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Projecting Response Rates Can Be Like Predicting the Weather
It’s not uncommon for clients and potential clients to ask what can be expected for a response rate in an upcoming campaign. It’s also not uncommon for the answer to be “It depends.” As with predicting the weather, the potential outcome of any marketing campaign is influenced by many variables, some of which cannot be controlled. These might include:

  • The nature of the product or service (Is it unique? Does it fulfill a specific niche? Is it a commodity product?)

  • The price point and any associated promotional offer (Is the value clear? Does the current promotional offer reduce the ability to return to the standard offer or incur a price increase when needed?)

  • The relative strength of the competition in the same category or geography

  • The overall health of the industry

  • The accuracy of list segmentation, if any (Including the breakout of customers versus prospects, and certain ethnicities that might require a unique approach.)

  • Creative execution (Is it themed or offer-driven? Is creative segmented or will it use a mass approach?)

  • Relevance of messaging (Are features clearly expressed as benefits?)

  • The customer experience (Does the product deliver on its promise? Is the customer support function up to the task when called into service?)

  • Strength of the brand

  • The economy

Numbers Can Be Misleading
In an attempt to establish some sort of benchmark, the most recent footnotable statistic that we’ve seen for an average direct mail response rate is 2.6%. Unfortunately the associated range of response rates was not provided. Affinitas experience has demonstrated a range of response rates as low as .5% and as high as 10.7%, with very unique sets of variables driving those rates. The low end was a mass market, non-segmented and very offer-driven approach. The high end was a carefully planned strategy with accurate list, offer and creative segmentation.

So How to Build A Strategy?
The best strategic approach is one that sets out to address and manage all of the variables listed above. Again, many can’t be controlled, but many can be managed. When you work with an Affinitas strategic team, we review and evaluate all of these variables with you, and we plan for the influencing effects that they may potentially contribute. A typical approach is to build a test scenario whereby we can gradually step into the market in a measured way, thus minimizing risk, preserving budgets, and providing the key data that will enable us to refine and move forward into a roll-out scenario that has the greatest chance of becoming the new high end of our range of response rates.

Learn more about Affinitas and how we can help you drive your response rates higher here.

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Winback is Not a Retention Strategy
More and more companies are coming to Affinitas seeking help with similar challenges:

  • “I’m losing customers faster than I’m adding them.”

  • “My churn rate is nearly 100%.”

  • “I need a winback solution – quick!”

Although Affinitas has built many successful winback solutions for a variety of companies serving multiple industries, even a successful winback approach may only be a band-aid on a wound that needs more serious attention. After all, a completely satisfied customer is less likely to leave you than a customer who feels that his or her needs haven’t been met. The key is to understand each customer’s needs, and to cultivate and communicate with customers during their lifecycle. Increased retention rates over the course of each customer lifecycle proactively reduce churn and minimize the frantic need for costly winback strategies and “save” promotions.

It’s All About Your Customer’s Experience
So many companies seem to say “We want to be the L.L. Bean of our industry.” It sounds nice around the boardroom table and it’s a worthwhile objective, but it’s just a futile fantasy without first understanding whether or not your company is delivering on its value proposition to its customers. And to further complicate the issue, professional marketers in most companies today are motivated and compensated based on the number of new customers that they add to the customer base rather than the number of customers that actually stick around and continue to purchase and drive revenue. The vicious cycle continues – companies bring on more and more customers, but don’t pay attention to them after they’ve become customers, thereby reducing customer satisfaction, thereby increasing churn, thereby increasing the need to bring in more customers and to eventually look for a winback solution that will stem the losses.

What’s Your Solution?
There’s not a singular solution that’s right for all companies and all industries. However, Affinitas has found that a two-step strategy can often get a company back on track:

First, build your safety net: Develop a tactic to help save the customers that are heading for the doors. It might be a special discount offer or a free gift, something that will keep them around long enough for a meaningful exchange of information that will shed light on the reasons for their dissatisfaction. This is a short-term approach to buy some time while you develop your retention strategy.

Second, build a bridge to your customers: Develop an understanding of the typical customer lifecycle – where and when are customers leaving? What is happening, or is not happening, at those critical times? Develop a relationship with your customers – conduct a satisfaction survey to give customers the opportunity to tell you where you’re not delivering. The results might be surprising. Be ready to address issues one-on-one and make some process changes. Develop a full scale plan to communicate with and nurture new customers from the very start of their lifecycle and for the duration of their tenure.

Retention begins the day after the sale is made.

Learn more about Affinitas’ proprietary Customer 1st retention program.

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