Direct Mail In Marketing: The Value Proposition

Marketing teams are increasingly exploring ways to add direct mail in marketing campaigns targeting all stages of the customer journey. Advances in technology, along with crowded and increasingly expensive digital marketing channels are driving this dynamic.

Evidence of a growing value proposition for direct mail is particularly appealing to data-driven marketers looking for new ways to stand out from their competitors.

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What Is Direct Mail In Marketing?

Direct mail is the most popular form of direct marketing. It involves the solicitation of products and services by an organization with the delivery of tangible, printed materials to consumers and businesses. Typical direct mail marketing campaigns include:

  • Postcards, letters, brochures, flyers and other types of formats that can be printed by high volume, commercial printers with great efficiency
  • A targeted audience that because of geography, demographics or known behavior are considered likely responders to the campaign
  • Creative that uses direct marketing fundamentals, including; copy & graphics designed to elicit an emotional response, enticing offers and a clear call to action.

The History Of Direct Mail Marketing

history of direct mail marketing

With roots traced back to the early Egyptians, direct mail as a primary marketing technique began to take hold after the invention of the printing press.

The advent of low cost and reliable mail delivery via national postal services enabled it to really take off when Aaron Montgomery Ward launched his mail order business in 1872 and others followed suit.

While direct mail marketing volumes peaked in 2008 in the U.S., the channel has been making a huge comeback due in part to the reliability of the returns that it is able to generate.

Recently, a new generation of cloud based direct mail automation tools has drastically improved the workflow, reporting and integration of direct mail in marketing campaigns that often include email and digital channels.  

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Why Use Direct Mail In Marketing Campaigns?

direct mail in marketing campaigns

Direct mail is an extremely effective channel. It can be effective in standalone one-off campaigns, sequences, or when paired with other multi-channel touchpoints that help to bring a complete marketing program together.

Marketing organizations that don’t have a lot of experience in direct mail or focus narrowly on digital campaigns can sometimes have a hard time seeing the value that direct mail can bring to the table.

However, in today’s world, consumers are used to tuning out the constant bombardment they get with digital ads anytime they interact with a brand. Marketers are turning to new, modern twists on older marketing techniques to help them stand out.

The tactile and personal nature of direct mail delivers a physical, emotional and deeper brand impression than other channels, according to new studies by neuromarketing experts.

Other reasons why marketers are including direct mail in marketing campaigns include:

It’s A Cost-Effective Marketing Channel

cost effective marketing channel

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With the rapid escalation of customer acquisition costs via digital marketing channels, the relatively slow rise in the cost of direct mail makes it a more affordable option for marketers.

While it will always include postage and printing costs, with modern direct mail campaign management systems, the price per piece actually comes in much lower than you would expect. Often, using direct mail in marketing campaigns can be a less expensive alternative to highly competitive digital advertising platforms like Google AdWords® or LinkedIn®.

In a recent article covering the average direct mail cost, we broke down how much companies can expect to spend on direct mail campaigns through the Postalytics system.

In an example — a 10,000 piece 4 x 6 postcard campaign using the Postalytics system in full would cost only $5,699.99 — and that includes the price for printing, your Postalytics subscription, and a mailing list purchased through the Postalytics app.

Additionally, new tools are enabling marketers to consolidate their planned purchasing to take advantage of volume discounts that were previously available only to mailers that sent out massive quantities in huge batch runs.

High Return on Investment

high return on investment

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The proof is in the pudding. The fact that direct mail advertising can have lower costs than other channels is great, but if it isn’t able to generate a positive return then what good does that really do?

Luckily, direct mail provides one of the highest average returns on investment of all channels. According to the DMA Response Rate Report, the average direct mail median household return on investment is 29%. That puts it above paid search (23%), and online display (16%).

The high return on investment was also cited as a reason for an increase in direct mail usage in a recent report from the Office of the Inspector General, ranking as the second most popular response to why companies increased their direct mail usage.

Direct mail returns are reliable but dependent on the quality of your mailing list. Luckily, our system makes it easy for you to buy high-quality verified lists to ensure that you are properly targeting your campaigns.

Effective Channel for Re-Engagement

One of the biggest benefits of direct mail in marketing comes from specific uses in your broader marketing strategies. Direct mail may be the premier channel for re-engaging with customers.

According to a report from the United States Postal Service Office of the Inspector General, a group of participants named “helps to re-engage with customers” as the number one reason why they had increased their direct mail usage.

reasons for increase in direct mail usage

Direct mail is an effective channel for re-engaging with customers because the platform allows you to stand out. A customer that stops interacting with your email campaigns might be more willing to engage through another channel. Direct mail provides a more personalized way to reach out to customers and re-establish a relationship.

Baking direct mail re-engagement campaigns into your marketing systems to re-establish content with lost leads, former customers, and those that have simply stopped engaging with your materials can be a great way to improve customer retention rates while forging deeper relationships.

