This document provides an analysis of a direct mail marketing campaign by Netflix to acquire new customers. Key elements of the campaign include obtaining an appropriate recipient list that matches the target market, designing the outer envelope and letter to attract attention and interest, and communicating the free trial offer and its benefits. However, the analysis notes some risks, such as the soft offer not obtaining quality customer responses and lack of urgency created around the trial expiration date.

1. Direct and Database Marketing 321
Assignment #2
By: Elizabeth Kulin
June 2009

2. Introduction
Direct marketing can be carried out through various Medias and is sent
from the marketer to the consumer. In the case of a direct mail piece, it can be
created in the form of a postcard, catalog, package or self-mailer. Strategic
choices of form, design, and matching the direct mail piece list and offer to the
appropriate target market, can increase the chance that the direct mail piece will
be opened by the recipient. These strategies can also increase the chances that
the desired response is taken by the recipients. Another advantage of direct mail
is the rate and types of responses provide testable data for the marketer.
However, from a negative standpoint, recipients who receive an abundance of

3. mail can over look direct mail and it is an expensive marketing medium to
execute. Nonetheless, it is noted by the Winterberry Group that this media is
expected to grow at a rate of 7.5% annually over the next few years (p.411),
which means it is still an important piece of a direct mail portfolio.
The first requirement of a direct mail campaign is to decide who the
recipients should be (for example, potential or currant customers). Once
decided, marketers must obtain the names and addresses from an in-house
database or list renting. As Vice Present of Direct Marketing for Netflix, with the
goal of targeting a direct mailing campaign towards potential new customers, it is
important to strategically analyze how the marketing team will obtain the prospect
list. Details about the list vendor, and what types of consumers will be on the list,
is important to gather and analyze. Ideally, the list would include consumers
whose characteristics matched the Netflix target market. This will increase the
chance that the recipients will be interested in the direct mail piece, and respond
to the offer. These chances could be increased by obtaining a list that possibly
includes people who own a DVD player, actively rent movies and have busy

4. lifestyles (a busy lifestyle could translate to an affinity for mail order services).
To learn if consumers on the list hold these characteristics, the marketing team
will have to communicate with the list owner prior to rental purchase.
The company “Experian” is a list provider that offers marketers the ability
to buy segmented lists based on different consumer attributes. Out of the 8 types
of list available for rental, the most appropriate one for this Netflix direct mail
campaign is the Behavior Bank Database (lifestyle data). This list claims to
include information on customer behaviors and buying trends such as hobbies,
brand preferences, product usage, frequent travelers and computer owners
(Experian website). Therefore, this list will offer the best insight to whether the
people on the list reflect the target market of individuals who rent movies as a
hobby, own a DVD player, and have a busy/travel lifestyle. Once the goal of
renting an appropriate list of recipients is completed, the offer must be
strategically created and analyzed.
The offer of this direct mail piece is a “free trial” membership. Its objective
is to entice recipients to respond, experience the Netflix service and by doing so

5. acquire membership that will create monetary sales for the company. The use of
the experience-marketing tactic could help to acquire a high volume of new
customers because it will allow responders to try the service and learn the
benefits first hand. For example, respondents who fall under the busy lifestyle
target market may become dependent on the benefits of the mail order service
that offers no postage requirements of late fee penalties. By becoming an
integrated part of people’s lives, Netflix can increase chances of conversion post
the free trial. However, this is a soft premium offer that could obtain high
response rates, which can help to grow the in-house database list, but not obtain
quality responses from recipients who are truly interested in becoming future paid
customers. To measure the results of the response, first the recipient must
initially open the mail piece itself. A strategic designed outer envelope can
increase this occurrence.
The outer envelope of the direct mail piece is a teaser that is used to
capture the attention of the recipient and encourage opening in an engaging way.
Marketers can convey the mail piece’s concept, offer and brand, using colors and

