When Greg Zakowicz, Senior Commerce Marketing Analyst at Netsuite, approached me to participate in his Commerce Marketer podcast, I jumped at the opportunity. Greg’s audience includes some of the most forward thinking marketers at retail and ecommerce companies – a perfect group to speak to about direct mail automation.
Listen To or Read This Fun Interview
Greg dives deep with me to discuss why marketers are returning to direct mail and how they’re deploying campaigns that deliver results. We touch on neuroscience, trust, the “long tail” of direct mail response, costs of direct mail and more.
Commerce Marketer Podcast Transcript
Greg Zakowicz: This episode of The Commerce Marketer Podcast is brought to you by the Bronto Marketing Platform, a flexible, yet powerful software that helps you grow revenue, save time, and optimize marketing resources. If you’re interested in making sophisticated email marketing easy, visit bronto.com, that’s B-R-O-N-T- O.com.
Direct mail is interesting. Over the past several years, I’ve seen an uptick in not only receiving retailers direct mail, but my engagement with it. In the past, I would normally just throw it in the trash, but now, I read it, I consider it, and yes, sometimes I even respond to it.
Greg Zakowicz: Many of the guests who come on this podcast for the last few years, we’ve always struck up conversations around this exact same behavior, and they’ve all seen the same thing on their side that I was doing, so I had to do a podcast on direct mail and how it can be combined with your other digital marketing tactics.
So here we are. Welcome inside of The Commerce Marketer Podcast Studio. I’m your host, Greg Zakowicz. Today, we’re going to talk all about direct mail, consumer response trends, how to tie it to your digital marketing channels and a whole lot more. To join me today, welcome to the show, Dennis Kelly, the CEO of Postalytics. Welcome to the show, Dennis. Thanks for taking the time to be here.
Dennis Kelly: Thanks, Greg. I’m excited to speak to you and your audience.
Greg Zakowicz: It’s going to be a good one. Dennis, before we get into it, why don’t you set the table for us? Why don’t you give us a little background about who Postalytics is and kind of what your customer looks like?
Dennis Kelly: Great. Postalytics is a direct mail automation tool. This is a new category of SasS software that has sprung up over the last couple of years, We’ve been among the first to come out. And what we do is we help marketers automate the process of producing direct mail integrated with digital marketing, CRM, and marketing automation tools, and measure the response of direct marketing. The goal of a tool like Postalytics and other direct mail automation vendors is to simplify the process of generating direct mail campaigns so that they look and act and feel a lot more like email marketing. And so a lot of our customers are folks on both the B2B and B2C side that have invested heavily in email marketing, in digital marketing and want to add direct mail to compliment those channels.
Greg Zakowicz: That’s very cool. I’ve been looking for a guest on direct mail for probably four months now, and I’ve just haven’t found the right guest. And I came across you and your copy. I knew just by looking at some of the stuff I had to have you on, so I know this is going to be good conversation today. Some people listening are going to get it and they’re going to say they’re probably doing the same thing that I said there in the intro. And they have found themselves responding more to direct mail in the past several years, and they have maybe the preceding few years before that. And we’re going to talk about why we think that is, but what do you think before we get into this whole thing, what do you think the number
one notion about direct mail that people should probably just forget right now that maybe they hadn’t ingrained in them?
Dennis Kelly: Well, it’s interesting that when you speak to a lot of marketers who will all call themselves data-driven marketers, they’ll say, “I’m data-driven marketer. I don’t make gut decisions, I don’t make decisions based on my intuition.” And then they say, “Well, everybody throws away direct mail because that’s what I do.” And so data does show that folks do actually look at direct mail, and that it is a pretty powerful channel when it’s used in the right way. In fact, the most recent
data that I have shows that about 42% of consumers either read or scan direct mail before throwing anything away. So there’s this misconception, and I think it’s driven a lot by the older batch and blast junk mail days of, say, pre-2008 where folks were just getting hammered with direct mail all the time. A lot has really changed, a lot of technology’s changed, a lot of targeting and personalization has changed, and so it’s really time to take another look at the channel.
Greg Zakowicz: Do you think that’s why it’s making a comeback is because you can put a lot more data behind it than today than you could say 10, 15 years ago?
Dennis Kelly: Yeah, there’s really a couple of dynamics at work. First, as you say, there’s an incredible amount of targeting, personalization and segmentation that you can do with direct mail. And so the quality of the advertising, the quality of the offers, the CTA and everything in the mailer makes a heck of a lot more sense. Second, folks that are now using web and landing pages to respond to direct mail. And that didn’t really exist 10 years ago or 15 years ago. But now, you get a piece of direct mail that really grabs your interest. First thing you do is go online and dig in further, do more research. Before you had to respond and talk to a human. A lot of folks are hesitant to do that. So now, direct mail is used to drive people online where they can then dig in deeper on an offer and become more closely aligned with a brand. And then the last thing is the volumes have dropped. So you’re getting less mail than used to. So the mail you do get is more impactful.
