Direct mail¶

This guide will tell you all you need to know about aligning your direct mail campaigns to benefit from word-of-mouth using Herdify targeting.

The targets¶

The Herdify targets for direct mail are provided as a list of postcodes, with scores if required. These can be downloaded from the Herdify platform. Only postcodes where word-of-mouth activity has been detected are included.

The Herdify score measures the prevalence of word-of-mouth activity in a postcode sector. If everyone in a postcode sector is exposed to word-of-mouth, then the score is 100. If no one is exposed to word-of-mouth, then the score is 0.

Areas with detected word-of-mouth typically outperform those without, with most brands finding that higher-scored postcodes deliver better campaign performance than lower-scored. This varies though: some brands see diminishing returns in postcode sectors where word-of-mouth is widespread and brand awareness is already high.

Address selection¶

Herdify targets can be used to prioritise the addresses that you send your direct mail to. The platform does not supply these addresses — they must be from another source. In the case of an acquisition campaign (cold) this is usually a third party provider. When targeting existing customers (warm) these addresses usually come from the CRM.

Cold direct mail¶

Most providers of prospect addresses apply some form of targeting or selection when you make your request. This may be based on personas provided or analysis of sales/response data. We recommend using the Herdify scores in combination with these methods of selection to achieve the best results.

To add word-of-mouth targeting to your usual selection method:

Request addresses from your third party provider. Do this in the way you usually would but with the additional requirement that the addresses should be in the postcodes included in the Herdify targets following the guidelines in steps 2 and 3. You can download the targets from the portal to share with your provider.
Check the volume available in Herdify postcodes. When used to filter addresses, the Herdify targeting will reduce the total number available and therefore less volume may be available than for previous campaigns.
- In most cases the volume available will be more than the desired volume for the campaign. In this case select addresses with postcodes in the Herdify targets up to the desired volume.
- On the rare occasion that the volume available in Herdify postcodes is less than the desired volume, prioritise selection of all postcodes in the Herdify targets and use the other methods to select the remainder in the way you usually do.

The first time you follow this process it is beneficial for the person doing the selection to go through the process with your Herdify Customer Success Manager. This could be someone from your team, the address provider or another agency.

Warm direct mail¶

Enhancing your warm direct mail campaigns by targeting word-of-mouth can be very successful, however there are some additional considerations over cold mailing.

Word-of-mouth is driving sales already, therefore areas where it has been detected often have a higher than average number of recent sales and new customers. Targeting these areas in a warm direct mail campaign can have disappointing results, as the recipients have only recently made a purchase.

Targeting word-of-mouth is much more beneficial for campaigns which target customers who have not purchased for some time. The period of time for this will depend on the particular product and is best taken from your existing knowledge of your customers.

Herdify can be used to target word-of-mouth in your reactivation campaigns by:

Gather the addresses of customers who have not recently purchased and you wish to reactivate.
Select from these addresses those in Herdify postcodes.
If there are more addresses in Herdify postcodes than you wish to mail, select those in the postcodes with the highest scores.

The first time you follow this process it is beneficial for the person doing the selection to go through the process with your Herdify Customer Success Manager.

Extensions¶

The processes covered so far are the basics of using Herdify to plan your direct mail campaigns. Most users will start with these, as they incorporate the benefits of targeting word-of-mouth while sticking closely to what users have done before.

Once comfortable, users can explore additional benefits to their campaigns from word of mouth by:

Including addresses excluded entirely by previous campaigns, but which have lots of word-of-mouth activity (high Herdify scores). For example, lower propensity demographic segments excluded in cold direct mail campaigns may still have high response rates when word-of-mouth activity is present.
Testing methods of combining Herdify scores with existing scores to identify the combination which gives the best performance. Analysing the performance of campaigns across both existing and Herdify scores at the same time can indicate groups to explore in future campaigns. For example, it could be shown that addresses with Herdify scores above 10 perform equally well regardless of their scoring in a demographic model, suggesting that addresses in areas with these Herdify scores but lower demographic model scores could be added to future campaigns.
Using targeted messaging in the creative. Such as referencing the local area by name or asking recipients if they know anyone using the brand.

Testing¶

Many users want to set up a test in their first direct mail campaign to measure the benefit of targeting word-of-mouth. Doing so can help identify how this targeting can combine with existing methods to have the largest impact and will help you report the value of Herdify now and in the future.

We recommend that testing follow some simple guidelines:

Limit the test to two targeting groups:
- Group a: one selected using the existing method
- Group b: the other selected using the existing method combined with Herdify
There may be addresses with Herdify scores in group a, as they can be selected by the existing method. Including these ensures it is a fair test of the benefits of specific word-of-mouth targeting over the existing method. To prevent bias, you should ensure the highest ranking addresses from the existing model are not reserved for group a. The best way to do this is to allocate addresses alternately to each group:
1. Rank all addresses using the existing method.
2. Allocate the highest ranked address to group a.
3. Allocate the highest remaining address with a Herdify score to group b.
4. Allocate the next highest remaining address to group a.
5. Continue alternating steps 3 and 4 until enough addresses have been selected.
Split budget 50/50 between the two methods. If this isn't possible then whichever group has the smaller budget should have enough to target 300 responses. The test could be conducted over multiple campaigns if necessary to reach this figure.
If there are other tests running at the same time, split these evenly between the test groups. For example, if you are testing 2 creatives with a 50/50 split across the whole campaign then the distribution for each targeting group should also be split 50/50 between the creatives.
Include a measurement of the halo effect in the post campaign analysis. This is necessary to measure the full impact of word-of-mouth on the campaign, as it includes people who were not targeted directly but who had the message passed to them by someone else. Herdify can provide this analysis for you.
Conduct additional analysis of the performance of addresses based on their scores in any existing model and the Herdify model. This will enable you to identify the biggest opportunities for optimising future campaigns. Herdify can provide this analysis for you.