Marketing effectiveness – measuring the long-term impact of direct mail and other channels

In our previous blog post on return on marketing investment (ROMI) and seeing the bigger picture in terms of measuring the effectiveness of all marketing channels together, we explained why it is important to not only calculate return, but also track it over time.

The question is: what do you do if a marketing channel shows a declining trend, or if its ROI is less than other channels?

Pulling customers through the sales funnel

The temptation is to pull back tactically on that particular channel in favour of less expensive, and arguably more effective, channels. Moving the marketing budget to maximise effectiveness can happen frequently – however, most marketers know intuitively that channels can and should work together to pull customers through the sales funnel. This is often difficult to prove because media reporting is usually ‘last click’ only and/or is not granular or complete enough across all channels.

Some channels are more effective at influencing and raising awareness, others are better at converting and some work best in combination to keep the customer in the sales mindset. So, how do you prove this to a board of directors who may be looking for marketing budget cuts and who perhaps only see a sizable difference in cost of sale and ROMI between channels? And how do you know the longer-term impact of pulling back on some channels in favour of others that seem to be more effective?

Direct mail resurgence

Direct mail is a good example of a channel that, on the face of it, can be rather expensive and may be at the top of the list in terms of budget cuts. However, direct mail has seen a resurgence during the global pandemic period and, although it is still seen as expensive, it has some very interesting marketing characteristics.

Interestingly, in our recent blog post on measuring the carbon footprint of various marketing activities, Kg CO2 per sale for email was shown to be higher than for printed direct mail.

At UniFida, we have been studying direct mail results using our unique marketing attribution solution, which provides detailed ROMI over time for different channels. It also shows where in the sales funnel each channel is most effective with particular types of customers – i.e. existing customers, or those new to a brand.

Retail example

One of our retail clients is seeing some interesting results. In the graph below, direct mail in the form of catalogues is seen as most likely to impact sales in combination with another media channel and, by contrast, Search Engine is most likely to act on its own.

marketing channels working together graph

As this client expected, the ROMI for direct mail is lower than a number of other channels, but it is having the strongest influence at the start of the sales funnel – meaning that it is creating awareness, leading to new sales through encouraging steps, such as searching online and creating sales that otherwise would not have happened.

This is illustrated in the chart example below where the strength of direct mail activity is at the Initiator stage (the start of the sales funnel) against other channels. By comparison, for this company email has a stronger influence in the sales Closer stage.

Media influence in the sales funnel graphWhen we looked at the impact of media in converting new customers, the % influence of direct mail (catalogues) at the start of the sales funnel was even more pronounced, but email was less of a Closer and its influence on new sales was more evenly split across the sales funnel.

Quite often companies have individual contact details and permissions for direct mail and not for email, as customers find the former less intrusive. ‘Cold’ direct mail is also an option, with quality data providers offering targeted individuals with permissions to mail.

Speak directly to a targeted audience

Direct mail can work well for even the most complex propositions and, with third-party cookies being phased out, it represents an opportunity to speak directly to new, highly targeted audiences. It is also easy to test – however, it’s important to ensure that your measurement looks at the bigger picture in terms of ROMI.

Direct mail may also be adding to the effectiveness of the entire sales process, so you need to evaluate how it is bringing in more valuable customers than would otherwise be difficult to reach.

So, when looking at your marketing results, the challenge is to step back and examine the long-term impact of the marketing mix. For every channel you should consider the balance between individual channel ROMI, the interactions between channels and the role each is playing in funnelling sales.

Proof of concept

UniFida can deliver the required expertise and technology ‘out of the box’ to help you automate ROMI evaluation. We can start with a low-cost proof of concept to demonstrate how ROMI can be calculated for your business.

For more information email [email protected] or call + 44 203 9606472.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed. Our ambition is to help our clients stay empowered and ahead in this challenging environment.


Return on marketing investment – the importance of seeing the bigger picture

To use a couple of sporting analogies, every marketer wants to score the equivalent of a bullseye or a hole in one. In other words, achieve a high score with the minimum effort. But just as in sport, it’s not always an easy task – however marketers can hit their targets by relying more on expertise and data, rather than just chance.

