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May 2011

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Direct Mail Marketing - The Old Granny Still Has Some Moves


By Cindy Williams

With the continual rise of Internet marketing over the past 15+ years, there are those in the marketing field and in business who believe that direct mail's heyday has passed. “We've entered a new era,” they say. “Just like the fax machine before it, direct mail is done, caput, on its way out.” Well, before you eliminate mail from your media mix and replace it completely with pay-per-click campaigns and a social media strategy, there are a few facts you need to consider. They may change the way you think about the future of direct mail marketing.

According to the Direct Marketing Association (DMA), more than 80 percent of U.S. households still read some or all of their advertising mail. What's more, last year the nation's non-profit groups collected nearly $200 billion through direct mail donations. In the sales arena, last year direct mail was responsible for the purchase of:
32,500 automotive services
55,656 apparel items
42,757 cosmetics and perfume items
10,200 furniture pieces
14,900 computer hardware and software items
Target Marketing, the respected direct marketing industry publication, predicts that despite rising postal costs the direct marketing industry has stabilized for the first time since 2007: 30.8% of surveyed businesses indicate they will increase their spending on direct mail in 2011; 41% say they will keep their direct mail spending the same as last year and just 12.7% believe they will decrease their spending on direct marketing this year.

According to findings published by the Winterbury Group, a respected marketing consulting firm, direct mail can anticipate 5.8% growth in 2011, which translates into $47 billion. They credit this rise primarily to new spending anticipated in the financial services, automotive and retail industries. The consultants also predict an increase in direct response print advertising (2.0%), which equates to $15.3 billion, and an increase in insert media that will enhance spending in this medium to $0.9 billion in 2011.

Clearly, the future of direct mail is far from dead. Old Lady Direct Mail, who has been around in some form since the time of the ancient Egyptians, not only has a pulse, but she also some new moves up her sleeve to make her viable for the foreseeable future.

Yet, despite the rosy picture these facts seem to paint, no thinking person can overlook the elephant in the room: postal costs that keep rising.

Rising Postal Costs - a Buzz Kill for Direct Mail Marketing
Another postal rate increase comes this spring, which will likely cause some mailers to rethink their strategies for reaching prospects and customers. The diagram below from the US Postal Service dramatizes just how steeply prices for First Class Mail have increased over the years. They're on the rise for third class mail too.

Facing a $7 billion deficit and decreasing use of the postal service by the general public, the USPS will probably continue raising postal costs for the foreseeable future and look for ways to alter service such as the proposed elimination of Saturday home delivery.

Still, because it is one of the few advertising media that offers a return that can be measured, direct mail advertising continues to be an attractive alternative for businesses. And, if done correctly, it continues to offer a highly attractive return on investment, despite the high cost of postage.

The Key to Success is Smart Targeting
If there's anything good to come from rising postal costs, it is that the price of mailing is forcing marketers to drill down on their best prospects and customers and live up to one of direct marketing's most celebrated tenets:

Direct Mail list selection allows businesses and non-profits to deliver their offers to those people who are most likely to be interested in them.

Gone are the days of “spray the field” marketing. No longer can mailers afford to blanket the earth with solicitations that are meaningful to only a handful of individuals. If you're mailing heavily and you're not targeting intelligently, you're wasting money and ultimately headed for disaster.

Fortunately, as the Direct Mail industry has aged, technology has improved our ability to know who our customers are so we can profile them and go out and find other people like them - the essence of list targeting.

What started out as an Egyptian slave owner circulating a papyrus flier to get help in finding a runaway slave has today become a finely-tuned science. Today, mailers can quite literally drop the toy catalog in the box of the toddler's parents and the investment opportunity in the hands of the fifty-year-old looking toward a comfy retirement. Like it or not, smart direct mail marketers know with surprising accuracy what we're all up to in our lives.

Their knowledge of us even extends to our grocery store purchases. Through loyalty cards, the large grocers track what you purchase then use direct mail to send coupons targeted to align their offers with what you've bought. Smart! That's direct mail that everybody wants because it is tailored to your buying patterns with pinpoint accuracy and saves the consumer money. It's definitely a new move from Old Lady Direct Mail.

This targeting accuracy should be good news to environmentalists who have long decried the waste of direct mail advertising. The reality is, according to DM research:
o Direct mail can actually reduce our carbon footprint. When a consumer buys from a catalog and eliminates driving the car to the mall, he reduces his carbon dioxide emissions. If we as a nation cut the miles driven by 3.3 billion, there would be a corresponding 3 billion pound reduction in carbon dioxide and a savings of $650 million on fuel. That's an environmental breakthrough.

o Mail, of all kids, accounts for only 2.4% of our country's waste.

o The creation of advertising mail accounts for only 0.19% of the energy consumed in the United States.

o Direct mail comes from trees, a renewable resource. The vast majority of mail produced today comes from trees grown specifically for this purpose. Direct mail doesn't deplete a resource. In fact, land committed to forests has increased by 5.3 million acres over the past three decades.
Other New Moves From Old Lady Direct Mail
Direct mail marketers are finding ways to tie their ad medium into social media, websites, email and mobile devices. By using their information gathering to launch multi-pronged campaigns that not only hit the mailbox but also the mobile phone, IPad and social networks, they cover all the bases and do a much more effective job of taking their message to the public and building advertisers' bottom lines. It's fast, it's efficient and it is the essence of smart marketing.

The Allure of Yesterday Updated for a New Age
In 1872, when Montgomery Ward started his direct mail catalog business, he could not have envisioned where direct mail marketing has gone today. And, although nearly 140 years have passed since that time, the main reasons advertisers were attracted to direct mail then are still valid today: Ibid. Direct Marketing Association.
1. Direct Mail is personal - Today through variable printing, you can address the reader by name and align your offer directly with his or her interests and buying patterns.

2. Direct Mail is targeted - The science of targeting customers gets more exact every year. From early days of simply targeting geographically to a certain neighborhood, we are now honing in on the psychographic and demographic subtleties that distinguish us all to put the right offer in the right hands on a far more regular basis.

3. Direct Mail is tactile - There's no substitute for holding an offer in your hands and considering it. This makes a stronger, more tangible impression on a prospect that is hard to equal.

4. Direct Mail is measurable - You can track your success, test offers, test lists, and tweak creative until your mailing is producing the results you desire. Few media offer this measurability. Certainly not TV, radio or newspaper advertising.

5. Direct Mail is cost effective - Yes, in spite of the soaring postal costs, direct mail remains affordable if you target your mailings the way you should. It is cost effective because it works.
Clearly, Old Lady Direct Mail has a few years on her. However, through the facelift of new formats, the tummy tuck the latest targeting methods provide and the lipstick brightness of modern ingenuity, she's updated her look and appears just as alluring today as she did 50 or even 100 years ago. She's definitely worth a second or third look as an advertising medium. The old girl definitely has some new moves.

Cindy Williams cut her teeth as a direct mail writer in the collectibles, banking and insurance industries. Today, she has over 25 years experience writing in a wide range of media. A former president of the RMDMA, she is an award-winning writer who holds numerous Summit Awards, the BMA Gold Key Award, the Art Directors Club Merit Award, and the coveted International Echo Award. Prior to founding Williams Creative Communications, she held creative leadership positions with several companies in the Midwest and Northeast. In 2003, the Rocky Mountain DMA named Cindy Direct Marketer of the Year, and in 2010 Creative Person of the Year. Cindy can be reached at www.YourGreatCopywriter.com or 303-465-1744.





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