Direct marketers turn to RR Donnelley for a complete range of innovative solutions. The goal of the RR Donnelley Direct Marketing Tip of the Day Blog is to provide strategic direction to marketers on trends and techniques that are currently working for a wide range of direct marketers.


05/22/2017

When Will They Leave?

Understanding Slide1the churn in your customer base is important for survival.  

Fortunately, many enterprises have contractual relationships with customers that define probable churn opportunities.   Services such as phone, mobile, internet, cable, magazines, insurance, landscaping, garbage pickup, you name it: there is a defined event during which a customer may choose to leave.

For these business models, renewals is a well practiced routine.   It is also a significant opportunity to extend revenues.   So knowing when a customer is likely to leave is a trigger for catching that valuable asset before they do leave.   The expense of saving the customer is far less than the cost of acquiring a new one.

Set up a churn model in your business.   It may be used to identify potential:

  • Defectors: customers who cancel
  • Laggards: customers who fail to renew
  • Returns: customers who leave and then return later
  • Loss time: how long they will be gone before returning
  • Upgraders: customers who cancel to take a better service from you

Statistical analysis can be exhausting, and best left to the mathematicians.   Nevertheless, you have a responsibility to understand the causes and revenue impacts of churn.   You can achieve this insight in a number of ways:

  1. Reviewing customer records for timely incidents such as inquiries, purchases, product variety, payments, complaints, service calls, tenure, seasonality.
  2. Attribution of customers by source, channel, offer, promotion, referral, competitor.
  3. Overlaying customers with socio-demographic markers, eg. age, gender, marital status, children, own, rent, income, education for example.  There are literally hundreds of descriptors to choose from.

All of the above data-points are possible flags of a coming churn event.   Group your  churned customers separate from actives so you can inspect the suspect drivers of churn.   This is an oversimplification of the task, admittedly, but it is the foundation for building a churn model.  Leave the heavy lifting to the math experts.

The business case for building and using a churn model is easy.   You are extending stable revenue.   You are cutting the future expense of customer replacement and customer education.   Added to these, your oldest customers are your strongest asset for referrals, upgrades and low cost revenues.

05/01/2017

How Propensity Modeling Can Accelerate Your Results

Graph Pict

Behavioral scoring is not a new science, but it always has new applications.   If you are like most direct marketers, you probably have a propensity model for some segment of your campaign efforts.   But odds are, it’s for customer acquisition.

That particular focus employs numerous factors which you have manipulated to determine who will respond to your prospecting campaigns.   The algorithm is applied to rented lists which are screened according to your model scoring system.

Beyond prospecting though, here are some additional fruitful areas where propensity modeling can help you improve results, both top line and bottom line:

  1. Churn Prevention: identifying key groups of expiring customers who are on the bubble.   These lapsed or soon-to-cancel buyers will require special handling to keep them active.
  2. Upgrades:   these are folks whose past behaviors indicate their likely interest in buying more service-rich or premium versions of your product line.
  3. Autopay and AutoRenew:  within your customer ranks are buyers who are more likely to post a credit card with you for automatic billing or renewal, given the right set of conditions or offer.
  4. Reactivation:   these lapsed and departed customers will likely return to you without the need of a special offer to do so.  You just need to ask them.
  5. Eager New Buyers:   these are brand new customers, perhaps less than 6 months on the books, who will likely buy more frequently and in larger values than most new buyers.
  6. Promoters and Advocates: within your customer files are loyal and active customers who are likely to refer their friends to you in member-get-a-member, and buyer-get-a-buyer promotions.
  7. Testers and Samplers:   your most longstanding customers may live in a comfortable groove; but among them, there are many who will try something radically new if you present it.   This may be a new product, but it could also be a new sales channel too.

The purpose of scoring propensity isn’t to select a group of candidates in a binary sense: “in or out”.   Rather, scoring gives you the ability to incrementally weigh projected returns against the additional costs.   Scoring allows you to adjust to the optimum investment, eg. list size, for an expected return, keeping you inside your ROI guardrails.

Look for marketing efforts that generate cost, and decide whether a propensity model could improve ROI for those activities.

02/03/2017

House Committee Announces 2017 Postal Reform Bill

6a014e89d79f06970d01b8d25c012d970c-120wiOn February 1, the House Oversight and Government Reform Committee leaders introduced H.R. 756, which is known as the “Postal Service Reform Act of 2017.”   Bipartisan cosponsors of the bill aim to make the Postal Service more efficient by cutting costs, streamlining mail delivery, and improving oversight.   On Tuesday, February 7, the Committee will be conducting a hearing on the bill.  