It starts with accurate media reports measuring the effectiveness of marketing efforts and investments. A lot of companies make do with media reports that are either not holistic – i.e. they focus on one channel and don’t take into account the existence and impact of other channels – or they are just a ‘snapshot in time’.

In other words, we need to look at the ‘bigger picture’ in terms of measuring the effectiveness of all marketing channels together, as well as any seasonal variations.

Be strategic

This approach should be strategic rather than tactical; companies need to look at marketing metrics in the longer term, rather than take the short-term view. Not looking out beyond the immediate horizon can result in:

  • missing a steady decline, or increase, in a channel’s performance
  • a lack of insight into the performance of each marketing channel at different times of the year, so not understanding seasonal impacts
  • not determining the ability for one channel to boost the performance of another when it is switched on
  • not recognising the impact of budget reductions in one channel on another.

It seems that few companies are stepping back and looking at trends over time, with all the channels measured together. Econometrics studies go some way towards helping to achieve this which, although useful, can be time-consuming and expensive. Also, they don’t provide a clear view of the effects of seasonal marketing activities.

More importantly the outputs don’t have the level of detail – such as campaigns and keywords – typically needed to optimise digital channels and direct marketing.

Optimise channels’ ROMI over time

What is needed is an attribution solution that provides detailed Return on Marketing Investment (ROMI) data over time, measuring digital and direct channels alongside each other, with the ability to drill down forensically into campaign detail.

Such a solution can even indicate at what stage of the sales funnel each channel and campaign are most effective and with which type(s)of customers – i.e. existing customers or those new to the brand. The ability to easily see such trends in marketing performance over the long term reveals a number of key truths, such as:

  • an overall decline or increase in the efficiency of all channels
  • natural variation in ROMI due to seasonality, and
  • the interaction (dependence or cannibalism) across different channels.

An attribution solution with built-in ROMI measurement over time enables marketing teams to step back and take a fresh look at their marketing budget and media mix. It empowers them to make well-informed, multi-channel decisions about how to drive more sales from the right types of customers and deploy the whole marketing budget more effectively.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed. Our ambition is to help our clients stay empowered and ahead in this challenging environment.


Untangling complex customer journeys

Understanding customer journeys in today’s multi-channel world is essential to successful marketing. It’s important to understand the contribution made by each step in each journey, as well as the human complexity involved.

First, let’s start with some actual data about customer journeys. At UniFida, we looked at the journey steps before a sale for an upmarket fashion retailer and found that in 2021 66,000 steps that could be linked to customers, both online and offline. These resulted in 25,000 sales, meaning an average of 2.64 events per sale.

In another direct-to-consumer customer journey data set, 244,000 steps preceded 96,000 sales in 2021, an average of 2.59 events per sale. On that basis, it appears that 2.6 steps is the average in terms of customer decision making.

Number of channels

Then there is the question of the number of channels that are involved in these journeys. Research by our partner Haensel AMS in Berlin (see graph below) revealed that, as well as 2.6 being the average number of steps, customers are most likely to use 2-3 different channels to arrive at a purchase.

Customer Journeys graph

Haensel AMS also looked at the length of time customers normally take from the start of their journey to the purchase. Nearly 40% purchase in one week or less, while the remaining 60% take between 2 and 20 weeks. This suggests two very different kinds of decision making are at play.

Looking at individual customer journeys, there seems to be no consensus on the right path to take. Each of the two example journeys shown below used  different channels, but one has five steps and the other three, with one taking 28 days and the other 47. We could illustrate thousands of different journeys and you would be hard pressed to find many with similar patterns.

customer journeys table

 

Marketing effectiveness

So how do we turn this rich variety of journey steps into reliable evidence of the effectiveness of marketing activities?

One consideration is that marketers only pay for a proportion of all the customer journey steps, and of these, nothing for Direct Entry (although you could argue that Direct Entry is an indication of the strength of the brand and the customer’s relationship with it, which may historically have cost money to achieve).

