Successful Direct Mail

Transcription

Successful Direct Mail
Being Effective With Less
Sep 2009
CONFIDENTIAL
CONFIDENTIAL
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Canada Post – key facts
•

Well respected brand

Canada’s Most Iconic Brand (Brand Finance survey 2009)

MacLeans’ Top 100 employers status (Mediacorp Canada Inc.) 2006, 2007, 2008

Among the most trusted federal institution (2007 Strategic Counsel survey – published
by the Globe and Mail)
Solid performance through extensive infrastructure

Consolidated group 2008 revenue: $7.7B; income before tax: $161M; margin: ~2%

Unconsolidated: 2008 revenue: $6.1B; income before tax: $66M; margin: ~1%

96% on time delivery standard for Lettermail service

45 million messages, mail and parcels every business day to 14.7 million addresses

~6,600 retail outlets, 21 plants, > 500 letter carrier depots, 23,000 delivery routes, >
6,000 vehicles

72,000 employees (four unions) - 6th largest employer in Canada.
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Modern Post - Overall Strategy
•
ENGAGE OUR
EMPLOYEES
Ensure our
people
understand
what it
takes to be
successful
INVEST
Build the
most
efficient
productive
post
Direct
communication
with employees
Invest in plants,
equipment and
technology
Bonus for all
employees
Use investment
to defend
current business
Focus on Health
and Safety
DIVERSIFY
Grow new
revenue
streams
Use newly-built
platform to deliver
new, near-core
products and services
Seek opportunities to
grow revenue in new
areas
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Our Postal Transformation (PT) plan
starts in Winnipeg
•
We launched our PT plan to invest in equipment, technology, and facilities,
as well as extensive new skills training for employees
•
Total required investment is estimated at $3.1B - is being managed in
phases until we can ensure adequate funding
•
First major investment is in Winnipeg: > $100M is being invested in
Winnipeg for construction of 3 new buildings
•
1 Processing Plant and 2 Delivery Depots (to be LEED* certified)
•
Scheduled to be opened in May 2010
•
New plant construction is creating between 75 – 100 jobs
•
Will maintain downtown presence
•
Currently working with the City of Winnipeg to relocate their Police
Headquarters to this site
•
As part of the lease negotiation, Canada Post will retain regional staff and
the Retail outlet in this location
* LEED = Leadership in Energy and Environmental Design
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Winnipeg – New Mail Processing Plant
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Definitions - Adminstration
•
Transaction Mail/Letter mail – bills, statements, personal letters – 54 cents
•
Addressed Admail – advertising mail – non fulfillment of service – 38 cents
•
Unaddressed Admail – targeted but not personalized mail – dist by postal
walk – approx 12 cents
•
FSA – first 3 digits of postal code – 5,000 – 13,000 homes
•
Postal Walk – postee route – 100 – 400 homes
•
Postal code – 6 digit postal identifier – 10-30 homes
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Media options:
There are more media options available today than ever before:
Addressed
Video games
Movies
Outdoor
Transaction
Out of
Home
Events
Unaddressed
Catalog
Mail
Corp page
Microsite
Web
Gorilla
SMS
Facebook
TV
National
Podcasts
YouTube
Email
Customers
Local
Reviews
Social
media
Specialty
Twitter
Second Life
Local
Radio
Print
Format
Flickr
Blogs
Newspaper (sub)
Satelite
Internet
Magazine
Newspaper(com)
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It is becoming a Pull vs a Push Game
I will decide which media I choose and when to listen!
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Trends
• Marketing vehicles need to be more effective at driving traffic
• Current prospecting lists are not meeting client needs
• Measuring customer activity is important
• Consistence of the customer experience continues to be a
challenge
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The Big Advantages of Direct Mail
It’s targeted. It’s measurable. It’s testable. It’s creative. It works.
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•
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•
•
•
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Helps to create loyalty and retain existing customers
Acquisition of new customers
Targeted to individuals by name, business and versioning
Less money is wasted on the wrong prospects
Responses can be tracked to calculate ROI
Test different offers, different lists and formats
Can be big or small in size – not limited to print formats
Message can be simple or complex
Best traditional media to drive online and most effective at building
business results
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Why are Companies Losing their Customers? (churn rate)
5%
4%
Lack of Contact/Interest
9%
Unhappy
Competitive Advantage
14%
Referral
68%
Moved
If you don’t take care of your customers,
someone else will!
