Effectively Using Statistical Sampling to "Penny Pinch" Direct Response Marketing, Fund Multiple Campaigns and Refine a DR Model
- This is page 2 of a 2-part article. If you landed here first, you might want to start on page one.
USING STATISTICAL SAMPLING TO SHREWDLY MAXIMIZE DIRECT RESPONSE MARKETING ROI
For the sake of illustration of important marketing science opportunities in direct response marketing, let's imagine a little direct response campaign: you want to target 2M prospective buyers in a 50-list campaign.
There's nothing magical about either number. You could target 5M or 50M in a 100 or 2000-list campaign too. But let's assume 2M prospects and 50 lists to illustrate some concepts. We'll also assume an average rental rate of 40 cents per name and 5K list rental minimums for ALL 50 lists. Again, those numbers are not uniform either (rates and minimums vary), but we're keeping this example simple.
List selection in DR always has some marketing ART in it. There are subjective assumptions being applied to select lists from the many millions that are available. There should be plenty of marketing science that crafts profiles to drive list selection... but, ultimately, some marketing art- ideally paired with LOTS of marketing experience- will influence at least SOME list choices.
Trying new lists is the only way to discover new pools of profitable buyers. You can't catch a single fish if you never cast a line. So, for this campaign, we're aiming to cast up to 2 MILLION lines because we want to catch a LOT of fish ASAP. You/We pick 50 lists totaling 2 million RELEVANT prospects that seem "best fit" for your offer.
If you wanted to promote all 2M names in those 50 lists BLIND (no list sampling), you risk $800K. That's the cost of 2 million targeted prospects at 40 cents per name. It takes a lot of hope- or foolishness- to fund an $800K blind risk like that.
BI can show you the proper way to randomly sample the 50 lists. Doing so, you can objectively determine the ROI of all 50 lists for around- say- approx. $100K instead of risking the entire $800K... cutting a 100% budget risk down to only 12.5%.
If the much cheaper tests reveal that only 600K names in- say- 12 of the 50 lists are worth rolling, that roll will cost $240K and go out to ONLY those lists now PROVEN to yield buyers at a very specific rate of conversion or better.
Since the very same work has also proven the other 1.4M prospects in the other 38 lists are NOT capable of delivering a satisfactory ROI for your offer (we have scientifically deduced the other 38 lists out of that 50 are NOT profitable), you don't waste upwards of $560K more promoting those weak-responding lists. Instead, you focus your marketing budget on only the 600K in that total pool that you now shrewdly target as your REAL opportunity. Bonus: you already KNOW they will yield because the tests have proven their worth.
With this multi-step approach, you save that extra $560K on list rental expenses while maximizing your ROI on that entire (2M) pool of prospects. Very simply...
You spend a lot less to harvest the profitable buyers and you don't waste money on the rest.
On a macro scale of utilizing many lists for each campaign (and many campaigns each year), proven tactics like statistical sampling can add up to millions of dollars in savings over time. In that example, it actually saves you more than you would expend to maximize your return on those 2M prospects. Put such savings to good use by funding some extra campaigns and your revenue results go way up from the
VERY SAME MONEY that would have otherwise been mostly wasted if you chose to hit all 2M names and just hope for the best.
If another block of 2M additional prospects could yield about the same level of conversions at about the same costs, that $560K you saved would fully pay for testing out that ENTIRE SECOND BLOCK of 2M prospects too.
In other words, instead of foolishly blowing $800K by promoting all 2M names in ONE blind campaign, that same $800K could have been used to promote only the worthwhile prospects out of the original 2M PLUS only the worthwhile prospects in up to another 2M pool and still leave a little surplus in your marketing list rental budget to perhaps cover about 35% of your list costs in a THIRD 2M-prospect campaign.
If your conversion rate turned out to be- say- 1.5% overall (another number that can widely vary for each situation), you would realize at least about 18,000 buyers over BOTH 2M-prospect campaigns funded by THE SAME MONEY, as opposed to wasting much of the $800K to get only around 9,000 buyers out of just ONE campaign. 18K buyers with some budget left over or 9K buyers and all $800K spent? The choice should be simple.
