The Deal: With Six You Get Egg Roll

In spring, a young man’s fancy turns to…testing.

It’s a sure sign that Spring is on the way. The March issue of Golf magazine arrived, and after the most dismal stretch of dull weather in recent memory, the green pastoral images of fairways and beach-like bunkers beckon irresistibly.

But among those pages floats another stimulant. Golf blew in 4 different subscription order cards. These 4 x 5-1/2 reply cards exemplify the art of mail-order merchandising.

One would ask, why do we need any cards? I am already a subscriber!

It’s all in the numbers.

True, for the longest time I used to let my subscriptions expire so that I could re-up and get the free gift. In the past our home was filled with calculators, phones, binoculars, hats, world maps and globes… all manner of stuff with somebody else’s logo on them. Not only did we like the goo-gaws, but it was fun to get them in the mail.

But Golf’s four order cards demonstrate the great science of offer testing. And there is practical beauty in that: when you understand what excites the buyer’s brain, you make more money.

Analysis

Each of the cards has exactly the same deal. One, two or three years for hefty discounted pricing off of newsstand. With each, the same gift premium is offered: a “Golf Distance Finder”.

I couldn’t use the distance finder. It would be perennially set at “Too Far” with only occasional gauging at “Fat Chance”.

Anyway, the cards are all different. The result of long, worried debates in Golf’s conference room about how to best wring a dollar out of a new sub, there are four gradations. Each effort targets a different dark corner of the golfer’s bunkered mind.

Card One: It’s blue, with giant GOLF titling. In simple fashion it provides the basic deal with a mention of the discounts off newsstand price.

For the unassuming habit-driven: "yep, sure, whatever."

For the unassuming and habit-driven: “yep, sure, whatever.”

A small un-captioned picture of the gift is featured with, “yours free”. This card is the control sample, and wins or loses on brand loyalty. Ideally suited for the unassuming, doubtless, committed player.

Card Two: It’s grey, with a smaller GOLF title, same deals but highlights “Your Price $16.00”. Understanding that some may not know what the gift is, “FREE Distance Finder” is inserted below the picture.

"The distance between me and the cup, and between me and Jupiter is negligible."

“I may never hit the green, but I can see Jupiter.”

This card is for the cash-strapped grinder who is figuring one year is just long enough to suspend the inevitable realization: golf is just a good walk in the wilds ruined. Or they figure $16 bucks is the right price for a telescope.

Card Three: It’s powder blue and screams to the wealthy and permanently, irrevocably, hopelessly optimistic, driven player: “Tomorrow will be a better day and the BEST DEAL! is a 3-year commitment.”

“This will be my year. Well, maybe, then again, sometime in my lifetime.”

The distance finder is featured, but it’s the 83% discount that grabs.

Card Four: This is the gutsy guarantee card. “Lower Scores. Lower Price.” is for the duffer who has journeyed through four painful levels of acceptance and will now admit they couldn’t hit a basketball with a broom in a closet.

“This year I will not tear up my score cards.”

They figure literature, technology and a little learnin’ might be the answer. If that still turns out to be a whiff, then they are ready to go for the money refund.

Results

At the end of the test, which could go on longer than the season, the Golf sales department will look at the results for each card, which got the most orders, which deal worked best for each card, which got the most email addresses, and which got the most money up front.

This is not a double eagle fantasy for statisticians. Rather, the results of this inexpensive test will predict which offer is worth rolling out in other media with the promise of the highest return on investment.

While solo direct mail may be proud of a $20 cost to get a new subscriber, the numbers may dictate that direct mail is still stronger than web display ads, email or simple on-page advertising. Knowing which deal is strongest can shave a few pennies off acquisition cost.

Long ago, we used to puzzle over the best offer: “buy one get one free” vs. “two for the price of one” vs. “50% off”.

It isn’t easy, but you can test.

Thanks for reading! Direct marketing tests are a way of life, and you never know when a new angle won’t build your margins unexpectedly. I swing at the ball with the same giddy optimism.

direct mail, Marketing

The Roots of Customer Loyalty

A 100-year-old brand backed by its owner.

We all have brand imprints that are part of our core. Coke, Kellogg, General Electric, Disney — these are trusted, bedrock brands we’ve known since birth. The most valuable brands today would be Apple, Google, Facebook–but not necessarily the most trusted, yet.

Then, there are those brands which court obscurity. Names like Zenith, Woolworths, IGA, Rexall…all in their time were once powerhouses.

A conventional envelope kit with 50 inserts, weighing in at only 3.2 ounces… a postal bargain.

So how is it that a company called Haband has 5,000,000 customers?

I wondered this puzzle when I received their mailing last week. Haband is a mailorder merchandiser founded in 1915 by two gentlemen: M. Habernickel and John Anderson. They sold ties to bankers in Manhattan.

Talk about product selection! Who wears ties today?

Clothing and footwear replace the original Haband product line: neck ties for bankers.

From their early beginnings the Haband brand grew to offer general merchandise, mostly, but not limited to, clothing.

Their style choices are not for everyone, and you would be right to suggest that your parents and grand parents would be more likely targets. Put another way, getting a Haband mailing is like getting an AARP mailing, only much later.

The secret to Haband’s success is the core… the essence of direct mail. A champion writes a letter to a customer, providing personal assurance about the desirability of a product.

The letter is central to the offer, and in this case, Duke’s guarantee of satisfaction.

Duke Habernickel is, I am guessing, the son or grandson of the fabled company’s co-founder.

The products in question range from duck boots to space heaters, from fleece pants to “ForeverSharp” razors. The broad selection is what I might have found in my late parents’ closets when we moved them into more modest and permanent surroundings.

