A Better Direct Mail Strategy for 2019

Start your 2019 year off right with a better direct mail marketing strategy. The DMA has reported that customer response rates increased year-over-year by an impressive 43% and prospect response rates more than doubled — reporting an astounding 190% increase. With these results in mind, is your current direct mail strategy working as well as it can?

Start your 2019 year off right with a better direct mail marketing strategy. The DMA has reported that customer response rates increased year-over-year by an impressive 43% and prospect response rates more than doubled — reporting an astounding 190% increase. The USPS “Household Diary Study” found that people read postcards in greater numbers with a 3.9% YOY rise. With these results in mind, is your current direct mail strategy working as well as it can?

We all set goals and expectations for our direct mail campaigns, but they don’t always go as we expect them to. Working on a better strategy can help us achieve better results. Before we get started on 2019, we need to look at our 2018 results. Did customers and prospects show interest but not purchase from you? Was there no interest at all or just below your expectations? Did you have any known issues with campaigns in 2018? Focus on both who bought from you and who did not. Are there any likenesses between the people in each group? In many cases, we will find that there are common issues with people that can help us better target the ones who did not buy.

Direct Mail Elements

  • Audience — The people you are mailing to really matter. Do you have the most current data for mailing? There are many was to clean up your mailing list, make sure you are using them. Once you know you have the right addresses you are ready to focus on other parts of your data. Tracking purchase history, demographics and geographics helps you to target them better. The more information you can collect and process to refine your target audience for each mailing, the better your response rate is going to be. Keep in mind that you can also purchase targeted lists based on your best current customers. If you have not tried this before, you may want to consider it for 2019.
  • Offer — If your offer does not resonate with your prospects and customers, they will not buy from you. Look at your best offers in 2018 so that you know what works best. Then take a look at the offers that bombed. What was different about them? How can you make sure that the offers in 2019 are much better? Targeting the right offers to the right people is critical for your response rates.
  • Design — Did you have some great designs in 2018? There are many areas where you can get creative to stand out in 2019. What size pieces did you send last year? How well did they work? Have you considered using larger pieces to stand out in the mailbox more? Color, images and copy placement are all factors in good design. Consider using higher impact images, bolder colors and fun creative elements, like texture, to draw people in. Your choice of paper stock matters, too. So consider a different, heavier stock this year, or even a pearlescent to really sparkle.

Now that you have some things to consider for 2019, remember that it is best to only change one thing at a time to be able to recognize the impact that each change makes. Ideally, you will want to run an A/B test by using a piece that worked great in 2018 to test against a newer piece for 2019. This will give you an opportunity to continually create better direct mail throughout the year. The best direct mail pieces target the right people with the right offer at the right time. Are you ready to create your best direct mail campaign?

5 Steps to Spark Great Direct Mail Ideas

If you are like many marketers, direct mail has been a part of your marketing strategy for a long time. This can lead to boring mail pieces with a declining response rate. So, how can you find new, great direct mail ideas to get your response rates back on track?

If you are like many marketers, direct mail has been a part of your marketing strategy for a long time. This can lead to boring mail pieces with a declining response rate. So, how can you find new, great direct mail ideas to get your response rates back on track?

5 Steps to Spark Direct Mail Ideas

  1. Doubt – You need to be able to start fresh. This means that everything you think you know about your mail pieces needs to go out the window. You need to be able to challenge every aspect of your mail pieces so that you and your team can build great new ideas from the ground up. This is where you need to be willing to take some risks and try out new ideas.
  2. Possible – Here you should identify the changes you and your team believe will be the best possible choices to improve your direct mail pieces. Here you will create a list of goals and objectives for your mail campaign. How can your direct mail be changed to meet your needs? What areas could stand some real improvement?
  3. Diverge – Here you will want to explore a lot of different ideas with an open mind. The best way to have a good idea is to have many to choose from. Write down every idea, even if you think it is a bad one or will never work. At this step you want to create as many ideas as you can think of. During this creative step you and your team will have fun with wild ideas. The longer you do it the more creative your ideas will get.
  4. Converge – Now it is time to really look at each of the ideas you have with a more analytical approach. Which ones will have problems? Once you find them, eliminate these ideas. Really question each one to find the best ideas to keep. You may end up with only one idea after this which you may be happy with. If not, go back to the diverge step and generate some more ideas.
  5. Reevaluate – This is the step once your mailing has been completed. Did your new mail piece meet your goals and objectives? If not, you need to go back to one of the other steps to make more changes. You may need to restart at Step 1, or if you got better results but feel like they fell somewhat short, perhaps starting at Step 2 or Step 3 is a better choice. Keep in mind that even if you got the best response rate ever with your new pieces, it will not last forever. You need to be vigilant in reevaluating what you are doing consistently after each mailing.

