Using Data to Show the Love: Segmenting Direct Mail

A few weeks ago, I received a letter in the form of direct mail from my current cable/Internet provider. Just like many other letters that I receive from them, it was informing me of an upgrade that they were performing to their systems. The letter itself came in a plain vanilla envelope and provided me with a short description of the upgrade that was taking place. What caught my attention about this piece of mail, though, was that the envelope had two letters in it; one in English and the other in Spanish.

Hispanic consumersSending your clients bilingual communications is not uncommon in markets as diversified as where I reside. But why send two letters? What a waste of money I thought to myself. Postage is not a big deal since based on the weight of each letter, it wouldn’t have made a difference if my provider just included one or two pieces of paper. In fact, it’s likely that they could have included three or four letters in the same envelope for the same postage rate if they had wanted, but the printing cost is what had me scratching my head.

You may be thinking to yourself, come on, it’s just one piece of paper. But you have to think about the large number that one piece of paper can turn into when you’re talking about thousands of customers. I live in a MSA with the fastest population growth in the US. With a population exceeding 2.2 million and a projected growth rate of nearly 10 percent through the year 2018, it’s not surprising at all that my MSA is highly diverse. In fact, over 500 thousand people living here speak Spanish, and this number is expected to increase by 21 percent over the next few years.

As for now, however, let’s take a conservative look at the 500,000 Hispanic customers who live here out of the total 2.2M customers; this is only a generalization since we know that not everyone uses the same service provider as me. Now, let’s consider that all 2.2M customers receive notices as I did. Most likely, the service provider is paying by the print image, and when sending out two letters, the provider is paying for two print images as well as the two pieces of paper in every envelope. Let’s take a quick look at the cost of the print images as it relates to this example.

Let’s assume that each print image cost only .10 cents, which is reasonable. Based on this example, 2.2M envelopes with only one letter in them would cost about $220,000. When you add in the additional letter, this doubles to $440,000. Wow! And once you add the cost of processing the data, the paper, the envelope, inserting and postage, which are constant, it’s easy to see that we’re talking about a lot of money for simple notices to your loyal customers.

So, the question is, how do you lessen the money spent on this form of direct mail while at the same time reaching all of your customers effectively? It’s pretty simple. You have to find a way to identify the language preferences of your customers. To do this, you need to capture their preferences when they sign up for service. Even though my example talks only about Spanish speaking households, it’s important to keep in mind that there is also a large number of people in my MSA who speak Portuguese.

When it comes to customer data and market segmentation, knowing which language your customers are accustom to will help you segment your mailings, which enables you to send the right letters that relate to each individual’s language preferences. As a result, this allows you to reduce your print costs by half. You can also apply this same technique toward all other mailings, including statements, promotional materials, special offers, etc.

And cost benefits aren’t the only thing you’ll gain when you segment your mailings. You also enhance customer service and loyalty. Think about it. When communicating with consumers in a language that they are most comfortable with and that’s easiest for them to comprehend, you’re not only showing that you care but you are also showing them the LOVE.

Sometimes, all it takes is a simple operational change to run your production more effectively, reduce costs and build happy loyal customers. Today is the day to start diving into your customer data, including language preferences, and using such data in way to segment your mailings and keep your customers happier.

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