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Direct Marketing Testing and Sampling

Testing and sampling is a planned measurement of alternative marketing elements in a campaign, in order to systematically improve future campaign performance and profitability.

Remember the golden rules of direct marketing:

  • “If it ain’t broke…fix it!” so it will work even better in the future.
  • “Test the BIG things” i.e. marketing variables

Six marketing variables:

  1. Product / service
  2. Target Audience (lists)
  3. Offer (price, terms)
  4. Timing
  5. Format
  6. Creative

Last Rule:

Only change one variable at a time.

The most important variable is the “audience” – the list. When compiling a list it is necessary to test to minimise the financial risk of buying all the available names. Below is a simple sampling model that we know will help you.

There is no “right sample size” or right and wrong way of sampling. Sampling can be as simple as picking records at random until you have a reasonable number. However the most successful sampling technique in our experience relies on a degree of confidence and accuracy. It works as follows:

Direct marketing sample size calculation

SAMPLE SIZE  = Z² x R x (100 – R)

Where:

Z = degree of confidence
R = estimated % response rate
E = limit of error

The degree of confidence (Z) is a commonly used constant. The most used constants are
1.281 for an 80% confidence level
1.645 for a 90% confidence level
1.960 for a 95% confidence level
2.575 for a 99% confidence level

So if you estimate a 2% response rate and want a 95% confidence that the roll out will be within +/- 0.3% (i.e. between 1.7% and 2.3%) then the sample size formula would look like this:

SAMPLE SIZE    = 1.96² x 2 x (100-2)
0.3²

=8,366

In other words if you take a sample of 8,366 and the response rate is 2% then you can be 95% confident that the rollout response from the total audience will be between 1.7% and 2.3% subject to consistent conditions.

In practice rollout conditions are rarely consistent. However after a test has been done and actual % response rates are known, the formula can be converted to adjust the confidence intervals.

To talk through your sample requirements contact us via email or use the contact form at the foot of this page and we will be happy to talk you through it.

Direct Marketing Testing and Sampling