Multi-Channel Convergence - Bridging Offline & Online

Michael BloomGeneral ManagerDatran Direct

Dan ParzychVP Analytics

Presented by:

MULTI-CHANNEL CONVERGENCE:MULTI-CHANNEL CONVERGENCE: THE CONSUMER BATTLE BETWEENTHE CONSUMER BATTLE BETWEEN

ONLINE AND OFFLINEONLINE AND OFFLINE

Introductions…

• Leading email inbox marketer in the industry • Multi-channel and offline division of Datran Media• 175 million unique and permissioned email addresses

• 50 million multi-channel records with validated postals• 30 million multi-channel records with phones numbers

• Direct response email behaviors on every record

• Industry leading cooperative database serving the direct mail publishing and continuity industries

• 120 million unique direct mail consumers with validated postals• Direct response purchase and payment behavior on every record

Agenda…Agenda…Agenda…Agenda…

• Current status of the direct mail channel

• Value of multi-channel marketing

• 10 laws of multi-channel marketing

• 10 actions to grow YOUR business through multi-channel marketing

What You Will Learn Today…

$$ $$ $$

Postal Costs Postal Costs UPUP Paper Costs Paper Costs UPUP Acquisition Costs Acquisition Costs UPUP

Response Rates, Lifetime Values, and Profits Response Rates, Lifetime Values, and Profits ALL ALL DOWNDOWN

Direct Mail Industry

at a Crossroadsat a Crossroads

Mailable Universes Shrinking and the

Direct Mail Industry is In CrisisDirect Mail Industry is In Crisis

ACTIVESACTIVES

EXPIRESEXPIRES

Multi-Channel Success in Traditional Direct Mail VerticalsMulti-Channel Success in Traditional Direct Mail Verticals

PublishingPublishing Telecommunications Telecommunications & Cable& Cable

Credit CardsCredit Cards

CatalogsCatalogs

Non-ProfitNon-Profit InsuranceInsurance

Direct Mailers Cutting Volume and Shifting Budgets to Online

Into Multi-Channel PlatformsInto Multi-Channel Platforms

What is Multi-Channel Marketing?What is Multi-Channel Marketing?

INTEGRATED…..OUTBOUND…..DIRECT MARKETING…..VIA MULTIPLE CHANNELSINTEGRATED…..OUTBOUND…..DIRECT MARKETING…..VIA MULTIPLE CHANNELS

Direct MailDirect Mail

Mobile MarketingEmail MarketingEmail Marketing

Telemarketing

Focus today on DM and Email Search engine marketing and TV

Infomercials are not outbound direct marketing channels

Multi-Channel Marketing is Critical Because

Consumers Today have MORE…Consumers Today have MORE…

• Channel Choice

• Decision Power

• Product Options

• Product Knowledge

• Price Sensitivity

• Hectic Lifestyle

• Mailbox Clutter

• Demand for Convenience

The NEW Age-Old Adage of Direct MarketingThe NEW Age-Old Adage of Direct Marketing

REACH THE…………RIGHT CONSUMERRIGHT CONSUMER

WITH THE…..RIGHT OFFERRIGHT OFFER

AT THE…..RIGHT TIMERIGHT TIME

VIA THE….…….…..RIGHT CHANNELRIGHT CHANNEL

The 10 Laws of Multi-Channel Marketing

MYTH or FACT???MYTH or FACT???

Introducing the ……

##11

DIRECT MAIL AND EMAIL RESPONDERS ARE DIRECT MAIL AND EMAIL RESPONDERS ARE DIFFERENT CONSUMER SEGMENTSDIFFERENT CONSUMER SEGMENTS

MYTMYTH!H!

Datran Media & Alliant Data Joint Research StudyDatran Media & Alliant Data Joint Research Study

Direct Mail ConsumersDirect Mail ConsumersEmail ConsumersEmail Consumers

52%52% Match Match RateRate

The Same Customers Transacting via Direct Mail

Are Also Transacting via EmailAre Also Transacting via Email

New Insights in

Consumer Multi-Channel PreferencesConsumer Multi-Channel Preferences

The SAME consumers are buying from BOTH

direct mail AND email channels

• 44% have bought Family-Oriented products from BOTH channels

• 40% have bought Beauty and Diet products from BOTH channels

Demographic Profiles are MUCH More Alike than Different

Direct Mail vs. EmailDirect Mail vs. Email

AgeAge

IncomeIncome

GenderGender

20-30 7% 13% 186186

31-40 18% 22% 122122

41-50 24% 27% 113113

51-60 22% 24% 109109

61-70 15% 9% 6060

70+ 14% 5% 3636

HHI < $25K 18% 20% 111111

$26 - 50K 23% 26% 113113

$51 - 75K 21% 24% 114114

$75 - 100K 15% 14% 9393

$100K+ 23% 16% 7070

MALE 32% 44% 138138

FEMALE 68% 56% 8282

Direct MailDirect Mail Email Email Email INDEXEmail INDEX

##22

INTERNET SOURCED LIST RENTALS DO NOT PERFORM WELL IN DIRECT

MAIL

MYTMYTH!H!

