THE CRUCIAL ROLE OF DIRECT MAIL IN EFFECTIVE CROSS CHANNEL MARKETING Direct Mail Presented by Erik Haug Senior Account Executive Erik.Haug@Expedite-DMF.com
On any given day, the average customer will be exposed to 2,904 media messages, will pay attention to 52 and will positively remember 4.
Direct Mail is Not Dead US Businesses spent $45.2 billion dollars on Direct Mail in 2010 and generated $702 billion in increased sales. Direct Mail spending is expected to increase by $25 billion by 2015. Direct Mail response rates are consistently 2 to 3 times higher than email response rates.
Direct Mail is Environmentally Responsible 70% of direct mail is printed on recycled paper. Only 11% of cut forest trees are used by the paper industry. The paper industry plants three times more trees than it cuts. There are more forests in the U.S. today than there were 50 years ago. An average person wastes 2.4x more electricity powering a single computer than on the energy used to produce the paper they use in a year.
Email Pros and Cons Pros Fast Inexpensive Great testing medium 79% of consumers click on a link from a known organization to learn more Cons 73% treat email as Spam if not subscribed to or requested Spam blockers Consumer short attention span requires short messages and limits creativity Opt in lists are often poor quality
Pros and Cons of Social Media Pros There will be 221 million internet users by 2013 84% of Gen Y users report noticing social network ads 19% believe the ads are relevant to them 48% join a brand or fan page Cons Overall online participation noticeably declines with increasing age demographics Users who like a brand or fan page often block notifications from that page
Direct Mail Pros and Cons Pros Proven, measurable results Ability to version by audience segmentation Provides space to convey complex messages Ability to reach virtually all consumers and businesses Cons Cost Perception of relevance by age Potential for failure if poorly planned, designed, executed
Four Massive Strengths of DM Endurance Acquisition Impact Sense
Attributes of Direct Mail Targetable Measurable Ability to convey complex messages Personal Proven ROI Creates impact Flexible Accountable Reliable Privacy Security Ability to drive online traffic Ability to retain and grow customer relationships
Recipient Advantages of Direct Mail Convenience Study and re-read materials Written record Review quickly – only 45% of consumers believe email is faster to read than traditional printed communications Show information to others
Statistics Prove Effectiveness 50% of consumers prefer direct mail to email 60% enjoy checking their mail 98% bring in their mail the day it is delivered 77% sort through their mail immediately 3.4% was the average response rate for letter size mail in 2010 75% say they receive more email than they can read Email response rates are down 57% since 2004 The 18-34 preference is 2-3x higher for health products information via direct mail than online sources such as social media
Direct Mail Response Rates Typical Direct Mail campaigns bring in around 1- 4% response rate Personally relevant campaigns can achieve 10-20% response rates The highest response rates are generated by relevant, personalized, unique mail pieces such as boxes, tubes, and dimensional mail sent to a narrowly targeted audience
Keys to Effective Cross Channel Marketing Use mail to drive traffic to landing pages Utilize personalized URLs (PURLs) Email before mailing to raise awareness and build anticipation Use email as a call to action, to persuade target audience to register to receive more enticing information through a direct mail piece
Keys to Effective Cross Channel Marketing Use social media to let customers know about an upcoming exclusive direct mail offer Print and electronic media should share a complementary design to produce a unified emotional connection A rich online experience driven by direct mail with a consistent message will get a customers attention
Keys to Effective Cross Channel Marketing Integrate digital channel analytics with your direct mail response data for more customization and micro segmentation Utilize variable data driven digital printing to create mail pieces with more customization and relevance
The Beginning… Every successful marketing program begins with one important question: What do your customers want?
The 9 Human Wants Acceptance Adventure Community Creative Expression Freedom Growth Interchange Responsibility Security
Definition of Good Mail Tangible, personal communication Connects with the recipient in a striking way Compelling feel, look, line of copy, etc. that makes the recipient feel important Provides an experience
Lists Many say that the LIST accounts for as much as 40% to 60% of the success of a mailing 40-40-20 rule
The Wrong List Great Offer Beautiful Copy Stunning Design Strong Call to Action The Wrong List
The Right List The Right List… Has the right geographic location Has the demographics that fit the best potential customer profile Has the quantities available to satisfy marketing needs
Types of Lists House Lists Response Lists Subscription Lists Contributor Lists Inquirer Lists Compiled Lists Consumer Lists Business Lists
House Lists A list of current customers and prospects This is the real value of a business Its important to capture as much information as possible Baseline info Name, address, zip+4 Purchasing History Additional Demographics Birthdays, family status, housing, etc.
