- Although testing and measurement are essential components of any direct mail campaign, they continue to represent a key challenge for marketers.
- Quad/Graphics’ Accelerated Insights is a cloud-based software platform that combines survey responses with predictive modeling to recommend the combination of images and words that will yield the best response.
- Accelerated Insights identifies which content combinations will pull the greatest response and which elements, in order of importance, are causing recipients to respond.
- In effect, Accelerated Insights creates a road map to align the story that a company wants to tell with what is important to customers and prospects.
By Lisa Cross
The decades-old method of testing direct mail, where various versions of the campaign are mailed to recipients and the response rates are compared, is receiving a digital upgrade. Quad/Graphics (Sussex, Wis.) has launched Accelerated Insights, a cloud-based software tool to enhance—and some might even say revolutionize—direct mail testing. This analysis explores the features of Accelerated Insights and describes its effects on direct mailing.
A Digital Method for A/B Testing Direct Mail
As any direct marketer can attest, A/B testing of direct mail campaigns is time consuming, expensive, and an anachronism in today’s fast-paced multi-channel communications world. Although testing and measurement are essential components of any campaign, they continue to represent a key challenge for marketers. According to Keypoint Intelligence – InfoTrends’ recent study entitled In Search of Business Opportunities: Finding the Right Prospects, US enterprise marketers’ top challenges are measuring marketing results and campaign costs.
Figure 1. Enterprise Organizations’ Top Marketing Challenges
N = 749 Enterprise Respondents
Source: In Search of Business Opportunities: Finding the Right Prospects, Keypoint Intelligence – InfoTrends 2017
Quad/Graphics has developed a digital process for testing direct mail. This newly-launched service is called Accelerated Insights, and the company reports that it offers the following impressive benefits:
- Reduces testing costs by up to 90%
- Increases response rates 18% to 27%
- Slashes testing time from two years to 60 days
The tool does not eliminate the need for mailing test packages; instead, it enables the expansion of what variables are tested. The mailing step confirms what the test predicted.
According to Andy Bear, Quad/Graphics’ Executive Director of Marketing Solutions and a member of the team that helped develop the platform, “Our decades of experience working with customers to fine-tune the tools, data workflows, and logistics of direct mail enabled us to develop a breakthrough approach to testing.”
Cloud-Based Predictive Modeling
Accelerated Insights is a cloud-based software platform that combines survey responses with predictive modeling to recommend the combination of images and words that will yield the best response. Instead of testing a direct mail campaign only via the mail, a survey is sent to a carefully selected group of respondents with characteristics similar to those of customers. The platform uses a sophisticated persona matrix that combines demographics with social and emotional characteristics to predict the factors that will motivate someone to act. The testing platform relies on a vetted pool of millions of survey respondents that are differentiated based on hundreds of characteristics. The technology draws from that pool to create survey panels that mirror direct marketers’ target consumers.
Based on the survey responses, a proprietary algorithm predicts which combination of format, offer, messaging, and imagery will be most successful. With that information, marketers can determine the most cost-effective package before sending out a single piece of mail. The figure below maps out the Accelerated Insights’ process for digital testing of direct mail campaigns.
Figure 2. Diagram of the Accelerated Insights Testing Process
According to Bear, the goal is to test all the elements in the direct mail package to determine the ones that make the most difference in influencing responses. He explains, “We test for things like the photo on the cover of catalog, images in mail pieces, headlines, offers—anything that we can represent in a survey as a short video, a short animation, a picture, or a series of questions.”
Quad/Graphics started developing the platform more than four years ago in response to customers’ requests for improved response rates and deeper insights on the effects of direct mail components. Another driving force was increasing postal rates. Bear notes, “With every postal increase, it became more important for our customers to better predict how a direct mail package was going to perform before they actually tested it. The historic scenario of two or three out of 10 A/B tests producing a winner is not acceptable in today’s world.”
The toughest challenge in developing the platform, Bear recalls, was generating an algorithm to deliver consistent and reliable results. He says, “The math is the secret sauce!”