 

Click Here for more information regarding reform bill details, including 7 key provisions, access www.rrd.com/postal_blog

11/16/2016

PRC Releases Approval For USPS 2017 Price Increase

Postal Bld 2On Tuesday, November 15, 2016, the Postal Regulatory Commission (PRC) issued its decision regarding the Postal Service’s 2017 Market Dominant Price Case.   The PRC approved implementation of the January 22, 2017 proposed price changes for: First-Class Mail, Standard Mail, Periodical, and Package Service.   Concluding that, “the proposed classification changes for these classes are consistent with applicable law and regulations.”

However, the PRC did not provide its approval on Special Services.   This category includes services such as Address Correction, BRM, Shipper Paid Forwarding, and instead stated, “the Commission will address the proposed Special Services price adjustments and classification changes in a separate order.”

 Click Here for all of the information, or access www.rrd.com/postal_blog

 

 

10/12/2016

USPS Files for 2017 Price Increase

Post Office BldToday the U.S. Postal Service filed with the Postal Regulatory Commission (PRC) a price adjustment notice associated with changes in the Consumer Price Index for All Urban Consumers (CPI-U) on market-dominant products.   Based on data from the Bureau of Labor Statistics, the Postal Service has inflation-based price adjustment authority of 0.422% for First-Class Mail and Standard Mail, and 0.871% for Periodicals, Package Services, and Special Services.   Within the filing, the USPS is seeking approval on several structural changes as well as a name change from Standard Mail to Marketing Mail which it feels better aligns with its customer’s use of this mail class.

 

 Click Here for more information including a summary and chart of the proposed 2017 USPS postal price increases, or access www.rrd.com/postal_blog

 

09/01/2016

Increase Loyalty With A “Leg Up”

Consumer LadderReward programs are used by many different organizations to help drive consumer behavior and increase customer loyalty.   To help maximize the entry and effectiveness of your loyalty program, make sure you provide your members with a “Leg Up” by including instant progress or a head start into the program.

Consumer researchers Joseph Nunes and Xaiver Dreze tested the effect of loyalty cards that offered instant rewards.   The researchers distributed car wash loyalty cards, with stamps, that allowed users to get a free car wash after 8 or 10 previous washes.   Two different loyalty cards were provided to participants:

  • One card required 8 stamps to get the free car wash, but had no initial stamps, all of the stamp spaces were blank - 0 of 8 stamps, or 0% progress.
  • The second card required 10 minimal purchases, but two of the stamps were affixed as a “special promotion” and entry into the program. Eight washes were still needed to get the free wash - 2 of 10 stamps, or 20% progress.

In the end, the researchers found that only 19% of participants with the first card, no initial stamps, purchased enough times to get their free car wash … whereas 34% of participants with the second card, two initial stamps, made it to the free wash.   Nearly double the loyalty.

Researchers also discovered a decrease in the number of days between car washes for the group with the two initial stamps.   On average, this group had 2.9 days less between visits, and the time between visits decreased by 0.5 days on average with each additional car wash purchased.   The decrease in time between car washes pointed to the increase in effort as the participants got closer to the reward.

To maximize your loyalty program consider offering sign-up bonuses, initial stamps or extra points.   Provide a member incentive that communicates "instant" progress and steps forward towards completing their goal.   Your members will be more likely to stick with it until completion, reach their goal quicker, and in turn you will boost your member loyalty.

 

08/19/2016

The Most Powerful Emerging Market

WomenWith incomes predicted to reach $18 trillion by 2018, control of an estimated 75% of discretionary spending, and power over approximately 60% of all online shopping … Women have quickly evolved into today’s most powerful emerging market.

These statistics may prompt you to look at your own marketing efforts and come to the conclusion to “target more women!”    And it would be great if it was as easy as creating and implementing a single marketing strategy.   But, marketing to women is a complex venture.   The truth is, every woman is an individual and to truly benefit from this powerful group thought needs to be given to demographics, lifestyles and preferences.   These factors strongly influence the type of content and engagement that will resonate with women.   For example, industry research shows that a woman under 40 is more likely to check her smartphone first thing in the morning, whereas a woman over 40 is more likely to check her computer and/or watch TV … and preferences change if the woman is employed full-time or if she is a homemaker.