Greg Zakowicz: So that’s absolutely true as well. I mean, the only thing I ever get is usually direct mail and then a couple of bills that usually have paid, and they just keep trying to get money out of me. So it makes direct mail look even better at that point.
Dennis Kelly: Exactly.
Greg Zakowicz: So there’s some data out there that shows, and I might’ve even come across it on a blog post on your website, if not, everyone can yell at me afterward, but it shows that the trust in direct mail is relatively high. And I think that might tie into maybe the reasons you talked about were if you think about it, before you used to have to call and talk to someone and whether people want to do that or not, but there was always some hesitancy with that. But you compare that to other channels. It could be a cold call and on B2B side, where we’re getting cold calls and you’re always skeptical until you’re not skeptical and emails. I love emails and I think it’s extremely powerful, but some people might look at emails and say, “Well, there’s either no data behind it,” because they’re doing it poorly or you get that reputation of like spam emails of like 10 years ago, some with junk direct mail. Are those the reasons that you think that there is more general consumer trust in direct mail over some of these other marketing channels?
Dennis Kelly: Yes, I do think that it’s a pretty complex issue. And just to take a step back, I think that trust in institutions is really in a decline, a long-term decline. We see that across every spectrum of our culture now between politics, business, everything else, trust is really hard to establish, it’s hard to keep. And all of the issues associated with data breaches, with online ad fraud, with things like Cambridge Analytica, and election stealing ideas, all sorts of stuff is out there around digital marketing now. And it just corrodes people’s trust in what they’re looking at.
Dennis Kelly: What’s also interesting is that neuroscientists have been studying the way that our brains process different types of ads. And one of the conclusions they’ve come to is that physical media that you hold and you touch, like a direct mail piece, is actually processed very differently than digital media. Our brains store the information in a different place, they process it differently, and our brains are able to more quickly recall media that we have used multiple senses to digest. And so it really gives this feeling that traditional media, like direct mail, is really authentic, tangible and it can be trusted, as opposed to these newer digital channels that are often now associated with less than desirable attributes.
Greg Zakowicz: Interesting thing there. I think if you’re a retailer that sends emails right now, maybe you might want to point to your consumers the next time you send an email to actually pick up and hold their computer because maybe that’ll tingle their senses. It’s interesting you say that though because this is a long, I’m working looking over 20 years ago now, but I did for a brief time door-to-door sales and they were like $20 price points. So they were not like asking you to cut a check for 10 grand for new solar panels or something. But that was one of the sales tactics was try to put it into their hand because once it’s a possession thing, but then you’re using different senses, they can actually feel the physical thing and there becomes a more of attachment to it. And it’s interesting you say that because I go back to a sales tactic from just doing door-to-door sales and trying to put this card in the people’s hands, trying to get this sale, doing the same thing there. So that’s really interesting you say that.
Dennis Kelly: Well, you think about it further, if more and more of our experiences are now virtual and online, where there is no physical contact, those that you do have become more valuable. They stand out more and they’re registered in your brain and anchored a lot more deeply than the thousands of digital interactions that you’re having all day.
Greg Zakowicz: Yeah, absolutely. So let’s go, I’ve got to get a neuroscientist on the podcast too.
Dennis Kelly: I know a great one that you can talk to.
Greg Zakowicz: With all joking aside, it’s actually on my list. So let’s talk offline about this because it’s on my list for a podcast episode, so this is good. I love the connections here. So there’s a lot of ways to use direct mail. It’s just same with any other marketing channel. We can use it for new customer acquisition, we can use it for post-purchase nurturing, lapse purchase or win-back, especially if they’ve opted out of an email campaigns, just like social media targeting. From your experience and your opinion, is there one better use case in other or is it just really a construct of how you develop and design the program for maximum effectiveness based on who you want to target? Is there one better use case than another?
Dennis Kelly: That’s a great question. And often I think that marketer’s ideas of how they should use a channel are shaped by the vendors that help supply or produce that channel. And traditionally, direct mail’s role, in retail in particular, has been an acquisition mailing. And it’s used all day long to try to find new customers and drive them into the stores. Many retails agencies have developed a lot of expertise in acquisition mailing, and the printing/mailing industry that supports them have developed a lot of expertise. And there have been some characteristics associated with direct mail production that work well with acquisition mailing. If you’re going to do any kind of personalization at any kind of cost per piece ratio, that makes sense. In a traditional capacity, you need to have a pretty big list that you’re sending to. And so the printer/mailers and everybody around the industry really sort of focused on acquisition mailing as the way to go.
