.5% decrease in mail volume for the same period last year.  Mail volume in the quarter was 48.5 billion pieces.  First-Class Mail and Standard Mail also fell 5.5 percent from the third quarter of FY2007.