This five-step process can help you create great direct mail campaigns. You always need to keep in mind postal regulations so that you do not have to pay extra postage for a mail piece that does not meet the standards. This can be done during the “converge” step as you eliminate ideas that have problems. The best direct mail pieces are targeted to the right people with the right offer and grab attention. The way you go about getting attention has so many options. During Step 3, let your creativity flow and see all of the ideas you can create. Always remember to design and write with your customers and prospects in mind. Focusing on what they want will drive your response. Are you ready to get started?

Fueling the Little Engine That Could

In our compulsion to always be in the fast lane, it’s easy to forget that once upon a time, direct mail was our principal medium of marketing communications and not incidentally, made some of its best practitioners millionaires.

direct mail
“Mailboxes in ivy,” Creative Commons license. | Credit: Flickr by Ryan McFarland

Summer Gould’s recent useful article, “How Direct Mail Is Your Little Engine That Could,” is a helpful reminder for those of us who like to believe we are always at the leading edge of technology-driven marketing. In our compulsion to always be in the fast lane, it’s easy to forget that once upon a time, direct mail was our principal medium of marketing communications and not incidentally, made some of its best practitioners millionaires.

That said, it is also worth recognizing that while the little engine can chug along and “snail mail” gives us the opportunity to put varied and interesting messages into the hands of potential consumers, that little engine needs a good deal of fuel and that fuel is increasingly expensive. According to Ms. Gould: “The average prospect needs to see your mail piece seven to 10 times before buying from you. So a well-planned direct mail program includes multiple drops with various mailers and postcards.”

That’s an expensive statement and raises the question: How much fuel do we need to get the little engine up and over the hill to bring us an order? Perhaps Gould is being too pessimistic. Seven to 10 mailings to get a purchase is almost certain to be wildly expensive and not economic unless your product is very, very expensive.

One way of looking at this is to calculate the cost-per-order (CPO) at different response rates and numbers of mailings to reach the desired response. In this case, 44 sales. Using Bizo and Epsilon data, the DMA’s benchmark says that “direct mail achieves a 4.4 percent response rate.” While that is a higher average return than is informed by my experience, let’s go with it, anyway.

Rosenwald chart
Credit: Peter J. Rosenwald

As we can see, direct mail at a 4.4 percent response rate, for every thousand mailed at a total cost of $1,000 per thousand, the marketer would have 44 orders on a single mailing, each costing $22.73. Assuming he could afford to spend 25 percent of his revenue for marketing, he would need at least a $91 or higher product price to justify just a single mailing. Each one thousand mailing would cost the marketer about $1,000. Whether we like it or not, that’s the cost of the little engine’s fuel. And if he had to mail the prospect three times to get the same 44 orders, his order cost would rise to $68.18 which would suggest that his product selling price would have to exceed $250.

On a CPM basis, as we know, email is likely to be only approximately 1/10 as expensive. Email costs are so varied that it is difficult to establish meaningful comparisons, but $10 per thousand emails sent is as good a rule of thumb as any. Using as our baseline industry average open and “clickthrough” rates, we see that to achieve that same 44 sales, converting clickthroughs to sales at 70 percent, it would be necessary to email 10 times. Even so, the total bottom-line cost would be only just under $100.

In this head-to-head comparison, on the basis of pure cost and response, the little engine would have been overwhelmingly beaten by email. The risk:reward ratios certainly favor email.

As we all know, CPO is only one variable. Of high importance is the comparative ease and speed of email, the ability to test quickly and accurately with small quantities and best of all, the ready availability of comprehensive data permitting large quantities to be analyzed and segmented quickly and easily. But as the figures demonstrate, just opting for email because it is much “cheaper per thousand” doesn’t address the key marketing economic issue: How much do we have to pay for an order and can we afford it? Looking at the entire smorgasbord of media from this perspective is essential.