Dennis Kelly: And so that’s great. It works well. There’s a ton of that going on. But now, with integrated direct mail automation tools, you can do small batch, fast turn mailing, or even integrated drip style campaigns that are integrated in with workflow automation and all sorts of other tools, and you can bang those out in minutes. So we’re seeing a ton of new use cases for mail in the post-sale upsell, cross-sell, world loyalty, win-back. Those types of campaigns are really now becoming possible for the first time.
Greg Zakowicz: And I’m going to assume like everything else, how effective those campaigns are probably data. So let’s look at the data behind it. You said you can take a small batch, or let’s use post-purchasers for an example. So we’ve got a recent set of customers who purchased, is a purchase date and what they purchase the most important data there, is really just having a purchase date or do we need a lot of granular data to make it more targeted, or is there one method or one piece of data that’s more important when it comes to these more targeted campaigns, or can you really work with whatever you have and it just a matter of how you construct the actual use case for it?
Dennis Kelly: I think that we see customers that have access to different levels of granularity of data, all over the board. Some folks are able to dive deep and really get very targeted with their creative and with the offers and the CTA’s that roll along with that. And the way that direct mail automation tools are created now, you can actually have highly dynamic content that is presented to different members of an audience, just the same way you would with email. And so you can build all that capability. And I’d say the vast majority of customers at this stage of the game that are just really learning about these new automated tools are not near that level of advancement. And so they’re using basic anchors such as a purchase date, a purchase amount, whether or not somebody has been active on email, and using some basic data points to as the focal point of their campaign.
Greg Zakowicz: Very cool. So a lot of times we’ll see, especially with the email marketing side, either a contact stops opening emails, they become unengaged, or they’ve haven’t purchased in a long time and their activity is decreased, but maybe it’s still existed, and a lot of times they’ll take some money and they’ll retarget those people onto social media. Really, this is just another use case for that. They can still go on social media and also do it via mail or if they want to… social media is becoming too expensive, or they just want to try a different channel, they can do that exact same data set, or the data points that they used to go on social media and say, “Let’s do direct mail instead.” Is that a good understanding of it?
Dennis Kelly: That’s a great understanding, exactly. And what we’re hearing from customers is that the cost of customer acquisition and retention through digital only channels has been rising pretty rapidly. Search engine optimization, everybody’s following the same playbook. Search engine marketing, everybody’s bidding up the same keywords. So the relative cost of sending a mail piece out compared to even five years ago has dropped. While postage has increased, and there has been some price increase in direct mail, it really hasn’t matched the rise in some digital and social channels. So you’re right, use those same basic parameters, add direct in as another touch, another three to five touches over a couple of month period. And when you see that layering of trust of authenticity and a surprise like, “Oh, I didn’t expect to hear from this vendor through a piece of mail.” That all registers and so the combined effect of the campaign is enhanced by including that physical component.
Greg Zakowicz: So I’m going to talk to you in a minute about promotions, benchmarks, tracking, things like that. Before we get into that though, I’m going to ask you to put your very high level general head on, just kind of based on your customers that you guys work with because I know this is going to be completely dependent based on the type of company. If you’re selling a high-end jewelry versus a $60 pair of sneakers, they can have very different audiences and different ways to attack this. But if a company is looking at direct mail and say, “Okay, I want to get started and I’m looking at the lowest hanging fruit.” So probably the best area of opportunity to at least prove a little bit of worth. Based on what we talked about before, customer acquisition, lapse purchase, just an engagement standpoint, post-purchase, is there one better place just to start versus another?
Dennis Kelly: We’ve seen, in our customer base, that about 60% of the folks that are coming to us are adding direct mail as a channel. And so we’re seeing a wide variety of different initial campaigns that people are focused on. But often they have a lot of investment in CRM, in marketing automation tools, and email marketing tools. And what makes the most sense to them is to leverage what they’ve already got in place. And so this idea of layering direct mail in with existing email campaigns is something that we’re seeing a ton of and it’s often really easily done. So you’ve got an infrastructure in place, you’ve got multiple touches that are going out in either a batch style or a drip style format.
Dennis Kelly: And if you can plug direct mail into that existing campaign to lift the overall response, then that’s an easily quantifiable goal. They’ve got a bunch of infrastructure already in place, general creative direction, lots of stuff already there. So it’s an easy way to plug into an existing considerable investment to gain more value from that. And so that kind of quiet email idea, like I’ve gone quiet on email, I’m a customer, I’m not completely disengaged I hope, but I’m just ignoring the email now, I haven’t opened up several, that’s a great place to start.
Greg Zakowicz: So let’s talk about, I would circle back to this, but let’s talk about how a retailer might do that. So I know you touched on it just a minute ago, so I’m going to bring it back up, just to set the tables. But we started looking at what we promote on the direct mail piece and there’s going to be probably arguments for and against doing something different for tracking purposes, or doing something the same like you’re talking about let’s keep that campaign the same, just hit them with different channels.
