Direct Mail: Is It Old Fashioned If It Still Works?

I still get a lot of sneers if I bring up the idea of direct mail to a client. Comments range from “Does anybody still read that stuff?” to “Aren’t postage rates outrageous?” The simple answers are “yes” and “no.”

Morpheus says Direct Mail WorksI still get a lot of sneers if I bring up the idea of direct mail to a client.

Comments range from “Does anybody still read that stuff?” to “Aren’t postage rates outrageous?” The simple answers are “yes” and “no.”

Let’s start with a few statistical facts (courtesy of the USPS Household Diary Study):

  • 42 percent of recipients read of scan direct mail pieces: That means that nearly HALF of your target audience is actually stopping, for a few seconds, to read your message. If you’ve designed it properly with a strong and relevant offer/call-to-action, you might achieve a 1 percent, 2 percent or even 14 percent response rate (yes, I’ve achieved that!). Digital ads, in comparison, are lucky if they get a 0.14 percent ad clickthrough rate — and then, once they get to the landing page, you’ll be lucky if you convert 2.35 percent.

I know the argument: Yes, but I’m exposing my digital banner message to millions of targets and it doesn’t cost me the same as direct mail does.

Let’s Do the Math

  • If you executed a direct mail campaign to 10,000 targets, and achieved a 1 percent response rate, you’d gain 100 customers.
  • To gain those same 100 customers, you’d have to run a banner ad that reached 3,035,700 targets (and let’s face it, you’re probably reaching a lot of non-targets in that number too).

The great thing about direct mail is that you can still rent or create a highly targeted list of prospects relatively inexpensively, as there is no wasted circulation. You’re only sending your message to prospects who meet your criteria — and therein lies the rub. Many companies aren’t clear exactly who they should be targeting, so they rent a list that is so broad that it has no chance of delivering a successful ROI.

Take a Bite Out of Postage Costs
If your only targeting criteria is to reach households who live in a specific zip code, or a specific neighborhood, you don’t even need to rent a list. The USPS offers a service called “Every Door Direct Mail.” By leveraging this new service, marketers can save thousands of dollars on postage — in fact, you can reach your 10,000 targets for as little of $0.29 per household.

Tactile, Targeted and Oh-So-Clever
Business-to-business marketers, who always benefit from targeting vertical market segments, should have a digital presence on sites where their known prospects visit — but have you looked at the overwhelming and competing messages on these sites lately? It seems you cannot even visit a site without being slapped in the face with an invasive pop-up ad, or flashing banner ad. Since 72 percent of Internet users say pop-ups are “very annoying,” and 49 percent find banner ads as annoying as pop-ups, your brand could probably benefit from moving into a distraction-free zone — which is what direct mail truly offers.

When direct mail arrives, your recipient must at least touch it — if only for a moment before recycling it — but if you’ve crafted a targeted and meaningful message, it will get opened. And that’s where many marketers fail. They don’t truly understand how to craft a direct mail piece that works.

Grabbing someone’s attention isn’t as simple as mailing a postcard — or a letter in an envelope. Although I’ve seen both of those tactics work when done intelligently. Three-dimensional packages can be an excellent way to get attention, especially if you’re selling something that’s expensive and your initial goal is to get an appointment for your sales force.

The Direct Marketing Association hosts an annual awards show (the ECHO’s) for excellence in direct response work. Take a gander at their case studies and study what works and, more importantly, why. Then tell me that direct mail doesn’t work.

A Possible USPS ‘Exigent’ Rate Increase – Playing Politics on the Backs of Ratepayers?

There are rumors that the USPS may request another exigent rate increase. Why are we going through this again? Advertisers, marketers and the business community love certainty—and have a strong distaste for uncertainty. When one considers the financial situation of the U.S. Postal Service during the past couple of years, it’s enough to keep mailers at bay in planning their ad budgets, and keep them from devoting much to direct mail in the overall media mix.

There are rumors that the USPS may request another exigent rate increase. Why are we going through this again?

Advertisers, marketers and the business community love certainty—and have a strong distaste for uncertainty. When one considers the financial situation of the U.S. Postal Service during the past couple of years—from uncertain prospects of postal reform legislative efforts, to what any emerging postal reform effort might contain or not contain in cost savings, to short-term financial viability and this past year’s default—it’s enough to keep mailers at bay in planning their ad budgets, and keep them from devoting much to direct mail in the overall media mix.

Tying postage increases to the consumer price index and giving USPS the latitude to implement such increases annually (as is now the law) has helped give the business community certainty about postage costs, so they can plan and budget accordingly.

Allowing an “exigent” or additional postage increase to happen when there are extraordinary circumstances (as is also now the law) was intended as a “last resort” to make Postal Service finances whole. Let’s be honest: An extraordinary circumstance happens when there is an absence of postal reform efforts moving forward, and, possibly, when there is an absence of U.S. economic growth and an exhaustion of wise cost containment initiatives inside the Postal Service. All three of these latter scenarios don’t exist—so why even consider an exigent increase?

It’s a bad idea. First, USPS customers would detest such a rate hike, as they do. It’s an uncertainty.

Recently the Direct Marketing Association (DMA) in its Direct from Washington newsletter reported:

With reason to believe that the United States Postal Service (USPS) Board of Governors may vote on a potential exigency rate increase in early September, the Affordable Mail Alliance (AMA), including the DMA, sent a letter to the Governors voicing their opposition of such an increase. The letter expressed concern about the negative effects that would come with such an increase, especially for the mailing industry and its suppliers. The letter recognized the continued financial struggles that confront USPS, but also stated that an exigent rate increase is not the solution to those struggles. With recent progress toward comprehensive postal reform in Congress, along with steady improvement in the USPS balance sheet, the letter stated that an exigency filing ‘at this point would be premature.’ The letter additionally requested a meeting with the Board to discuss the issues at hand and to ensure that USPS is fully informed before making a decision of such great magnitude.

Second, if the architects of an exigent rate hike think that such a case is what is needed to convince lawmakers that postal finances are indeed a mess, and that a reform law—now in discussion—is desperately needed to fix them, then how dare play politics on the backs of ratepayers? An exigent rate hike is unlikely to move best-case legislation forward (and may even help move a bad bill, from customers’ perspective) and will saddle mailers with even higher costs than budgeted. Thus, there would be more uncertainty and more mail dollars flowing elsewhere in advertising.

As the Affordable Mail Alliance contends, any exigency scenarios are at best premature and, might I add, most likely non-existent. So USPS, please listen to your customers and just don’t go there.