Direct-Mail Testing Upended With Bayesian Analytics 

Direct-mail marketers have relied on either A/B testing or multivariate testing to evaluate winning campaigns for generations. Those evaluations, unfortunately, weren’t always based on statistics, but on educated guesses or office surveys. But a confluence of technology and something called Bayesian Analytics now enables direct mailers to pre-test and predict responses before mailing.

Direct-mail marketers have relied on either A/B testing or multivariate testing to evaluate winning campaigns for generations. Those evaluations, unfortunately, weren’t always based on statistics, but often on educated guesses or office surveys. But a confluence of technology and something called Bayesian Analytics now enables direct mailers to pre-test and predict responses accurately before mailing.

Bayesian Analytics may well upend how we test to identify the highest profit-producing control more quickly and at a fraction of the cost of traditional testing methods. Bayesian Analytics is already being used in astrophysics, weather forecasting, insurance risk management and health care policy. And now, a few cutting-edge mailers have successfully used this analytics approach, too.

Usually, direct-mail marketers test four categories of variables, such as price, headlines, imagery and formats.

Within each of those variables, direct marketers often want to test even more options. For example, you might want to test the relative effectiveness of discounts of $5 off, $10 off, 10 percent off or 15 percent off. And you want to test multiple headlines, images and formats.

The following matrix illustrates the complexity of testing multiple variables. Let’s say you want to test four different pricing offers, four headlines, four imagery graphics and four direct mail formats. Multiplying 4 x 4 x 4 x 4, you find there are a possible 256 test combinations.

GHBlog100516It’s impractical and costly to test 256 combinations. Even if your response rate dictated you only needed to mail 5,000 items per test for statistical reliability, you’d still have to mail over 1.2 million pieces of mail. If each piece costs $0.50, the total testing cost is $600,000.

Bayesian Analysis works with a fraction of the data required to power today’s machine learning and predictive analytics approaches. It delivers the same or better results in a fraction of the time. By applying Bayesian Analysis methodologies, direct mailers can make significant and statistically reliable conclusions from less data.

The International Society for Bayesian Analysis says:

“Bayesian inference remained extremely difficult to implement until the late 1980s and early 1990s when powerful computers became widely accessible and new computational methods were developed. The subsequent explosion of interest in Bayesian statistics has led not only to extensive research in Bayesian methodology but also to the use of Bayesian methods to address pressing questions in diverse application areas such as astrophysics, weather forecasting, health care policy, and criminal justice.”

Bayesian Analysis frequently produces results that are in stark contrast to our intuitive assumptions. How many times have you used your intuition to test a specific combination of variables thinking it would result in a successful direct-mail test, only to be disappointed in the results?

Bayesian Analytics methodology takes the guess-work out of what to test in a live-mailing scenario. Instead of testing and guessing (as the late Herschell Gordon Lewis wrote in his recent column, Rather Test or Guess?) you can now pre-test those 256 combinations of variables before the expense of a live mail test. The pre-test reveals which combination of variables will produce the highest response rate in the live test, resulting in substantial test savings.

But wait, there’s another benefit: You can learn what mix of variables will produce the best results for any tested demographic or psychographic group. It’s possible to learn that a certain set of variables work more successfully for people who are, for example, aged 60+, versus those aged 40-59. This means you may be able to open up new prospecting list selections that previously didn’t work for you.

Again, a handful of mailers have already pre-tested this new Bayesian Analysis methodology — it has accurately predicted the results in live testing at a 95 percent level of confidence. Now that beta testing has been completed and the methodology is proven to be reliable, look to hear more about it in the future.

There’s more about this methodology than can be shared in a single blog post. To learn more, download my report.

My new book, “Crack the Customer Mind Code” is available at the DirectMarketingIQ bookstore. Or download my free seven-step guide to help you align your messaging with how the primitive mind thinks. It’s titled “When You Need More Customers, This Is What You Do.” 