Greg Zakowicz: So let’s use lapse purchasers, for example. Maybe a retailer has a four part lapse purchaser drip campaign going, or workflow going, let’s say, it has 20% off in there to win the customer back. Would the best case scenario be to have your direct mail piece match that incentive or match that promotion, or to do a different promotion so you can figure out which is doing better? It sounds like layering it on and, and keeping the exact same incentive or promotion going is the best way to go. But is that a good assessment or kind of break down about layering on like you just mentioned?
Dennis Kelly: Yeah, sure. So we actually see a divergence there depending upon whether the campaign is acquisition oriented or customer oriented. And so in this use case we’re discussing, where there is a win-back idea or a reactivation idea, folks are not responding to the existing campaign and that’s why they’re being targeted. And so we’re finding that our customers are getting a little more aggressive on the direct mail touch, just to see if we can wake them up and drive them back into our digital environment and then reengage with them maybe on a less expensive per piece channel once they’ve come back. As opposed to folks that are doing acquisition mailing, where they’re trying to establish their brand, established trust, and they’ll often use the exact same offer in direct, where they’re at the top of the funnel as opposed to somebody that they’ve already invested heavily in acquiring, and now they’re feeling like they’re running the risk of losing them. They’ll want to bring them back with something a little bit more powerful. And so rather than 20% off, they’ll go 30% off on direct mail
piece just to see if they can boost the return.
Greg Zakowicz: So that’s more of a return thing rather than versus a tracking thing because you mentioned before that you can now have individual landing pages, or you can set up some sort of domain where we know they’re coming in from the direct mail piece. So it sounds like that’s just more of a strategic play than a tracking play. Is that correct?
Dennis Kelly: That’s right. Tracking is another topic. And we recommend that folks really focus on generating ROI off of their early efforts with direct mail and tracking can be done in a whole lot of different ways. And so we’ll leave that aside.
Greg Zakowicz: Yeah, would you mind going, or given a couple examples of different ways you can track direct mail, obviously having certain landing pages where you can certainly measure that or unique promo codes-
Greg Zakowicz: … if you want to go on there and do that. Are there other more non-obvious ways to track if someone’s looking at doing this?
Dennis Kelly: Yeah, sure. One of the things that is really exciting about what we’ve introduced in Postalytics is the fact that we can now track delivery. There’s a little known service from the US Postal Service called Intelligent Mail barcode that big mailers, big retailers and others that have investing significantly in the channel have been taking advantage of for the last decade or so. Essentially, if your printer/mailer agrees to follow a particular format and apply a barcode to individual pieces of mail, you can actually capture data about mail when it’s being delivered, or when it’s not being delivered because of bad addressing. With Postalytics, you can actually look at a dashboard and see when your mail is hitting and what mail is bouncing, for lack of better phrase, just like you would with email marketing. So you can actually start timing your other channels based upon far more granular data than just guessing. Well, I’m guessing it’s going to show up around this date and we’re going to start blasting out other channels. Now we’ve got actually real data about when mail is being delivered that you can trigger other things from.
Greg Zakowicz: So I think one of the cool things about that is you can also… since you have that data, you can also look at like another channel and say, “Okay, Greg got this direct mail piece on Monday. It’s okay, I’m five days to convert.” And you can start seeing time from delivery to conversion on these particular piece which one will help, I mean, you could really take that and use that to apply it to email or social marketing campaigns as well. But you also get a better baseline about how your particular audience is responding from… if it’s going through weeks and you see them start converting, at least you know there’s some sort of time period and lag there where you can use your other channels like email to delay upon it like you mentioned. So within that, I know I’ve got three weeks to try to target Greg with some emails, here to try to convince him to close a sale or give him more information on there.
Greg Zakowicz: So I’m assuming you have your customers use that data. You could see point of delivery to time of purchase or time of conversion, which I would imagine would be extremely helpful. But that kind of leads me to a question about life cycle of a campaign. So every email campaign has a lifecycle. First 24 hours, you get the majority of the bump and then it starts to degrade, and after about three, four days, that email’s kind of dead. They might convert on it later, but you’re getting very few opens at that point. Is there a traditional life cycle when it comes to direct mail? Is it we expect the conversion within three days for the most part or can it be much longer?
Dennis Kelly: A great question. And it’s something that we’re really learning a lot about as more data is rolling through Postalytics and our various response channels are capturing when folks are responding. And what we are seeing is that direct mail does have a much longer tail than email and digital campaigns. We are seeing a lot of campaigns that are still capturing responses 30 days after a piece of mail hit. And so if you think about what happens a lot of times when you do get a piece of mail that is intriguing, there’s a sorting process that goes on right away, mail comes into a home or into a business, someone takes a look at it, scans it, determines whether or not it’s in the pile they’d be thrown away, or the pile to be dug in further on.