A multitude of "been there, done that" strategies employed by direct response experts like BI contribute to making intelligent use of your marketing budget. Cost-per-sale goes down while revenue-per-customer goes up. Working at both ends like that is the best way to improve your marketing ROI. We can show you that money.
DR is one of our most potent specialties. Many new pieces we've created have outperformed the established control creative. A "control" is a piece of marketing that is currently the best-performing creative in use by the marketer.
Various versions of creative face off head-to-head against the established control in smart, direct response marketing models. If a new piece of creative outperforms a control, it becomes the new control... against which subsequent new creative will compete. This "survival of the fittest" cycle continually repeats as solid creative becomes control, tires over time and is then replaced by new, fresh creative that delivers better ROI.
If you are leaning on the same old marketing that has been used for quite a while, it very likely needs some head-to-head rounds with new challengers. Prospects who have already seen it won't necessarily become buyers by showing the exact same marketing to them over and over again. Even award-winning, "best-of" Superbowl ads get retired soon after they premier.
BI is a capable source of wow creative, able to develop DR marketing that can knock established control off their perch. We've even beaten our own creations when asked to outperform control pieces developed by our own team. That's how to do the messaging portion in great DR marketing models. You WANT controls to be defeated. Each victory means your message is getting better and your model is getting stronger & more refined.
Let us take our best crack at developing new creative for your business. Any DR marketing model makes testing one source of creative against another a relatively easy affair. Let us demonstrate the BI difference in the most meaningful- and objectively measurable- way.
HOW BI CREATES HIGH-PERFORMANCE DR CAMPAIGNS
We take on each project from scratch- no preconceived notions... no pre-fabricated bias. Every project is 100% unique. We do the hard work to uncover a fresh angle(s) or an entirely new theme. Because modern buyers want to be wowed, we apply 21st-century solutions to the task- not the "same old, same old" formulaic tactics from 5-10-20+ years ago.
For example, our collective brilliance approach offers immense innovations because it brings the best of all 3 buyer impact dimensions into one powerful message. Since it is grounded in marketing science, you don't have to lean on hope that our recommended hooks, etc, are sound. There's little marketing voodoo... just solid work yielding "WOW!" creative.
We blend quality messaging with eye-grabbing imagery to get your pitch viewed... and the desired "call to action" answered. The challenge of getting prospect attention and holding it is not to be underestimated. How many email promotions that hit your inbox this morning:
- were flowed straight to your trash can without even a look?
- got a quick look and quickly followed the first group to the trash?
- actually pulled you in and got you to seriously consider whatever they were pitching?
- got you to pull out your credit card and "BUY NOW"?
We employ novel approaches to leap such hurdles, motivating more prospects to take a serious look... a crucial first step towards getting to close them.
DR creative can take many forms: email, mail, radio, TV, streaming video, social, etc. We will figure out the best one(s) for you as part of building you a new, better campaign.
Enormous passion goes into each new campaign as if we are creating a fine work of art. Decades of highly-tuned experience is the ultimate confidence booster. For:
- Internet promotions, we work in many mediums including email marketing, multimedia marketing, webinars, vodcasts, podcasts, infomercials, etc.
- direct mail, we've developed short format, long format, #10, magalog, tabloid, bookalogs, etc. (we've done them all).
Along with developing the creative, BI can also help you manage the campaign from end-to-end. This can include sourcing the ideal lists to test (a massively important piece of good direct response marketing campaigns), setting up the test cells,
executing the statistical testing phase of the campaign, measuring the results, recommending the lists that are roll worthy, executing the rolls and tabulating & documenting the final results. We can do ALL of this cooperatively with your people or up to turnkey if desired.
We have an extraordinary mix of long-term-proven, DR talent in our subcontractor network including premier, "A-list" copywriting & layout teams in both online and traditional mediums. List specialists, mail & email services, creative packaging groups, fulfillment services, video & audio specialists, campaign management, etc.- whatever is needed for the kind of DR to be done, we likely have the very best talent on hand ready to make it happen for your company.
Even if your current messaging is already doing well, we can help you aim higher. See the BI difference for yourself by testing us against your established control. If your business could benefit from fresh creative energy & experience, contact the Big Innovations team right now. We look forward to helping you find your next big thing.
