Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association

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Company Doubles Direct Mail Response

Time Warner Cable - Charlotte Rings up Digital Phone Sales with Cohorts; Versioning of Direct Mail Doubles Average Response
 

DENVER--(BUSINESS WIRE)--April 18, 2006--Time Warner Cable is the United States' leading provider of digital telephone service (VoIP). Using a program of direct mail to promote its digital phone service, Time Warner Cable - Charlotte was experiencing typical response rates between 0.6 percent and 0.8 percent. The company felt it was time to look at new marketing techniques that would improve upon these numbers and drive digital phone sales. It turned to Cohorts for a new marketing approach, using segmentation of its database to send versioned messages for its digital phone offer.

A household-based segmentation tool, Cohorts divides virtually all U.S. households into 30 cohesive groups (or Cohorts segments) that share distinct demographic, lifestyle and consumer behavior characteristics. A Cohorts analysis of a client's database blends client-gathered customer knowledge with extensive behavioral information from industry-leading market research providers. The Cohorts process provided Time Warner Cable - Charlotte an actionable understanding of each Cohorts segment in its database -- and the basis for targeting and communicating with customers and prospects.

Objectives

-- Identify and target Cohorts segments within Time Warner Cable - Charlotte's subscriber list who have a higher propensity to subscribe to digital phone service and are most likely to respond favorably to digital phone service offers.

-- Combine appropriate Cohorts segments into mega-segments based on lifestyle similarities such as marital status and whether children are living at home.

-- Create versioned direct mail pieces (for the same digital phone offer) using messaging and creative that resonates with the appropriate mega-segments.

Strategic Steps

Using a Cohorts analysis, Time Warner Cable - Charlotte identified subscribers who would most likely be interested in a digital phone package. A look at the distribution of Cohorts segments within the database showed the overall makeup of the current subscriber base and revealed the segments with the greatest affinity for certain cable and telephone services. Once identified, these Cohorts segments were combined into three mega-segments for direct mail purposes. The segments were defined primarily by age and whether the household has children.

Time Warner Cable - Charlotte then developed three separate direct mail pieces, each presenting the same digital phone offer but targeting a different mega-segment. Designed as an oversized postcard, each piece was versioned with text and imagery that would appeal to a particular mega-segment, based on the deeper understanding of those mega-segments enabled by Cohorts. The three mailers were called "Dog," "Frog" and "Lottery," reflecting the creative and messaging of the pieces.

Results

When compared with previous results, the Cohorts-based personalization strategy to mega-segments delivered higher response rates -- more than twice the response over traditional direct mail efforts.

-- All versioned mailers responded at higher rates than previous non-versioned mailings.

-- The three direct mail pieces realized an average response rate of 1.35 percent -- a 107 percent lift over previous campaigns.

-- The "Lottery" versioned mailer, directed to adults ages 46 to 58 with no kids in the home, resulted in a 1.47 percent response rate -- a 126 percent increase over previous rates.

-- The "Dog" versioned mailer, directed to adults ages 26 to 33 with no kids in the home, had a response rate of 1.31 percent -- a 102 percent increase over previous rates.

-- The "Frog" versioned mailer, directed to parents with kids at home, had a response rate of 1.27 percent -- a 95 percent increase over previous rates.

-- Higher-than-average returns more than offset the nominal increase in costs (about $200 overall) for creating versioned mailers, thanks to the cost efficiencies of digital printing.

Summary

Time Warner Cable - Charlotte's success at personalized, Cohorts-based customer communications has made Cohorts segmentation a fixture in the cable company's approach to direct marketing.

"These results are remarkable," said Brian Schmidt, director of marketing, acquisition at Time Warner Cable - Charlotte. "Based on this success, we will continue to use Cohorts to tailor our messages and creative to specific target markets."

Schmidt indicated that Time Warner Cable - Charlotte expects to expand the use of Cohorts in its ongoing efforts to create relevant, successful marketing programs that directly address corporate objectives and help to create the best possible experience for customers.

About Cohorts(R) and Hispanic Cohorts(R)

Cohorts and Hispanic Cohorts help marketers get the right message to the right household, significantly improving the effectiveness and ROI of data-based marketing initiatives and strategies. These integrated household-based segmentation and marketing tools enable marketers to understand the distinct types of customers they serve, precisely identify multi-channel marketing opportunities, create customized communications and marketing programs, and craft actionable market research. Cohorts and Hispanic Cohorts analyze and describe consumers in terms of their demographics, lifestyles, attitudes and behaviors, as well as their interactions with marketers -- such as what consumers buy, how much they spend and their preferred channels of purchase.

About the Company

Experienced in database marketing applications, market research and database development, Cohorts works with leading companies in a variety of industries, including financial services, healthcare, hospitality, insurance, retail and telecommunications. Cohorts' clients include Ambien, Cablevision, Cendant, Choice Hotels International, Harrah's Entertainment, La Quinta Corporation, Mediacom, Memorial Hermann Hospital, Target, Time Warner, The Venetian Resort-Hotel-Casino and Value Link. Cohorts' key strategic partners are Equifax, Experian, MRI, Scarborough Research and Simmons Market Research Bureau.

For more information, visit www.cohorts.com or contact Erica Gunn at Cohorts, 1624 Market St., Suite 311, Denver, CO 80202; 303-893-8600; fax: 303-893-8611; or egunn@cohorts.com.

 

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