Dennis Kelly: And so if your mail piece stands out, it’s got an intriguing offer that makes sense to me, I’m going to set it aside, and I’m going to dig in when I have time to do that. And oftentimes, particularly for longer consideration purchases, those mail pieces will be passed around to multiple people, either within the same household, or within a business. And there’ll be multiple touches to that landing page that is designed to really match up with the offer creative, and you will see over a course of 30 days, multiple people hitting a landing page from different IP addresses. And that’ll happen more frequently with direct mail than you’ll get with other channels.
Greg Zakowicz: Is that a good thing? And of course it’s a good thing, but does it ever potentially create complexities with trying to figure out subsequent direct mail campaigns because you might have, say, for certain campaigns, you might have 7 or 14 day response rate? And then all of a sudden, you get this campaign that 14 days goes by and they’re scratching their heads going, “Oh, this thing tanked. And then 10 days later, all of a sudden, you start to see those conversions kick in and it might just be product related, it might be off related, something like that, it might be timing of the year around certain events. Does that ever create complexities with kind of understanding the baselines internally, or is there a general rule that says, “Okay, most things happen around 14 days after that”? It’s great if you get something coming yet, but that’s gravy at that point. Like how do you manage that when either with your clients, or just personally the differences in the types of campaigns?
Dennis Kelly: We recommend to do a lot of testing. The most sophisticated customers have continual testing going on for offers that can show the steepness of the curve of the drop off of response. And so the way that the charts would look when you see them, is there will be a lot of response in the first week to 10 days of a direct mail campaign typically. And then sometimes it’s a fairly steep drop, and there’s not a heck of a lot of response. And other times, it’s more of a slower ramp down. And so there are things that can drive the steepness of that curve. If you’re mailing to consumers between Thanksgiving and New Years, you could have a pretty short attention span because that is, by far, the peak time when everybody and their brother’s out mailing and consumers are being inundated with offers. And so if you’re sending to consumers that time of the year, it’s going to look a lot more like email, which is a heavily used channel year-round. Whereas in other times of the year, you’ll see a slower decline and a longer tail to those responses.
Greg Zakowicz: Would it makes sense for retailers during that or was just Q4 kind of at the holiday shopping season as the example here? Would it makes sense for retailers who are using direct mail during those times to send more direct mail? Like you would an email, everyone’s send cadence goes from three, four, or five times a week and they go circle on the two day or one every single day and it just increased the frequency. Does it make sense that for direct mail based on the cost, or should you just stay consistent with what you do?
Dennis Kelly: We definitely see, particularly from a retail standpoint, during the Q4 rush, many more touches per customer, and they’re fighting over every dollar with all of their competitors. And so there’s a lot less time to analyze what’s happened, digest it, and redevelop the strategy. It’s all been planned out in advance, many more touches during that time-frame.
Greg Zakowicz: Very cool. I hate benchmarks, industry benchmarks. I used to fight with my clients and I was consulting on this whole time because they’d always ask me for him, and I would always have my response saying, “You have no idea what goes in those metrics.” So you’re judging yourself against something you have no idea about it. It doesn’t make sense. But people ask for metrics all the time, they ask for benchmarks all the time. But that being said, I’ll talk out of both sides of my mouth because there are things that just working with clients consistently. For example, if you’re sending a welcome email immediately after sign up, your minimum open rate should be 80%. If you’re sending a thank you email two days after someone makes a purchase, your open rate should be 60%.
Greg Zakowicz: But for the most part, benchmarks, I don’t know, so you’re like, but I’m going to ask you the benchmark question because I’m a jerk. Are there any types of metrics or benchmarks that you look at with a direct mail piece that you can say, “Okay, this is what you should at least be shooting for.” And if you’re in the ballpark, then you can start benchmarking against yourself, or is it completely dependent on company size, how many people you’re targeting, type of campaign you’re actually sending off? Is there anything that is really a general staple that you can point to or no?
Dennis Kelly: Yes, we do have some pretty good data. Direct mail’s been measured from a response standpoint by large sophisticated mailers for quite a long time. And so there is a good amount of data out there that can help guide us to general response rate benchmarks. But as you can imagine, when we’re looking at them in our customer base, the response rates are all over the place, and they’re so dependent on the audience, the offer, the CTA, the creative. For example, the average response rate for direct mail campaigns to existing customers is about double that of an acquisition mailing. And so without that information, a customer’s idea of what a benchmark ought to look like can be greatly skewed.
Dennis Kelly: There are some great benchmarks that had been put together by an industry association called Data & Marketing Association. And they put together an annual study, they reach out to large, fairly sophisticated mailers to look at a big body of data, millions and millions of mail pieces. And what’s interesting in their studies between 2010 in 2016 mail volumes dropped about 25%, while the response rate of a direct mail campaign for an acquisition mailing improved from 1.4% to 2.9%, and for a house list or an existing customer list, the improvement was from 3.4% to 5.1%.
