Building Letterbox Marketing campaigns for ROI

by Shaun Lyall
08 November 2018

Don't miss out on the opportunity to use popular and compelling Letterbox Marketing due to a misinformed assumption that you can't prove the ROI of the channel.

Letterbox Marketing can have an overwhelming impact on our decision to purchase. However, it is commonly overlooked in favour of digital channels. 

The tendency towards investing in digital channels, which are generally viewed as more easily quantifiable, is understandable. Both media agencies and brand marketing teams alike are under increasing scrutiny to justify their marketing dollars. But ignoring Letterbox Marketing as a medium is a missed opportunity.  

In Salmat’s 2019 Marketing Report (SMR) more than half (57%) of Australians said that price counts for between 80%-100% of their purchase decisions. Price is a key driver that would convince consumers to switch brands. Marketers are clearly capitalising on this by regularly discounting their products (26% weekly and 28% monthly).

The grocery sector in particular has jumped on the discounting bandwagon with over half (53%) discounting weekly. In fact, 41% of marketers in the Grocery sector believe their company discounts too much.

According to the Australasian Catalogue Association’s (ACA) 2018 Industry Report, Letterbox Marketing has proven to be a convincing medium for consumers looking for both price and product information.

The scope of catalogues’ influence spans a multitude of industries, as varied as furniture and toys to groceries and alcohol, which have used the medium to great success.

Just consider the ACA data.

Not only do 64% of grocery shoppers use it to research price, but 70% of grocery buyers made a purchase after reading a catalogue in the past four weeks.

While it’s fair to say certain industries have confidence in the letterbox medium, how can your brand understand its impact on sales? 

The reasons for tracking ROI

Building out clear and quantifiable KPIs for your campaign at the outset is a proven way to track and benchmark performance. It allows you to assess the performance of your individual campaign and provides you with the evidence to prove the value of the channel when budgeting for future campaigns.

We recently worked with a national retailer on a Letterbox Marketing campaign. The client was clear on the amount of sales required for the campaign to breakeven. With this in mind, the team was able to build a sizeable hitlist of households to achieve the required sales target. 

Modern day Letterbox Marketing campaigns are sophisticated affairs and specifying your target market is key. Choosing your intended audience should be the first step in building your campaign, as all messaging and distribution will flow from this information.

Once you have your target audience and messaging agreed, you can decide how to track and report your ROI.

Selecting which ROI to bank on 

Another common misconception is that the ROI of Letterbox Marketing campaigns are impossible to report. However, there are numerous methods to track the success of your campaign; it just takes a bit of consideration upfront. 

What is it that you want to achieve with your campaign? Do you need to get people through the door of a new store? Do you have a special offer that you want to promote? Do you have a sale starting soon? These are questions that you should be asking yourself. 

To get started, consider which of the following you would like to track and use to report the performance of your campaign:

  • Brand awareness

  • Store traffic
  • Website traffic
  • Product sales (General/Specific product)
  • Coupon codes/Vouchers
  • Email registrations (Database building)

The two most common types of campaigns our clients use are designed to drive foot traffic in store or online and sales of specific products. 

Track ROI in a way that works for you 

Measuring in-store traffic can be as simple as reviewing product sales, talking to store managers or, if you have the technology, measuring footfall at the entrance of the store. Similarly, brands can easily measure the increase in sales of particular products that have been promoted on flyers or catalogues within the catchment area of the Letterbox Marketing drop.

Make sure to benchmark the performance of the KPIs you are using against the period before the campaign. Typically, we recommend noting the performance of product sales, for example, in the four weeks leading up to the campaign, as well as for the duration of the campaign itself. However, when doing this, be sure to take into account seasonal trends. Also keep in mind that that depending on the product (some have longer buying cycles), sales may occur after the campaign period. 

One of the easiest ways to track the impact of Letterbox Marketing is through the redemption of voucher codes or database sign-ups. If you decide to use a voucher code, make sure that it is unique to the campaign, so customers cannot go online and find the same offer. Also, ensure that the offer itself is compelling enough to get people to act. 

Change for a hair fashion retailer 

Letterbox Marketing campaigns can also be used for data capture when combined with digital in an integrated campaign. A hair fashion retailer in Brisbane was running an in-store promotion supported by a Letterbox Marketing catalogue and a digital version of that catalogue on Lasoo.com.au. Data analysts from Lasoo were able to supply real-time insights into what shoppers were interested in and, more importantly, what they were not interested in.
Feedback, which was based on engagement and interaction rates with the digital catalogue, was provided to the retailer who took immediate action. 

Certain products, such as hair straighteners and bundled packs of shampoo and conditioner, had very high interaction rates. But there were a few products, including a relatively expensive men’s hair gel and a very inexpensive curling iron, that experienced no interest at all.
The team from the retailer removed the curling iron from its in-store campaign and instead, used the shelf space for better-selling products. And as for the men’s hair gel, it used the data to demand a better price from their supplier, bringing it more in line with what customers were willing to pay.
The curling iron was also removed from the next catalogue and replaced with an item that was more likely to bring revenue. The hair gel remained, with a much sharper price point.
This proves that digital catalogues can be utilised to provide real-time market research that helps fine-tune not only the brand’s Letterbox Marketing campaign, but also the in-store display to boost revenue.

So, don’t underestimate the power of Letterbox Marketing. Through simple planning upfront, you can track, assess and benchmark your campaigns for a great return on investment from this compelling channel. For more information call our team on 1300 725 628.

About the author
Shaun Lyall

Shaun has been with Salmat for just over three years, initially working within the Client Engagement Team before moving across to the New Business/Agency Team a year ago. Shaun is experienced working with some of the biggest brands and retailers in Australia, offering strategic and tailored solutions.

More articles by Shaun Lyall