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Business Strategies for Uncertain Economy
In an uncertain economy, the business strategies for marketing,
channels, IT, products, and customers change from “growing” to
“harvesting.”
Upturn
Downturn
In an upturn...GROW
In a downturn...HARVEST
Business growth
Acquire more customers
Grow existing customers
Marketing
Brand and name promotion
Service for current customers
Channels
Focus on reach
Squeeze value
Infrastructure/IT
Invest in IT
Optimize current IT
Products/Services
Divest non-core businesses
Add core capabilities
Customer Objective
Investment for revenue
Savings for efficiency
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Source: Peppers & Rogers Group, a division of Carlson Marketing Worldwide
2008.
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Why Direct Mail?
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Channel Preferences – stats*
• 52% of 18-39 year olds reported greater satisfaction in reviewing
mail over email
•Over 90% of Canadians read their mail in the same day the receive it
• 94% of consumers say they took action on promotional offers and
coupons they received via mail in the last year.
• One in five consumers report that more than 10% of offers and
coupons they receive by mail lead to a purchase.
• Close to 40% of responders have tried a new business because of
info received through the mail.
• 70% report renewing a relationship with a business because they
received a direct mailing or promotional item.
*Research Summary – 2008 DM News
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What Customers Think
According to Consumer Attitudes towards Direct Mail*
78% of Canadians agree that mail is a great way for companies to communicate
93% of Canadians (up from 91% in 2005) are opening their mail as soon as it is
received or later that same day.
72% of Canadians (versus 57% in 2005) look forward to what’s in the mailbox
72% say that mail is more private than online
60% agree that “mail helps me to stay on top of things in my life”
* The Value of Mail Study, Marketing Research CP #05-01, Leger 2005
Financial Brand Research, Marketing Research, Canada Post, 2005
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Who is reading the mail?
2003
2008
Men 18-34
65%
67%
Men 35-49
64%
77%
Men 50+
68%
65%
Women 18-34
76%
79%
Women 35-49
70%
86%
Women 50+
75%
78%
Source: Vertis Customer Focus Retail 2008- US
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Reason’s for opening the Direct Mail Piece:
Reason
Total Adults
Timing of the piece arriving coinciding with need
67%
Consumer’s name on the front of the envelope
66%
The package looks interesting
60%
A special offer or discount
54%
The package looks important
52%
Feel something in the package
51%
A free gift or token inside
42%
Dated material enclosed
35%
None of these
Source: Vertis Customer Focus Retail 2008 - US
5%
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What are they responding to?
Message
Total Adults
Coupons
71%
Buy one get one free
71%
Single item discount
63%
Percent off
59%
Gift card
52%
Everyday lowest price
37%
Grand Opening
36%
Gift with purchase
34%
Consumer tips
29%
Loyalty card offer
26%
Event invitation
23%
None of these
8%
Source: Vertis Customer Focus Retail 2008 - US
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The Nine Benefits of Direct Mail
1. Results are Directly Measurable
2. You Speak to Somebody, Not Everybody, Reducing Waste
3. You can vary the message to suit the recipient
4. You can do a complete selling job-even for complex product
5. Direct mail is a private medium (below the line)
6. It can build a Brand – on its own or with other media
7. Direct Mail can act as your sales force
8. Direct Mail can increase loyalty
9. Direct Mail creates a positive impression for a brand or company
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What is considered a good response rate for direct mail?
A "good" direct mail response rate is dependent on many factors, but the
three most important factors are: Target Audience, Offer and
Creative.
Other
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–
–
factors which affect response rates:
Type of program - i.e. acquisition or retention initiatives
Value of product or service - i.e. high value or low value
Ease of response or redemption of offer
Seasonality
Competitive activity
Average response rates range between 1% and 3%, but can be as low as
0.25% for high value items or in a very competitive market, or as
high as 25% when dealing with current customers.
Source: Canadian Marketing Association
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What makes up good Direct Marketing
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Targeting
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Frequency and Targeting
Seth Godin in his book Permission Marketing uses the anology of seeds and water to
demonstrate the importance of assuring frequency of promotional campaigns. If you
