Case Study: Verizon Targets Small Businesses with Direct Mail

It's Monday and that means it's time to focus on a marketing case study. This week we've chosen Verizon and their successful direct marketing program that targeted small businesses. The full case study can be found here, published by Deliver Magazine. We liked this one because it goes back to the basics of using traditional direct marketing tactics, such as significant testing, a creative package that will get opened and proper data targeting.

Pushing the Envelope - Verizon Reaches Out to Small Businesses

Challenge
It’s no secret that big companies often don’t do well when making overtures to small businesses. In many instances, their outreach efforts fail not because big businesses don’t have anything worthwhile to offer but because major marketers aren’t very good at holding the attention of small entrepreneurs.

Background
In fall 2006, the telecom giant began sending out a test mailing of direct mail pieces that bore a striking resemblance to an all-too-familiar office-supply staple — the interoffice envelope. Verizon targeted 11,851 small businesses with the envelopes, which featured the words “INTERNET NOTICE” stripped across the top and the crossed-out names of fictitious previous recipients. A final “name” — “Cable User” — was unobscured, a cue for business owners to “cross out” their cable provider and switch to a high-speed digital subscriber line (DSL) provided by Verizon.

The envelope was accompanied by a cover letter — with the heading “For Speed, For Features, For Price … Verizon Business DSL” — that was signed by Verizon small business marketing director Marquita Carter.

Results
In an interview, Carter explains that Verizon officials settled on the three-month “Interoffice Envelope” campaign after tests suggested its simple familiarity stood a strong chance of cutting through the promotional clutter that confronts many small businesses.

“The iconic look of an interoffice envelope — who’s going to just toss that out?” asks Carter rhetorically. “We tested this approach and got some really strong results. It bettered our control number by 30 percent.”

Carter says a test is part of every direct mail campaign at Verizon. The company sends out two or more different pieces of direct mail and measures which one generates the most calls and conversions to sales. The responses are benchmarked against the control campaign, which is the best campaign from the last direct mail cycle.

“We put a lot of time, energy and research into understanding what makes them (small businesses) tick, what keeps owners up at night and what are the approaches that are really going to get their attention,” explains Carter. “We’re always testing and trying to find ways using direct mail to get the attention of a small business owner.”

Such research is what helped Verizon’s business marketing team decide to target a select group of businesses with the Interoffice Envelope campaign. Rather than take a scattershot approach, Verizon targeted small businesses with particular connectivity needs, promoting services like its rapid FiOS Internet connection to companies that handle matters such as engineering designs, financial documents, X-rays, legal files and data backups.

“Our focus is on what we consider a sweet spot — small businesses with fewer than 10 employees, businesses that really form the backbone of the U.S. economy, businesses that really have a need for high-speed Internet,” says Carter.

And while Carter says that Verizon uses a variety of media to get the attention of small business owners, direct mail will remain a constant in its messaging efforts. “It may vary from quarter to quarter, but we always have a constant stream of direct mail going to small businesses,” Carter notes. “It’s one of the most efficient ways to reach them.”

There you have it--the classic direct mail success story!

Is it Spam or is it Your Direct Marketing Approach??

What is your definition of spam? In a recent article from DM News, Q Interactive and Marketing Sherpa teamed up for a study to find out this definition according to consumers. If you are an e-mail marketer, the results of the study may surprise you. Here's a snapshot of what the articles reports:

• 31% of respondents said that they consider "e-mails that were once useful but aren't relevant anymore” to be spam.
• 41% hit the "report spam" button if "the e-mail was not of interest to me,” 25% if "I receive too much e-mail from the sender" and 20% if "I receive too much e-mail from all senders.” (yikes, how am I responsible for all senders?!?)
  
• 56% thought that by clicking the button they would "filter all e-mail from that sender" while 21% believe it will notify the sender that the recipient did not find that specific e-mail useful so the sender will "do a better job of mailing me" in the future.
• 47% of respondents believe by hitting the “report spam” button, they will be unsubscribed from the list.

With all of the uproar around the increasing numbers of junk e-mails, you'd think that consumers would understand e-marketing better and -- at the very minimum -- know how to successfully unsubscribe from unwanted e-marketers lists! I guess we're not as far along as we think when it comes to e-mail. In fact, since this study resulted in the way it did, Q Interactive is urging the industry to better educate consumers on how to opt-out from unwanted e-mail messages.

