Building Success with Direct Mail
“The latest direct mail response rate data from DMA will leave you speechless.” Sure, it’s a clickbait-esque headline, but in this case based in fact when you’re talking about the latest DMA Response Rate Report, which found response rates of 9% for a house list and 5% for prospecting in 2018.
Here at Specialists Marketing Services, these stats mirror our clients’ experience pretty closely. So, what exactly are mailers doing to achieve direct marketing success rates that outpace email, social, paid search and display combined?
According to DMA, it’s likely a combination of these factors:
- Marketers are becoming more selective, sending mail to recipients who actively welcome it.
- Better-quality data and more sophisticated modeling allow for more tailored offers.
- Advances in digital production make segmentation and personalization more cost-effective at higher volumes.
We’d add another item to the list: Patience. Successful marketers recognize direct mail campaigns as part of a long game rather than delivering immediate gratification, especially when it comes to prospecting.
The role of direct mail in prospecting versus retention
The majority of historically heavy mailers — catalogers, for example — found their response rates for prospecting direct mail beginning to decline several years ago. Many still utilize direct mail for prospecting, but not nearly as much as in years past. Yet, they still devote some resources to the channel, because they understand the economics for making direct mail work in terms of cost per acquisition. Generally speaking, these mailers are also well-known consumer brands rather than start-ups with little to no name recognition in the marketplace.
Customer retention or reactivation direct mail campaigns, on the other hand, can prove successful for a variety of brands and vertical markets. When even pure-play e-commerce companies use direct mail for their retention efforts, you know it works.
Other useful retention/reactivation tools can include trigger marketing, such as trigger postcards based on a customer’s on-site activity like a shopping cart abandon. Trigger postcards are easy to personalize while engaging your audience across multiple channels with a consistent and hopefully memorable message or offer. They’re also ideal for reaching site visitors who haven’t yet opted into your email list and email recipients who aren’t opening your emails.
Creative trends in direct mail
For a variety of reasons, bigger isn’t always better when planning a direct mail campaign. Costly oversized or multi-page mailers have been replaced by leaflets, mini-catalogs and even double postcards, which provide both production and postal efficiencies. These are especially effective when used to drive online traffic, where shoppers can access an entire product line.
The digital production advances mentioned above have also greatly simplified the use of variable data and images to make even the smallest real estate as engaging and relevant as possible.
The role of direct mail in nonprofit acquisition efforts
Direct mail still accounts for a large proportion of nonprofit direct marketing revenue, because it targets an audience that is still more likely to interact through the mail.
In contrast to for-profit downsizing trends, many nonprofit organizations are still finding success with “bigger = better” when it comes to direct mail, including high-impact premium packages. However, a balanced mailing schedule is optimal as donors will only contribute so much in a given year. Too many premiums increase cost for a diminishing return, while too few lead to an underutilized, low-responding file.
In terms of direct mail package features, we’re seeing an increasing trend of currency in packages and pre-paid or stamped reply envelopes.
Choosing your data — and your data provider — wisely
If your brand is delving into using direct mail for your customer acquisition efforts for the first time, here’s a quick primer on the basic types of lists available:
- Transactional data is drawn from specific buying behavior. This type of data can be found in a stand-alone branded list that’s available on the rental market. Transactional data is also available through co-op lists, which are master databases available to members of the co-op.
- Subscription files are buyers who subscribe to a magazine or publication, such as Better Homes & Gardens, Forbes or the New York Post.
- Nonprofit donors who financially support one or several charities.
- Compiled data, also known as aggregated data file sources, is drawn from broad public sources such as survey data, motor vehicle records or change-of-address requests.
A successful direct mail campaign will utilize the best mix of a variety of sources depending on the brand, product category, intended audience and campaign goals; ideally, data sources would permit a multichannel approach incorporating digital components such as email, retargeting and display.
So, what’s the “best” type of list for your campaign? Simply stated, the one with user behavior that mirrors your campaign goals. If you’re looking to sell product, your first choice would be transactional data. To boost your subscriber count, start with subscription files.
After that, here’s where knowledgeable direct marketing specialists or a reputable advertising agency shine. Their experience can be invaluable in assembling the right mix of data sources to meet your campaign goals, and helping you determine if investing in modeling techniques is worth the time and resources.
For the best possible campaign outcome, look for a company that has both broad spectrum experience and some proven successes in your particular vertical. This ensures they have a handle on general market trends as well as the quirks of your market and audience, and can advise on the best tactics for managing customer acquisition costs while driving strong response. One quick way to get a sense of a data partner’s experience is by looking at their datacards.
Considering a direct mail campaign? Whether it’s your first or your fiftieth, let’s talk about getting results.
We’ve never done a true multichannel campaign that includes postal mail. Where do we start?
You’re not alone! Though the overwhelming majority of consumers prefer a multichannel approach, just 14% of brands say they’re running coordinated customer acquisition campaigns across all consumer channels. Our advice? Start with a postal/digital approach and build from there. More multichannel tips here.
What about multichannel campaigns for nonprofits — do the tactics differ?
Online giving grew by 12.1% in 2018, according to Double the Donation. But demographic differences between donors — including generational —can have considerable impact. That’s why testing diverse engagement methods is critical for nonprofit organizations. Focus on donor retention rather than acquisition to start. Closely monitor your analytics to see who’s giving and how, then let the data dictate where you invest your marketing dollars. Since half of all nonprofit site traffic came from mobile and tablets, make sure all your digital campaign efforts are mobile-optimized.