How Chief Marketing Officers Can Innovate With Direct Mail
The sweet spot of digital technology plus direct-mail effectiveness is out there, just waiting for you to find it.
All marketers worth their salt have probably used direct mail at some point during their career. It's a marketing mainstay, not purely by virtue of its having been around forever, but because it consistently delivers better response rates than any other channel.
And, while a new generation of marketers may not realize it yet, the integration of direct mail into the digital world creates an environment in which mail is poised to be more powerful, performance-intensive -- and cost effective -- than ever.
Let me back up a bit and address my supposition above, which is that for some marketers in 2017, direct mail may seem like digital's less sexy cousin, the slow burn to digital's instant gratification. Well, the reality is that direct mail does in fact require a commitment of time, creativity and effort; but it pays all that back in increasingly impossible-to-ignore ways.
And, while digital is easier to implement and cheaper per impression, there's a reason that digital retargeting has come to be referred to as a channel where marketers "spray and pray." This of course refers to the practice of spraying a message across a large, unknown universe of prospects and customers, and praying that some of them care enough to take action against that message.
Digital vs. direct mail -- not even a contest
With digital retargeting response rates averaging around 0.7 percent, I'd call that pretty cost inefficient. A direct mail postcard, on the other hand, will net about a 4.25 percent-to-5.0 percent response rate. It can do this for four key reasons that every marketer will understand and embrace:
1. The ability to smartly use data is the best it's ever been -- and only getting better. Advances in data-gathering, combined with the ability to segment and model with more precision than ever before, enables heavy-duty micro-targeting with direct mail.
Rather than relying on volume to deliver results (and picking up the attendant cost), marketers can target just those prospects most likely to make a purchase. Imagine, for instance, identifying anonymous visitors to your website who also have specific attributes that you see across your loyal customer base.
Our company, for example, is helping a high-end housewares retailer use this type of data to identify prospects who have recently applied for a home renovation permit. Imagine the possibilities! Advances like ID resolution, combined with the application of third party data, are among the sophisticated data methodologies that are available to marketers today.
2. Customization is less complicated than ever. With the advent of dynamic printing, combined with a plethora of campaign-management tools, customization is available at levels that weren't imaginable before. Direct mail is a particularly ripe channel for personalized messages and imagery due to its variety of formats, and physical connection to the recipient.
We work with many brands that leverage our custom template library to easily update postcards and other mail pieces with imagery and messaging that is relevant to their segments. One big box office retailer currently has campaigns running to six different segments. Few strategies are more powerful than combining point one (an engaged audience) with point two (a targeted message). But, today, direct mail can do even more.
3. Direct mail amplifies the performance of other channels. Multi-channel campaigns have become table stakes for most brands, as consumers move fluidly across digital and non-digital channels. And, when direct mail is part of that mix, it not only serves as a workhorse in its own right, it stacks up incrementally at every other touchpoint.
Our clients are experimenting with every combination of direct mail, email, social media and even addressable TV -- and they're finding that each channel becomes more efficient and effective when direct mail is priming the pump. In fact, The Little Book of Bigger Returns found that when direct mail was used as part of an integrated campaign, it boosted those brands' ROI by 20 percent, and helped improve the lift of online campaigns by a whopping 62 percent.
Certainly, direct mail can get into recipient's hands faster than ever. In the distant past, direct mail could take as much as 30 days to reach households. Now, it can get out in a matter of hours -- a critical upgrade, as our own client campaigns have shown us what direct mailers have known all along: Recency matters.
We've done numerous tests related specifically to the timing of mail after a prospect visits a website, and have found that the more quickly a prospect receives that physical reminder of the product, the higher is his or her conversion rate. In a test for a Fortune 100 retailer, we found that mailing prospects who had visited the retailer's site within the previous seven days produced an open rate six times that of visitors from the past three weeks, and a click through rate nine times the rate of visitors over that same period.
I'm not the only one who has figured all of this out. According to 2017 Media Usage Survey results, direct mail isn't just holding steady, it's growing. Thirty-one percent of marketers surveyed reported increasing their use of direct mail this year, with another 33 percent keeping it at 2016 rates. And based on spend and volume analysis, major brands such as Nordstrom, Starbucks and General Motors are among the top mailers in the country.
So, if you're a long-term mailer, I encourage you to keep it up.
If you're newer to the game, don't let fears about cost or complexity keep you on the sidelines. The sweet spot of digital technology plus direct mail effectiveness is out there, just waiting for you to find it.