OPPORTUNITY

Toward the objective of optimizing a fixed media budget for a Direct Response Television (DRTV) subscription-based campaign, the challenge was to develop and execute a methodology that, through testing, would identify opportunities for scalable rollout to achieve incremental revenue without the need for additional media dollars.

Having already run (and established CPC (cost-per-call) and conversion benchmarks for) “introductory” offers, the next step was to explore and identify better offer strategies to drive more customers and with which to rollout in place of the offers currently being run. Of course, rollout yield depends on many factors including price point, markets, flight duration, conversion and attrition.

STRATEGY

Develop a multivariate testing matrix in select matched markets and test various price point positions across a 4-week period to determine best-performing offers.

RESULTS

There were substantial differences in the CPC between the control and test positions, with an average reduction of 20% across the four markets.Armed with this data (and assuming conversion rates remain constant), the implications of rolling out with the new offers were profound, as illustrated below.

Note: CPCs above are illustrative and do not reflect actual results.

PROJECTED OUTCOMES

  • Projected incremental revenue of $845,000 in one quarter
  • Projected incremental revenue of $845,000 in one quarter

Notes: Some caveats on conversion and attrition rates: Ongoing back-end analytics, of course, would have to identify any impact of the new offers on conversion rates and attrition rates. The projections above assume no change in the conversion rate as a result of the new “better” offers. Indeed, conversion may improve as a result of the better offers.