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How to Use a Lookalike Audience for Your Direct Mail Campaign
Direct Mail
April 25, 2023

How to Use a Lookalike Audience for Your Direct Mail Campaign

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You might have heard the term “lookalike audience” in relation to social media marketing. In fact, it’s a term used primarily in Facebook audience segmentation, which aims to discover users with a high chance of converting. Beyond social media marketing, the lookalike audience has great potential for direct mail marketing campaigns, possibly increasing the effectiveness of DM and lowering the cost of acquisition.

What are lookalike audiences?

A lookalike audience is, essentially, just what it sounds like. It’s a group of potential customers or clients with enough similarities to your existing consumer base to make them attractive propositions. You can create a lookalike audience based on your entire target audience or just small segments, allowing you to create highly targeted direct mail campaigns aimed only at specific demographics.

You create a lookalike audience by noting the key characteristics of your current buyers. These might include:

  • Age
  • Gender
  • Geographic location
  • Interests
  • Buying habits or online behavior

This characteristic matching is generally done for you on a social media platform. You could utilize the information in your customer relationship management (CRM) tools for direct mail marketing to create your lookalike audience criteria.

How to use lookalike audiences

Lookalike audiences are ideal when your current target demographic is saturated, or you’re simply looking to expand your customer base. By finding other potential buyers similar to existing customers, you can target leads with a higher chance of converting. This could potentially boost ROI by reducing the amount of wasted time and resources mailing customers who were never going to engage with your brand.

The 2023 State of Direct Mail Report already shows that direct mail delivers the best ROI of any channel—and 74% of marketers agree. With marketing spending on the increase, any factor that can make targeting leads a more efficient process is welcomed by businesses in all industries.

Measuring results

As with any adjustment to your marketing initiatives, you need to be able to measure and demonstrate its effectiveness. Consider A/B testing by creating two different lookalike audiences and running the same direct mail campaign with both. Change only one factor between each audience, or you won’t know what made the campaign more or less effective!

Make sure you have the capability to measure the effectiveness of your direct mail marketing campaigns via the following:

  • Response rate
  • Conversion rate
  • Cost per conversion/acquisition
  • ROI

If you run multiple campaigns, track them carefully — compare and contrast them and ensure you understand which factors brought success so you can replicate them for future marketing efforts.

Omnichannel opportunities

Utilizing the lookalike audience method for your direct mail marketing provides you with plenty of data that you can transfer to other channels. Direct mail can be the hub of an omnichannel marketing strategy, empowering you to input that data into social media marketing and even content marketing.

Now that you know which of your lookalike audiences was most effective, try using that information to create a new LinkedIn advertising campaign. B2B providers can match their audience characteristics to LinkedIn users to increase the effectiveness of advertising and LinkedIn content.

You could also use this new data to hone your pay-per-click (PPC) advertising or create follow-up emails that are far more bespoke and in line with the additional traits of your new audience. Social media marketing becomes so much simpler as you can continuously update and add to the parameters of the various audiences you target with your ads, shared blogs, and other content or images.

Business content managers can even apply the same principles to video marketing, creating bespoke video audiences aimed at getting more shares and comments.

Acquisition strategies and lookalike audiences

As well as creating engagement with new audiences, you ultimately want your direct mail marketing content to convert and drive new acquisitions. 58% of marketers have allocated more money to direct mail campaigns in 2023, and 31% have just less than or over 50% of their budget allocated to DM (State of Direct Mail Report). To make that money work, you need techniques like lookalike audience generation to ensure the absolute best ROI.

Lookalike audiences on social media create higher click-through rates (CTR) in 90% of cases, which is a compelling statistic. However, for the best chance of gaining new acquisitions via direct mail campaigns and lookalike techniques, it’s all about having the right data and plenty of it. The more data gathering you can do on customer traits and behaviors, the more impact your direct mail campaigns will have on your new yet familiar audience.

Schedule a demo to learn more about how Lob can help you with customer acquisition and retention and how to craft the most effective direct mail campaigns.

Improve direct mail ROI with intelligent targeting

Curious about marketing lists and intelligent targeting? Watch our webinar, Intelligent Targeting for Direct Mail Campaigns to go into the topic further!

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