While marketing costs per thousand and response percentages follow more or less predictable patterns, how much any product or service, single sale, continuing sale or subscription can afford to acquire a new customer depends totally on its own economics; how much the marketer is prepared to risk and how soon he expects to get his investment back.

Direct mail may well be the little engine of choice for many good reasons. But before taking a ride on it, it would be prudent to compare its costs and risks to other media.

How Direct Mail Is Your Little Engine That Could

Because direct mail is the little engine that could for your marketing funnel, it can sustain you through troubled times. Direct mail is most powerful when used in a long-term, multi-touch plan. The average prospect needs to see your mail piece seven to 10 times before buying from you.

direct mail
“Mailboxes in ivy,” Creative Commons license. | Credit: Flickr by Ryan McFarland

Because direct mail is the little engine that could for your marketing funnel, it can sustain you through troubled times. Direct mail is most powerful when used in a long-term, multi-touch plan. The average prospect needs to see your mail piece seven to 10 times before buying from you. So a well-planned direct mail program includes multiple drops with various mailers and postcards. Then once the prospect makes a purchase from you, you move the consumer into your customer retention mail program. These types of programs are extremely effective and can be counted on to consistently generate sales.

Are you taking advantage of direct mail programs throughout the year? Do you mail consistently? Do you have a plan? Depending on what you are selling and who your customer base is, it will determine what your direct mail plan should be. The more data you are capturing on your customers, the better you will be able to target them with direct mail.

So what should a basic prospect direct mail plan look like?

  • List — Purchase a multi-use list of prospects based on what you know about your customers such as demographics, psychographics and more.
  • Message — Prospects need to learn who you are, what you do and see testimonials from current customers. You are trying to convert them to customers.
  • Offer — You need to create offers that will resonate with your prospects. What is in it for them?
  • Format — To be most effective, alternate formats for each mailing so that each prospect will get a letter, postcard and self-mailer over the course of your program. You can use formats more than once, but always make sure to add something fresh and new to each mailing. Sending the same thing over and over again does not get you the results you need.
  • Schedule — This will really vary depending on what you are selling, more expensive purchases are made less frequently vs. some items that need to be purchased all the time. The general rule of thumb is once a month to once every other month for high-ticket items and twice a month for more frequent purchases.

So what should a basic customer direct mail plan look like?

  • List Pull as much information as you have on each customer. You can use their purchase history to get your direct mail highly targeted.
  • Message — Customers should get messaging that is applicable to them and what they buy. You can suggest add-ons that complement what they have already bought or items that other people like them have purchased.
  • Offer — Customers love coupons on items that they buy. You can also give them special offers on new items they have not previously purchased from you but are likely to buy.
  • Formats — Just like prospects you should vary the formats of direct mail you are sending to customers.
  • Schedule — Customers should have a more scaled-back schedule than prospects. They know who you are and how to buy from you so send to them less frequently. We recommend at most once a month.

Are you ready to get started planning your ongoing direct mail campaigns? By constantly feeding your pipeline with your direct mail prospects and customers, your marketing funnel will always be generating sales. Get excited about your direct mail programs and create some really fun direct mail pieces. When you get creative you stand out more and get remembered. Make you direct mail campaigns real profit-drivers. Have you had a very successful long-term campaign? We would love to hear about it.

What Is Agile Direct Mail and Why Do I Need It?

Many organizations are familiar with agility strategy, but have you considered how you can create agile direct mail campaigns? Why should we even consider this for direct mail, because agile means we can quickly adapt to changing circumstances to stay ahead of the competition? Are you ready to see how you can create an agile direct mail campaign?

direct mail
“Mailboxes in ivy,” Creative Commons license. | Credit: Flickr by Ryan McFarland

Many organizations are familiar with agility strategy, but have you considered how you can create agile direct mail campaigns? Why should we even consider this for direct mail, because agile means we can quickly adapt to changing circumstances to stay ahead of the competition? Are you ready to see how you can create an agile direct mail campaign?

