Direct Mail: The Good, the Bad, and the Scary
Response rates may be down, but they’re still high (averaging 3.4 percent) compared to high-tech digital channels. ROI needs a shot in the arm, though.
Do old-school marketing tactics such as “snail” mail still work? You betcha, according to research gathered by the Direct Marketing Association (DMA) from an online member survey this past spring. Yielding average responses from 34 of every 1,000 pieces distributed, direct mail is nearly 30...
To access the remainder of this piece of premium content, you must be registered with MyPrintResource. Already have an account? Login
Register in seconds by connecting with your preferred Social Network.
Complete the registration form.
The panel discussion is part of the broader agenda of DMA’s recently announced Data-Driven Marketing Institute (DDMI), which is engaging the entire data-driven marketing industry in a coordinated campaign to set the record straight about the countless ways that data-driven marketing benefits consumers – and fuels the economy. Through research, advocacy, and consumer engagement, DDMI is working to advance and protect data-driven marketing; to increase understanding and improve perceptions of data-driven marketing; and to prevent needless regulation or enforcement that could severely hamper data-driven marketing and stifle innovation.
“In Washington, DC, and around the globe, regulators are seeking to put an end to the collection and use of consumer data,” said Linda Woolley, acting president and CEO of DMA. “In this informative panel discussion, attendees at NCDM will learn about the threats to marketers’ bottom lines, from executives on the front lines defending the responsible use of Big Data.”
The Numbers
Why does direct mail continue to work so well, despite such Big Brother paranoia? Because it is targeted, tied to geography and demographics, and it’s personal. Most importantly, it is measurable, said the US Postal Service. “When mail gets opened, sales get closed,” touted a USPS print ad. The aforementioned DMA survey found that direct-mail response rates have dipped some 25 percent over the past nine years, from 4.37 percent in 2003, yet have remained stable since 2010.
The continued effectiveness of direct mail has a lot to do with the quality of data and the ability to target mail more effectively, Yory Wurmser, DMA director of marketing and media insights, told Ad Age earlier this year. “The future of direct mail lies in that [data], but the quality of the response for direct mail also indicates that direct mail is not disappearing,” Wurmser said. “It’s not the situation you had with newspaper advertising where it just fell off a cliff. It’s probably stabilizing instead of continuing a steep decline.”
After upfront spending on paper, ink/toner, printing, and postage, however, is the 7 percent return on investment (ROI) good enough for direct mail? Cost per thousand for business-to-consumer letter mailings is around $556, while business-to-business is $919. In a post-DMA show blog last month, Pat Deck, chief marketing officer of exhibitor IWCO Direct, stressed, “Marketing budgets remain tight and ROI is more important than ever.”
The DMA survey found that email produces far better ROI at 28.5 percent, which explains why it will continue to attract a slightly higher percentage of marketing budget dollars in 2013. Eighty-three percent of the respondents use email in their promotional campaigns; direct mail followed, at 79 percent, and was trailed by paid search, Internet display, and telemarketing. In comparing direct mail ROI with email’s, Wurmser noted, “The cost is equivalent when we’re talking about getting a new customer, but for [a response from] an existing customer, email is more efficient, with ROI that’s four times higher than direct mail.”
Ignorance is Not Bliss
But counting ROI dollars can be deceptive, warned foldfactory.com’s Reese. Part of the problem, she said, is direct mail is not always measured and tracked accurately the way that other mediums are. “The software solutions do exist,” Reese pointed out, “such as the Intelligent Mail Barcode.”
And while statistics stack up in favor of direct mail, print providers might be surprised at how many prospects don’t even know how to start a campaign rolling, Reese added.“Our Trish Witkowski led a workshop series at GRAPH EXPO [in October], and what we found is that there is a lot of interest among marketers and agencies but many don’t know where to begin. They are in desperate need of guidance.” Witkowski, the firm’s chief folding fanatic and a graphic designer by trade, has become somewhat of an Internet cult figure for direct mail print, regularly blogging and hosting tutorial, grassroots videos online.
Witkowski and Reese believe that adequate print training has been somewhat neglected in the education of young designers and media buyers under the age of 30, many of whom don’t know what they do not know. “They’ve grown up with this tremendous access to images and ideas,” Reese notes, “yet many of them have no clue about the basic capabilities of digital printing, for example, or variable data and imaging, not to mention segmenting lists and doing test mailings. We have to make the younger generation feel like print belongs to them, too; that it’s not nebulous. They need to think of it as the art and science of their marketing message.” The self-proclaimed chief vision officer knows that younger people can develop an emotional attachment to and respect for print, citing related studies conducted at nearby Vanderbilt University.
