As a follow-up to the “Odd Couple” post, here I’ll talk about Channel Switching as a way to effectively marry direct mail and email in a multi-channel campaign.
First recall the key point of the “Odd Couple” post. Multi-channel marketing, particularly simultaneous direct mail and email, can reduce campaign ROI because the incremental channel, often the email channel, doesn’t always result in enough incremental response to recoup its cost.
Channel Switching can solve this problem by effectively utilizing both channels. Here is how it works: The idea is to run a multi-channel campaign, email and direct mail in this case, in stages beginning with the most cost-effective channel (email) and then SWITCHING to the less effective channel (mail).
First, use email to generate as much low cost response as possible. Since Email is typically less expensive than direct mail the ROI on this first round is attractive. However since email response rates are often poor it’s important to use direct mail as a follow-up to increase the total response to your campaign (or you may not hit your overall response target).
Second, follow-up the email drop with a direct mail drop to the email non-responders, preferably using a predictive response model to maximize your response rate. It’s often the case that prospects tend to respond to different channels and so you may find that your direct mail response rate is unaffected by the previous email drop. In fact you may find that the email helps to increase your direct mail response rate although this is not always the case.
The combination of the two drops increases overall sales while reducing the cost per sale since the cost of the email generated response is less on a unit basis.