On April 17th, there will be another postal increase for some mail categories. As a direct marketer, you can choose to do one of two things:
1. Roll your eyes and feel defeated by yet another price increase, certain that direct mail has become cost-prohibitive. OR
2. Scratch your head and reflect on ways to optimize your programs and actually save money despite the postage increase.
If you, like me, opt for the silver lining approach, let’s explore four smart and easy ways to decrease your direct mail spend and increase your response rates. Talk about a win/win proposition!
- Segment Your Data. By segmenting your database, you’ll be able to quickly discover buckets of opportunity ranging from your most profitable customers to your highest potential prospects. Allocate your marketing dollars wisely, and don’t waste your budget on messages that will fall on deaf ears.
- Craft Relevant Messaging. As a direct marketer, you goal is to illicit response. Not only do you need to find the right audience, you also need to hit them with a relevant message that will get them to act on your offer. Incorporating strategies such as personalization and human behavior response triggers into your copy and design can improve your response rate and ultimately increase revenue.
- Digitize Your Print. Use technology that will transfer your one-sized-fits-all communications into meaningful conversations. Through business rules assigned to your program, variable digital print can take hundreds of variables and make them come alive into a personalized message for your target audience. Less volume and higher response can validate the digital print ROI.
- NCOA Your Mailing List. An upfront investment in NCOA (National Change of Address) could save you sometimes thousands on undelivered mail. Use this updated data with correct mailing addresses to cleanse your database and maintain a high quality list.
I received a timely example in the mail yesterday that brings home the point I am trying to make. A catalog called “Your Electronics Source for Engineering Solutions” was sent to me but with the title of a position I held two years ago. Had I left Wilde, this irrelevant catalog would have never come to my attention. Lucky for them, I’m still at the same company. But unlucky for them, I’m not in the market for Extra Rugged Sealed Circular Connectors or Round Pin Fin LED Heat Sinks anytime in the near future. Money, in my opinion, not so well spent.
“Is direct mail dead?”
This is one of the most common questions we receive from our clients. Everyone has their perspective on this lively debate; but since numbers don’t have opinions, I thought I’d share some that were recently published in the Winterberry Group’s Outlook 2011: What to Expect in Digital and Direct Marketing.
- Marketers spent $114.6 billion on traditional media in 2010, compared to $154.4 billion for direct and digital advertising. Traditional ad spending is seen as dropped to $112.6 billion in 2011, but direct and digital expenditures will rise to $163.9 billion.
- Within the US, many traditional mediums (such as radio, magazines, outdoor advertising and newspapers) declined.
- Digital spending realized the biggest jump–8.5%–winding up at $27.7 billion.
- In 2010, marketers bumped up their direct mail spending, which increased by 3.1% to $45.2 billion.
- Direct and digital channels are making gains with overall spending on these channels is expected to rise by 6.2%, racking up to $163.9 billion in expenditures.
- In 2011, direct mail will grow by a healthy 5.8% to $47.8 billion in part due to financial services, retail and automotive marketers returning to the fray and the lack of emergency postage rate increase, according to Bruce Biegel, Managing Director at Winterberry Group.
- Among other channels, direct response broadcasting is anticipated to jump by 7.6% to $25.4 billion. Digital spending will show the largest growth–14% to $31.6 billion.
- When marketing budgets expanding, however, digital mediums are claiming most of the increases. Email, search and mobile marketing led the pack when Winterberry asked marketers which channels were capturing new spending.
- Email has staked a claim as the hub of integrated marketing efforts, Biegel says. During 2011, spending on this channel will jump 18.1% to $1.6 billion.
- Search offers the most predictable ROI; revenue generated from it is most closely related to expenditures. Local search options are drawing in small- and medium-sized business’ budgets. As such, search spending will increase by 13% to $17.6 billion.
- Spending on social media, still a nascent channel, will jump to 35.4% to $1.6 billion.
Clearly, direct mail is not in need of a defibrillator. In fact, when done well and part of a multi-channel campaign, direct mail can achieve impressive results. As Biegel points out, “[Direct mail] is not cool, but it works, which is why it came back.”
So next time you’re in a debate about the fate of direct mail, lead with the facts instead of jumping on the latest marketing bandwagon. And remember, your best bet is a combination of channels that are done well.
As I read more and more articles about the merits of using one marketing channel over another, I cringe at the word “versus”. Marketers preach that an integrated multi-channel strategy, from direct marketing to social media, will yield the best results. Yet we feel a need to pit one channel against another to see which one prevails.
In my experience, this “us vs. them” channel mentality becomes even more prevalent at larger companies where silos are built higher than cubicle walls.
In addition to the responsibility of the CMO, I’d like to see more positions created that are in charge of connecting the dots. Just like the game you did as a kid in your activity book after you completed “What’s wrong with this picture?” and “Which two are identical?”.
If more marketers in the trenches were charged with connecting how one marketing channel integrated with another vs (oops, I used the “v” word) showing metrics to justify their channel’s budget, results may be very different.
This may be a generalization, but it is certainly a familiar situation for me in past lives and companies that I have been exposed to.
I’d love to hear from companies that are doing it right. Then, I think they should share their lessons learned with others. Shout it from the rooftop. Blog it. Speak about it at industry events. This topic is sure to paint (or draw) one pretty picture.