Free gifts: knife, watch and pen. Suitable for any Haband customer!

But when it comes to direct marketing, what sells, and what doesn’t sell is more than personal taste. I have learned that my opinion does not count.

This is a platinum rule, maybe even titanium. Put another way, just because I wouldn’t buy it doesn’t mean that no one else will buy it.

Au contraire!

Haband is successful because it knows its customer very well, and the customer has a reciprocal expectation and trust in Haband. Thus, Duke Habernickel signs his name to a letter introducing no less than 46 items for purchase, plus another 3 free gift items to sweeten the deal.

The Haband mailing piece is itself unusual in today’s environment. With so many products you may have expected a catalog.

Instead, it is a low-color, 6 x 10 envelope stuffed with 47 individual sell sheets, plus letter and reply envelope.

The kit delivers 47 product sell sheets, from shoes to sharpeners.

The two-sided, 4-color sell sheets each contain the entire deal, embroidered with enthusiastic sell copy, and anchored with individual order form. They are printed on the lightest coated paper stock available.

While you may question the flimsy medium, Haband gets the 47-piece job done in just under 3.3 ounces, thereby capturing the lowest possible postage rate. By the square inch, each product has a digest-sized page of display. Pretty smart.

Duke’s letter is verbose, jumbled, effervescent, and personable. It is traditional, and lacks the slickness of general agency creative. The copy is laced with 28 “you’s and your’s” in addition to 8 personal references by name. More significant however are 7 “me’s, I’s and my’s” illustrating Duke Habernickel’s personal investment in the relationship.

It would be a challenge for many marketers to claim being “your friend”, but that’s what counts for Haband customers.

For some, the effect may be unctuous, but if you are a Haband customer, you are Duke’s customer, and comfortable with it. The personal touch is expected and welcomed.

The roots of customer loyalty are founded in matching customer expectations, tone and manner. Whoever, and wherever those 5,000,000 buyers may be, they will not be discounted as strangers at Haband.

Thanks for reading! I believe this is the first Haband piece I have ever received. I must ask serious questions about what demographic group I have now joined.

direct mail, Marketing

Walgreens Rolls Up Your Sleeve

This may be the best traffic builder ever.

This week we received a notice from Walgreens (at the corner of happy and healthy). It’s only August, but they are now targeting my left arm for a flu shot.

This is the painless inoculation that fends off the swarms of flu virus planned to put me in bed next February.

What is not painless, and what Walgreens has figured out, is the paperwork. The mailer includes the consent form that normally we fill out at the scene.

The pocket encloses the nefarious consent form we normally fill out beside the ointments display.

Kudos to the marketer at this famed drug chain who saw the chance to streamline the process, save a few minutes, boost traffic, and promote sales all at the same time.

Truly, the flu shot appointment is drudgery. Who wants to sit behind a curtain in a tiny corner getting stabbed? Who wants to fill out a two-sided form on a clip board, standing beside the first aid display?

Walgreens provides the form, by mail. Bring it in, and –poink– you’re ready for the needle. The only question to answer, “Which arm?”

This annual campaign is one of the easiest to master, and I am surprised more drug chains don’t use it. Selecting a list targeted at seniors is easier than falling asleep in front of the TV.

The creation of the package is simple: envelope and form. In this case, the programmers could have stepped up, and matched our street address to the closest Walgreens store, included its address and a map, but they didn’t.

The consent form is personalized. Walgreens could have included store# and address without much fuss.

They could have also matched our rewards account and popped a little note in the kit to personalize the event, but bedside manners may not be first and foremost in their minds.

Costwise, the investment is 45 cents a piece. With a response rate of 30%, the cost per visit is $1.50 ($0.45/30% = $1.50). Given that most retail traffic builders pull far less response, and usually offer discounts on top of that, this promotion is a winner hands down.

Walgreens gets the flushot revenue from Medicare, plus an in-person visit from a retail customer.

Surprisingly, the incentive is buried here: a $2,000,000 donation to the U.N., and an important deadline. Shoulda-woulda-coulda!

Passing The Zig Ziglar Test
This is a moment to validate the Walgreens mailer according to the late sales counsellor Zig Ziglar’s test for sales viability.

He posited, quite astutely, that there were five road blocks to making a sale. The Walgreens promotion knocks down each of these objections:

1. No Need– The target list is to 65-year-olds, prime flu victims
2. No Desire– Walgreens streamlines the paperwork, and further offers a donation to the United Nations Foundation for every inoculation
3. No Money– Virtually free: costs are covered by Medicare and most health insurance
4. No Rush– The offer does have a deadline for eligible donations, but Walgreens could have pushed this harder. See the fine print.
5. No Trust– Hey, this Walgreens–America’s favorite drug store!

Overall, with a few tweaks, a great, timely promotion.

I’ll look for the bottom line next February.

direct mail, Marketing

PCH and The Hard Truth About Pressure Sensitive

Yesterday we bought a sheet of stamps at our post office, and the smiling attendant cautioned me, “Those should only go on envelopes!”

“Sure..like I might put them on the fridge maybe?”

He responded, “Exactly. A lady came in last week complaining she bought set of stamps, and when she couldn’t find them, said they had all ended up on the bathroom mirror.”

Clear evidence of a youngster in the house.

That is the happy truth of stickers. “Pressure sensitive” if you are in the business. We love to peel them and stick them.

Stickers!

A few years ago at a “Bring Your Kid To Work” class we took great enjoyment in explaining how direct mail packaging worked. I gave a swarming group of ten-somethings a bunch of fundraising mail.

“Open it up, and look for the stickers, guys!”

