You might be forgiven for thinking that direct mail is old hat and that with social media, SMS and email it can’t compete effectively. Well think again – in the same way that television and Kindles haven’t killed the book, email and SMS for marketing it doesn’t mean that direct mail is destined to be the poor relation. Granted technology is constantly changing and it’s easy to think that the more traditional communication methods have become unfashionable amongst the wealth of new apps and tools available.
Direct Mail delivers significant ROI
In 2013 Central Mailing Services statistics showed that 48% of the UK population responded to direct mail over the past year. It also showed that 62% of people like to receive offers via mail and 56% of people welcome mail that provides useful information. So we all still respond well to direct mail when it is made relevant and targeted to us.
Although the prognosis for direct mail is better than most people would imagine email direct marketing is still a significant force. According to a panel of 128 senior B2B and B2C client-side email marketers interviewed for the British Direct Mail Association’s annual national client email report, 56% expect to see increased marketing budget allocation to email in 2014. Optimism for the channel’s outlook this year has been underpinned by a 16% leap in average ROI from £21.48 in 2012 to nearly £25 (£24.93) in 2013 for every £1 spent on email campaigns. This rises to an average of £30.52 for B2C campaigns.
This rise in ROI has been attributed to a heightened focus on better-targeted campaigns. There has been a strong emphasis on list segmentation as the percentage of marketers segmenting campaigns for six+ audiences rose from 29% in 2011 to 38% in 2013. Segmented emails accounted for 60% of all email revenue in 2013, compared to 55% in 2012. Increased social media activity has also made a big impact on email ROI as it has increased levels of brand engagement with consumers and helped to drive a rise in the acquisition of new email addresses.
We currently live in a world of time-starved people and most of us suffer from email overload and many messages are not opened and are condemned directly to the rubbish bin. With 300 billion messages sent each day, and a constant bombardment of marketing email after email, it makes a welcome change to receive a creative and relevant piece of direct mail when you get home. In fact, if it has some novelty value, it may well be kept and shared and it will certainly stand out from the mass of boring emails. With digital printing becoming more attractive in terms of cost effective volumes and personalised messaging, it is possible to send out something a little different from your competitors without blowing the over stretched marketing budget. Printed direct mail is now becoming so effective that its ROI has increased every year in the last decade.
The future is Omnichannel
A Direct Marketing Association study in 2013 showed that the response rate for direct mail to an existing customer averages 3.4% compared to 0.12% for email. So the next big thing for print providers is hybrid direct mail or Omnichannel – a combination of printed direct mail and online interaction through email, SMS, social media – and all relevant channels.
Printed direct mail is now a good way to drive digital interaction and as a result digital marketing is now creating innovative solutions for printed DM. It appears that the future may well be a mutually beneficial alliance as opposed to a fight to the death.
Research from InfoTrends supports this theory that, when print is successfully combined with other communication channels into a campaign, response rates are significantly higher.
Being creative with direct mail design and format can easily drive much improved results. The use of structural dimensional mail pieces has become very popular, making it much more eye catching and appealing than a flat piece of paper. Research has shown that dimensional mail:
- Can have 20 times the penetrating power of flat direct mail
- Can boost response rates by as much as 75%
- Scores 80% or better in generating positive opinions among recipients.
Challenges for SME businesses
The biggest challenge in this area for most SME businesses is having the internal resource and expertise available to effectively manage hybrid mail campaigns. With around 75% of email marketing still being run by in-house teams, the obvious solution is for print providers to offer a combined solution of print and email to their customers. The customers would then benefit by freeing up internal resources and also having a partner with the expertise to run hybrid mail campaigns.
When print providers start dealing with hybrid direct mail it creates the opportunity to develop and expand their data management capabilities. Currently the bottleneck for the growth of Big Data management is growing the skills fast enough; a McKinsey Global Institute report projected that the United States needs 140,000 to 190,000 more workers with “deep analytical” expertise and 1.5 million more data-literate managers. So if there ever was an opportunity for growth staring you in the face, there it is.
A major part of managing Big Data projects is asking the right questions: How do you define the problem? What data do you need? Where does it come from? What are the assumptions behind the model that the data is fed into? How is the model different from reality? Listening to the data is important, but so is experience, intuition and a much deeper understanding of destination markets and consumer behaviour. After all, what is intuition and gut feel? It is the human brain analysing large amounts of data to draw conclusions rather than using a maths model.
Digital print technologies have advanced to engage target audiences through data driven personalisation in a very similar way to how email and other online capabilities have progressed. Variable data printing utilises triggers based on consumer data and segmentation to determine the messages and creative assets. Combine all these elements with timely delivery services and you have the most compelling and effective marketing channel there is.
Neil Falconer -Print Industry Strategy Consultant and MD of Printfuture.com
So direct mail may be changing into hybrid mail and undergoing something of a renaissance, but let’s be clear the printed part of a direct mail campaign is the most important and adds the most value. As print providers we all need to spread the word that direct mail is alive and well and competing very successfully in a digital world.
This article was commissioned by Ricoh to bring you independent opinions from industry experts. We hope you find our guest speaker’s views interesting and stimulating. We would appreciate your feedback.
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