Cohorts’ Direct Mail Mojo: Jumpstarting Response Rates through Household-based Segmentation

After experiencing typical response rates of between 0.6% and 0.8 percent for its direct mail initiatives promoting its digital telephone service (VoIP), Time Warner Cable – Charlotte decided that it was time to adjust its direct mail marketing strategy to drive increased sales.

The company turned to Denver-based Cohorts to provide a greater understanding of its client-base. Cohorts is a household-based segmentation tool that categorizes all US households into approximately 30 segments, characterized by distinct demographic, lifestyle and consumer behavior patterns. Cohorts aided Time Warner Charlotte with a detailed portrait of how its client base is segmented.

Once the program had determined which clients in Time Warner – Charlotte's database would be most likely to respond to the digital phone service, Cohorts designed three versioned direct mail pieces designed to appeal to the different segment groups. The pieces they produced were named “Dog,” “Frog,” and “Lottery,” referring to the creative content of each piece.

The “Dog” versioned mailer was directed at adults between 26-33 with no children at home, and had a response rate of 1.31%.

The “Frog” mailer was directed at parents with kids at home and had a response rate of 1.27%.

The “Lottery” piece was directed at older adults, 46-58 years of age, with no kids in the home, and produced a response rate of 1.47%.

On average the campaign achieve a response rate of 1.35%, more than doubling the response rates of its prior direct mail initiatives.

When asked about what she attributes Cohorts' success to, Erica Gunn commented, “Well one major factor is that our system is household-based as opposed to many programs that are geographically based, targeting specific zip-codes.”

Cohorts also launched Hispanic Cohorts in October of 2004. Hispanic Cohorts identifies 19 different Hispanic household segments within the USA. Whereas many Hispanic segmentation tools are based on Hispanic sounding surnames, Hispanic Cohorts instead focuses on acculturation levels of its identified Hispanic segments. “This approach allows us to hone the message more precisely and in turn resonate more with each household that we target,” says Gunn.