Use these 3 guidelines to create brand experiences that will help draw women to your brand:

  1. Analytics, segmentation and testing are valuable tools, use these tools to help you discover and address distinct preferences within this market
  2. Seek to engage and build a relationship with your female audience using messaging that empowers her, and helps her strike a balance between time, money and well-being
  3. Remember, a woman can be an influencer, buyer, owner, and user, so help her to fully understand your product or service benefits so she can make an informed decision

When marketers get it right, the female consumer can have a multiplier effect through her social sharing and sales referrals.  

The women’s market is a driving force!   Targeting and tailoring communications to women that empower and meet her individual needs can help deliver more profit to your bottom line.

 

08/09/2016

Details Inside

Envelope SEnergize and pique your reader’s interest with the outer envelope.   Adding copy to an outer envelope, especially if personalized, can lift response by 30% on average.   Try using references to landmarks, local geography, postal service, speed, or urgent call to action.

For difficult subjects, for instance laser eye surgery?

Remember the big ideafocus on specific benefits.   Appropriate copy on the outside of the envelope could be -  “Thread a needle … Count the freckles on your child’s nose … Never squint at the TV again … details inside.”

 

07/15/2016

House Committee Approves Postal Reform Bills

Capital Bld 2On Tuesday, July 13, the House Oversight and Government Reform Committee voted unanimously to approve HR 5714, the Postal Reform Act of 2016.   The Committee also approved HR 5707, the Postal Financial Improvement Act of 2016.   Washington insiders are hoping to get both bills to the House Floor for a vote in September 2016.

Click Here for more information including important points of interest to mailers, or access www.rrd.com/postal_blog

 

07/14/2016

Time To Get Emojional - World Emoji Day This Weekend!

Emoji - Party Popper - MedWorld Emoji Day, is July 17th  

Emojis have the unique ability to convey a wide variety of emotional feelings without words and with only one small picture character. Emoji Smile - vsm Around since the late 1990s, the emoji has truly become one of today’s current phenomenons.  

Industry experts estimate that last year alone, tens of billions of messages with emojis were sent, and according to Twitter, more than 110 billion emojis have been tweeted since 2014.   Emojis have spread throughout Unicode’s blocks of numeric codes and the Unicode Consortium continues to add characters every year.   They are even used by the White House. Emoji - US Flag - vsm These emotion packed graphic characters have a remarkable year-over-year campaign usage growth of 777%, a month-over-month growth of over 20% … and increasing.   Industry sources report, email alone has seen a year-over-year increase of 7,100%.

To further underline emojis prevalence in today’s society, in 2015 for the very first time, the Oxford Dictionaries Word of the Year was a pictograph – or emoji. Emoji - Face with Tears of Joy - vsm Officially called the ‘Face with Tears of Joy’, it was chosen as the ‘word’ that best reflected the ethos, mood, and preoccupations of 2015.  

As marketers we understand the value that comes when brands connect with consumers at an emotional level.   Which emoticons may resonate with your audience and message Emoji - Exclam - vsm – consider these finding from one industry study:

  • Happy faces at 44.8% are the most widely used emoji Emoji Smile - vsm - Sad faces account for only 14.3%  Emoji - Sad Face vsm
  • Individual vs Brand usage:
    • Individuals using emojis in their own Tweets frequently use face emojis
    • Brands use more eye-catching emojis and those that evoke emotional responses
    • There are about six emojis that are common among both groups – these tend to convey emotion and build rapport -  Emoji - Heart - vsm Emoji - Thumbs-up - vsm  Emoji - Monkey - vsm  Emoji - Music - vsm  Emoji - Smile - vsm  Emoji - Peace - vsm

  • Americans love royal themed emojis - they tend to use emojis such as the crown or princess more than twice their British counterparts  Emoji - Crown - vsm
  • Mobile marketers are using emojis more often in their push messages
  • The retail & commerce industries have seen the largest growth in emoji usage, peaking during the holidays

Interested in using this creative tactic?   Consider testing usage of the Party Popper Emoji Party Popper - vsm, Sparkles Emoji - Sparkle - vsm, Thumbs Up Emoji - Thumbs-up - vsm or Wrapped Present Emoji - Wrapped Present - vsm to highlight or emphasize a communication.   If you decide to try other emoticons make sure you understand any hidden meanings, and overall placement within the context of your greater creative to confirm it contributes to the brand’s message and does not impair image or relevance.   Emojis are most effective when they are used strategically and with intention. Emoji - Money Bag - vsm Used successfully emojis can be a powerful tool for a marketer, they provide emphasize in a tone that you just can’t get with words alone. Emoji - Thumbs-up - vsm