Why Direct Mail is Anything But Dead

If you could invest your marketing budget in something that would yield a return on investment (ROI) of 1,245%, you would. And if you could get your customers to spend 28% more with your company, of course you would. Because you’re a smart marketer or business owner, and you are dedicated to generating profitable growth.

So then why aren’t you executing smart, targeted direct mail (DM) campaigns for your brands?

Wait … let me guess. Because “direct mail is dead.” It’s not trendy anymore. Digital advertising seems so much more measurable, and it’s what your CEO wants you to focus on.

I’ve heard it all before from the biggest brands and the smartest marketers. But I’m here to tell you that direct mail is anything but dead; that the advent of innovative and effective channels like social media advertising and retargeting do not excuse you from executing tried-and-true tactics like direct mail; and that the savviest marketers and most successful companies are eating your lunch when it comes to direct mail strategy.

1,245% ROI

Think about that for a second. According to Keith Goodman from Modern Postcard, each dollar spent on direct mail yields, on average, a return on investment of $12.45. Compare this to the average ROI of non-DM advertising, which is typically $5.29. So, when executed well, DM can produce more than double the results produced by some of your other marketing tactics. For some companies, a doubling of results might mean millions in sales, hundreds or thousands of new customers or clients, or significant gains in stock price. And yet, some of the hardest working marketing leaders in America are dismissing direct mail as “too expensive,” passé, or not efficient enough.

“In our 48 years of business, we’ve seen lots of trends come and go. The one constant is the need for printed materials,” explains Justin Eagon, Graphic Consultant at Vogue Printers. Interestingly, not only are printed collateral materials (like postcards, self-mailers, brochures and catalogs) a mainstay, companies like Vogue are witnessing an increase in corporate investments in direct mail. “Our clients in the healthcare, financial and non-profit sectors are doing more direct mail now than in previous years and are reporting an increase in sales, revenue and even fundraising success, respectively.”

A recent USPS study revealed that direct mail recipients purchase 28% more items and spend 28% more money than recipients of other types of advertising. Plus, more than 60% of DM recipients were influenced to visit a promoted website with the biggest influence on first-time buyers.

While our clients are scrambling to increase the open rates of their mass email distributions from 18% to 30%, I sometimes have to remind them about the “open rate” for direct mail. A staggering 98% of “snail mail” is looked at and sorted on the very day it arrives.

Have I got your attention yet? Good.

Keys to a Successful Direct Mail Effort

While direct mail, when executed flawlessly, can help you achieve significant brand and direct response gains, it’s not as easy as slapping your logo on a postcard and sending it out into the universe. To generate great results, a direct mail campaign must be firing on all cylinders. Before you release your next batch of art files to your favorite printer for your next mailing project, be sure to give appropriate consideration to the following:

1. Strategy. What are you trying to convey and what do you want the customer to do? The quickest way for a DM project to fail is for the strategy to be weak. If you’re the head of marketing for a hospital, for example, you’d be wise to understand that different goals require different approaches. Convincing local residents to come to a free seminar about weight loss will be achieved through a very different strategy than shifting regional sentiment about wait times and quality of service in your emergency room.

2. The list. I’m convinced that most DM projects fall apart at the level of the list. Renting or purchasing direct mail lists isn’t sexy; building a great list is Herculean work; and running a report from your own database can be a disaster if your database is full of holes. So marketers tend to rush to the creative ― writing witty headlines and choosing evocative stock photos to convey their message. But the list will make or break you.

Our colleagues at Modern Postcard assert that 40% of the success of a DM program is dependent on the list, and here at Silver Tree, we’d wager that the dependence might be even higher. Even when you have a good partner for purchasing or compiling lists, it’s easy to make mistakes. We’ve seen MBA programs mail expensive packages to 6-year-olds and we’ve acquired lists from B2B data experts like Hoovers that were more than 25% undeliverable.

When it comes to B2B lists, we have found that the highest quality data comes from your own CRM system (e.g., the best sales prospects for Grainger’s newest offerings are current and previous Grainger customers) or from membership associations that rent lists (like when a medical malpractice insurance company targets the current members of the American Society of Healthcare Risk Managers). That said, even your own list goes stale quickly; 18-20% of the population moves every year, and 10-15% of businesses move or stop operating each year. Don’t blink, or you’ll lose your customers.

3. Message and creative. You must say the right things, say enough, but not say too much. You’ve only got a matter of seconds from the time someone picks up the direct mail piece before she decides whether to act on it, set it aside, share it with someone else or trash it. Your words and images need to make a meaningful offer and contain an actionable call to action (e.g., “bring this coupon to our 4th of July sale in Mequon,” or “visit our website before the end of the month to enter our sweepstakes to win”). Like all advertising, direct mail can become expensive at the outset (especially if you’re paying for first-class postage), so producing pieces with generic messages is wasteful. You can do better.

4. Personalization and integration of tactics. Twenty years ago, when email took over our lives and our businesses, marketing experts predicted that direct mail would die. And it simply hasn’t because the sharpest marketers (and printing companies) are finding new ways to keep print relevant. We asked Doug Still, Director of Marketing Services at Printing Arts, to tell us what he’s seen in the past 10 years and he told us, “Digital and print mediums have found a way to peacefully coexist. We believe mixing the two makes for a more enriching and dynamic consumer buying experience and offers marketers new ways to promote their products.”

What has replaced static messaging is an innovative approach to marketing that can make use of personalized website URLs (PURLs) and combinations of variable data messaging that is delivered via email as well as in the traditional mailbox. By way of example, consider the work being done at Lake County Press, where Senior Vice President Peter Douglas reports that such integrated campaigns for a hotel chain client netted a response rate in excess of 25% (whereas 1-3% response on static direct mail was previously considered successful).