20 Content Variables Tested in One Pass
The Accelerated Insights software categorizes respondents according to demographics, psychographics, occupation, geography, as well as the social and emotional factors that influence why someone makes a purchase. From this pool of survey respondents, the technology creates “look-alike” panels representing every possible iteration of the target audience for a campaign. Up to 20 content variables can be tested in one pass. In addition, the platform can evaluate how variables interact with one another. According to Bear, the platform can compare 1,200 iterations of the content variables.
In relation to traditional testing, Accelerated Insight’s proprietary predictive algorithm reportedly gives marketers 10 times the insights for one-tenth the cost of traditional testing, and offers statistically reliable projections that yield an accuracy rate of 97% (+/- 3%). The software identifies which combinations will pull the greatest response and which elements (in order of importance) are causing recipients to respond.
Bear elaborates, “Traditional testing costs, on average, are 8% to 10% of overall direct mail budgets. Accelerated Insights decreases testing costs up to 90% by completing tests in less time, accessing the expense of different formats, and reducing the number of printed tests.” Putting Bear’s comment in perspective, the tool offers the potential to bring testing costs down to only 1% of overall direct mail budgets.
Testing and Results
Limited Release Before Launch
Before launch, Accelerated Insights was in limited release for two years in several industries, including financial services, insurance, healthcare, and retail. Bear explains that those initial industries all had significant testing budgets, would benefit the most from a method that cut costs, and followed very sophisticated direct mail testing methods.
Finding the optimal direct mail package to motivate an audience to act is an ongoing challenge. Marketers often make minor changes to a campaign—a new color or image—that initially lift response rates by 1% or 2%, but do not move the needle enough over the life of the campaign. Bear reports that the Accelerated Insights platform, with its finely tuned survey panels and multi-variant testing, accurately predicts the best-performing audience segment and format.
The Proof is in the Results!
Quad/Graphics reports that Accelerated Insights delivered the following results in its testing phase:
- A national auto insurance company realized a 25% increase in response; the tool predicted a 23% increase.
- A national telecommunications firm’s testing budget was reduced by 55% after the software accurately predicted which campaign elements had the most impact on response.
- Guided a regional specialty footwear retailer to a 32% lift in response. The company outperformed its Key Performance Indicator (KPI) baseline by at least 200%. The retailer extended its use of Accelerated Insights into all marketing channels.
- Provided recommendations to a national life insurance firm that predicted an 18% lift in response. The actual increase was 19%.
Bear attributes the increase in response to the platform’s ability to discern what matters in the campaign and what does not, as well as which components matter to select segments. In effect, it creates a road map to align the story that a company wants to tell with what is important to customers and prospects.
According to Bear, “Marketers can get the complete picture of what works and what doesn’t through the Accelerated Insights Simulator, a cloud-based application that gives marketers secure access to all the parameters and results of the testing.”
Figure 3. Accelerated Insights Simulator
Quad/Graphics is offering Accelerated Insights exclusively to current and new direct mail and catalog customers. While the tool can improve direct mail response, it does not eliminate the need for mailing test packages. Bear does not recommend that customers go from Accelerated Insights to a full campaign roll-out. He explains, “Because there are a lot more things that affect performance than are in the simulator itself, we always recommend that customers do a roll-out test to confirm what the tool predicted.”
The Bottom Line
Accelerated Insights is an offering that can increase Quad/Graphics’ customers’ use of direct mail. The companies that are using it are improving response rates, marketing return on investment, and testing efficiency. In addition, it enables marketers to step into the analytical age and use data to drive design.
Investing in printed direct mail can be a risky business. Creating winning and affordable direct mail campaigns that generate leads, build customer loyalty, and increase sales is an ongoing marketing challenge. Accelerated Insights offers marketers the opportunity to minimize risk via a digital testing platform with high degree of accuracy in predicting success.
Lisa Cross is the Associate Director of Keypoint Intelligence – InfoTrends’ Business Development Strategies Consulting Service. She is responsible for conducting market research, managing custom consulting projects, and reporting on industry events. She also assists companies in developing multi-channel communication, marketing, and content strategies.