Mark Kolier’s Blog

Posts Tagged ‘Direct mail’

Despite all the talk about marketing via social networks, mobile marketing and digital display, the ‘traditional’ consistently performing channel – good old direct mail – continues to grow. While mass mailings of the 1980’s and 1990’s have diminished (I still recall the days when we would print more than 10,000,000 mail pieces for some of CGSM’s clients), 1:1 print marketing has flourished.

How can this be? Weren’t digital advertising and social media going to be the death of direct mail? To paraphrase Mark Twain – ‘Rumors of its death are greatly exaggerated’. Winterberry Group’s Bruce Biegel recently reported that in 2010 direct mail spending in the United States was $ 45.2 billion. More than any other single direct response channel.

The primary reason direct mail is growing once again is that it works. There were declines in 2007, 2008 and 2009 due to economic concerns and the general business climate. But the fact is that people trust direct mail more than online offers. Highly targeted direct mail via the use of sophisticated personalization resonates with consumers. There is also a perception (correct I might add) that direct mail requires a greater investment on the part of the marketer when compared to digital marketing techniques such as display or email marketing.

There are initiatives floating around the U.S. Congress such as ‘Do Not Mail’ and ‘Do Not Track’. The ‘Do Not Mail’ initiatives stem from the perception that trees are being harvested to send people mail they would rather not receive. The Direct Mail industry has to do a better job of adopting consumer choice initiatives in order to not send people mail who do not want to receive marketing messages.

As for ‘Do Not Track’, clearly people have privacy concerns when it comes to the use of their personal data for marketing purposes. The digital marketing community also has work to do in order to educate and assure people that individual behavioral and purchasing data is not being passed around from marketer to marketer. This debate has supplanted the ‘Do Not Mail’ debate in Congress which is yet another advantage for direct mail marketing.

Customer prospecting via direct mail remains challenging but not impossible. Financial institutions like banks and insurance companies continue to refine their efforts to acquire new customers through direct mail. And direct mail as a contact management strategy is an extremely effective tool to build a relationship and move an identified prospect to becoming a customer.

I still look at the mail every day that I am home to see what we’ve been sent. Yes some of it is not relevant to me but it might be to other members in my family. We only have one mailbox after all, unlike email, text or mobile messages.

So don’t abandon all your direct mail efforts for the hot new channels of today. While social media marketing, digital display, search engine marketing, mobile marketing and word-of-mouth marketing are all great new channels, tried and true direct mail should be an integral part of your marketing toolkit.
Do you look at the mail as soon as it arrives? Do you like receiving mail?

The United States Postal Service (USPS) actually has a magazine it puts out somewhat regularly called Deliver. I don’t know if they give themselves a discount on their periodical rate. Quite often there are articles regarding the viability of mail; adjectives like enduring are used in conjunction with the description of the tangible advantages of the touch and feel of a mail piece.

Recently, advertising mail supplanted first class mail in total pieces delivered. Yet the USPS lost money last quarter – in fact the USPS has lost money in 12 out of the last 14 quarters. This year the USPS recommended cutting Saturday service as well as eliminating prepaid retiree health benefits.

We all know the reasons why – online bill paying being one of the big reasons first class mail volume has dropped so dramatically. To counter the ongoing trend downward the USPS has filed for a rate increase which will impact both first class and standard A (or advertising mail). Standard A or direct mail advertising continues to grow in revenue but some interesting changes are taking place as prices go up and mail volume overall declines. I can’t understand why squeezing the only area of the USPS that is growing seems like a good idea to the USPS.

Mail is becoming the channel for luxury and expensive brands. It’s nearly impossible to prospect through the mail for products and services that are inexpensive. The metrics simply do not work anymore. Magazine subscription offers used to flood the mail box but no more. The decline in magazine subscription mailings has a great deal to do with the decline of magazine circulation in general, but it has more to do with the fact that prospecting for new readers or renewals for existing readers is too expensive to be done through the mail.

It seems to me that less expensive products also have given up on mail as an acquisition channel. However the luxury marketers are using mail effectively as a channel to an increasing degree. Particularly once a prospect inquiry has been made for a luxury product, (whether it comes from a television, radio or magazine ad), that prospect is nurtured and analyzed, and then the prospect will be mailed to on a regular basis.

This tactic is very effective and works for several reasons.

1) Mailing to a self-selected lead/name is highly effective and very profitable for luxury or expensive products.

2) Consumer mailboxes have become more and more empty. Mail messages can penetrate the clutter much more so than in recent years.

3) People under thirty actually are not as tired of direct mail and the message penetrates much more than email which is fast becoming irrelevant to them – especially advertising email.

The tide has turned and direct mail is now on its way to being the bastion of luxury and expensive products and services. Maybe it’s there already.

What do you think?

I remember the first time I went to Tokyo in 2000.  The area in which my friends were living was very chic and filled with westerners.  Where my friends live now (they have moved around several times) is also a very nice area but more typically Japanese with few westerners (that’s means you!).   But the thing all these areas seem to share is that there are (except for major thoroughfares) no street signs and no street addresses posted.   How does the mailman know where to go?  They do it by neighborhood and somehow it works.  But it does not work if you want to send any kind of offer to the household aside from a generic message on behalf of a neighborhood business.

Japan does not have lists of people to buy and sell as is the case in the U.S. and many other places.   Since the population is so homogenous there is no need for demographic and psychographic profiling.   People are not all that different – at least city people are city people and country people are country people.  In Japan mail is delivered 7 days a week and you pretty much have to check your mailbox every time you return home.  I did not get to see any offers from companies that may have provided services to my friend but I imagine that there may be some mailing to customer files but then again maybe not.   I was told how efficient the Japanese postal service is, and that would be consistent with just about everything in Japan.  The Japanese postal service is being privatized over the next 9+ years.  This is something that is often discussed about the USPS but never really seems to gain any real traction.   

The cultural reasons would seem to be many for why there is no customer list industry in Japan but I am sure that there are many Americans that would prefer if there were little advertising mail in the United States.   There are however no shortages of direct response television ads and some of the same characters that hawk products on American television can be seen doing the same complete with dubbing, subtitles etc. for selling those products in Japan.    I wonder if the Japanese will use the mail any differently as the amount of advertising messages continue to increase there as much as in the U.S…   I for one think it is a channel that could be leveraged but it would not be easy (what is easy these days?). 

And don’t ever just throw your unwanted mail in the garbage.  In Tokyo your neighbors make up what I call the ‘garbage police’.  The recycling standards are quite high in Tokyo and as gai-jin (foreign people) are not fully familiar with garbage protocols you can spend fifteen minutes being admonished by your neighbor due to your errors in separating your garbage.   These people take this stuff seriously!  Good thing though – 36 million people have big time garbage potential.  And even with the strict standards there are mutant super crows that prowl the streets of Tokyo.   These birds are scary big and appear to have hit the steroid stash.   They make noise 24 hours a day and frequently made me feel as if I were in an Edgar Allen Poe story or Alfred Hitchcock movie.   I have heard that the crows have actually gone after people and they take small animals regularly.  One final observation about garbage in Tokyo (and Europe for that matter) – re: public garbage cans.  There aren’t many.  Having been to Europe twice in the past 9 months as well as Tokyo I have never carried my trash around more in my life.  However the streets of Europe and Tokyo were infinitely cleaner than in New York (not saying much) or most other places in the U.S.   Yes there is a correlation.   But it would take an American quite some time to get used to that!