Simplicity of Execution

simplicity of execution

Compared to software driven digital marketing channels, the traditional direct mail marketing process required a significant investment in time, meetings, people, contractors, email and spreadsheets.  

However, modern direct mail in marketing systems have greatly simplified the process. In the case of Postalytics, our cloud based software makes the creation of both scheduled batch as well as triggered drip direct mail campaigns as fast and easy as the email marketing process.

In the Inspector General’s report, 36% of respondents said that their growth in direct mail in marketing usage was due in part to the fact that direct mail marketing campaigns were easier to execute today. It’s clear that many companies saw the production process for direct mail campaigns as a barrier to entry, but modern solutions have helped to close the gap and make it a more enticing option for companies of any size.

Additionally, companies don’t have to worry about preparing their campaign for shipping anymore, either. Postalytics and other similar systems will handle the printing, envelopes, and other direct mail specifications so that your marketing teams can focus on big-picture marketing strategies.

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Improve Customer Loyalty

improve customer loyalty

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Companies are always trying to find ways to improve loyalty among their customer base. For the same reasons that direct mail makes an excellent channel for customer re-engagement also make it an effective choice for customer loyalty campaigns.

In the Inspector General’s report, 30% of respondents said that their increase in direct mail usage was attributable, at least in part, due to the platform’s ability to enhance loyalty programs.

Direct mail marketing is already a very personalized way to connect with your customers. They receive an envelope that is personally addressed to them. It feels tangible. However, with modern systems, direct mail campaigns feel even more personalized through the injection if critical customer data.

You can use direct mail campaigns to re-engage customers that are already a part of your loyalty program, introduce them to your loyalty program, or work to build a closer relationship with them by using customer and purchase data to offer discounts that they will find appealing.

Customers appreciate companies that take the time and effort to engage with them through multiple channels. The personalized nature of the channel help to grab their attention and bring them back into the fold.

Effective for Companies of Any Size

The value of direct mail is displayed by how widespread the usage of the channel is, regardless of company size. You would think that companies of a certain size would be more likely to use direct mail marketing in their multi-channel approach.

You would probably guess that larger companies are more likely to use the channel. They are more likely to have the resources and experience. Because direct mail campaigns in previous years were more intricate and cumbersome, it made sense that larger companies would be more likely to use the channel regularly. However, modern direct mail management systems have made it easier than ever for companies of any size to launch, track, and optimize their campaigns to maximize conversions and revenue.

However — that isn’t really the trend that we see in the Inspector General’s report. Yes, smaller companies (with 5 to 20 employees) were less likely to employ direct mail in marketing campaigns. However, nearly 70% of respondents in smaller companies still stated that they used direct mail. At least 87% of companies with 21+ employees stated that they used direct mail, according to the survey.

Source: United States Postal Service Office of the Inspector General

While a higher percentage of medium and large businesses use direct mail, the fact that nearly 70% of small businesses use direct mail in some fashion shows that the channel is a productive one for any size of company.

In the Inspector General’s report, they outlined how some internet-based companies are starting to embrace direct mail wholeheartedly. For instance, Wayfair, an online home furnishings eCommerce company, launched their first print catalog in February 2016. This touchpoint allowed the company to enhance the shopping experience of their customers and develop more close-knit relationships.

Higher Response Rates

Direct mail isn’t just for direct response advertising. It also makes for a highly effective educational channel. By integrating direct mail in marketing and sales campaigns throughout the nurturing process, you can deliver highly valuable educational materials that have a better chance of being read by your intended audience.

Direct mail shows better response rates than email. A study from the DMA found that direct mail sent to households had a 5.1% open rate. Email only enjoyed a 0.6% open rate according to the study.

When it is mission-critical that you catch the prospect or customer’s attention and increase your chances of receiving a reply — direct mail is an ideal choice. Using creative approaches like changing the size or stock of the mailers that you send. There is a lot of creative leeway with direct mail that can help you grab the recipient’s attention and improve the channel’s already high response rates.

Finally, modern direct mail automation tools make it easy to test offers and segments of your audience by removing friction associated with the production of direct mail.

Multiple Formats Provide Versatility

Direct mail advertisements come in many different shapes and sizes. That provides marketing teams with a lot of versatility in regard to the imagery and messaging that they deliver. It also provides a lot of options for testing. Companies may find that a specific type of collateral typically performs better for them than another type.

We recently published a post where we covered the different sizes for direct mail postcards and letters. In Postalytics, you can launch direct mail sequences (or integrate mailings in sequence with other channels) with our triggered direct mail drip campaigns.

The Value Proposition

Direct mail is an effective, versatile channel that can operate both as a standalone advertising channel and an integral part of your broader multi-channel marketing program.

Postalytics can help you maximize returns through direct mail by helping you to cut costs, improve personalization, and track and measure the impact of your campaigns for a data-driven approach.

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