This document provides an analysis of a direct mail campaign by Netflix to acquire new customers. It discusses the target market selection, list acquisition, offer design, envelope design, letter design, and buckslip design. Some key elements include selecting a lifestyle data list to match the target market, a "free trial" offer to experience the service, and personalized letter copy translating Netflix attributes to customer benefits. However, the document notes the letter could improve by conveying a greater sense of urgency to respond.

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

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 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

3. 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 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
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

4. 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 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

5. 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
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
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

6. 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 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

7. 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 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.