How Mailers React to COVID-19 Matters

By Christopher Montana

LiftEngine Logo Full Color

VP of Business Development

Over my 25+ years in the Direct Marketing Data business, I have seen the ups and downs of our economy bring those associated with our industry periods of prosperity and, unfortunately, some incredible challenges. As our economy is in the midst of yet another week of significant shutdowns due to the spread of COVID-19, no one knows for sure how long we are going to need to battle consumers’ financial fears due to unemployment, falling stock prices and continued uncertainty. We do, however, have two things on our side: history and technology.

Looking at how direct marketers reacted to past economic downturns, as well as proven strategies and technologies not in wide use or available back then, I believe there is much that we can learn and apply to upcoming marketing plans during these unprecedented times.

Learning from Past Trends

The direct marketing industry has almost always seen a direct correlation between circulation, media spend, and the economy. As the economy experiences growth, we see an increase in the number of pieces advertisers are putting in the mail. Not surprisingly, when the economy starts to take a downward turn the inverse is true. In an attempt to reserve financial assets in hopes of weathering the economic challenges, circulation of housefile segments and prospect mailings are reduced.

Whether it was the wake of Black Monday, the aftermath of the Dot-Com bubble burst, or the duration of the Great Recession, the result of each economic downturn comes with a number of rippling consequences for each sector of our industry. With a reduction in circulation and lower response rates due to dips in consumer confidence and spending, housefile universes steadily declined at alarming rates across the board. As such, available name universes on housefile segments, list rental, and consumer co-ops files shrink, making prospecting in difficult times even more challenging.

Regardless of how much costs were cut, top and bottom-line revenue, as well as customer lifetime value, was negatively impacted for the short term.

As economic conditions improved, marketers were faced with a new challenge of finding familiar and proven pools of data that would satisfy now-growing circulation plans. The result was the need to test into new data sources, test deeper into proven data sources, and re-engage with lapsed customers, previously un-mailed, to win them back. The result was a long and expensive road to returning sales, revenues and customer counts to pre-downturn numbers.

While admittedly this sounds like a no-win situation, we do not need to follow the same path as the past. Today, there are tools available to maintain circulation while limiting risk. With many of these options broadly available, you can proactively protect your circulation and avoid more costly efforts to rebuild down the line.

Strategies for Efficient Campaigns

More Efficient Targeting with Predictive Data Models

With consumers now prioritizing their needs and purchases accordingly, your customer today may not look like your customers pre-March 1st. Instead of trying to hone-in on a moving target, consider leveraging or updating Predictive Data Models. While there are a number of options, here are the two simple-to-implement models we are recommending to clients:

Good Customer / Look-Alike

A “tried and true” approach to maximize response and ROI by simply helping you target prospects that mirror the lifestyles, demographics and spending habits of your best customers. Because these “best” customers may look different “post-pandemic” vs. “pre-pandemic,” it’s best to review both timeframes to determine how best to move forward.

Merge Optimization Models (aka MOM)

“MOM” takes a more unique ROI approach to protecting your campaigns. Instead of identifying the best prospects and or house-file segments to reach, these models provide insight into which records should be dropped from a mailing. The result is the opportunity to improve campaign ROI by eliminating potential unproductive names from a mailing, or to make room for more productive prospects.

Supplement or Complement with Social Media

Digital-Direct marketing through Audience Onboarding can lift direct mail campaign performance at a reasonable cost. There are a number of strategies we are implementing with clients to stretch their marketing buck:

Synchronize to Your Direct Mail Campaign

Run a social media campaign to your mailed prospects and customers while they receive their direct mail piece in-home. The added touchpoint is proven to boost response due to the multi-channel offer.

Supplement with Social Media Between Mailings

If a direct mail campaign gets delayed or canceled, fill in that gap with a social media campaign. It’s a cost-effective way to keep your brand front and center.

Engage with Lapsed Customers

Instead of reducing attempts to reach lapsed customers via an expensive direct mail piece, consider reaching out to them with a digital-only, special offer to get them to reengage with your brand.

We believe there are numerous ways to rethink your strategy to ensure you’re using your marketing dollars with reduced risk in times of uncertainty. We recommend brokers and agencies communicate these ideas with their clients. As always, we are here to help.

About LiftEngine

Since 2005, LiftEngine's primary mission has been to help clients better understand and connect with their most responsive prospects and customers, online or offline. Our expertise is behind the marketing campaigns of 400+ clients.

Behind LiftEngine is LiftBase, our proprietary addressable consumer database. Comprised of 250 million US consumers, 140 million US households, and 1,000+ enhanced data elements, LiftBase powers our audience development services and industry-leading products, PortalLink and LaunchPad.

Let's connect today!

Published on Apr. 23, 2020, Last Updated on Jul. 07, 2022