While I was fumbling through the kit, I dropped the contents on the floor under the table. Down I went after them. After picking the pieces up, I re-emerged from below to find that every smiling face in the room was covered in address labels and Post-its.

Is there anything more attractive in paper than glue?

The shiny poly label attracts the eyes, and the fingers, just to touch…

Just for starters, the direct mail kit that succeeds is the one with the best offer, hands down. The trick is getting you to see, read and adsorb that offer before the envelope hits the can. Stickers are the slippery slope to cognition in direct mail.

Publishers Clearinghouse masters the technique, and here’s how they have excelled at the game.

This laminated sheet has two labels which must be peeled and placed on the order form.

Last week we received PCH’s latest deal, a 6 x 10 envelope announcing $5,000 a week for life to a lucky winner. Can you believe that?

Actually, yes. A 3% annuity on $6 million will do it, and PCH’s line up of advertisers will support that.

A stark wake up call: blunt and unapologetic.

The format lessons of PCH are worthy of attention though. Their outer envelope sports a permanent, shiny poly label alerting a likely agent at the lettershop where to place it. The label also alerts me that I am on the winner selection list.

I know, I know, me and 10 million of my demographic peers. But still, we believe what we want to believe and we hear what we want to hear.

The point is, the label adds zero value to the offer, but its glossiness rivets my greed gene. So I have to give pause for the $5,000 weekly stipend’s impact to sink in on my heretofore ascetic life.

The official document, suitable for framing.

On the back of the envelope is a long forgotten typeface that graced impact printers thirty years ago. 8-pt. type, sans serif, calling me out. Two phrases bring a momentary, primal galvanic response to my system: “you have ignored” and “your number will be dropped”.

The former kinda sounds like a warning, a scolding. The latter, sounds bad, like maybe, I am going to be fired. Yikes!

About now you may be thinking of PCH’s checkered past and all those dubious sweepstakes hypes they thrust on your grandad. Let it pass. That PCH came to heel back in the year 2000, and paid their debt to society. Chastened, they pay homage to the rules.

Not as impactful as a biohazard warning label, but reminiscent.

The second point of all that is that the PCH writers know how to wake us up. Just a couple phrases, and I am motivated. I open the kit.

Inside is a lot of paper. Lots of brochures with lots of merchandise, including magazines. Remember magazines? Of course you do, and alongside those are some of the most fascinating merchandise items that only last week you saw on cable TV.

The meat of the matter: this jumble of brochures is the workhorse in the kit.

Point three: there is an uninformed voice out there that believes neatness and brevity is the soul of direct mail design. This voice belongs to millennials and general ad agency creatives. Good direct mail that works leans toward messy, and hodge podge. That’s why it’s called what it’s called. But it works.

The key working tools in this kit however are just being revealed amid the clutter: a scratch off game, and even better, a bingo game with stickers.

There was no doubt the bingo would be a winner, but the labels beg to be placed, regardless.

Would you be surprised to learn that the scratch off game turns out to work in your favor? The numbers revealed all match…YES!! And the bingo card, well, those numbers come together after nine squares are covered. WOW!!

You wouldn’t be surprised, because you knew they were going to. So did I but I patiently stuck them all on the card anyway. Why? Remember the bathroom mirror story?

Point four: where the fingers go, the mind follows. While the skeptic may say we are too mature to play with stickers, PCH knows that under those layers of our supposed adulthood meanders the brain of a K-1 which just couldn’t leave them alone. That’s the hard and happy truth.

The scratch game is a winner. How can we lose?

Digging into the package we retrieve the order form which really looks like the chalk-lined floor of a triple murder. There are three hash-lined empty boxes waiting for you to supply the appropriate bodies, in this case…..stickers!

These shapes need attention, just like the kid’s patterned quiz, game and color place settings at Boston Pizza. Digging into the pile of paper I find a laminated piece that includes another label that needs to be popped out and stuck onto the order form.

The intuitive order form waiting for stickers, dutifully placed by yours truly.

Having completed two of the three boxes, I now go back to the kit to find two small stickers that I need to complete my form. Flipping through the kit I see that all of the merchandise can be mine if I tear off the coded stamps, and place them on the form.

I go for the 75-foot pocket hose, and a half pound of Lincoln Wheat Pennies.

Point five: good mail order forms are the picture of good mental ergonomics. There is a feng shui about form design that must be respected. They are completely intuitive, much in the same vein as a brand new Mac computer which provides zero instructions. The PCH form is beautifully designed, almost virginal, waiting for completion. It avoids the messy hodge podge noted above.

(Incidentally, we buried a Mason jar of pennies out behind the bath house at our cottage years ago. When we sold the cottage we spent a day feverishly digging holes to retrieve the jar but never found it.)

There’s something for everyone. Admit it: the frying pan is a winner, and you want it.

The rest of the kit is a workhorse, selling its wares, notably the non-stick frying pan you can scramble an egg on with a power saw and not leave a scratch. I should point out that there is also a letter enclosed, signed by a real person.

The sixth point that you must recognize is that despite the massive publicity and coverage that preceded this package, PCH is not too big to ignore the value of the letter. You shouldn’t either. Letters are in our cultural DNA. We like to read mail, and we like to be saluted by real, living people, and sometimes your letter is what wins a recipient over.

The carefully inserted form must display your number. Do NOT mess this up!

After completing the form, the reply envelope awaits, and it too gives the buyer a dexterity test, both with a tear-off flap, as well as a die-cut hole designed to reveal what may be, possibly, remotely, prayerfully, your winning number. No promises, but it would be foolhardy not to insert your order form in the proper manner.

Finally, the last sticker required brings us back to the beginning.

You will need a stamp.