6. exciting copy formats to attract attention. The Netflix free trail outer envelope
integrates the company brand, uses design copy to attract attention, and conveys
the offer details (type, response method, and time expiration). The copy provides
the recipient insight to the direct mail piece’s sender and purpose, while the style
and design add to the attention attraction.
The actual copy includes the word “FREE” in large text font, is bright and
loud in design style, and announces to the recipient that this is an offer letter. It
also provides response instructions and timing expiration information. This
enables the recipient to learn about the offer details and response requirements
before opening the letter, practically illuminating the need to open the letter.
Unfortunately, this could counteract the objective of the outer envelope, which is
to get the recipient to open it. It is important that the outer envelope pushes
recipients to open because the internal letter is another strategic element to the
mail piece that has information for the recipient.
The goal of the letter is to connect with the reader, tell a story and claim
mail validity (p.416). This Netflix letter is a classic package that incorporates

7. personalization; by using the words “you” and “you’re” throughout the copy. It
asks recipients to respond by internet, which requires recipients to have access
to a computer and internet service. However, since Netflix targets individuals
with such access (its service is partially web based) this requirement should be
convenient for the recipients of this direct mail piece. The letter also states that
there is an expiration date for the free trail, however it is about 1 month in
duration post receipt (Jan received this letter in November and the expiration is
December). This duration could be to long of a span to really create a sense of
immediacy among recipients, which could negatively affect response rates.
Additionally, the copy within the letter has been designed using bold and
underlined text at various points. Such specific text stands out and enables the
reader to learn about the offer, response method, and time expiration without
reading the entire copy. Also, the PS, research shows 79% of people who open
a direct mail piece will read the P.S. first (National Mail Order Association, http://
www.nmoa.org/articles/dmnews/Postscripts407_RJ.htm), emphasizes the main
offer and incentive in effort to encourage the reader to become interested and

8. take action. Finally, the letter design includes an interactive device card that
attempts to attract interest to become hands on and involved with the letter.
Also, this card is printed with the offer and response methods details. This
means that if the reader tares off the card, and discards the letter, they will still
have a reminder and the necessary information to take action and respond.
These design tactics of the letter are used to encourage the recipient to
not only respond, but also grow interested in Netflix by translating their unique
attributes into customer benefits the response rate could be more successful.
For example, Netflix has a large library of movies, which is most likely a benefit to
the target market that often rents movies. To portray this selling point the copy of
this letter states that Netflix has, “over 100,000 DVDs – we’ve got everything”.
By stating this, the letter is speaking to the active movie renter target market and
illuminating an attribute, which they find beneficial. The letter reinforces this
visually with images of popular DVDs at the bottom of page 1, and verbally on
page 2 with a list of DVD titles.
A second selling point and unique attribute of Netflix is it mail order

9. service. The letter points out that Netflix makes life easier by stating that it has no
due dates, no late fees, and free postage (both ways!). This attribute is a benefit
that speaks directly to the busy lifestyle target market customer. By translating
selling points into customer benefits this letter seems to be attempting to
convince readers that going beyond the free trail, and becoming an active
member of Netflix, is beneficial. This tactic might be implemented to attempt and
offset the soft offer.
A direct mail piece is strategically written with the campaigns objectives in
mind. A classic format to follow is the AIDA formula. This letter attempts to
follow the AIDA formula as it implements each of the 4 criteria. Its color, design
and the repeated capitalized word “FREE” attract attention at the outer envelope
level. Second, the letter sparks the reader’s interest and offers beneficial
information describing the Netflix customer benefits. Finally, the letter should
leverage the user’s interest to create a desire to obtain the offer and a sense of
urgency in responding. This letter does attempt to ignite these feelings in the
reader by associating emotional elements of relaxation and fun to the action of

10. watching movies. However, it does not portray a real sense of critical urgency to
take action. Furthermore, this letter has included a buckslip brochure that also
does not convey a sense of urgency.
A buckslip is a visual element that includes shorthand description of the
letter. It requires less reading time and attention from the recipients. In this
case, the Netflix buckslip restates the membership benefits through copy and
image that details its DVD library and easy mail order service. It also includes
the free trial offer information. However, the offer information is not incorporated
into the main scene of the imagery, but in text below it. Recipients who do not
take the time to investigate the entire 1 page could overlook this lower section
area. In this case, the offer would not be communicated to the recipient. The
marketing team has decided that the bulk of the space should display information
about the Netflix membership service instead of the free trail offer. This could be
in efforts to offset the soft offer, but also entails risk for the direct mail piece and
its objective of acquiring new customers.