Search engine events do not have a direct cost like a campaign, but they are more likely to lead to a sale if search engine optimisation has been well tuned. However, this still leaves a considerable number of paid-for channels from which marketers would like to measure for ROMI (return on marketing investment). This is where we can introduce the methodology that we have developed to at least untangle the financial return from each activity, if not the psychology behind the customer’s selection.

Three-step approach

  1. We start at the moment of the sale and build a data set of every online and offline step that preceded it in a 90-day window (it could be less, but many journeys take longer than four weeks).
  2. Next, we use maths to attribute a proportionate significance to each event preceding a sale. This is where we introduce a methodology developed by Haensel AMS which is based primarily on the time intervals before and after each step, but also on the amount of engagement with a website each step takes. In addition, Haensel provides a score to show the contribution each step makes towards the initiation, holding or closing of a sale.
  3. In addition, we can drill down and compare how new and existing customers are performing, or men compared with women. We can start to answer questions such as: does social media X interest our high value customers? Or what is attracting customers to buy certain types of merchandise?

Impact on ROMI

So far so good, but we don’t yet know what the effect will be of pulling budget from certain campaigns or channels, or increasing it. However, we can roll back in time with this attribution approach and look at earlier periods where spend was higher or lower in certain areas to see how this impacted ROMI.

To summarise, we have succeeded in developing a proven methodology for untangling the monetary impact of direct marketing activities. This can be very valuable when it comes to managing budgets or understanding what works and what doesn’t for specific groups of customers.

 


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed. Our ambition is to help our clients stay empowered and ahead in this challenging environment.


Developing use cases for a customer data platform

How can developing use cases for a customer data platform deliver what your business needs? Here we discuss how use cases came about and introduce key stages to successfully implement valuable marketing technology.

jigsaw puzzle

In praise of use cases… or ‘anvandningsfall’ as they were originally termed

Back in 1987 a Swede called Ivar Jacobson presented the first known article on use cases as a means for capturing and specifying requirements for computer systems. He didn’t much like their original long Swedish name and eventually settled on ‘use case’ which has since been universally adopted.

So why are we singing their praises?

Developing use cases for a customer data platform does not require technical knowledge, they allow your teams to collaborate on the desired business outcomes and uncover gaps. One of the key things with a use case is it ensures your stakeholders have defined the business need and, how the activity will be measured.

Developing use cases for a customer data platform

An example of a marketing use case is “Use data to deliver relevant, personalised omni-channel campaigns in order to increase revenue and reduce marketing costs”. The use case is pretty straight forward. The brand wants to communicate with their customers across multiple channels in order to generate revenue and potentially reduce wasted marketing spend.

Many businesses fail to develop core use cases to solve a problem or deliver on a strategy. By developing core use cases, which are prioritised based on the business goals and can be measured, it will give you the north star to focus on and deliver against your goals.

We see at least three stages in the process of successfully introducing marketing technology where they are of crucial importance.

Articulate and Document Use Cases

First by going through the discipline of articulating and documenting use cases a business can clarify exactly what they want this nebulous item, a marketing system, to actually do.

It provides a non-techy way for the requirements to be mapped out so that the user community can articulate step by step what both it and the system are expected to do, and what the outputs should look like.

It also allows for consideration of time. When and how quickly should processing happen including volume. Thus, allowing the system providers to get a handle on whether for instance they are dealing with ten thousand or a million customers.

Given that nowadays almost all martech is purchased off-the-shelf rather than being built inhouse, the combined use cases can help start the process of vendor selection. Rather than being told a long list of the glossy features that can be delivered by the martech salesperson, most of which you don’t want in the first place, the company can factually check whether the system being proposed can actually do what you require.

Develop the Business Case

Next, the use cases can feed directly into developing the business case. If for instance you are going to be able to do A that you couldn’t do before, how much customer value are you going to be able to generate compared to where you are now. Or alternatively how much staff time will be saved using the new tool to deliver B more quickly?

We find that business cases for martech generally span across four key areas:
1 The incremental revenue generated by being able to do something that was not possible before.
2 The cost of time saved by using a better tool to deliver something more quickly.
3 Reduction in technical debt by streamlining and unifying data and platforms.
4 Reducing reputational risk by having clear GDPR measures in place

Once past the business casing stage, many organisations will want to start with a live proof of concept or POC. If you select a few areas where the new technology should add value, and where it can be set up and configured quickly (please note I am not writing LHF!) then a POC can be put in place.

