Go Beyond RFM When Choosing Prospecting Files
Today more than ever, its important to understand the best possible way to get the most out of the lists you are selecting for your direct mail campaigns.
In the past, recency and monetary selects were the best way to boost response on an ailing list. But while many mailers still use these as the primary “go-to” segments, sometimes they are not enough. Marketers must think outside the box and consider modeling, enhancements and creative segmentation on their prospect files.
Don’t Dismiss Modeling
Modeling is not a dirty word. Some people feel it takes too long to create a model, it’s too expensive, their file is too small and/or it just doesn’t work. Don’t just dismiss it. A good model can show you like-responders, pinpointing those most likely to respond. A good model can yield solid results. It can uncover names that are not so obvious which would work for your offer and be very profitable in the long-run. There are many types of models and you have got to see what works best for you. Use them to create a snapshot of the mailer’s best customer and then test.
Enhanced Data
There are also arguments for and against ordering files with this type of information appended. Some brokers and mailers claim enhanced data performs worse than traditional files and are a weaker segment. But enhancements—when qualified and verified and culled from multiple accurate sources—can be a viable segment to test. They can pinpoint and target who your prospect audience is, making the assumption that you already know and understand whom you are trying to reach. Age, disposable income (as opposed to net worth), ethnicity, religion, and presence of children, are all very test-worthy first-tier segments.
You can then explore psychographics like hobbies, interests, and second-tier demographics like marital status, home ownership etc., to further qualify your prospects. Through data enhancements you can understand and explore the demographic and/or psychographic information available, gaining insight as to whom you are currently reaching (house file) or looking to reach (prospect files). Ask the list manager for their opinions as to what they are seeing work and not work.
Each file is different and each enhancement source is different as well. Do the research and test. Get creative with your segmentation of the files you are testing. Try seasonality. A six-month or a three-month segment may not be your best bet for your mailing. If you have a holiday related offer (like Mother’s day or Christmas), maybe you should test the previous year’s holiday-acquired names. Looking for end-of the-year donors taking advantage of tax breaks, try the people who responded during that time frame last year.
Try Multiples vs. Singles
Whether you are looking for donors, buyers, or subscribers you are buying into the loyalty factor here. Are single donors less loyal to their favorite causes because they are newer, thus more likely to respond to your offer? Are multiple donors used to donating to various causes and frequently and more likely to respond to your appeal? What are the buyers’ purchasing patterns? Have the subscribers renewed or are they new to file and less loyal? Do the research and test.
Here’s the Bottom Line
Recency and frequency are usually the first thoughts to boosting/tweaking response and average gift/purchase, and rightfully so. They are not the end-all to salvaging a list. In a market of ever-diminishing universes, it hurts to lose a good list so look at all the options available. Look at lifetime value, look at selects available, the enhancements, modeling availability etc. Do the research. Test, test, and retest… and if you have to, retest again. The lists you save may be your very best future files.
Bob Stein is vice president of list management at Trinity Direct.
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