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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 recipients.

 

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.