And in a world where children expect the ad-server on their tablet device not to show them ads for video games they already own and where websites remind us that we’ve been meaning to buy those green throw pillows from Pier One, personalization matters more than ever, regardless of whether your marketing tactic is digital or traditional. According to the American Marketing Association, 91% of brands plan to personalize marketing messages to consumers’ individual needs. Are you on board?

5. Format, timing, and sales follow through. I’m convinced that busy marketers tend to dismiss the impact of direct mail because it’s hard work ― not because it doesn’t work. It’s easier and faster to launch a paid search campaign with Google or even to write a script for a streaming radio commercial and have it produced and live on Pandora or Spotify by the end of the week. And because marketers are being asked to do more with less staffing and smaller budgets, they sometimes opt for a project they can actually complete in a reasonable time frame.

Direct mail, when done right, is hard because it’s not just about the list, the message, the design, and the strategy, but because it's also but smart timing (like getting the cadence of postcard wave mailings just right), about memorable and appropriate formats (like the college admissions team that mailed custom white boxes with Rubiks cubes inside instead of sending another boring view book), and it’s about sales follow through (like taking the time to train the sales team how to close the deals you are going to generate when customers receive their direct mail piece).

Direct Mail Isn’t Dead, But It Also Isn't Everything

At Silver Tree Communications, we would never suggest you put all your eggs in one basket. So while we love direct mail, we’re unlikely to suggest you put 90% of your marketing budget against this tactic. (Unless you’re like Bed, Bath and Beyond, whose now-famous blue and white sumo postcards with store coupon are perhaps the most ubiquitous and successful direct mail pieces in the nation.)

We suggest you start experimenting with direct mail and measure your results. Integrate your DM thoughtfully with other touch points, like social media, television, radio (streaming and broadcast), paid search and print advertising. Eagon tells us that “marketers are realizing there is a strong need to include printing in their multichannel marketing efforts,” and he’s right.

Take a lesson from brands like Blue Man Group, which uses postal-to-email match services so they can mail out direct mail pieces that say “watch your email for a special offer from Blue Man Group” and then follow up with an email to those same would-be customers about seat upgrades for their upcoming shows.

And cut yourself some slack when timing is tight. If you need to reach the customer today, DM isn’t going to work ― though social media, paid search, even banners or streaming radio might be your solution. But once you get through your marketing crisis, then get back to planning your next DM campaign. Putting it off is simply delaying results you should be taking to the bank.

Our Predictions for the Future

If we were asked to predict what the future of direct mail looks like, we’d wager on the following:

  • Innovative formats will rule the day. Expect to see interesting die cuts and coatings on brochures and postcards, a resurgence in the use of door hangers (we use National Distribution Systems), and 3-dimensional product mailings.
  • Women and millennials will drive the renaissance in direct mail. Millennials don’t want their smart phones cluttered up with advertising, though they welcome your messaging in their mailbox. As for women, 80% of the direct mail opened in the United States is opened by women.
  • High-touch marketing will be literally about touching the marketing. “Marketers are finding, after many years of testing both traditional direct mail and email campaigns, that consumers (in many cases) prefer the tactile feel and interaction of direct mail,” explains Still. And he’s right. New print technologies that create soft-touch, grit, gloss and dull experiences are changing the game. When Audi sends me a postcard treated with soft-touch aqueous coating to promote their new A4, I’m caught happily in the experience. The feel of the paper reminds me of their luxurious leather seats. An email during my busy workday could never have elicited this response.
  • Technology will enable rather than replace direct mail. Douglas, whose firm has been in the printing business for nearly 50 years, says that “technology has played a large role in our evolution to helping our clients manage their brands.” We predict that successful printing companies will continue to see themselves as graphic consultants and partners who can offer their clients diversified services and products.

The Elephant in the Room

“Why not ‘walk the talk, Kate?’,” asked one of the printing specialists we talked to while developing this article. I think he expected a defensive answer, rather than the strategic one I’ll offer now. It’s a great question. This article is being published as part of the Silver Tree Communications blog series, will be shared on social media, and will receive additional distribution via an e-newsletter to our clients and friends. We love direct mail, as I hope is fully evident by now, but we believe that direct mail is a powerful sales tool. The reason this article isn’t being sent as a brochure or white paper to postal boxes across the nation is because I’m not trying to sell you anything ― just teach you a few things and spark your thinking. Direct mail is great for brand marketing, direct response marketing (sales), and time-bound offers. But I hope people will be reading this article, on demand on various electronic devices, a year from now. Also, I didn’t choose DM as the medium for this message because I don’t expect a measurable return. (That said, if you like what you’re hearing and need help with your marketing strategy or direct marketing campaigns, please give us a call.)

Just as email isn’t the right tool for every effort, neither is direct mail. The channel should serve the business strategy. In the end, my point is this ― DM didn’t die with the invention of email any more than the advent of the tablet computer obsoleted the cell phone. Today we have more: More channels to manage, more targeting methods to consider, more impressions to make before the customer sits up and takes notice. Being a great marketer is not about letting go of tried-and-true tactics just because something new came along. Marketing today is not for the faint of heart because it’s a heavy workload to carry. It’s no longer about “one tactic or the other” but about “one tactic and the other.” There is more to understand, more to juggle, more to integrate, and more to measure.

If your brand is like most, you need to be versed in every type of marketing tool in the toolkit. And then it’s about matching the tactic with the messaging, at the right time and in the right way. No small order, but I believe you can master it. Let us know if we can help.

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