Types of Response Lists Buyers Subscribers Expires Inquiries Members Change of Address Attendees Donors
Response Lists Customer Lists People that have responded to specific direct mail programs and offers Victorias Secret, L.L. Bean Subscriber Lists Subscribers to magazines, newsletters and subscription services Subscribers to People Magazine, Golf Digest, etc.
Response Lists Warranty / Registration Lists People that have bought and submitted warranty or registration cards for specific products Owners of appliances, Dell PCs, Sony TVs, etc.
Response Lists Advantages Highly targeted Higher response rates on related products and services Lists available to cover virtually any product or service
Response Lists Disadvantages High cost of rental (7.5 to 15 cents per name – or more) Requires approval of mailing piece You probably cannot use to market a competitive product Difficult to purchase for very specific geographic areas Most lists do not have sufficient counts to satisfy demand
Compiled Lists Business Lists Consumer Lists Compiled from multiple public domain records Telephone books Government records Census Data
Compiled Consumer Lists Occupant lists Full saturation – no name, just Occupant or Resident (Also known as OCC/RES lists) Consumer lists Includes name Current Resident 1124 Elm St S Evanston, IL 60606 John Adams 1124 Elm St S Evanston, IL 60606
Compiled Business Lists Always include business name and mailing address Contact names Necessary when mailing to large businesses Outdated data can hurt your response rate Title or function is often just as effective Business demographics Include type of business, sales $, number of employees, etc.
Business Lists Often dont have contact names Most lists are compiled Available universes are smaller than consumer lists (about 15,000,000 total establishments) Major Suppliers Acxiom Dun & Bradstreet Experian InfoUSA Trans Union Business Information Services
Information Contained on Business Lists Company Name and Address Job Titles Business Type (NAICS Codes – formerly known as SIC Codes) Business Size Number of employees Sales volume
Compiled Lists Benefits Wide coverage Easy to obtain Low price - $.02 - $.05 per name Volume discounts Disadvantages Not as highly targeted as response lists
Design Considerations Whos the audience? Whats the budget? Is our message clear? Are we providing an easy response method?
Data Processing CASS (Coding Accuracy Support System) A USPS testing program offered that evaluates and certifies the accuracy of addresses through postal coding software.
Data Processing CASS What will it do for the customer…. Address matched to National Address listing of USPS, verifies deliverability Standardizes address block (removes punctuation, abbreviates, zip correct) Appends +4 to zip, creates delivery point barcode If address does not match: Kicked out with code detailing reason
Address Hygiene NCOA - National Change of Address: An address correction service provided to mailers through USPS licensees Required for presorted mailings 4 years of Data - updated every 10 days Includes reporting options for customer Eliminates back end cost and data entry of ancillary endorsement service
Address Hygiene NCOA - National Change of Address What will it do for the customer…. Update movers on data file Mail piece gets delivered to the correct address the first time, no delays Important address updates available for customer to update their list Eliminates cost of address correction fees and data entry costs
Mail Classifications First Class Automated Mail 500 or more pieces (average.37 cents per piece up to 2 ounces, letter size) Usually delivers in 1 - 3 days local, 4 -7 days national Standard Automated Mail 200 or more pieces (average.26 cents per piece up to 3.3 ounces, letter size) Usually delivers in 4 - 7 days local, 7 – 14 days national Non-Profit Requires Non-Profit authorization from Post Office (average.15 cents each, letter size)
Sources DMA 2010 Statistical Fact Book Epsilon Consumer Channel Preference Study Printing Industries of America Winterberry Group Using Neuroscience to Understand the Role of Direct Mail – Bangor University, October 2010 International Data Corp Info Trends DM News USPS – Deliverables