Costco’s highly targeted and integrated mail and door drop plan uplifted response by 28%.
Costco, a membership warehouse club with both Trade and Individual members, was opening its 26th UK warehouse in Hayes. They knew that the success of the launch relied on optimising mail and door drop with a highly targeted media plan that maximised membership by attracting the right audience from the right geographic area.
The launch plan combined geographic, demographic, behavioural and timing insights to develop the ideal integrated mail and door drop media strategy.
A geographic analysis determined the distance current members were willing to drive, defining a suitable marketing area. Costco also considered overlapping store areas to minimise cannibalisation.
Demographic profiling identified the key datasets guiding prospect targeting; Occupation, Wealth, Company Directors and Self Employed from Home. Buying data from a B2B database allowed personalised mail to prospects.
Behavioural and timing insight from previous campaigns showed that those touched multiple times by mail and door drop had higher response rates. This guided the ideal media mix, frequency and timing.
New prospects were mailed twice, while lapsed customers from nearby stores mailed once (a week before launch). Door drops covered both audiences with a second or third communication, as well as bringing in additional response from the non-mailed audience.
Hayes was the most successful Costco opening to date. The first day ROI is a key target for Costco. The mail and door drop campaign generated a first day ROI of 3.74:1. 63% of new members were recruited before opening day.
The optimum contact frequency uplifted mail response by 28%. The programme brought together over two years of test and learn insight and ultimately led to Costco increasing its investment in mail and door drop by 12% annually.