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New Company Uses Gift Cards to Increase Direct Mail Responses and Gain Valuable User Feedback
October 29, 2009
By Donna M. Airoldi
Dukky is a new direct response company with a new platform to help loyalty and rewards program marketers. Its product creates gift card offers as part of a direct mail campaign that integrates viral marketing and an online component for monitoring individual performance and gaining feedback on users. The result? Significantly higher response rates, and feedback that can be used to better target future offers.
The New Orleans–based company, founded in June 2008, unveiled its new program earlier this year and is beginning to get national attention, with BMW and other top clients signing on.
“The product can be used across a number of platforms, from internal employee programs to B-to-B, however its most common use is B-to-C programs because of the nature of its outreach,” says Dukky CMO Scott Couvillon, who said the loyalty/reward product was created to assist large incentive houses, after talking with firm like Carlson Marketing and Maritz at tradeshows and trying to figure out how Dukky’s products could be applied to their programs.
How does Dukky work?
The company puts together a mailer with up to 40 personalized gift cards with reduced-points redemption offers for products in a client’s loyalty/rewards program. If the recipient is interested, they visit an activation site through a personalized URL (PURL), where they must activate the cards in order to use the offers and verify their contact information. They can then forward the offers to friends, family and colleagues through e-mail or social networks. Visitors to the redemption center can then earn bonus points for completing a feedback survey. The client can monitor the usage in real time through an online dashboard that’s part of the Dukky product, to see who is responding to the program and what products are popular, or not.
“Points are a liability for companies,” says Couvillon. “They’re credit toward something the company has to one day fulfill. But the only contact they’re having with employees or customers is through statements saying, ‘Here’s your reward balance and here’s some stuff you can get with the rewards points.’ The reaction was poor, so they tried to migrate to digital, since it’s cheaper to maintain. Problem is, it’s also easier to ignore, so companies were getting even fewer responses.”
Couvillon says Dukky can help in two ways, further explaining how the new product can help with direct mail responses.
“We can take inventory of the top ten redeemed items from previous programs and create a personalized gift card for each of those products,” says Couvillon. “Customers will receive a mailer of gift cards for those items, which are available for redemption with a reduced number of points. Maybe they’ll be able to get a plasma TV for five hundred fewer points than initially listed. They can then choose to activate only those cards for items in which they’re interested. On the activation site, they’ll get asked whatever questions the brand or incentive house is interested in getting feedback on: What type of products would you like to receive? What do you like about working at Company X? What would you prefer to see in a promotion campaign? Whatever the company wants.
“Companies can then use that feedback to improve their loyalty programs. It’s a much more engaging format than ‘Here’s a link to a site with a clearing house of products,’ or a catalog and your points statement. The interesting part is the backend stuff, where you can watch the activation site responses and see what is happening before the first card is even redeemed. You can see what users are looking at as well as the life span of the e-mail program. For some companies, direct mail might be better, say, if an e-mail campaign received a huge number of responses the first twelve hours, but then nothing.”
What are the costs and expected results?
Couvillon says Dukky guarantees an 8 percent response overall, combining primary and secondary responses. The typical direct mail campaign has a 1 percent response rate. Customers also are given the option of performance-based pay rather than paying a per unit cost, as with direct mail campaigns.
“If we’re confident we’ll beat performance benchmarks by a lot, then we’ll set what the costs are and pro rate against benchmark performance,” says Couvillon. “If we do worse than the existing program, you pay less than your cost. If far better, then we or the reseller deserves more than your existing program. You pay for your response, not what your costs are.”
Dukky research has found that programs with a social/viral component had the greatest redemption levels, with the greatest depth coming from secondary recipients. “We just did a program where we gave away a free breakfast,” says Couvillon. “Recipients did not have a previous relationship that we knew of with the restaurant. We got an overall 10 percent response to people going online, activating their offers and answering questions.”
About 41 percent of primary recipients activated online, with 66 percent of secondary recipients doing so.
“People were sharing on average with three other people,” Couvillon adds. “The most people will forward to is about nine, but on average three. That’s because it’s coming from a friend or relative. It’s still direct marketing, but it feels personal. Apply that to loyalty programs. Consumers know what they want. Put content into the hands of your advocates and let them do the marketing. It’s a very different way of thinking about direct marketing.”
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