where given 100 seeds with enough water to water each seed once would you plant all
100 seeds and water each one once or would you be successful of you planted 25 seeds
and used all of the water on those 25 seeds?
While intuitively and even conceptually we understand the importance of frequency to
successful promotional and sales campaigns, somehow when it comes to actually
implementing the campaign, we opt to sacrifice frequency for reach. And then we (or
others) complain about the ineffectiveness of our promotional efforts.
When faced with the decision to mail
one direct mail piece to 10,000
people or 2,500 people four times
think about the fate of
those seeds you can only water once.
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Targeting with GeoPost
A value-added service for all Canada Post business
customers
Applied to:
- Unaddressed mailings
- Addressed targeting
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GeoPost Plus
Target by Geography
Target by Demographic
Target by Lifestyle
Target by Business
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GeoPost Plus
Target by Geography
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GeoPost Plus-Geographic
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GeoPost Plus
Target by Geography
Target by Demographics
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GeoPost Plus-Demographics
9Male
9Education
9Female
9Income
9Marital Status
9Occupation
9Families
9Travel to Work
9Children
9Dwellings
9Households
9Mobility
Geopost Sample
9Immigration
9Aboriginal Pop.
Variable list
9Ethnicity / Language
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GeoPost Plus
Target by Geography
Target by Demographics
Target by Lifestyle
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GeoPost Plus-Pyste Targeting
Pyste Clustering:
Lifestyle segmentation based on parameters such as:
shopping behaviour, media, vehicle purchases, profession,
family and income status.
Cluster 17
Young Technocrats (U2)
Fresh out of university and with a few years of work in technical jobs, these Young
Technocrats know the why's and wherefore's of the new economy. Still single or
coupling "informally," they live in rental housing and have some money to burn
travelling abroad or frequenting local venues. Having postponed starting a family,
this cluster can live a lot on $82,000 a year. With the third highest index for work
in professional and technical jobs, this cluster also indexes high on older, semidetached homes and work in artistic and cultural activities.
Cluster 21
University Enclaves (U2)
University neighbourhoods share a diversity of spirit as well as a diversity of
culture. As they cater to the needs of the scholarly crowd, these areas epitomize
an expansive urban lifestyle that takes advantage of each twenty-four hour day.
Their average income of $73,000 may fall in the middle of the bi-polar income
distribution of students and professors, but it nevertheless provides a spending
cushion for basics as well as extras. They ride bicycles or walk to work or school,
live in older apartments, and either have or are working on a university degree.
Psyte
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GeoPost Plus
Target by Geography
Target by Demographic
Target by Lifestyle
Target by Business
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GeoPost Plus – Targeting by Business
9 Number of Employees
9 Annual Income
9 Industry Type
9 Advertising
CBI Filters
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GeoPost Targeting example
Scenario:
A retailer is looking to launch a new location. The challenge they face is
how to reach their potential subscribers within a trade area.
All Canadians are potential purchasers, but selected Pyste clusters of
customers have a higher propensity, more disposable income and
potential to purchase.
Canada Post offers Consumers Choice – an opt-out unaddressed mail
program.
Selected Pyste Clusters (for the purposes of this exercise only).
12 - Urban Gentry
11 – Asian Heights
17 – Young Technocrats
21 – University Enclaves
36 – Pacific Fusion
38 – Sushi and Shiraz
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GeoPost Targeting example
Locations
Deerfoot
T2H 0L6
Northlands
T2L 2J8
All points of
call (10 km)
60%
match
50%
match
40%
match
188,271
51,906
56,493
59,140
172,333
50,468
53,846
55,986
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The Brick – Data Hygiene Case Study
Background
For a number of years, The Brick collected mailing information at
their point of purchase. This information was then used to
target customers with campaigns. But they saw a reduced
response rate and higher return rate year over year. Thus
higher cost per sale.
Solution
CPC working with The Brick applied a number of data hygiene
techniques. These techniques revealed that 29% of their
database where duplicates and 20.5% where invalide
addresses and 3% identified as moved.
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The Brick – Data Hygiene Case Study
Results