There is no better way to finally confirm that everything works from the technology to the customers responding to it. In addition, a live POC that works, gets quick buy in from all levels in an organisation. The POC will also pick up on what is not working and enable you to put it right.

Set Up, Configure and Deliver with the Use Case Specification

And finally, when the full martech needs to be set up and configured, the developers can take the use cases as the specification against which they are going to have to deliver. The company can sign off the configuration as done when the use cases work.

At UniFida we like to help our clients with developing their use cases at the start of the process of introducing a customer data platform. We do this for all the reasons articulated above, and incidentally it helps us understand quickly whether we can in reality deliver what you need.  Having developed several client use cases, we can help stimulate your thinking around what they might provide.

Our offer! We have made a decision not to charge for this kind of consultancy as it helps you understand what you need the technology to do, and for us to understand what we may be called on to deliver.

Please do get in touch if help with developing use cases for a customer data platform is what you are looking for.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Post lockdown marketing, did you grasp the moment?

You may recall our post from March where we provided suggestions on what marketers might do during the Covid lockdown. Now, as the lockdown starts to ease and we enter the new normal, we look towards marketing post lockdown.

For our part we have initiated a project concerned with multi-channel marketing mix attribution, working with a small team of graduates from University College London, and Edinburgh University.

Our mission is to find out if we can detect any patterns that hold true for more than one client that help us to understand the effects of timing and sequencing in how events prior to an order combine to contribute to the order actually happening.

So, for instance, is an email a week before an order more of a driver than a catalogue three weeks before, or a social media referral just a day before, and does it matter what order they happen in?

In a multi-channel world these are important questions, and we hope to have some definitive answers for you before too long. If you are interested to discuss this project, and how it might help your marketing post lockdown, please email us.

We have also been pushing full steam ahead with developing our UniFida customer data platform technology including:

  • Redesigning the way you can select audiences for campaigns to make the process much slicker
  • Integrating with Fresh Relevance for website and email personalisation
  • And with Microsoft Power BI for data visualisation

We very much look forward to talking, and even meeting, with you in the post lockdown period as business gets back on its hind legs again!

 


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


McKinsey has defined ‘Modern Marketing’ for us!

McKinsey’s March article ‘Modern Marketing: what it is, what it isn’t, and how to do it’ takes a bold look at all the enablers and capabilities required for marketing today.

Importantly they define the goal of modern marketing as: ‘to leverage data from all consumer interactions to creatively deliver as much relevant one to one marketing as possible’.

This is interesting, not least for some things it omits, such as developing brand awareness.

The article does however give a broad spectrum of their recommendations as listed in the table below.

modern marketing requirements

As providers of a customer data platform technology and data science, we can’t help being excited by the number of areas where the capabilities of our software and analytical services are required by the modern marketer, as indicated by the blue arrows.

Central to their concept of a customer-centric mindset is the need for: ‘a centralised data platform with a unified view of customers, culled from every possible touchpoint; the continuous generation of insights from customer-journey analytics; the measurement of everything consumers see and engage with; and the hiring and development of talented people who know how to translate insights about customers into experiences that resonate with customers’.

In another section they suggest that it is important to ‘elevate consumer insights and analytics’, and that ‘no marketing activities should be executed without the backing of relevant insights and the ability to measure performance’.

There is a lot we found to be of interest and we strongly recommend reading the full article.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Dumping Cost Per Click

Have you ever felt that you wanted to dump cost per click (CPC) as your measure of ROI but time pressures and lack of tools mean that you remain stuck with it?

We have just received an interesting report from LinkedIn Marketing Solutions which explains how a large proportion of digital marketers are still using CPC as their ROI measure for digital marketing.

But we all know that CPC, useful as it is, only describes one part of the customer journey.

Part of the problem is that, as the report explains, marketeers are under constant pressure to make decisions quickly; they have frequent budget allocation discussions and need to base decisions on something.

However, we suspect that a bigger issue is that digital marketers don’t have the tools to measure the true return, based on their overall contribution to sales achieved, from their different online and offline media.