Greg Zakowicz: Remarkable.
Dennis Kelly: So all these things are coming together; mail volumes dropped, there’s better technology, better targeting, better personalization, and all of these things are driving response rates up, but there is a pretty consistent split between targeting cold people and then targeting folks that already have an association with your brand.
Greg Zakowicz: That makes a lot of sense. But I appreciate the numbers because people always want them. I got hit up with that question via email a couple of days ago and I’m like, “Ah, I’ll do what I can for ya.”
Dennis Kelly: Yes, it happens all day long. It’s part of being in marketing.
Greg Zakowicz: Yeah, welcome to the business, right?
Dennis Kelly: Right.
Greg Zakowicz: You mentioned before we’re tying data points from all across the board and we can do these really, find how to retarget approaches or campaigns to customers or whatever it might be. Is there a minimum number of, say, addressable contacts that would be required to really think, “Okay, this campaign would have success for us because there was at least, say, 1,000 people here,” versus “Hey this is so targeted that we’re going to send 20 of these things out.” You’re kind of hoping for the best. Is there a minimum number that you normally advise companies, “Hey, you should at least start with this, and then figure out what works and doesn’t from there”?
Dennis Kelly: Well, I mentioned briefly before in the old days, the minimum number mattered a lot and it was really a function of the traditional printer mailer requirement. For them to put together any kind of personalized direct mail campaign, they’ve got to spin up a job, they have to have a skilled operator called the Prepress Operator set up some fairly sophisticated software, merge a lot of data in with variant signed creative. It’s a big process. So it takes time and there’s a fixed costs associated with it.
So traditionally, direct mail only made sense in larger batches. That’s not really the case anymore. With today’s direct mail automation tools, you can send one piece, you can send a 100 or 100,000 pieces. And it can all be completely variable, highly personalized and all done for one flat rate per piece. And so this is part of the dynamic that has opened up a lot of new use cases.
Dennis Kelly: As it relates to statistically valid data from a testing standpoint, we do recommend that you target at least 2,000, and typically more like 5,000 to 10,000 folks to test out a concept. When you’re dealing in small numbers, you just not going to have anything of those of statistical significance. But there’s no reason why using today’s tools, you can’t bang out 50 mail pieces that a sales rep following up on a B2B conference with a little spreadsheet that was captured, it’d be done in five minutes. So there’s all these new use cases that are calling for these fast turn, quick small batch or drip style campaigns that never really existed before.
Greg Zakowicz: I know this will vary, so I’m asking a lot of varying questions here, but it’s just common nature of the beast, cost of actually sending direct mail pieces. Like you mentioned going back to the old days, where you had these bashings because you had all these different processes, and preproduction, things like that, what’s a typical cost of a direct mail piece? Let’s just say like you can probably give me a common size, but like a flat postcard mailer that would normally go out. What are we looking at from a cost perspective typically for, say, 1,000 pieces?
Dennis Kelly: Sure. Typically you’re looking at somewhere all in between 50 cents and 75 cents for a postcard mailer per piece. And then as you drive more volume, you can get discounts off of that. And so the idea of just having it sitting in a SaaS direct mail automation system sort of ready to go and hitting that corporate card on an as needed basis makes it very easy to do and to execute on tests and ideas and small, little quick turns. You can bang these things out in a matter of minutes.
Greg Zakowicz: And how about for best practices for design of these pieces? So we’re living in a very visual world now, most of the social networks, at least the dominant ones are all visual first. Whether it’s image first or video first, attention spans, I don’t know, they keep saying attention spans get shorter. I don’t know if it’s true, it’s much just being more publicized now. But are there some common best practices for like text to image ratio on a direct mail piece?
Dennis Kelly: We advise folks that in today’s environment, all those dynamics exist. And the thing that I mentioned before is folks really want to go online to do more research. So your goal should really be to drive them to do that, induce that action. We like to say that if you’re going to send mail with a postcard, you need to think of a postcard as a billboard. It’s got to be highly visual, it’s got to be emotional in its emphasis, And you can’t jam too much text into a postcard, or no one’s going to read it, and it’s just going to confuse the audience. So a simple, clear, powerful offer, call to action, clarity on both sides, lots of imagery that is designed to target the audience you speaking to.
Dennis Kelly: With a letter format, you can tell more of a story. And when folks open up an envelope, they are often expecting to see a bit more, and to be able to digest a little bit more than they would by holding that postcard and looking at those glossy images staring back at you. The last thing there is that that CTA and offer can be more nuanced in a letter format than it would be in a postcard where we tell folks, “Tell your big story online if you’re sending out a postcard.”