Agile Campaign:

  1. Roadmap: First you need to build your roadmap. This will consist of three to four direct mail deployments and tracking. Each mailing will highlight a new benefit of your product or service, along with a new offer. After each mailing, check reporting to see what is working and what needs to be changed. It all comes down to the four basics of agility: Thoughts/ideas, Questions, Decisions and Actions.
  2. Mailing 1: Design and mail your first drop. Be sure to include multiple ways to respond and track your responses.
  3. Mailing 2: Look at the responses from the first mailing. What worked? Keep that. What needs improvement? Make changes to design and the offer, then mail your second drop with the ability to track your responses.
  4. Mailing 3: Check responses, not only from Mailing No. 2, but also in comparison to the first one. You should see an improvement. Again, you will need to make changes that help to improve your responses.
  5. Mailing 4: You should now see a clear pattern emerging that you can then use to make changes to enhance this mailing’s appeal and, thereby, response.

The key to direct mail agility is consistent mailing over time, with constant vigilance on what is working and what needs improvement. There are no excuses for not tracking your responses; if you have no idea if something is working, you have no reason to send another one. You are just wasting your money. You and your team need to constantly be having conversations; not just about what you are doing, but about what the competition is doing, too. What new ideas are you coming up with? Where can you find inspiration? Constantly feeding the conversation about your direct mail campaigns will keep agile thinking top of mind.

One key thing to be careful of, especially if you have been doing direct mail for a long time, is assumptions. What are your assumptions about direct mail? How are they blocking you from seeing a better way? You can try listing all of the facts you think of about direct mail, and then challenge someone else on your team to provide facts that contradict what you thought. This is very enlightening and can help you see beyond your own assumptions to ideas you never thought possible. There are many opportunities with direct mail that you may not have considered before.

Many times, marketers are afraid to fail. Agile direct mail says even if you don’t get the first result you thought you would, it’s not a failure but an experience to build a better mail piece the next time around. Every direct mail piece you send tells you something. Use that information to build better and better campaigns. Agility will get you to success much faster than you have before. Are you ready to get started?

Why Your Postage Rates Could Go Down in April

Since postage is the most expensive part of direct mail marketing, any postal rates changes are big news. Usually, the USPS announces a pending rate increase. On Feb. 25 the USPS filed a notice with the Postal Regulatory Commission that would reduce postage rates.

direct mail postalSince postage is the most expensive part of direct mail marketing, any postal rates changes are big news. Usually, the USPS announces a pending rate increase. On Feb. 25 the USPS filed a notice with the Postal Regulatory Commission that would reduce postage rates. Within the filing, the USPS stated:

“… It intends to remove the exigent surcharge on Sunday, April 10, absent action by Congress or the courts to make the existing exigent surcharge for Market Dominant Products and Services part of the rate base or to otherwise extend it.”

In this filing, the USPS also noted that while it “… recognizes that daily revenue fluctuations could result in a one or two day variation on when the revenue limitation is reached, our current estimate is that the revenue limitation will be reached some time on Saturday, April 9, 2016.”

The end of the 4.3 percent increase surcharge has been anticipated for some time, though the rate of collection left the actual date hard to determine. The reason there was a 4.3 percent increase was because the post office was granted an exigency rate case that allowed it to try to recoup some of the funds lost during the great recession. The court ruled that the rates could not be permanent and must be rolled back after the allotted amount was reached. That means that on April 10 we will see an overall decrease in postage by 4.3 percent.

The post office has been hoping for either legislation or court action to allow the higher rates in order to help offset the losses the post office has suffered for the past several years. The Postal Service worries how it will replace the 4.3 percent of revenue that’s been essential to keeping it in the black for the past two years. These rates have been in place since January 26, 2014, so it will be good for marketing budgets to have more money for the rest of 2016.

So let’s take a look at what some of the most common new postage rates will be:

  • First class single piece letter = $0.47
  • First class single piece postcard = $0.34
  • First class single piece flat = $0.94
  • Presorted automation first class letter mixed rate = $0.419
  • Presorted automation first class postcard mixed rate = $0.272
  • Presorted automation first class flat mixed rate = $0.75
  • Presorted automation standard letter mixed rate = $0.291
  • Presorted automation standard flat mixed rate = $0.539
  • Presorted automation nonprofit letter mixed rate = $0.176
  • Presorted automation nonprofit flat mixed rate = $0.40

As you can see, these amounts will add up over time to marketer’s postage savings. This means you may be able to mail more pieces or add additional design elements that would not have been affordable under the current postage rates. There is still a chance that action could be taken by either the courts or Congress to change the rates, but as of now, it does appear that we will have a postage reduction starting on April 10. What will you do with your postage savings?