E-marketing is an interesting conundrum. As a channel, it is such a boon to direct marketers because it is inexpensive and really easy to measure and track campaign success. Yet, I think the success of it is tied to many factors.

I was having a discussion with a colleague, Barbara Perdome of Grapevine Communications, and she really drove the point home. She shared with me that while many firms have been trying to cut down on direct mail expenditures because of rising costs of postage, printing, etc., many of those that she works with have pushed their DM campaigns to e-mail, and lessened the amount of direct mail campaigns. And, her opinion is that you can only do this if those who receive the e-marketing messages are going to be open to reading them. Let's face it, some segments of the population just aren't going to read e-mail messages.

And it takes just 1/2 of a second to hit the delete button.

On the other hand, most of us walk to our mailboxes each day and take the time to go through the mail that we receive through snail mail. We may still throw the marketing messages away, but Barbara thinks (and I agree with her) that more care is taken to look over each piece of mail prior to tossing it in the round file.

Another colleague, Robert Middleton of Action Plan Marketing, advises business consultants to send their marketing messages many ways, and when it comes to online, you've got to send multiple e-mail messages along with advertising it in your online e-zine and on your website. Why? Because people simply don't read every e-mail message that they receive. Even those who have opted-in on his e-mail marketing list and want to attend his seminars and workshops don't always read his message until he's sent out several versions of it. People are stretched for time -- and then there's the argument that everyone gets so many e-mail messages each day, it's impossible to (a) read them all or (b) really pay attention to what each one is saying/offering/selling.

You could argue that it is the same with direct mail -- and with telemarketing. I remember in my telecom sales days when we would do a dialing-for-dollars telemarketing sales day, we would have to call 20 customers in order to get one appointment. Sometimes, it was more like 30 or 40!

I guess the point is that you need to be delivering relevant information to people who are interested in your particular products or services. The only way to accomplish this is through a direct marketing approach where you examine the customers who buy from you today, and determine what they look like from a demographic, lifestyle and financial perspective. Then, you can target your e-mail, direct mail or telemarketing campaigns to your customers with messages that will most likely be of interest to them.

Of course, having the right creative is important, too. Your message has to be on target and your offer must be compelling. All of the pieces of planning a direct marketing campaign are very important.

However, if you aren't targeting the right people, your efforts may not have the payoff that you desire -- in spite of all of the other DM components that you've carefully crafted. Our advice is as simple as this: Use an intelligent approach for all of your direct marketing efforts to better hone in on a target group of customers or prospects. If you do this, those who you target will be less likely to hit delete, hang up, or throw your message into the trash can!

Case Study Monday: Manchester United

Senior Editor, Chantal Tode, of DM News brings us today's Case Study -- and it's a great one! This Case Study proves once again that when you utilize creativity within your direct mail campaigns, you will achieve excellent response and conversion rates.

Situation: As one of the most popular English football teams in the world, selling tickets isn’t an issue for Manchester United. The problem was that season ticket holders weren’t renewing until a few games into the season, delaying cash flow. In addition, the football club wanted to migrate season ticket holders over to its brand-new online ordering service, thereby reducing the significant resources dedicated to processing phone, mail and walk-in orders.

Approach: Interactive gift card publisher Serious USA Inc. helped Manchester United develop a direct mail campaign that went out to 60,000 season ticket holders in 28 countries. Approximately 50% of the mailing were mailed to names in the UK, 40% to the rest of Europe and 10% to the US. Attached to the inside of the trifold mailer was an interactive CD card which contained content such as interactive seat views letting users experience the view of the stadium from any seat in the stadium and exclusive branded wallpaper and screensavers. With one click, users were redirected to the Manchester United web site, where they could renew online. Season ticket holders who renewed by May 31 were entered into a sweepstakes.

“People are already in the computer domain when they’ve gotten the CD,” so it’s a compelling way to drive online sales, said David Brown, CEO at Serious. Plus, the exclusive content provided a way “to make sure recipients felt excited about the season and the brand,” Brown continued.

Results: Click-thru’s came from 28 different countries, with 54% of recipients clicking thru to various areas on the Web site. Over 20,000 season tickets were sold by the end of May, a month earlier than usual and 60% of these were renewed online.