Thanks for reading! If you think PCH is wasting its time and money with all the paper, games and labels, take note that they run this promotion frequently. It works.

direct mail, Fundraising, Marketing, Media

Battles In The Mailbox

The Memorial Day rush begins.

There is an ongoing, armed conquest being waged in our mailbox.

Whether it was my donation to a certain political party that flagged my name, or perhaps a popular consumer magazine subscription, the ensuing barrage of fundraising mail from veterans’ associations is non-stop in our mailbox.

Regardless, the creative pitches are stunners, and deserve a closer look. You are hereby invited to read my mail!

Most of these charities are profiled and rated on Charity Navigator.org, which strips away the emotion to detail actual performance against their stated missions.

Turnkey Office

As big as a door mat, and packed, too.

The Disabled Veterans National Foundation takes overwhelming force to a new level with their glossy, Flat-sized embossed package. Despite the red-stenciled “DO NOT FOLD” our faithful USPS carrier did just that to get it in the mailbox. It measures 12 x 15, and according to the weigh scales at our grocer’s fish counter, weighs 13.4 ounces. If that seems heavy to you, perhaps we have been paying too much for our halibut.

The field ready office with solar powered personalized calculator and stationery.

Inside this doormat-sized kit is a desk pad, calculator, calendar book and ball point pen. Along with this prefab office kit is a $2.50 check drawn on a Bank of America account. Surely a mistake, it is signed, dated and made out to me. In the enclosed letter, the writer, smitten with remorse, asks me to return the check.

Check mailings are iffy because in many cases the marketer needs to have funds held in escrow to honor the checks if, fates forbid, the recipients decide to take the money.

“Made in China”–The disturbing bug that must be shown.

This kit ain’t cheap. Postage alone is nearly a dollar, and considering the hand-applied “Philip Brown” label on the calculator, plus its die-cut and tensor-ribboned place mat, the overall cost has to be at least $4-$5 dollars each.

Which may explain why the kit was made in China– not an encouraging signal for U.S Veterans. I wait to see if they will send me a typewriter next year.

Parade-Ready Flag

Steel plate reveal: your own desk ready Stars & Stripes.

Wounded Warrior Project also approached us with a package, a 5 x 10 windowed boxlet displaying a real flag inside. This Army-green imitation steel-plated ammo box is nearly half an inch thick, so it’s non-automation all the way..40-45 cents to mail. The flag is intricately folded into a die-cut foam holder that also holds the addressed donor form, a hand-assembled product for sure… which explains again, why it was made in China. In the mail, $1-$1.50 each.

We’ll talk about cost/response in a minute.

Photo Wallet

A photo wallet… a hard to discard gift.

Wounded Warrior Project also sent along a separate request which included a 4×6, 20-page photo wallet. Inside a regular 6 x 9 envelope, this gift actually made immediate sense, and the wallet now holds images of our ridiculously brilliant, and beautiful grandchildren. Not being one to take anything for granted, we will reward WWP for the effort. Still, with postage, in-the-mail cost is 40-50 cents each.

Calling Cards

Ersatz calling cards stuck in place to get the letter opened.

Help Our Wounded, and Armed Forces Aid Campaign have learned how to affix 3 plastic phone cards to a page. Technologically, this is pretty cool, if not done by hand. The cards are stuck on top of each other and appear jumbled through the large glassine window….as if they were thrown in quickly, sealed and run off to catch the 3 o’clock mail. The impact, especially for the uninitiated such as me, is strong. Their job is to get the envelope opened, and indeed, the ploy works. Help Our Wounded, aka Healing American Heroes is not found on Charity Navigator. My bet is the mailing costs 50-60 cents all-in.

Going For Our Stronger Feminine Side

A pretty package with writing in mind. This one’s for Gramma.

Disabled American Veterans is the senior classman in veteran’s charities. Despite that, they have assigned a female status to my record, so I receive kits that reflect more genteel tastes than one might expect. Putting the gender bias aside, especially in North Carolina, this kit is in keeping with DAV’s efforts to send along quality gifts.

I can’t use any of this one, which is resplendent in lavender-hued Forget Me Nots. Still, if I was desperate, making a struggling attempt to write to my passed on mother, or to scratch out a hasty last will and testament, I have notepad, and mauve colored, simulated vellum sheets for assigning my debts to chosen in-laws.

The kit is tasteful, if gender specific, and is certainly an eye opener. DAV also uses real stamps on the reply envelope. While the accountants may come unhinged at this largesse, DAV’s frequent use of the costly stamps is proof that the presumptuous gesture works in bringing in more donations.

One wonders how many codgers will steam off the stamps, versus cross out DAV’s return address and use the envelope to pay their water bill instead.

All in, this piece must tip the scales at $2.00 in the mail. But it works.

Subtle and Cautious

Creative use of stamps–just enough to impress, but maybe a challenge for the USPS accountants.

The USO is the most conservative kit to ask us for a donation, and that is in return for a genuine Stars & Stripes Flag plus good feelings. I included this under-played kit because of their creative use of postage.

Non-profit letters get a privileged postal rate, somewhere between 8-18 cents depending upon address density and automation compatibility. USO chose to affix 5-cents worth of stamps to their outer envelope, and to use their postmark (#440) to make up the difference at the counter.

Their reply envelope reveals their cautionary approach to wasting postage money. Rather than place the full 49 cents on the envelope, like DAV, they are willing to go for 5 cents, but left the Business Reply Mail (bill us) indicia in the corner.

We guess that this itsy-bitsy effort will drive the postal accountants nuts.

In the mail cost: 40 cents, tops.

Drop Another Nickel

Just when you thought the nickel was yours, they want it back.

