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Case Study: Customer Reactivation Using Postcards

Date: October, 2013 --

In this case study we’ll illustrate how an online apparel retailer took the novel approach of attempting to reactivate its members, who were either dormant or had unsubscribed from receiving email communications, with a traditional direct mail postcard campaign. This case study will illustrate how even an eTailer catering to a younger audience can benefit from direct mail, while also demonstrating how trying a different medium of communication can make all the difference in reactivating those chronic non-responders within your database. This case study is brought to you by Data Services, Inc. in cooperation with our friends at the Prescott Report.

Can you imagine reviving 45% of customers who have gone to sleep on you with a little, low-priced postcard?  That is what the Belgian “buying club” Outlet-Avenue did recently.

The company was founded with the goal of targeting young people with a fashion sense and restricted budgets, thus having an eye for, and appreciation of, the best brands, but at the best prices. The business model is “club” with a bit of a twist of exclusivity. While selling exclusively online, counter-intuitively, the club requires people who aspire to membership to be able to provide the name of an existing member in order to get past “the velvet rope.”    

Reinforcing the “exclusive” tone, the company’s slogan, intentionally chosen to be in English, is “Smart shopping for smart people”.  Of course the dual use of “smart” to mean both intelligent and “well-dressed” is not lost on young people in Belgium.  

Since the site sells current fashions and overstocks on-line exclusively, it needs to continually wet the membership’s appetite, which it has traditionally done with email and SEO efforts. These fade in effectiveness over time, apparently, and the company discovered that 45% of its customers were “asleep” and no long purchasing.

Of course, there might be many reasons for this lack of interest, not the least of which is that this demographic has a fairly short loyalty span, but the company suspected that it was possible that many of their unsubscribes were the result of an over-full mailbox, or possibly a bad customer service experience.

The legal problem with an unsubscribe is that the email channel is now closed, but the physical direct mail channel using the customer’s purchasing address is still open!  Hence the decisions to use a very simple but carefully focused postcard. 

The card is personalized to the inactive member and contains a warm and welcoming message, “We miss you!”, along with an offer of a €20 ($26) discount on the next purchase!

Through after-campaign market research to determine its effectiveness, the company learned that the campaign had a remarkable 62% recall rate, which is substantially better than the usual recall rate for the traditional retailers. Also impressive were the 59% reading rate, and 84% message retention rate. Moreover, a remarkable 64% of the promotion’s recipients had used or intended to use the offer to renew their membership.  

In addition, top-of-mind brand awareness of Outlet-Avenue has surged over its competitors, with an increase of 158% compared to the group who did not read the mailing.

The directness and simplicity of the card produced remarkable retention of the three primary messages:  "We miss you", "Register again" and "Enjoy this generous discount".

The company attributed an increase in on-line order of 3.95% to the postcard and calculated an ROI of 2.39 to 1.

This is a good reminder of two important points 1) Direct mail is a very effective acquisition, retention and reactivation tool even in the online and digital age and with the ‘Digital Generation’ and 2) In some cases those ‘Chronic Non-Responders’ are the result of the medium of communication and not due to a lack of affinity to your products/services. Be sure to talk to your Data Services, Inc. representative in order to discuss how our marketing technology/platforms and data management processes can help you better target within your database.