Greg Zakowicz: I was going to say I imagine the challenge with sending an envelope as part of that piece though is like an email. How do you get the open? So you’ve got that extra hurdle to be seen, but it gives you maybe some bigger payoffs because you can be more nuanced inside. But I’ve got to believe the open rate on envelopes might be a little bit less than tough to judge an open rate on a flat postcard, but at least it’s in the eyeballs. They at least take a look at it before they throw it in the recycle bin. So I’ve got to believe there’s challenges on both sides.
Greg Zakowicz: When we talked about tying things into current existing campaigns, lapse purchase, post-purchase, whatever it might be, I get this all the time because I’m a big proponent of browse abandonment emails if done well, obviously card abandonment emails stick out there, but they follow actions that people are taking on websites or with the shopping carts. Because we can tie direct mail on these pieces now, do you ever get conversations or at least questions asked to you about kind of that “creep factors” like, “Oh, you’re following me, just because I haven’t purchased in three months, and now I’m getting this direct mail piece to come back and purchase”? And I as a consumer, you can tie these things together. Do you get a sense that there’s concern over that, or at least you get questions on a lot? And like I always say to me from an email side, it’s not a concern if you do it the right way. What is your response to that creep factor question?
Dennis Kelly: We haven’t heard much of that outside of this one very particular use case. We see some retailers that will target a piece of mail that go out based upon a view of a webpage or an abandoned shopping cart as you mentioned. And we get some discussion of that. But for the most part, a lot of the mailing that is being done in that scenario that you mentioned where, “Hey, I haven’t clicked an email on a while, so I’m getting this direct mail piece.” It’s really more… oh, I haven’t thought of that brand in a while, and this interesting. So I think that the creep factor is similar to that in the online space. If I’m anonymously browsing your website and you’re using some reverse IP look-up to establish a physical address and then shoot me a picture of something that I’ve just looked at, that’s more likely to creep me out.
Greg Zakowicz: It’s an old, I don’t know if they still do this, but in radio sales a long time ago, it was probably 20 some years ago, when you’re dealing with a company that was unsure whether they want to spend the money to do it, a lot of times a sales person would say, “Okay, do you have any leftover stock or inventory here?” It can be a garden hose that was eight foot instead of 10 foot, and they just couldn’t move in. And they’d say, “Okay, do a test run. We will advertise this eight foot, garden hose on the radio, don’t promote it anywhere else and let’s see how many move.” And they proved the effectiveness of it.
Greg Zakowicz: Would a strategy similar to that for a company who has never done direct mail before and is looking to get into it, does that make sense from a strategic point of view, or does it make more sense to just have either a unique promo code or something like that and tie that to what you’re currently marketing or would follow that, you’re layering upon marketing streams that are currently happening. Which is a better approach for a company who is looking to get into direct mail?
Dennis Kelly: I think that it is definitely a better idea to layer direct mail into your existing infrastructure. And I’ll just say as an aside, if a product isn’t moving, it’s unlikely that a new channel is going to change that. And so I think the way that we’ve evolved in how we and a lot of marketers think about direct mail is that it’s another touch point that can trigger maybe a little bit different emotional response, anchor the brand one more strongly, get an action. But it’s not going to be a silver bullet that is going to take a loser campaign or a loser product and turn it into a winner. And so we are seeing the vast majority of our success and our customers focused on this idea of attacking tons of low-hanging fruit, something within their existing realm that maybe they feel like they can boost a metric struggling in a particular audience segment, or something that they feel an existing channel is getting tuned out. And that’s really where folks are targeting direct mail efforts.
Greg Zakowicz: I’m sure there’s a lot of differences in strategies between B2B and B2C when using direct mail. Is there one primary nuance or pitfall that you generally would see across the B2B space when you’re looking at this that you might not see on the B2C side or vice versa?
Dennis Kelly: Probably the biggest difference we see between the B2B side and B2C side is that most of the time B2B organizations have longer, more complex sales cycles often with some fairly high paid sales people involved in closing a deal. So the channels and the strategies associated with trying to acquire customers and keep customers are very different because of that. So from a direct mail standpoint, we see a lot of mid and low funnel direct mail activity in the lead nurture space, where in the B2C space we see acquisition mailing and then post sale loyalty, win-back kinds of mailings. And so that’s the primary distinction that we see. And the type of creative, the type of offer will often be more content oriented in the B2B space than in the B2C space, where try and get you to take action on a very specific piece of material, or selling, or a specific discount, or offer that we’re making to you today with limited time. And that kind of urgency, sense of urgency doesn’t exist in the B2B space where the buyer might have a 6 month to sometimes 18 month sales cycle that you’re dealing with.
Greg Zakowicz: Great response. Are there any companies off the top of your head that you can think of that you think do direct mail really well?