There will often be multiple influences on the journey to a sale, and many of these can be offline, like things sent through the mail, or undetectable on your website, like opened but unclicked emails. It is only when you look at all the online and offline influences in combination that you can start to allocate the value of a sale back to its causes.

This capability is precisely what we have developed in UniFida, so that we can bring together everything that may have influenced each of your customers in the 90-day window before they placed an order.

When you can see for each order both its value, and all the events that led up to it, and then weight them according to how recent they were, you can then do the value attribution job properly.

If you would like to find out more about how we can help you solve this problem, do please send us an email, and we will arrange a call at a time convenient to you.

Read the full report ‘The Long and the Short of ROI’ from LinkedIn Marketing Solutions.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


Multi-channel marketing mix optimisation case study

This case study looks at marketing mix optimisation strategies used by an insurer to improve the spread of their marketing budget.

 

The Situation

A substantial insurer selling directly to consumers uses budget allocation software to optimise recruitment ROI across channels.

 

The Client’s Business Goals

  • To use historic campaign performance metrics combined with a channel mix performance model to inform budget allocation
  • To trial our budget allocation software called BAT to optimise the way that money is allocated over 300+ activities each year
  • To use the redistribution of budget recommended by BAT to challenge the current allocation of marketing budget
  • To generate as a result an uplift of >5% of value from the same amount of overall marketing recruitment spend

 

Marketing Mix Optimisation Solution

  • We set up a joint team with the client to analyse historic marketing campaign metrics stretching back up to three years
  • From these we developed some 20 different channel level saturation curves showing how ROI declines in any channel as spend is increased
  • The historic metrics, combined with channel saturation curves, were loaded into BAT, along with the client’s multi-channel mix performance model to handle halo effects and re-attribution of some of the web demand
  • We used BAT to run optimised budget distribution scenarios, introducing cut-offs at an activity level in terms of minimum and maximum permissible spends
  • We then undertook with the client a budget planning process review to fathom out how best to introduce BAT and its outputs into the current planning cycle
  • Finally we trained the client to use BAT so that they became confident to drive it on their own

 

Key benefits

  • The overall business benefit was to get a substantial uplift in the value of sales from the same budget. We are not allowed to quote the uplift obtained but it gave an ROI on the cost of our software and services well in excess of x 20.
  • A second major benefit was the improved speed to develop budget plans; with over 300 campaigns pa and multiple channels in play, budget planning was taking many days to complete. This has now been reduced to seconds once the parameters for a new scenarios have been set
  • Lastly BAT has provided planners with the benefit of a full audit trail; all input metrics, saturation curves used and assumptions made are documented for each scenario. Additionally the BAT tool now holds a saturation curve library for use in future planning.

UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.


3 problems that can arise when allocating marketing budget according to campaign ROI

What could possibly go wrong when allocating marketing budget according to campaign ROI? Well, depending on exactly how you do that, quite a lot actually!

 

Here are just three examples

  1. If you approve any campaign expected to provide an ROI > X you may be approving campaigns for which there may be alternatives that yield better X+++ returns. These may be different types of campaign with the same objective, or for instance the same campaign but just run at a different time of year.
  2. It’s well known that all channels can suffer from over-use or saturation, at which point their ROI will start to drop. Just think of the irritation caused by a TV advert repeating too often. But if you cannot tell what the cumulative ROI of all your campaigns in a channel is, how are you going to be able to measure this effect, and know when to reduce spend in one channel or increase it in another?
  3. Campaigns don’t just happen in isolation; they happen within the context of all the other campaigns that are happening at the same time, each of which may have an impact on a potential customer. Hence you spend on DRTV will impact your returns from direct mail or door-drops. Understanding the impact of your main channels on other channels can become critical.

So, how do you resolve these issues and get to the point where allocating your marketing budget takes account of them?

We have developed a process, and related technology, that is designed to help you get to this point. The way it works in detail varies with each client, because no two clients share the same marketing campaign mix, but the outcome will be that you have a marketing budget that should get you the best possible return.

Contact us for more information and a no-obligation chat.


UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.