The VSC That Couldn't Grow
The Case – Mature Direct Mail Automotive Call Center
We approached a company that had plodded along for 8 years in an industry where many players come and go without ever gaining any traction. They had their ups and downs over those years but were in decline in the months leading up to meeting Milestone. Sales had plateaued while acquisition costs were rising. This combination had them headed down a path of uncertainty. Although they originally were focused on direct mail, they had begun experimenting with outbound dialing and affiliate marketing campaigns in an effort to band-aid the rising cost of their direct mail campaign.
Like many companies, they had become reliant on their direct mail provider of many years and that partner had ultimately gotten complacent with their business. With no fresh ideas or solutions their response rates continued to decline along with their sales counts. Successful VSC companies can typically absorb acquisitions costs somewhere between $500-$800 per sale. In the months prior to us taking over, their numbers had bottomed out.
Previous DM Marketer November Spend - $313,813
November DM Marketing Sales – 279
November DM Cost Per Sale - $1,124
Previous DM Marketer December Spend - $316,813
December DM Marketing Sales – 218
December DM Cost Per Sale - $1,450
The Milestone Approach – Inside-Out
With all our prospective clients we encourage an inside-out approach, one that first focuses on utilizing the data they already own to deliver the best possible results. Because this particular company had been in business for 8 years, they had collected swaths of data over the years (previously mailed, responders, sales, cancels, etc). And while all clients generally recognize this information as valuable, few know how to unlock its true potential. This company was no exception. They literally had a gold mine below their feet, yet they were struggling to get ahead.
Despite their rising acquisition costs and a desperate need for change, this particular client was extremely skeptical of our approach at first. Sharing sales data or responder data with 3rd party data partners is something that all clients will have reservations about. The VSC industry is one where every data provider tends to promise exceptional results, the freshest data or the largest database in the marketplace. After multiple meetings and a persistent pledge that we could make a difference, they finally agreed to a very small test.
The Test – First Milestone
The client insisted they were “already doing” much of what we described in regard to re-targeting their renewals and responders, so we settled on doing the cancel program for the initial test. Most clients are hesitant to mail customers who have cancelled because they believe if they canceled once, they will likely cancel again. To initiate this test the client provided approximately 45k cancelled records. We made our selections based on our proprietary selection process and opted to only mail 18,730 records for a total market spend of $6,461.
The Results - Client spent $6,461 on our First attempt Cancel Campaign and got 145 Sales. $44 Cost per sale!!!
Potential Unleashed = The Milestone
While excited about the initial results, the client was quick to point out that while MOST data providers get the first test right, it’s the second or third mailing that proves the concept. The value is truly in the consistency. Eager to show that it was no fluke we deployed additional internal campaigns. The client eventually credited Milestone with “saving his December.”
Because of the enormous success with the internal programs, the client was open to test our other campaign strategies. Ultimately this led us taking over their entire marketing program:
We began managing all of their data.
We developed more enhanced modeling services to find other consumers that fit their typical customer profile.
We started collaborating on creative development and producing their mailers.
We completely took over their Dealer Campaigns.
We also reformatted many of their affiliate programs.
After a few short months, with Milestone's help, we had righted the ship and put this company back on a successful path to growth and prosperity.