Paralyzed Veterans of America is one of several charities which has a conveyor belt from the US Mint to their mail room wherein millions of shiny new nickels are deposited on glossy label stock letters.

Just yesterday we discussed at lunch how many of us keep the nickel, which after all, adds up when everyone is mailing them, March Of Dimes excluded.

PVA’s piece is a max-sized letter, 5 x 11-1/2. This is a smart move because the postage is the same large or small, so you might as well get the most paper into the package that you can for the same price. However, nickel-enhanced gold foil labels are heavy, so the rule is to keep below 3.3 ounces or the rate goes through the roof. $1.25-$1.50 in the mail.

Did You Get Our Card?

Flowers, fuzzy puppies and kind sentiments… a happy birthday for some one.

The Veterans of Foreign Wars by comparison uses a tiny 3-3/4 x 7-1/2 envelope, aka a “Monarch” to ask the nagging question, “Did your special edition birthday cards arrive?” Somewhat reminiscent of the neighbor’s kid who knocks on our door to sell Christmas wrap. We still have six rolls from last year.

Well, yes, the cards did arrive. I am sorry, but so far I have not found a suitable target for them which are best described as lovely and softly sweet. My Mom might have liked one, but not from me. Again, these are estrogen-energized, and if I get my hands on the person who tagged me as female, I am going to scratch their eyes out.

A simple little kit, probably 40-cents in the mail, at most.

How Do They Make Any Money?

As you can see, these kits range in cost from 40 cents to perhaps $5 each all-in. Can a non-profit actually make a profit from these mailings? Check the Charity Navigator for details. You will be enlightened.

But realistically, the acquisition of a brand new donor will always be at a loss. The strategy is to keep that donor giving for a long time afterwards, hopefully with a final bequest of planned gift when they pass on.

“How the @#$%^%$$ will we ever make this work?”

For the accountancy gene in you however, rest assured that every fundraiser has a donor acquisition cost they won’t exceed. This is the anchor point in a campaign. To respect that restriction, a good forecast on the cost of a response is to divide the piece-cost by the expected response rate.

For instance, a piece costs $2.00 in the mail. This is big money, and the accountants are squirming in their chairs. But the marketing folks believe the kit will get a 7% response.

$2.00/7% = $28.57 cost per response.

If the charity can show that a new donor at that cost will stick around on average for 5 years and return $150.00 in donations, then that is a reasonable investment.

Meantime…

We are digging in for more incoming mail. Hopefully without flowers.

Thanks for reading! We do support our Vets and and respect all that they do. If you are inclined to donate to a cause, check out their website for a financial report, or visit Charity Navigator.

direct mail, Economics, Marketing, Media

Awakenings: What Happens When USPS Cuts Prices

Spoiler Alert: This Is All About Direct Mail Math

It was not a well publicized announcement, 10 days before Christmas, that the USPS will most likely cut the price of a first class stamp by 2 cents, April, 2016. That’s a 4% cut!

Whether the consumer figures out that a letter will mail for only 47 cents is a question, but for the direct mail community, the news is big.

First of all, direct mailers don’t talk cents. They communicate in thousands. (‘000’s.) A 2-cent drop in mail cost is worth $20 per thousand pieces mailed.

Hopefully the marketing folks at USPS have now awakened to the merciless mathematics of direct mail. In the civilian world, when we experience a cost of living increase, we suck it in, or look for a raise in pay to compensate.

In direct mail however there is a brick wall facing an increase in mailing costs. The reality is, mailers don’t manage by total program cost. Rather, they manage by cost per response.

For instance, if a charity spends $1,000 to mail 3,000 letters, it is because they expect to get a 2% response…60 donations, at a cost of $16.66 each.

That cost per response (CPR) is bedrock..an anchor around which all other budgeting decisions are made. So when the USPS issues a 1% increase in postage, the CPR goes up, which is unacceptable.

The Story Behind The Story

When the post office raises its prices, we experience the inelasticity of direct mail performance, because mailers must preserve that cost per response. The only way to do that is to spend less on something else, and that is exactly what happens: smaller envelopes, fewer pages, cheaper paper, less ink, for example.

The bogeyman in this reduction process is that the cheaper the package, the lower the response, which drives up the cost per response again!

The end game option in this vicious circle is to cut out lower responding markets, by mailing fewer pieces, and diverting funds to other direct media.

None of this helps the USPS.

Mail Trends 2008-2015 Prove The Point

In 2007 the USPS delivered 104 billion pieces of direct mail, its highest performance in a 240-year history. Next year, the U.S. economy had a collapse, and there was a 4.3% drop in direct mail. In 2009, there was another drop of 16.8%, eroding 21 billion pieces over two years.

From 2007 to 2015 Direct Mail volume shrank 24 billion pieces.

Revenues likewise fell from $20.8 B in 2007 to $17.3 in 2009. $3.5 billion dollars–gone. Looking for cash, the USPS raised its prices nearly 13% from 2006 to 2009.

The bottom line is that the USPS has held direct mail revenues in the $17 B tier ever since, with three more price hikes from 2009 all the way up to 2015. Its actual revenue per piece has gone up from 20 cents to 22 during that time. Direct mail volumes have stabilized around 80 billion pieces, down 23% from its stellar 2007 year.

What You Don’t See

Revenue per piece grew 10% while weights decreased 13%.

While the USPS has been able to weather the economic storm, the quality of mail has deteriorated. In 2007 the average piece weighed 1.83 ounces. In 2015 that shrank to 1.60 ounces, a 13% decline in paper, ink, pages and envelope. More post cards, fewer envelopes, fewer flats.

