One of the major advantages of Direct Mail is that it allows you to market your product or service with a low up-front commitment. It also gives you the opportunity to test your programme, before making significant investments.

For example, when you launch a new product in the market, you will want to know what would be the optimum price that will give you the maximum profit (or maximum market share). You could set your price by referring to previous experience and market checks. But, more usefully, you could try to find out what your customers think and how they will react to you price. You could also discover whether by raising or lowering your price you could bring in more profit. Knowing your customers' sensitivity to prices can help you generate greater profits and manage your inventory more effectively.

For Direct Mail programmes, you can conduct an experiment known as a Price Test to get the answer.

Please check our Test Planning Sample to review an example, and check our Test Planning Template to use a worksheet to analyze your campaign.

Caution: when you conduct a price test, always remember to run a 3-point test, i.e. test your regular price against both a higher and a lower price.

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