When to Squeeze

A marketing email should not ever be an isolated interaction between you and the recipient—it should be a player in a concert designed to delight, woo and convert. Other players in this concert include forms, links, content, assets, and, importantly, landing pages or squeeze pages. For your recipients, these pages should

A marketing email should not ever be an isolated interaction between you and the recipient—it should be a player in a concert designed to delight, woo and convert. Other players in this concert include forms, links, content, assets, and, importantly, landing pages or squeeze pages. For your recipients, these pages should:

  • Provide a clear, concise path to becoming a customer.
  • Enable them to become customers.
  • Resolve any concerns they may have about becoming customers.

Let’s cover the basics:

A “landing page” is a web page, either on your site or hosted within your ESP or other site, that details the offer of your call to action (CTA). A landing page provides the visitor with several or numerous information sources or paths to engagement. For instance, you might link to white papers and videos that support your message (see Figure 1 int he media player at right), provide social media icons for connecting, or even reviewing options for feedback. In short, there is no limit to the amount of information you may include on a landing page—but more is not always better.

When more is not better, a squeeze page provides an ideal solution. A “squeeze page” is a Web page with a singular focus on the conversion (see Figure 2). Similarly designed to a landing page, it is without the myriad options one might find on a targeted landing page. On this page you’ll have no social icons, no links to your website, and only one option for engagement. As a mnemonic, think of a squeeze page as putting the squeeze on the visitor to do just one thing: complete the call to action referenced in your email.

Landing and squeeze pages provide you with ample opportunities for A/B and multivariate testing. Creating multiple versions of your pages, you can test messaging, buttons, images, color, formats (responsive or static) and much more. What’s more, combined with analytics monitoring, you can discern who’s visiting, for how long, what they did, where they go and so much more.

We have many clients who at the outset were performing some marketing (either direct mail or email), but in most cases were sending recipients to their home page—and without benefit of a tracking URL. There are two primary reasons you should never, never send your marketing traffic to your home page, 1) your home page should provide information appropriate for your general audience and, as such, does not specifically engage the marketing-message recipient; and 2) it is difficult or impossible to discern—even through analytics—which visitors came to your home page through other promotions, and which specifically visited your home page after having received your marketing campaign. These analytics are critical to understanding the behavior of your recipients, so don’t miss this opportunity to collect it, analyze it and act on it.

As you design your landing or squeeze page, use your email or direct mail piece as the guideline. Be sure you are directing clickthroughs to a page using the same art, same messaging and consistent branding. This similarity of design is comforting to the visitor and ensures they’ve come to the right place. Given they found the design of the email compelling enough to click, why spoil the moment? You already found what works, give them more.

If, however, you find that you’re simply not getting the conversions you expected, check the number of visitors first. You must have visits to gain conversions. If not, back up and take a closer look at the initial engagement and consider first things first. No matter how wonderfully written, artfully designed, and programmatically perfect a landing or squeeze page is, if your message does not drive your recipient to visit the page, your conversion rate will suffer. Ensure your message drives the visit before you give angst an audience over conversion disappointments.

If number of visits is within your acceptable range (but when is it ever enough?), work on the other players within your campaign, such as:

  • Form length
  • Form questions
  • Button design and placement
  • Text content
  • Links
  • Downloads
  • Supporting resources
  • Design
  • Programming errors

All of these elements can and should be tested and tracked through A/B and multivariate testing combined with analytics and heat-mapping. Using landing and squeeze pages makes this testing process easier and more reliable than trying to root through or make drastic changes to your site’s home page.

Taking this discussion just one step further, if a landing page simply doesn’t provide you adequate real estate, consider a “microsite,” a series of linked landing pages that spotlights your offer.

Sometimes integrated email means the integrated components within your campaign and rather than the components of the initiative. As you develop your emails, think beyond the inbox and give consideration to the end-to-end experience and what you can provide to your visitor in order to attain that elusive conversion.