When Is EDDM Right for You?

EDDM (every door direct mail) has gained in popularity. EDDM, as defined by the USPS, is designed to help you reach every home, every address, every time. You can map out a target area, use demographic data (e.g. age, household income, and size) to select a delivery route, choose a mailing drop off date, and pay online—all from your computer. And, you can create your mailings up to 30 days before you plan to mail them. Simply enter an address, zip code or city and state for your target area to get started. Sounds great right? So how do you know if EDDM is right for you?

EDDM (every door direct mail) has gained in popularity. EDDM, as defined by the USPS, is designed to help you reach every home, every address, every time. You can map out a target area, use demographic data (e.g., age, household income, and size) to select a delivery route, choose a mailing drop off date, and pay online—all from your computer. And, you can create your mailings up to 30 days before you plan to mail them. Simply enter an address, zip code or city and state for your target area to get started. Sounds great right? So how do you know if EDDM is right for you?

EDDM is right when:

  1. Your Business can Appeal to a Large Number of People:
    In other words, since you are selecting a geographic area that has a wide variety of people in it, you will need to be offering a product or service that most of them want or need. A few examples of broad appeal are dry cleaners, restaurants, general stores, delis, lawyers and other small business in local neighborhoods.
  2. Small Business:
    The reason that this works better for small businesses is because they do not have marketing departments or people who can handle more complex direct mail campaigns, nor do they have the budgets for them. Small businesses benefit from the ease of use and low cost of postage with EDDM

So, if EDDM is right for you, you have a couple of choices. EDDM Retail is designed for the small business to do it all themselves, while EDDM for BMEU is for a commercial mail service provider to do it for the small business. The benefit of having a mail service provider is that you can mail more than 5000 pieces per day and they can help you avoid problems with design, paper stock and any other issues you encounter. If you need help finding a provider you can visit https://mymailconnection.com/ to find one.

One of the key benefits of EDDM is all the space you have on the mailer to put your compelling message, add coupons and drum up interest in your business. You only need to leave enough room to fit the Postal Customer info and the indicia. This means on an 8.5 x 11 sheet you get to use almost all of the 11 inches. Take full advantage of the space with great graphic design. Make sure that your offer is clear and concise so that it is effective. Coupons are a great way to introduce people to your business and an easy way to track your responses. Even with EDDM you need to know what is working, so finding ways to track who is responding and with what coupons is very important. The only way to continue to improve your response rates is to know what works and what does not.

EDDM can be a great way to get into direct mail for small businesses. It is not cost prohibitive, can be done by the business if they wish to without too much trouble and allows for more room to advertise. Take advantage of EDDM and find a cost effective way to market your small business to potential customers near you. If you need any help with design, copy or have questions about EDDM a mail service provider near you can help.

‘Take This Catalog and Shove It!’ – A Modern Customer Relations Parable

Somewhere within the bowels of Restoration Hardware, somebody got themselves a calculator and said to themselves, “Hey! I know how we can save a whole lot of money—let’s print these babies all at once!” What they failed to take into account was the potential negative reaction of their customers

Somewhere within the bowels of Restoration Hardware, somebody got themselves a calculator. And when they added up the cost of creating, printing and mailing multiple catalogs throughout the year, they said to themselves, “Hey! I know how we can save a whole lot of money—let’s print these babies all at once, and drop ship them via UPS. It’s gonna save us thousands in time, paper and postage!”

What they failed to take into account was the potential negative reaction of their customers.

When 15 pounds of catalogs landed on my doorstep I was stunned. At first I thought they must have mistaken me for an interior designer, and figured I need to be “in the know” on every single product SKU in their inventory.

But upon further examination, I was simply disgusted at their lack of marketing savvy. Not only did it take me more than 10 minutes to cut off all the plastic that encased them, but the books instantly filled my small recycling bin in the kitchen.

As a marketer, I wondered why I was even on their list. Not only have I not spent $1 at Restoration Hardware in the last 12-months, but upon further reflection, I’m not sure I’ve spent more than $100 there in the last several years!