• 85%85% Continuation Rate on Postal Tests

• 60%60% Continuation Rate on Telemarketing Tests

Datran Direct delivers internet sourced postal and phone direct response hotline list rentals monthlyonthly, weeklyeekly, and EVEN dailyaily

Winning Winning Categories:Categories:

Merch Merch BuyersBuyers

Auto Auto InsuranceInsurance

Credit Card Credit Card Applicants Applicants & Rejects& Rejects

Debt Debt ConsolidationConsolidation

Case Study with Leading Multi-Channel Agency Red Clay Media

Compiled Lists vs. Internet Sourced ListsCompiled Lists vs. Internet Sourced Lists

• PRODUCT: Elective Medical Procedures with $3K price point per procedure

• MARKETS: Chicago Kansas City St. Louis

• COMPILED LIST: Target core demographic segments (Age 23-50, HHI > $75K)

• INTERNET LIST: Target 0-30 day active direct response email consumers

• BUYING PROCESS: Direct Mail Inbound Telemarketing Doctor Appointment

• KEY PERFORMANCE INDICATOR: Cost Per Appointment

Direct Mailer in the Health Care Industry

Internet Sourced List Outperformed Compiled Lists in EVERY Market

$0

$100

$200

$300

$400

$500

$600

$700

CO

ST

PE

R A

PP

OIN

TM

EN

T

CHICAGO KC ST. LOUIS

DATRAN ONLINE-SOURCED LIST DELIVERS 40% LOWER CPA IN DIRECT MAIL

COMPILED LIST DATRAN ONLINE LIST

46% LOWER

CPA

30% LOWER

CPA

42% LOWER

CPA

##33

INTERNET SOURCED SELF REPORTED CONSUMER DATA IS NOT

ACCURATE

MYTMYTH!H!

Internet Sourced Self Reported Postal Data

Is Very Accurate Is Very Accurate

• Consumers want to get something from online registrations – Mortgage, Credit Card, Life Insurance Policy, etc.

• Many websites validate consumer Registrations at point of entry

• Datran Direct validates all postals nightly – Delivery Point Validation, CASS Validation

• 78% of self reported postals PASS Delivery Point and CASS Validation

• Dates of Birth are confirmed accurate (except January 1st spike)

• High match rates with national consumer databases (Alliant, Acxiom, Experian, IBehavior)

##44

TARGETING RECENT RESPONDERS IS MORE IMPORTANT FOR EMAIL THAN FOR DIRECT MAIL

FACFACT!T!

Recency is

More Important for Email than for Direct MailMore Important for Email than for Direct Mail• Direct mail consumers have a much longer “shelf life” than email consumers

• Direct mail recency measured in months and quarters (response 95% complete in 60 days)• Email recency measured in hours and weeks (response 95% complete in 5 days)

• Email recency is predictive of DM response BUT DM recency is NOT predictive of email response

• DM buyers did not perform any better in email than random consumer selects

• Email inboxes are MUCH harder to reach than postal mailboxes

• Only 1 mailbox but consumers have multiple email inboxes (1.4 per person on average) • Expired and undeliverable email addresses MUST be removed from lists

• Delivery to the email inbox is NOT guaranteed like delivery to the postal mailbox • Consumers use email inboxes for different purposes (transactional vs “disposable” emails)

##55

SENDING RELEVANT MESSAGES IS CRITICAL FOR DIRECT MAIL BUT LESS IMPORTANT FOR

EMAIL

MYTMYTH!H!

Relevant Messages are as Important

For Email as for Direct Mail For Email as for Direct Mail

• Irrelevant messages in direct mail are costly and wasteful at $.50/unit

• Irrelevant or inappropriate email messages are risky because they lead to high spam reports and complaints

• Internet Service Providers (ISPs) monitor consumer spam and complaint ratios very carefully

• Excessive complaints and high undeliverable bounce rates cause BAD things to happen• Loss of whitelisted bandwidth• Blacklisting• Complete shutdown of delivery channel

##66CONSUMERS USE EMAIL FOR SHOPPING BUT RELY ON DIRECT MAIL FOR BUYING

MYTMYTH!H!

