Mailing Lists: Slimmer and Trimmer
Joshua Mellberg thought he knew his customers. As the senior advisor and owner of Senior Advisors Wealth Management (SAWM), a financial planning service provider for retirees, Mellberg had worked closely with hundreds of older men, women, and couples. He had a clear picture of his customer base: 76- to 80-year-old retired homeowners. However, this knowledge was not helping his company to keep mailing costs down. Informational seminars for potential customers serving as Mellberg's primary business development tool demanded that SAWM send out monthly mailings to attract crowds of new customers. With 45,000 mailings a month costing the company an annual $160,000, Mellberg knew that there had to be a better way to attract an audience.
On vacation in Arizona Mellberg met Jovan Will, who told him about his company, CopperKey, a provider of marketing solutions. Mellberg, attracted by the promise that CopperKey could both lower costs and increase response for his mailings agreed to a trial run of CopperKey's Bizfusion Prospector, a Web-based predictive marketing software. Back in the office CopperKey took profile information from all of the attendees of Mellberg's seminars in the past six months to give him a better idea of what his real customer base looked like. Mellberg was shocked to find that it was quite different than his original idea. "I found that I always was mailing to people who own homes, because I figured they have more assets," Mellberg says. However, he found that a much greater percent of his clients had apartments, not because of financial restraints, but because of the ease of maintenance. " I found out who my target person was and who was likely to respond."
The initial analysis model took a few weeks to build and process. "Historically that's been done by groups of analysts and there's a time and cost element involved," says David Castillo, cofounder of CopperKey. With BizFusion, once the profiles are created, a multivariate model and a regression model can automatically be produced, with a set knowledge base for guidance. This model can then assess new data every time a mailing needs to be sent out.
"Senior Advisors and CopperKey then created a trial mailing list for people in one zip code in the greater Tucson region, which the company services. Mellberg ordinarily sent 40,000 mailers to recipients in this zone, but using CopperKey's analytical targeting he sent out only 20,000 and within six weeks and noticed a higher response from this region. With the smaller mailing, Mellberg said that he was happy to cut cost, but understood that this might create a slight decrease in response. "I thought the percentage would probably go down," he says, "But [the day of the seminar] I actually had to open another room because of the flood of people." SAWM then deployed BizFusion Prospector's targeting methods beginning April of 2006 to sift through all of the company's mailing lists.
Within weeks the company's response rate increased from 0.8 percent to 1.33 percent. Additionally, SAWM now uses a less expensive postcard instead of a fold-over mailer, saving the company 21 cents per send out. The 40 percent increase in response has helped Mellberg not only cut costs but build his business. SAWM is saving $30,000 a year on mailing. Now with a surplus of funding, Mellberg may also look to other channels to connect to new prospects. "The next thing we want to do is get him into email campaigning," Castillo says. Mellberg is also looking to improve his customer value quotient. "My focus is on getting as many people as I can in front of me. Now that I have more people I can look for my most qualified clients."
By using CopperKey, Senior Advisors Wealth Management has been able to:
better target the right customers;
increase response to mail outs by 40 percent; and
save $30,000 annually on mailing costs.