The test campaign demonstrated the benefits of data hygiene.
Volume of undeliverable was reduced by 20.5%
“The test campaign was a success and we’ll be able to apply
what we learned to future campaigns”. Says Tracy Wiberg,
CRM manager. “As a company that mails more than 10
million pieces annually, this will bring significant returns for
The Brick.”
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Creative
Creative-the other 30%
Even though a plain, white #10 remains an effective direct marketing device, it’s
good to know that we can spice it up a little… “9 out of 10 respondents
indicated that they are more likely to open direct mail if it looks
interesting”
Good creative can:
•Draw attention
•Drive open rate/action
•Build Brand (positive impression)
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Add Interest with Die Cuts
Get creative and stand
out in the mailbox, with
Die Cut “Postcards” and
Envelopes
Envelope Sample Courtesy of Innovative Graphics
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Toys
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Intrigue
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Campaign Integration
Subaru Canada
addressed DM
package that was
integrated with
their mass campaign,
giving a better ROI.
Sample Courtesy of Rapp Collins Canada
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Customer Interaction
Knorr Canada wanted
to get customers to
interact with their DM
piece the same way
they interact with the
new product.
Results: More than a
50% response rate.
Sample Courtesy of Rapp Collins Canada
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Interactive
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Fun with mail
Objective:
Create awareness of VW’s Touran
late entrance in the MPV market
Solution:
A mail pack using the spelling theme
bringing the car to life in a light and
playful way.
Results:
158,974 mailed, 9,611 prospected
Generated, with a response rate of
6.05% outperforming VW’s expectations.
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Senses
Objective:
Australia Allianz trying to reach new
potential customers, knowing that 30%
of businesses are under insured for fire
they wanted to use an unexpected
approach.
Solution:
A burnt smell piece with a die cut burn
mark. Included versioning for
trade, retail, generic and office.
Results:
37% conversion rate overall with
the scented version pulling a 2%
higher response rate.
Source International Post Corporation – Feb 2009
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Have fun with your message
Source International Post Corporation – Feb 2009
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B2B
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Play on
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Consistent Branding
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OFFER - Checklist
9 Call to action (web, phone, BRM)
9 Time limited
9 Exclusive/unique – not offered through other channel
9 Meets customer need
9 Timely
9 Perceived value
9 Brand trust – frequency of contact
9 Test/Control groups
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Direct Mail & Email
• 73% of people prefer to receive advertising by mail rather
than by e-mail.
• Only 18% prefer e-mail advertising.
The survey was done by International Communication Research, commissioned
by Pitney Bowes Corporation (the article did not state the date of research).
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Direct Mail & Email
Emails cause a sudden jump in response.
Source: Canadian Marketing Assn and Canada
Post Corp
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Direct Mail & Email
• Email boosted the response curve, but people still hang on to
traditional mail pieces for reference, and to help them place
orders.
• Use print and digital communications in a way that they can
support each other.
• Determine the most effective mix by:
– Testing the timing of email and traditional mail
deployment
– Following with careful analysis
Source: Canadian Marketing Assn and Canada
Post Corp
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Email friction
Stamps (remember those?) make direct mail work. Because it costs money to send a piece of
junk mail, you'll think two or three times before you mail something to a million people.
Email, of course, is free.
Except it's not. The friction that slows down sending email to everyone all the time is the cost of
all the people you'll lose. You might lose them because they unsubscribe, or more likely,
you'll train them to ignore you. Worse still, you might just make them annoyed enough to
badmouth you.
Drugstore.com made two mistakes with their relationship with me. First, they bought the lie that
opt out is a productive strategy. They unilaterally decided that I'd be delighted to get regular
emails from them, merely because I bought some shaving cream.
The second mistake? They didn't bother to be selective about what they sent.