Consumers Use Email and Direct Mail for both Shopping AND Buying

Consumers Do Not Have a Preferred Contact StrategyConsumers Do Not Have a Preferred Contact Strategy

SUCCESSFUL MULTI-CHANNEL CONTACT STRATEGIES LEVERAGE THE STRENGTH OF EACH SUCCESSFUL MULTI-CHANNEL CONTACT STRATEGIES LEVERAGE THE STRENGTH OF EACH CHANNEL TO DELIVER SPEED AND CONVENIENCE AND ENABLE MULTIPLE BUYING PATHSCHANNEL TO DELIVER SPEED AND CONVENIENCE AND ENABLE MULTIPLE BUYING PATHS

• Email Direct Mail Website Order

• Email Website or Inbound Telemarketing Order

• Email Website Order

• Direct Mail + Email Website Order

• Direct Mail + Email Outbound Telemarketing Order

• Email Direct Mail Email Outbound Telemarketing Order

Successful Multi-Channel Contact Strategies

Enable MULTIPLE Buying PathsEnable MULTIPLE Buying Paths

Email Direct Mail

Website TelemarketingORDERS

##77

MULTI-CHANNEL CONSUMERS ARE MORE VALUABLE THAN SINGLE-CHANNEL CONSUMERS

FACFACT!T!

Multi-Channel Marketing Delivers

Higher Response Rates & Higher Order Size Higher Response Rates & Higher Order Size

SEGMENT BSEGMENT B

EMAIL ONLYEMAIL ONLY

SEGMENT ASEGMENT A

DIRECT MAIL ONLYDIRECT MAIL ONLYSEGMENT CSEGMENT C

DM + EMAILDM + EMAIL

15-25%15-25% Higher Order Higher Order

SizeSize

15-25%15-25% Higher Higher

ResponseResponse

##88OFFERS THAT WORK IN DIRECT MAIL

WILL ALSO WORK IN EMAIL

FACFACT!T!

• Direct mail creatives can be repurposed for email

• Core principles of winning DM creative also apply for email• Precise and Credible Subject Line• Content Personalization • Engaging Short Copy• Visual Interest• Prominent Call to Action

• Increase response with consistent messaging across channels

• Email is the PERFECT platform for testing direct mail offers and creatives• Less expensive• Fast results

Will Also Work in Email Will Also Work in Email The Same Offers That Perform in Direct Mail

##99

LEADING DIRECT MARKETERS ARE ALREADY SUCCESSFUL AT MULTI-CHANNEL MARKETING

MYTMYTH!H!

Few Direct Marketers are Fully Leveraging

Integrated Multi-Channel Marketing StrategiesIntegrated Multi-Channel Marketing Strategies

•CHANNEL SILOS• Direct mail and email channels managed by different business units• Database systems do not integrate channels into a single platform

•COMPETING METRICS• Performance measured at channel rather than at overall customer level• Channels compete for revenues, profits, and share of customer wallet

•COVERAGE GAPS • Less than 15% email coverage on direct mail records• High percentage of emails are undeliverable or unresponsive

#1#100

MULTI-CHANNEL MARKETING REQUIRES HEAVY DEVELOPMENT AND

INVESTMENT

MYTMYTH!H!

10 Opportunities to

Grow YOUR Business Through Multi-Channel MarketingGrow YOUR Business Through Multi-Channel Marketing

I. VISION. Begin with a multi-channel vision and test plan. Vision is free and testing is cheap.

II. MISSION. Expand your Mission Statement. You sell TRANSPORTATION, not horse and buggy rides.

III. EMAILS. Incent consumers to provide multi-channel information. Ask for emails with every contact.

IV. EAPPENDS. Use eAppends and phone appends to enhance direct mail records. Benefits far outweigh costs.

V. BUDGET. Allocate 10% of your marketing budget to multi-channel testing. NOT testing will cost MUCH more.

VI. LISTS. Consider new internet sourced lists for direct mail testing. Online behavioral lists perform in DM!

VII. STRATEGIES. Create multi-channel contact strategies that enable multiple buying paths. Simplify buying.

VIII. TESTING. Use email channel to test new offers and creatives for direct mail. It’s cheaper and faster.

IX. CREATIVES. Repurpose direct mail creatives for email. Consistent messaging boosts response.

X. METRICS. Track campaign performance at an enterprise/consumer level rather than a channel level. Win-win!

Thank You!Thank You!

Q & AQ & A