Cranky, I took to Facebook to see if I was the only recipient of this marketing fiasco. It turns out 45 of my FB friends were also on the receiving end of this giant mailing effort. And 25 of them left equally cranky comments of support to my rant. One even suggested that we collect all the catalogs in the neighborhood and drive over to RH headquarters and set them ablaze on their doorstep! Yikes!

Next, I decided to let Restoration Hardware know of my frustration. First I visited their FB page and left my post, expressing my disgust. Taking a quick peek again this week, I’ve discovered lots of lots of similar customer complaints, including comments like “I will never shop at your store again!!!”

But the highlight (or perhaps lowlight) was my experience with the RH brand directly. I went to their website and completed the Feedback form. But it was the response I got that told me that RH is clueless when it comes to marketing. To help put this into perspective, I’ll share my note to them and their canned response. This is all a true case study in what not to do.

From: carolyn@goodmanmarketing.com
Received: 6/6/14 1:49:23 PM PDT
To: carolyn@goodmanmarketing.com
Subject: RH – Feedback

As a homeowner, I am appalled at the 50 lbs of catalogs you sent me recently. It took me 10 minutes to cut through all the plastic, so I could dump 13 catalogs in my recycle bin. I posted my crankiness to my FB page and have had over 40 others respond with equal disgust.

As a marketer, I am stunned at your lack of understanding of your customers and prospects. It can’t possibly make good financial sense to send me all this stuff as I haven’t made a purchase from you in years … and even then didn’t spend more than $100. Please, I’m begging you, take me off your mailing list … and contact me if you want some help with marketing strategies and tactics that can truly pay off with engaged customers, higher average order sizes, and brand evangelists.

From: Restoration Hardware Customer Service [mailto:webcs@restorationhardware.com]
Sent: Saturday, June 07, 2014 7:22 PM
To: Carolyn Goodman
Subject: RE: RH – Feedback <<#419189-1221170#>>

Dear Carolyn,

Thank you for contacting Restoration Hardware regarding our sourcebooks. We respect your environmental concerns and assure you that we are also very conscientious about our global footprint. The paper we use for our catalogs is sourced from sustainable forests, certified by ‘Programme for the Endorsement of Forest Certification’ (PEFC). According to the PEFC website, the group works throughout the entire forest supply chain to ensure that timber and non-timber forest products are produced with respect for the highest ecological, social, and ethical standards.

Additionally, we recently reduced the number of sourcebooks and the frequency by which we send them. Mailings that were once monthly are now only twice per year. For those who prefer to view our catalogs online, we have made our sourcebooks available on our website and through various smartphone and tablet applications.

In order to ensure that you are removed from our mailing list, please cancel your subscription via our website by clicking here. If you are unable to do so, please respond with the name and mailing address in which the sourcebooks were delivered, and we can certainly cancel your subscription for you.

We sincerely value your feedback. It is through our customers’ input that we continue to improve our quality of service. Thank you for taking the time to share your thoughts with us.

Again, thank you for contacting Restoration Hardware.

Sincerely,

Jenna Blase
Email Customer Service Advocate
Restoration Hardware

How to Make a Billion: The Costs of ‘Undeliverable as Addressed’

The USPS recently shared some interesting data on the volume and cost of undeliverable as addressed (UAA) mail. That tab was $1.3 billion in 2010, and that was just the cost to the Postal Service, which has to incorporate these costs into its rate-setting. All this UAA is money down the drain to the mailers—who designed, produced and labeled it and applied its postage—and to the Postal Service that has to deal with its final disposition.

The USPS recently shared some interesting data on the volume and cost of undeliverable as addressed (UAA) mail.

According to the USPS, “Total UAA volume dropped from 9.3 billion pieces (4.71 percent of total mail volume) in FY 1998 to 6.9 billion pieces (4.11 percent of total mail volume) in FY 2010. (This reduction, while significant, falls far short of previous Postmaster General Jack Potter’s goal of reducing UAA mail by 50 percent by 2010.) Historically, UAA mail runs in the range of 4 percent to 5 percent of total mail volume, and the percentages of total volume vary by class of mail. Periodicals mail, for example, has a UAA percentage of about 1.5 percent, while Standard Mail usually runs about 6.75 percent. Interestingly, the volumes of UAA mail that the USPS forwards or treats as waste both experienced declines, but the volume of UAA mail that the USPS returns to sender actually increased.”

