Written by John Rooney
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In this series, we take a look at what goes into creating, launching, and testing a successful mortgage direct mail campaign. While this particular study features a loan modification offer, many of the best practices listed below can be applied to multiple categories in and beyond the mortgage industry.
Background
An established mortgage company was looking to expand its services to include loan modifications, and needed a marketing partner to help launch their new program. After doing their research, they came to us based on a referral from one of our existing clients. Starting from scratch, we built a comprehensive test campaign that revealed the winning formula, and one that far exceeded all ROI target levels.
Objective/Challenge
Bottom line objective: make the phone ring, and double the ROI. Sounds simple right? Well, It can be, but you have to do your due diligence. Rather than use a one size fits all approach, we chose to set-up a controlled test by comparing different variables - and tracked them closely. Part of the challenge was to decide which elements should be variable, and which ones should be fixed (more on that to follow). The ultimate goal was to identify the best responding list/mailer combination, and lock it in for long-term, sustained results.
Strategies/Tactics
Test marketing is always a good practice, but it’s also easy to over-complicate things if you’re not careful. With that in mind, we developed a short, one-month strategy that quickly delivered the variable data we needed, and equally important, provided a controlled “apples to apples” comparison among the test samples.
Variables: The campaign zeroed-in on two simple variables, combined into four test samples. This is where we ultimately answer the two biggest question marks: the list and the content.
Variable #1: The List - The 1st hypothesis was based on the use of lender name – specifically, whether to include it, or not include it. The pro: it lends legitimacy and instant association with the offer. The con: the lender name is based on the originating lender, and in most cases, is not necessarily the servicing party the customer is used to writing checks to. The second hypothesis involves the payment details. Is it better to connect with customers based on their payment situation? And where’s the fine line between offering just enough information vs. too much information? We chose to test two separate lists – each from a different credit bureau – leading us to the content potion of the debate.
Variable #2: The Content – With the list variables decided, the content came down to how to properly execute the two strategies: lender name and payment details. We developed two shells – one with detailed payments and one without. The lender name was set-up as the wild card that could be added to each format. The result was an arsenal of four unique test combinations, tagged as letters A-D (see samples below).
Letter Combinations: A-D:
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Letter A - Lender Name,
No Payment
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Letter B - No Lender Name,
With Payment
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Letter C - No Lender Name,
No Payment
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Letter D - Lender Name,
With Payment
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Fixed Elements: These common elements were chosen as fixed based on their historical benefits and results. In other words, they were selected as “sure bets” across the board, from the outset.
Snap-Pack Envelope: This format was chosen primarily for its high open rate. It’s meant to look important, secure and confidential – much like a notice you would receive from your own bank. Psychologically, the format also engages the recipient by “snapping open” the perforated edges. Tip: avoid common mistakes like using “scare tactics” on the outside (i.e. fines or imprisonment), and don’t pretend to be associated with the U.S. government – it will come back to bite you.
Snap-Pack style mailers are proved to have the highest open rate vs. standard envelopes.
Postage/Timing: 1st class versus standard postage? – let’s compare. We chose 1st class postage, which allows you to control the day of the week each piece arrives (give or take a day or two). To keep the test consistent, we mailed letters A-D over consecutive Fridays, for Monday/Tuesday arrivals. A USPS mail tracking tool was used to anticipate daily deliveries and call volumes.
As an alternative, standard postage, which can take 5-12 days to deliver, is good when you have established mailers dropping simultaneously in a cycle – plus it saves .10 cents per piece once the urgency become less of an issue.
Call Tracking/Testing
This final tactic is a must in any campaign, and can easily be linked to your in-bound phone system. We set up a call tracking account with four unique toll-free numbers, one per letter version. The system captures exactly which letters generated which calls, and includes detailed reporting on the call statistics.
Free call tracking offers multiple campaign benefits
such as unique 800#s, call recordings, and
comprehensive post-campaign reports.
The Results
After one month of due diligence and testing, there was one clear winner: the right combination of list strategy and mailer content. So, which of the four proved to be most successful? If you’re interested in taking your marketing to a whole new level, contact me today for a free consultation to learn all the answers, and then some.
John Rooney
Senior Marketing Consultant
www.blackbookdata.com/html/john_rooney.php
Toll Free: 888.818.3282 x105
Direct: 858.240.7848
Cell: 858.761.3003
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