Dennis Kelly: Yeah, yeah, there are a lot of companies. We’ve got a great customer that it’s a B2B customer, but they’re really kind of act more like a retailer. So it’s an interesting hybrid. It’s a company called the Zogics. And so they sell health club and gym supplies to about 30,000 gyms and health clubs around the US. And so it’s an eCommerce play, and they’ve got some elements of kind of a B2B organization where they’ve got some products that have a longer sales cycle and they’ve got salespeople that are involved from an inside sales standpoint. And then all these other SKUs that they’re really trying to get orders made on a recurring basis.
Dennis Kelly: And so they built a multi-touch direct mail campaign within an existing win-back email campaign that was designed to reactivate customers that hadn’t opened any of their emails over the previous six months. What we’re psyched about is how they really use the postcard format to create big powerful images with a super clear offer, and they had great results. They were able to drive their order flow up by 140% within the first three months of a multi-touch DM aspect to this campaign. And then the overall ROI of the win-back campaign over a year was boosted by over 500%.
Greg Zakowicz: Very nice, good results, right?
Dennis Kelly: It’s like anything else, there’s no magic bullet, there’s nothing there that is going to automatically make everything great. But when great marketing is applied to a channel that is underserved and underutilized, then you can see some really good results.
Greg Zakowicz: That’s a good snippet right there. Great tactics. So really nice job, splendid. How about a pet peeve of yours? Do you have any direct mail pet peeves?
Dennis Kelly: Absolutely. So the thing that drives me crazy is when I see direct mail campaigns that have way too much text crammed into them and no clear call to action. A direct mail piece is not a book, a direct mail piece is not something that you should try to overwhelm with too much information, and they’re universally not successful and they are very quickly scanned and thrown away. And so they’re really a waste of money. And so we touched on this earlier, but if you can think of a postcard as more of a billboard in terms of creative direction, I think you’ve got a lot better chance of being successful.
Greg Zakowicz: Why do you think companies still send direct mail pieces like that? Do you think it’s just ingrained with them, it’s how we’ve always done it, do you think they’re trying to be smarter than the average bear? Like why do you think people are still doing that?
Dennis Kelly: Well, unfortunately, I think that a lot of times the answer is that a good creative person will come up with a creative format and then it gets reviewed by executives that say, “Oh, you missed this, you missed that. We need to say this.” And so CEOs like myself end up intervening in a great direct mail campaigns.
Greg Zakowicz: I’ve never heard of a CEO intervening like that ever, Dennis, ever.
Dennis Kelly: So, yeah, I think that often there are many parties that are exerting influence that maybe should stick to their knitting.
Greg Zakowicz: You mentioned that with the Postalytics platform you tie to CRMs and things. How do you guys integrate with different CRM systems? Is it just API based, that’s integration? Do you guys have built in integrations anywhere? Average retailer coming across, would you guys integrate with their CRM? Would you integrate with their email platform? Kind of walk us through that, just very briefly if you could.
Dennis Kelly: Yeah, sure. We’ve got some standard integrations that we’ve built out with some different CRM and marketing automation tools. We built out integrations with a kind of a integration platform called Zapier, which is super powerful. And it’s being used by lots of our customers, tie together all sorts of disparate systems into automated workflows. And then the other thing that we’re seeing a lot of folks doing is they’re using our direct mail API to tie into their existing system. And so we help out the development team, the tech team on the other side. It’s pretty straightforward. It’s a modern REST based API, and you can start driving direct mail out of an existing infrastructure, typically within just a few weeks of setup and testing with a tool like ours.
Greg Zakowicz: Great. Dennis, you got a couple minutes to stick around, answer some non business related questions?
Dennis Kelly: I do.
Greg Zakowicz: Yeah, no problem. We’ll have contact info in the description of the podcast. But if someone wants to reach out to you, how about verbally, what’s the best way to get a hold of either you or the company or both?
Dennis Kelly: Our website, postalytics.com, has all sorts of different channels where folks can get in touch with us. We’ve got chat, you can email us, you can hit me directly at email@example.com, you can hit teamsales@postalytics, support@postalytics, or you can call us 7812918660. Lots of ways to get in touch with us. You can hit us on social as I mentioned. So we are super excited to talk to folks. As I mentioned, we are fairly early stage company. We’re growing quickly, but we’re really at a stage where we can really invest time and energy with individual customers when they reach out. And so really happy to engage with anybody.
Greg Zakowicz: Dennis Kelly, everyone, CEO of Postalytics. Thanks for your time Dennis. Enjoyed the conversation and gave a lot of great insights and knowledge to the conversation space. Thanks for carrying me today. For those listening, especially our listener of the week, Steve from Brooklyn, if you want to be the listener of the week, let me know you’ve tuned in. And if you’re interested in telling your eCommerce or email marketing story, I’d love to hear from you as well. Hope you all enjoyed the episode. Until next time, have a great day and please be kind to one another.