All this UAA is money down the drain to the mailers—who designed, produced and labeled it and applied its postage—and to the Postal Service that has to deal with its final disposition.

That tab was $1.3 billion in 2010, and that was just the cost to the Postal Service, which has to incorporate these costs into its rate-setting. Add to this bill the cost of 7 billion pieces that went nowhere near the intended recipient—and that’s a fortune off the bottom line. Some of this is inefficiency. Marketers in particular—primarily who use the Standard Mail category—must do a better job in data hygiene and the use of postal addressing and preparation tools.

It may be helpful, and profitable, for mailers to make sure they are undertaking every feasible effort to keep their mailing lists clean—and to avoid this hefty bill. The Direct Marketing Association has an online tool to help marketers make sure their list hygiene and data management efforts are up to par.

It’s called the Environmental Planner & Optional Policy Generator, and it’s based in part on the DMA’s “Green 15” Environmental Principles. But the green focus is dual in nature. Avoiding mail waste through proper data management also applies green—as in money—back to the bottom line! Consider these suggested activities from this planner to get back some of this billion-plus that are lost to UAA:

________________________________________________________

I. LIST HYGIENE AND DATA MANAGEMENT

Our company continually endeavors to manage data and lists in an environmentally responsible manner with a focus on reducing the amount of duplicate, unwanted and undeliverable mail [to both consumers and businesses]. To achieve our goals in this area [If applicable to the goals and/or nature of your organization, please select one or more of the following options.]:

A. We Maintain Suppression Lists

  • We maintain in-house do-not-market lists for prospects and customers who do not wish to receive future solicitations from us (as required by DMA’s Commitment to Consumer Choice).
  • We maintain a more detailed suppression file that enables customers and prospects to opt off our organization’s marketing lists on a selective basis, such as by frequency or by category.

B. We Offer Notice & Choice

  • We provide existing and prospective customers with notice of an opportunity to modify or eliminate future marketing contacts from our organization in every commercial solicitation (as required by DMA’s Commitment to Consumer Choice).
  • We provide periodic notices and opportunities for prospects to opt in or opt out of receiving future marketing contacts from our organization.
  • We provide customers incentives (such as the offer of a discount on their next purchase) for notifying us of duplicate mailings and incorrect addresses.
  • We offer customers a choice to receive communications from our organization electronically.

C. We Clean Our Lists Prior to Mailing

  • We use the Direct Marketing Association (U.S.) Mail Preference Service (MPS) monthly on all applicable consumer prospecting lists. In addition to use of MPS, we maintain clean, deliverable files by using (Please check all that apply):
    • ZIP Code correction
    • Address standardization
    • USPS National Change of Address (NCOA)
    • Other USPS products such as
      • Address Element Correction (AEC)
      • Delivery Sequence File (DSF)
      • Address Correction Requested (ACR)
    • Predictive models and RFM segmentation
    • Other: (Please specify.)
  • We use the DMA “Deceased Do Not Contact” list to eliminate names of deceased persons from mailings.
  • We use the Foreign Mail Preference Service on applicable mailings to the United Kingdom, Belgium or Germany.
  • We use the mail preference services of other foreign national direct marketing associations, where applicable.
  • We [ encourage/ require] our client mailers to use MPS.
  • We [ encourage/ require] companies and organizations that rent our list of customers to screen consumer names through MPS, and to maintain their own do-not-rent and do-not-mail in-house name suppression lists.

D. We Merge/Purge Our Data

  • We match outside lists against each other to prevent duplicates.
  • We use match definitions in merge/purge that minimize duplicates.
  • We match outside lists against other commercially available suppression files where appropriate.

E. We Test Market Offers

  • We test a sample of a list before mailing or marketing to the entire list.
  • We test different versions of advertising and marketing offers, in mail and other media, to select those offers and media combinations that receive the best response.

For more information, see DMA Environmental Resource Guide, “Mailing List Management: A Key to Waste Reduction,” pages 63-70.

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Now the entirety of the UAA issue is not attributable solely to less than adequate data management, but it is likely a good portion of it is. We know the DMA Board of Directors—in adopting its first environmental public goal which in part commits to reduce UAA by 25 percent from 2009 to 2013—very much intends for marketers to avoid losing these billions down the line.