The irony in this is that the USPS is actually earning more money for every ounce delivered: 11 cents in 2007, versus 13.8 cents in 2015, a 25% increase.

The Good News

A 4% reduction in postage in 2016 may not mean much to the consumer, but to the direct mailer, it opens the door to better creative, design, and production. These lead to better response, lower cost per response, which drives up mail volumes. Whew!

This price cut is good, good news.

PS: Kudos to you for getting through this important math lesson! Please share.

PPS: You can check all the numbers by reviewing the USPS Revenues, Pieces and Weights report which they faithfully publish very quarter.

Marketing, Thank You

How To Save Your Brand

The most successful companies are those that everyone can place in a good story with a happy ending.

So it is that I can report to you that American Airlines gave us back our money, no questions asked.

It is a seemingly daunting challenge to get money out of a mega-giant company. $45 billion in sales, 339,000 employees, protected by walls of service teams separated by deep moats of phone boards, websites, fax numbers, procedures and protocol.

Still, it only took two phone calls and a personal letter to initiate a resolution that delivered two valuable e-vouchers which we will use by January, 2017.

The Customer Relations Department looked at our problem and said, “Yes!”

Ironically, the same day we received the prized e-vouchers we also received an email from an earnest worker in the “Refunds Department” saying, “No.” That was a belated response from our website submission of the original request, over three weeks ago.

We were delighted and satisfied with the turn of events, on many levels. First, we got our money back, no small deal in itself. Second, American did the right thing quickly, within 4 days. Third, and most important, American had recognized the value of a happy customer.

This last accomplishment is a twofer: of course, we will advocate on AA’s behalf, contributing to that word-of-mouth phenomenon wherein reputations are defined for good or bad. But on top of that, American reinforced our belief in the goodness of the relationship, and that is the ultimate customer satisfaction, knowing we haven’t been ripped off by someone we thought was our friend.

I can’t stress this last point enough. Brands live by their customer relationships. The better a customer knows a business, the more profitable the relationship. That’s because we buy more, we come back often, we cost less to service, and we bring our friends.

American Airlines’ Refunds Department, inappropriately named, failed on this test, but kudos to the Customer Relations Department that got it right.

Thanks for reading! Please share, and to the readers who wished me luck in this venture, I can say it all worked out just as I hoped, and expected, that it would.

Marketing

Customer Loyalty In The Balance

Can a world class company get out of its own way to keep a satisfied loyal customer?

Hopefully by the time this thought is completed, the answer will be “Yes”.

Right now I am waiting for a phone call from American Airlines, whose world wide revenue is $42 billion with 1500 planes in the air. 339,000 employees and 11.9% profit. The satisfied, loyal customer is me, and I am banking that AA will understand its role as my first choice in air travel.

Actually, it’s my second choice. My first choice, since I was a child has been to fly without mechanical aids of any sort. Or feathers. After that however, American it is, all the way.

We all have flight horror stories. Actually, not true again.

I do not have any nightmarish tales of terror-filled dives from 30,000 feet. No images of luggage bound for Hawaii disintegrating into shreds under a marauding gang of monkeys in Mumbai. I have never been displaced by an AA employee who didn’t try to make amends efficiently and with a smile. I like to think of myself as the perfect customer, and I want them to think that way too.

So it was, on September 22, 2014 that I paid American $1520 for two round trips to Barbados, departing February 3, 2015.

On flight day however, a severe medical event put our plans on hold. Speaking to American, the reservationist said, “No problem, we will get you on the same flight tomorrow. Here’s two new tickets. Hope you’re feeling better!”

Next day comes, and we don’t feel any better, so the trip is off.

Calling the reservationist at American, they take it all in stride.

“That’s okay Mr. Brown. You have until February 3, 2016 to use these tickets. It’ll cost you $400 in change fees, but there it is.”
Writing all of this down, we circled our calendar to plan a trip before February 3, 2016.

I am pausing here to listen for my phone to ring. I was told to expect a call from American shortly.

Anyway. Just before Christmas, I opened up the AA website, and scheduled a trip to California. Then I called American to see how to use my old Barbados tickets.
“Oh, sorry Mr. Brown. You needed to use those tickets by September 22, 2015, the anniversary of their purchase.”
“That’s not what I was told.”
“You were misinformed.”
“What do I do now?”
“You can go to our website and try for a refund. Is there anything else I can help you with?”

All those warm and cosy feelings of customer loyalty and goodwill are drifting away, like 1,520 dollar bills swirling around the sewers of my jaded imagination.

No call yet, as I stare at my phone, but I am still confident that the Supervisor of Customer Service Supervisors is going to call me with understanding, and good news.

As instructed, I submitted a claim for our two tickets to be refunded. This was tricky, because they only give 250 words capacity to state one’s case. This is compounded by the site timing out, which means I had to enter it twice. I recorded the case numbers, as the site said it would require 4 days to review the request. Ever hopeful of a logical, fair-minded manager seeing the obvious justice of my request, I closed out and went on Christmas break.

Yesterday, recovering from Christmas, I visited the website, plugged in my case number, and was informed, “No.”

Stunned, I troubled myself with doubt. There has to be a mistake. Heck, there IS a mistake. They said “No.”

So, an hour ago I decided to re-wind the tape and try again. Back onto American’s website, I scheduled our California trip again, put the booking on hold, and then called American reservations to use my Barbados tickets.

I had my story prepared. The California trip is $984, so I figure this is a satisfactory deal: they honor their $1520 client with a less costly trip.

Linda, a friendly and concerned reservationist listened to my story.

“Yes, you were misinformed all right. Let’s talk to a supervisor. Please hang on. Don’t go away; this may take several minutes, but I won’t lose you.”

