Setting Realistic Expectations for VDP

Maybe you’ve seen the numbers. According to one research firm, variable data printing (VDP) increases response rates by an average of 36 percent, average order size or value by 25 percent, customer retention by 48 percent and response time by 34 percent.

These numbers can be intimidating. Do they mean that these are the numbers that you, as a marketer, should expect to be hitting? The answer is a categorical “No!” If you read a variety of current VDP case studies, you will see an extremely wide range of metrics, with highly successful VDP programs showing response rates from the single digits to nearly 100 percent.

That’s why, based on the value of the product being sold, the comparison to previous metrics, and the goals of the individual program, survey data can be all but meaningless. What matters isn’t response rate. It’s return on investment (ROI). You can have a 4.2 percent response rate, and if the value of your product is high, you can have 1,000-percent ROI.

Let’s look at some of the issues associated with response rates and how they can affect the outcome.

Recipient Base. Who are you sending to? If you send your direct mailer out to the general population, you will receive a much lower response rate, even with VDP, than if you send to a carefully selected recipient base—say, your best customers or a carefully selected demographic sub-set of a purchased mailing list.

Predisposition of Recipients. What is the goal of the campaign? To convince someone who has never heard of your product to buy it? Or does your audience already have a vested interest in the outcome? An example of the latter is owners of cars that are due for a tune-up. Don’t forget to include a deep discount on the price.

 Value of the Incentive. What is being offered as an incentive? One marketing services firm regularly generates 21–percent to 75-percent response rates with its personalized promotion program, which offers high–value rewards, such as remote control cars or sets of personalized golf clubs, to recipients willing to sit down and listen to a sales pitch. No wonder the response rate is so high!

Regional versus National. Regional marketers might have a better chance at grabbing recipients’ attention than national marketers just because they have a local connection. When a regional theater began promoting its programs within its immediate geographic area, it achieved a 21-percent response rate. But its marketing services provider notes that, had the program been run by a national advertiser, it would have been thrilled, even with a much lower response rate.

If you are doing a national campaign going to an undifferentiated, purchased mailing list, don’t expect the same results as a marketer sending to a carefully selected sub-set of its best customers. Or if you are selling a moderate–value product to a national audience using direct mailers, don’t expect the same response rate as marketers selling high–value products to a specialized audience using personalized URLs.

Your success in VDP is not going to be determined by your response rate in any case. It will be determined by your ROI, and response rate is only a small part of that. This is great news for marketers, because you don’t need high response rates to get a phenomenal ROI—and those are the numbers that really count.

Let’s Discuss Your Marketing Objectives

Contact Bruce Browning at (914) 380-7510 or [button url=”http://www.olleymay.com/contact-us/”]CONTACT US[/button] online.