I've never purchased diapers online, since my diaper purchases predate online diaper shopping.
And my hope is that I won't be buying Depends for another
fifty years or so. Drugstore.com should know this.
And yet, because it's apparently free to email me,
some lame brand manager says, "sure, do it!“
Except then I unsubscribe and an asset that is worth
ten or a hundred or a thousand dollars disappears,
probably forever.
Find friction and embrace it, don't ignore it
Source: Seth Godin
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Comparative Analysis:
VS
Newspapers
Unaddressed Admail
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Newspaper/FSI Distribution
*RAC 2007 Flyer Symposium – Flyer Advertising: The Big Picture
**0.70% increase in circulation over past 5 years
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Newspapers
•
3 methods of tallying # of people that might see your ad in
newspaper:
1) 7-day a week subscribers
• < 22% of the total # of HH in marketplace
2) Circulation:
• total # of newspapers distributed to
subscribers, convenience stores and
newspaper boxes.
3) Readership:
• Rule of thumb - multiply circulation by 2.25
Source: Kelco Marketing Group Inc.
1.866.835.7620 [email protected]
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Who’s Reading?
Readership with daily Canadian newspapers (Adults 18+)
RAC 2007 Flyer Symposium – Flyer Advertising:CONFIDENTIAL
The Big Picture
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Newspaper: Advantages
•
•
•
•
•
•
•
Reaches a profile of readers
National & local coverage
Immediate, tactical & newsworthy
Short lead time
Low production costs
Broad acceptance
Flexible & timely
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Newspaper: Disadvantages
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•
•
•
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Short life or staying power
Expensive to build frequency over time
Low coverage 22-30% HH subscribe and declining trend continues
Generation X & Y relying more on digital media for news and information
Results are not measurable by segment: demographics, psychographics, lifestyle profile or
geography such as postal walks.
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Coverage: Toronto Star Example
Home Delivery 7-Day Subscribers by Delivery Zone
Toronto Star Subscribers: 334,793
Total households in
Zones 1 thru 8:
2,010,457
Total Subscribers in
Zones 1 thru 8:
334,793
Average 7 day a week
subscription rate of
Toronto Star
Zones 1 thru 8:
17%
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Retailer
Example:
Antique Treasures
Store Located:
M9B
Target Audience: 5 km radius of store locations
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Customized Geography Based on Customer Data
Store Location
Boundary accounts for
71% of sales
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Cost & Coverage Comparison
N ew sp aper A d
A pproxim ate Co st
A d S ize
# of sub sc ribe rs in
T arge t Ma rk et
C os t pe r S ubs criber in
T arge t Ma rke t
% c over age of T arge t
M ark et
$39 ,742
Full Page ad
2 8,81 7
$ 1.37
1 9%
$24 ,821
1/ 2 pa ge a d
2 8,81 7
$ 0.86
1 9%
$19 ,429
1/ 3 pa ge a d
2 8,81 7
$ 0.67
1 9%
U n ad d resse d D irect M a il
A p p ro xim ate Co st
F lyer Size
Q uant ity printed
Co st per H H (pri nt,
pr ep & d ist ribut ion)
% co ver age T arg et
M a rke t
$39 ,742
11 X 17 f ull colour f lyer
2 37,9 76
$0 .16 7
156 %
$24 ,821
1 48,6 28
$0 .16 7
97 %
$19 ,429
1 16,3 41
$0 .16 7
76 %
Example of 1/3 page Ad size:
Cost of Advertising: $19,429
Total CPC HH in Target Area: 153,199
Total Toronto Star subscribers in Target Market: 28,817
Variance: 124,382 HH Do Not see your ad. Only 19% penetration rate
Using Unaddressed Admail with the same budget
could increase your penetration from 19% to 76%
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Unaddressed Admail Advantages
• 93% Canadians read their mail the same day;
• You can reach 100% residences and businesses, including all
apartments and condos;
• You can be creative, including sending samples of your
product;
• You can select and target Letter Carrier routes based on
geographic, demographic and psychographic criteria; you can
target prospects who look like your best customers;
• You can measure and assess your performance because you
know who responded within your targeted prospects;
• You can test a strategy on a small scale before rolling it out,
reducing your risk;
• You can improve your strategies and reallocate your dollars
based on your performance.
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Summary
Steps to successful DM:
1)
2)
3)
4)
5)
6)
7)
Know your audience and their need for your product
Target existing and like customers
Talk about value over price/discount
Be creative and intelligent with your piece
Test timing, offer, approach
Consider customer preferences for communication
Track your campaigns
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Questions and Comments
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