I think then she may have gone to help some hapless flier whose baggage was crushed by a forklift, but as promised, she came back on to introduce me to Stacy, another friendly and concerned, super-supervisor.

After hearing my story, she advised that I need to speak to a Super-super-supervisor, who unfortunately does not take incoming calls, but will call me within 2 hours.

Before we hung up, I asked Stacy, “Do you know what it’s like to have $1520 taken from you? If you had that money right now, what could you buy for yourself?” I went on, “I am a loyal American Airlines customer, an AAdvantage member since 1990. I have earned over a million miles. Please be sure you pass that along to your supervisor.”

I nearly tore a hamstring just now as the phone rang. Leaping to the desk to answer, after a pause I heard a tinny voice on the line: “Hello, this is Carmen. This is about your credit card, and will be your last notice…” .

I wish. Slamming down the receiver, I returned to the keyboard to wait for the important call. It should be soon. Within the next 60 minutes or so, anyway.

Since this issue first arose, I have had time to think back over the years of traveling on American. Living in Chicagoland, I have parked hundreds of times next to the south elevator on Level 4 at Terminal 3, and taking the escalator to AA ticketing.

Back then, security was pretty simple. A pat down and you’re on your way. The main concourse of H&K gates is festooned with flags from all the countries American flies to. There was a time I walked under those flags as US troops were welcomed home from Kuwait. That was a moving experience.

I recall a late night trip from LaGuardia which was ground-stopped due to weather. That night I slept on the ventilator in LaGuardia, in my suit, but with a chuckle thinking of the tireless, patient ladies standing in tight shoes behind the ticket stand at the gate, making reservation changes until 11pm.

I was last in a long, grumbling line to greet them. They had just finished with a noisy, self-important little man whose world was not revolving on its axis right. They were hammering away at the keyboard for his satisfaction. He walked off in a huff after unloading on the ticket crew.

I was next. This lady looked up. She could have been Mom.

“Boy! I’ll betcha you’re gonna be glad to see me!” I added, “Won’t they at least give you a chair?”

Her face broke into a smile. Just then, her colleague noticed,

“Do you know that last fellow has put himself on standby on over ten different flights??”

With that, she looked over.

“Hmm. We’ll fix that. Delete all those. Leave the Wichita on. He earned it.”

These ladies were gracious under the most demanding conditions, and they got me a spot, not direct, but quicker than a stopover in Kansas for the martinet before me.

Well, no call yet. But I am still optimistic that I am in queue for some relief.

The last time I flew, I opened up American Way magazine to the North American map of AA’s destinations. I checked off the city dots I had flown into. Thanks to the airline’s network I have seen virtually all of the majors and nearly three quarters of the intermediate cities on the page. I may not know much about the cities, but I know the airports. This may not be the feat of a Magellan or a Captain Cook, but I can claim that American took me there.

The call just came in.

“Mr. Brown, this is Starr. I am sorry you are having difficulties. Tell me again what happened?”

Starr and I discussed the situation. She has news. “I can’t help you. Reservations doesn’t have authority to refund tickets. You need to write a letter to Customer Relations in Phoenix. Here’s their address. They have a fax number too.”

“Starr, do you think this is an unreasonable request? Asking for an exchange based on the misinformation?”

“Oh, not really… I don’t know, but it’s over my head. You have to write them.”

Starr gives me the name and title of the Director of Customer Relations. Hopefully, that person has authority. We hang up.

So, ever optimistic, I am preparing my written request to a manager. It’s going UPS tomorrow. My hope is that their antenna are up and sensing this pivotal opportunity to make this customer happy, to reinforce the goodwill I have cultivated and nurtured for a quarter century.

All it takes is “Yes.”

To be continued….

direct mail, Marketing

Your First Impression Won’t Be Your Last

St. Joseph’s Indian School delivers the piece de resistance.

You know it’s Fall when the big fundraising kits stuff your mailbox. This year we have a surfeit of gifts from direct mail fundraisers.

Father Flanagan’s Boystown stickers for identifying anything that moves.

Years ago the pioneers in the business presented us with address stickers.

These we have dutifully paid for and have now labeled every moveable item in our home: CDs, iPads, iPods, iPhones, chargers, golf clubs, cassettes, Walkmen, books, staplers, rulers, vinyl… luckily we don’t own a pet.

The ante was raised by the March Of Dimes who gratuitously presented us with a small monthly stipend of ten cents: a shiny new dime pasted to a donor form.

Food For The Poor’s coins… how can you just pocket them?

That munificence has been outpaced by Food For The Poor who made change for the dime, and sends us a penny and a shiny new Jefferson nickel. That’s a 40% cutback, but insertion is more costly, so it’s a wash.

Not to be outdone, Disabled American Vets provides a 9×12 calendar, which we can place beside the 10×20 calendar from Boys Town.

Of course, wall calendars are bulky, so we are grateful to St. Joseph’s Indian School which gave us a 4×6 calendar booklet for the purse. I am waiting for the 3×5 that fits in my shirt pocket.

There’s no excuse for not writing….here’s a VFW pen.

The mailing industry is of a generous culture though. With all these other possessions, we have also received dozens of greeting cards: whole writing kits, with pens, to reach out and greet someone– anyone.

Oblate Missions has sent us so many Christmas cards it may be easier if we send them our Christmas mailing list instead.

Catholic Relief Services’ prayer medallions.

You can’t blame an organization which does its part in reinforcing the goodwill that blossoms from receiving a greeting card in the mail. I am all for it.

As a sidenote, the USPS post office in Libertyville has a well designed rack of greeting cards for sale.

