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Case Study: Targeting Travelers with Multi-Channel Direct
Date: August, 2012 --
In this case study, we’ll discuss how a B2C
client in the hospitality/travel industry utilized a multi-channel approach to
increase response rates amongst both loyalty program members as well as those
on their prospect file. This program will demonstrate how this client’s current
customers and prospects positively respond to good offers presented
appropriately through direct mail, and were even more responsive when email is added
to the mix. We’ll also touch upon how response rates varied across mediums
between existing loyalty program members and pure prospects.
The organization in
focus is a relatively large one, serving approximately 4,000,000 customers on
an annual basis. The goals of this particular campaign were to increase the
number of customers in “luxury” categories, to increase membership in its
customer loyalty program and to investigate the effectiveness of direct mail
and email individually and when paired.
The company's primary
marketing strategy had previously been mass-media advertising involving zero
use of direct mail or other direct media. In fact, even members of the loyalty
program were communicated to mainly by email.
Discounts of up to
20% off the regular fares were part of the offer and loyalty program members
were offered opportunities to add benefit points to their loyalty account.
Using the common profile for current
customers within the loyalty program, in this case women aged 45 or older
having above-average levels of income and education, prospect lists of names
and addresses of consumers living in zip/postal codes associated with this
demographic were acquired.
These two populations, loyalty program
members and acquired names, were then subdivided into four categories, one of
whom received no communication and three of whom received direct communication:
direct mail followed by email, direct mail only and email only.
Colorful brochures were mailed in the
early part of the year, when many people make summer travel plans, and email
messages with similar graphics followed one week later. Telephone research
surveying began after the two campaigns were completed to explore the knowledge
of and attitudes regarding topics pertinent to the client’s business, intention
to travel and intention to join the client’s loyalty program.
The results prove conclusively that
the multichannel marketing combination of direct mail and email reinforcing the
main message are the most effective, and that direct mail alone is more
effective than email alone. These conclusions held true for both loyalty
program members and prospects.
For example, loyalty program members
who received the direct mail brochure had open, read and content-recall rates
upwards of 60% higher than those who received the email only. The prospects who
received both the brochure and email disclosed open, read and content-recall
rates more than 20% higher than those who received only the email as a
stand-alone. Loyalty club membership obviously matters.
Sales data were even more dramatic, but
somewhat puzzling. Loyalty program members who received only the brochure were 30
times more likely to buy than those who received only the email. Puzzlingly, those
members who received both the brochure and an email were only 14 times more
likely to purchase than the email only recipients. Among prospects, the
brochure recipients were twice as likely to purchase as the email-only
In short, the data suggests that enhanced
ROI is to be found in acquiring loyalty club members and continuing to mail
them offers. This may seem to be so obvious
as to not deserve mentioning; however, whether one should follow that mailing
with an email seems to us to require some more testing.
Note also the critical role of Address Hygiene
and National Change of Address (NCOA) in this case. A certain level of
incorrect or outdated addresses in the loyalty program member file could have
rendered the demographic analysis incorrect. As a consequence, the subsequent
selection of zip/postcodes and names would have been off-target, thus rendering
the test invalid.