The Postal Service is working closely with mailers and, vice versa, to tackle other ways to manage UAA and to reduce its volume. Certainly, Intelligent Mail barcodes will help, with the ability to track mail whereabouts in real time as it moves through the USPS’s processing and handling. “Return to Sender” UAA is the most costly for the Postal Service to handle, because of the return handling costs—that, too, needs attention.

In the very least, marketers also should work with their mail service providers most closely to design mail pieces for postal automation compatibility, to apply proper data management practices (as indicated by DMA, for example), and—as the USPS embarks on its network consolidation effort—to track their mail most precisely through the mail stream. A billion dollars and more are in the balance.

Helpful Links:
DMA First Public Green Goal, concerning List Hygiene

DMA Environmental Planner & Optional Policy Generator

75 Years Ago, Three Young Men …

I’ve always loved reading old magazines. As a kid in the mid-1970s, I spent hours on rainy afternoons with issues of Look, Sport, and Life saved by my mom and dad from the early 1960s. It wasn’t just the pictures and stories about JFK, Willie Mays and the Beatles that pulled me in; it was also the advertising. The cars, the foods, the TVs — a lot of it was already pretty different from what I knew.

I’ve always loved reading old magazines. As a kid in the mid-1970s, I spent hours on rainy afternoons with issues of Look, Sport, and Life saved by my mom and dad from the early 1960s. It wasn’t just the pictures and stories about JFK, Willie Mays and the Beatles that pulled me in; it was also the advertising. The cars, the foods, the TVs — a lot of it was already pretty different from what I knew.

The other day, I went further back in time – 75 years – via the March 1935 issue of Popular Mechanics that I had picked up at a yard sale. There are articles on developments in television, solar motors, and around-the-world travel on the Graf Zeppelin and the PanAm Clipper. And, the city of the future (1960!) is shown on the cover: a fantasy of terraced skyscrapers, giant pedestrian bridges and rooftop helicopter buses. (See image in the media player to the right.) Oh, well … “The future,” said French poet Paul Valery, “isn’t what it used to be.”

So, then I turned to the ads. Some of the brands are still around (Ford, Harley-Davidson, Simoniz), even though their products have changed in some big ways since then. And there are companies that have disappeared over the decades (LaSalle Extension University, Plymouth, Midwest Radio Corp.).

But for most of the ads, whether full page, fractional or classified, there was only one reply option: the mail. That’s right, no websites, no Twitter or Facebook, not even a phone number … just a mailing address for the prospect to reply to. Many of them even had a clip-out coupon.

Because only the inside and back covers were in 4-color (selling cigarettes), many of the rest have to rely a lot on their copy (and the emotional appeal behind it) to draw a response. “Send for FREE BOOK,” “Become a RADIO EXPERT.” Legendary bodybuilder Charles Atlas promises salvation with a new physique: “I’ll prove in ONLY 7 Days that I can make YOU a New Man!”

This is great stuff! As antiquated as the ads may appear, a lot of these techniques and rules are still at work today, in a variety of media, including direct mail and email. But what made my jaw drop was a page spread (see image in the media player to the right.). On the left page, the headline for a half-page vertical for the Encyclopedia Britannica: “He’s the best paid man here because he is the best informed.” At right, the full page for International Correspondence Schools (now Penn Foster Career School) shows three identical male faces, and asks: “WHICH ONE gets the job? They’re alike in everything — except just one thing! [O]ne factor … makes one of these applicants the logical man for the job! HE HAS TRAINING!” (See image in the media player to the right.)

I instantly thought of “Two Young Men,” Martin Conroy’s 2-page letter for The Wall Street Journal, the most successful advertisement in the history of the world (and which Denny Hatch discusses in his forthcoming book about copy drivers for DirectMarketingIQ.) That mailing was its control for 29 years starting in 1974, and earned it well over $1 billion. It tells the story of two men who go to their 25th college reunion, and while they’ve turned out alike in many ways, and even work for the same company, one of them is its president, because of what he knows — that made the difference.

That this classic mailing used a similar comparative technique to space ads from 40 years earlier is not surprising. Even in recent years, a dozen or more direct mailers have their own mailings that echo, loudly or otherwise, Conroy’s effort. They’ve just “stolen smart.” It’s more proof, that as much as culture and technology have changed, as sophisticated and clever as we may now think we are, the direct marketing rules and techniques of the past are still quite valid, and profitable, today.