This one cartoon I loved for its text:

Outer Cover: “Wow! You got a real, honest-to-goodness card! Not a text. Not an email!”
Inside Caption: “Wow! It has an inside too! It just gets better and better!”

In one of their early bold moves, Disabled American Veterans pasted 45 cents in stamps onto their reply envelopes. Overflowing in confidence that once we saw the postage in place, we would feel obligated to fill the envelope.

Marines Toys For Tots and Wounded Warriors provide your stamps.

Even gutsier, Wounded Warrior Project and Marine Toys For Tots are paper clipping custom 47-cent stamps to their letters. This is very expensive, as Stamps.com provides these stamps at a hefty premium.

The strategy works though. Can one really use the stamp for anything other than a gift without a stab of guilt?

To avoid being pressed into service, British sailors eyed their brew from the bottom up.

The gifting brings to mind the old conscription practices of the 1700’s when British sailors were pressed into service when they drank from a tankard of ale, only to find the King’s shilling in the bottom. By unwittingly enjoying the beverage, the sailor had been hired.

I think of that clever ploy as I pile up the loot, especially the coins and stamps.

The mailers know what they are doing. Despite all common sense, they have proven that the unsolicited gift still wrests outlandish response rates and donations. And once you are hooked, they will be back until they end up in your Will.

That’s right. Planned Giving is a part of every established fundraising strategy, and if you asked, many organizations can tell you which of their huge bequests started with a direct mail gift, years before.

Fleece gloves… probably a postal nightmare, but still handy.

This season’s most impressive packages included one from Kids Wish Network, which sent along a pair of fleece gloves. They arrived in a lumpy wrinkled paper envelope I am sure that the post office would rate as “baggage class”.

But how do you throw those out? What tight fisted non-donor could wear them, especially when the writer suggests: “When you use the deluxe fleece gloves I sent you, I hope you you’ll remember Wish Kids like Tabitha…” .

The penultimate delivery however, the cream of the crop, the ne plus ultra, is the bulging envelope from St. Joseph’s Indian School. No doubt USPS rated this one as “duffel bag class”. Inside we found the usual and generous complement of address labels, gift stickers, 4×5 note pad, 5×7 note pad, pocket calendar, wall calendar, personalized calendar card, and 3 shrink wrapped greeting cards.

St. Joe’s mystical Dream Catcher, not to be ignored.

In addition however there was a most unique and unusual item, a genuine facsimile of a Lakota Indian Dream Catcher.

The Dream Catcher is a little hand-made assembly of string net, naugahide, beads and feathers. Mounted on die-cut foam core, it is shrink wrapped with colorful operating instructions ending with: “to be hung on the tipi or lodge and on a baby’s cradle board”.

I have to admit, I had to dig through pounds of newspapers and old phone bills to retrieve this package from our recycling bin. There is something especially foreboding about disposing of the St. Joseph’s piece so casually.

The Marines Toys For Tots medallion, struck with the USMC shield and Semper Fidelis on the other side.

Yes, in the past, I have taken all the coins, scribbled on lots of notepads, hung countless calendars, and stuck hundreds of stickers without a moment’s guilt, or nearly so, but the Dream Catcher had me netted and nettled. This one item–which I would never purchase on a dare–clinched the deal. Just how unlucky could my life turn out if I didn’t give due respect?

So it’s hanging over my DAV Certificate of Merit.

Thanks for reading! I hope you find your charity of choice this season. These organizations are especially effective, and they mind their pennies too.

Marketing, Media

USPS: Taking A Retail Moment

The USPS card display is there to capture the impulse to do something nice.

Kudos to the merchant-minded individual who suggested that the Post Office should sell greeting cards in their lobby. After all, if you want to receive letters, you need to send them too.

Party invites! Looking for a venue.

It turns out that the USPS does an audit every year to measure how long we wait in line. Two minutes is the national average. During that time we have a variety of scenery to peruse.

Beyond the oddities of humanity that lean over the counter to ship parcels bound up like mummified hat boxes, or to mail extravagantly addressed purple letters, or the restive small children that roll across the floor, we can look at the card displays.

The USPS selection is not encyclopedic, but it is enough to trigger the impulse.

The selection isn’t anywhere close to that found at a card store, and that’s good. We only have two minutes to make a choice. But the cards available still represent a middle of the road attempt at gentle humor, quiet sympathy, and friendly reminders.

Next to the greeting cards is a rack of retail gift cards, perfect for the last minute desperate search for an overdue birthday gift.

Stationery sets as starter kits. After all, if you want to get letters, you have to write them.

Across the lobby is another display of stationery sets, and party invitations.
When we are there to pick up our mail, or buy stamps, we have a brief opportunity to snatch a couple of cards, and whip them off to someone who is on our mind at that precise moment.

The USPS is demonstrating a simple case of vertical integration here. They are providing the total service: stationery, gifts, attractive postage stamps and delivery.

What better way to merchandise the universal service that gives you access to over 150,000,000 addresses across the continent?

The next time you visit your post office, take a look around. This is the perfect place to yield to the impulse to greet and treat someone, two blocks over, or on the other side of the country.

It only takes a couple minutes.

Phil Brown

"Like triple cream– rich, pungent, a little barnyardy, and spreads easily. A good cheese."

Category Archives: Marketing

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The Roots of Customer Loyalty

Walgreens Rolls Up Your Sleeve

PCH and The Hard Truth About Pressure Sensitive

Battles In The Mailbox

Awakenings: What Happens When USPS Cuts Prices

How To Save Your Brand

Customer Loyalty In The Balance

Your First Impression Won’t Be Your Last

USPS: Taking A Retail Moment

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