Queens of the Direct Mail Soapbox!

Long Live Direct Mail! Say it loud -- say it proud! Really.

Guess what? Even though we have a plethora of direct marketing tools in our picnic basket -- and a lot of them are way cool, way sexy -- direct mail is still the most effective way to get your message out. Yep, there's been a new survey conducted about this very topic. A recent article in DM News by Dean Rieck states that:

A recent survey by International Communications Research concluded that people prefer receiving things by direct mail. Seventy-three percent of respondents said they prefer receiving new product announcements by mail, versus 18% for e-mail. And, a whopping 86% said they prefer direct mail for official correspondence, such as bills, bank statements and financial reports, compared to 10% for e-mail.

For those of us who have long lauded the benefits of highly-targeted, intelligent direct mail, this is music to our ears. Further, Rieck goes on to say that, "fewer people trash unsolicited direct mail when compared to e-mail, 31% to 53%." Now, we all love e-mail and it's very apparent that there are those who prefer to be communicated with via e-mail. However, this study simply points out that direct mail does still work -- and when you're trying to get a particular message out to a specific audience, you can do it quite effectively with direct mail.

If you're avid readers of this blog (and we hope you are!), you know that we're huge proponents of strategically utilizing all of the available direct marketing channels. And, by listening to your customer's preferences, you can make your campaigns very successful utilizing a multi-channel approach.

The point of this post is to remind you that as you plan your DM campaigns, don't rule out direct mail. When executed correctly, this channel is a great way to get your message across -- and an excellent way to ensure that it will not be ignored. You can use any format you like and many different methods of delivery.

Now, here's the next conundrum . . . how do you effectively utilize direct mail and be a "green" marketer at the same time? Because as more and more studies point out, both businesses and consumers are getting greener by the day. Something to think about as you go about your day!

Have a great Tuesday!

More on Grocery Loyalty Programs

The other day we commented on how Albertsons is canceling their frequent shopper program. No longer will they issue cards that shoppers swipe to receive discounts. In a nutshell, they cancelled the program because they weren't using the data.

Our comment was--what a shame that they didn't take advantage of the rich data to better serve their customers AND build more profitable, more long-term relationships.

Well, I came across some research that validates this premise. See the following article from "Promo Magazine", titled: Frequent-Shopper Data Improves Direct-Mail Offers: Valassis

The key finding from the research: "Using data from frequent shopper programs to target direct-mail offers can boost sales nearly 26%, according to research from direct-mail and FSI giant Valassis."

Perhaps Albertsons abandoned their program prematurely. Or maybe they just need some new marketing thinking!

TGIF. Enjoy your weekend. Happy 4th!

P.S. Valassis (the company that performed the research) offers their results at their website. The study is called: Swipe Past Common Benchmarks. How Frequent Shopper Card Data is Pushing Direct Mail Results Way Up. Good data for any consumer packaged goods marketers.

Direct Mail Favored by Consumers

Can you believe it? Our friend, Jerry Snyder, from NAC, one of the country's leading lettershops, shared a recent article from the June 18th printed version of DM News. (Try as I might, I couldn't find this article on-line, so no link. I'd be happy to send you the PDF of the article, if you'd like it.)

In any event, the article, headlined "Mail Still Consumer Favorite" provides research performed by International Communications Research. Their survey found that "despite today's digital world, consumers clearly prefer mail to other communications vehicles, such as e-mail, for receiving new product information and offerings as well as confidential business communications including bank statements and financial reports."

The article is full of key stats that compare DM to other media. It states that consumers are much more unlikely to throw away mail without opening it, than they are to delete an e-mail. Further, the study found that consumers found direct mail "less instrusive," "more convenient," and "more persuasive" than other media.

Wow.

RRW is always on the look-out for new channels for our clients. We keep up with changes in social media marketing, mobile marketing and other interactive channels and new technology. Of course, we won't stop this research and will constantly strive to bring fresh ideas and new viewpoints to our clients. (After all, that's our job!)

But, it's also important to remember that for many marketing initiatives, the old stand-by, direct mail, still is effective.


P.S. We blogged on a related topic a few days ago, relaying how consumers preferred to get their credit cards via direct mail. Just more food for thought and reason to keep DM in your toolbox.