We recently asked a question on our Facebook page about whether email or direct mail marketing messages were better received. With world communication becoming increasingly more virtual, and with so much focus on “green” business practices, it can be tougher to get results from a direct mail campaign. We spoke with Ricardo Perez, VP of Postal Systems in Hayward, California, to get more information about how to maximize direct mail campaign results.

1. It would seem like email campaigns would be more productive than direct mail, since more and more people are online. What benefits does direct mail have over email?

Direct mail and email marketing have pros and cons, and each one’s effectiveness depends on many variables, i.e. target demographic (Web 2.0 young adults vs. Baby Boomers), type of audience (opt-in customers or members vs. prospects) and desired response (information vs. donation vs. purchase). For example, a Web 2.0 demographic will likely respond better to online marketing – not just email, but social media and viral marketing campaigns. On the other hand, selling high ticket items to baby boomers is better served by a direct mail campaign because they are familiar and comfortable with the format and are generally not as involved online. Furthermore, statistics show that direct mail tends to generate higher initial response than email, possibly because emails are caught by spam filters, cannot be validated the same way as mailing addresses and are often deleted before opening due to fear or viruses or privacy concerns. Benefits of direct mail include:

Highly targeted – carefully developed lists allow more focused target marketing than most other media. This in turns generates greater response and more revenue per dollar spent.

More personal – giving today’s array of digital technologies, direct mail can speak to recipients on an individual level and appeal directly to their interest.

Flexible – letter, postcards, brochures, catalogs – the list goes on. Direct Mail allows for a wide variety of formats tailored to the target audience and the desired response.

Tangible – the truth is many people look forward to receiving “junk mail” to learn about new products and services. And the fact that someone spent money to reach them lends credibility to the offer.
Measureable – last but not least, direct mail is highly measurable in terms of tracking responses and testing different offers. This in turn allows marketers to quickly and efficiently fine-tune campaigns based on what works.

Ultimately, the best approach often involves using multiple channels simultaneously, particularly providing an online response mechanism such as a Personalized URL with a direct mail piece.

2. What are three key components to remember when putting together a direct mail campaign?

The key components of any direct response marketing campaign are:

1. Analyze market opportunities and select target markets.
2. Develop market offerings that position the product or service in the minds of target buyers as delivering some central benefit, i.e. Volvo positions its cars as the safest a customer can buy.
3. Include a specific offer or call to action that compels people to respond, and track those responses to inform future campaigns.

Of course, don’t forget to meet USPS regulations on the mail piece design!

3. What kind of options do people have for distribution of direct mail campaigns? Do you think it’s advisable to purchase a list?

While anyone can print and mail a direct mail campaign on their own, at some point it makes sense to leverage the expertise of professionals with experience in designing, printing and mailing direct mail campaigns. Not only can direct marketing knowledge improve the campaign’s performance, but costs can be minimized with software and equipment designed to qualify for postage discounts and automate the fulfillment process.

It is advisable to purchase a list assuming sufficient due diligence is done ahead of time to properly profile prospective customers. I have seen Nonprofit clients participate in list exchanges with other Nonprofits, thinking they are saving money by not paying for lists. However, the assumption that someone who donates to an educational organization will also donate to the symphony is faulty at best, and can be very expensive when considering the print, mail and postage costs incurred sending a direct mail piece to a poorly selected audience.

4. In developing a marketing plan, are there any other items related to direct mail that a company should plan and budget for?

Direct mail is just one of several channels that should be considered with any effective marketing plan. In fact, direct mail, email and the Internet are all part of the broad communication channel, which also includes television, radio, newspapers and magazines, telephone etc. The primary difference between direct mail and the other brand-based marketing efforts is the direct response component. This in turn requires careful planning of response mechanisms, i.e., 800 numbers, reply mail, coupon redeemed in-store and the Internet. Moreover, the responses must be tracked and measured carefully to ensure maximum follow up by inside sales people and campaign improvement over time.

5. What are average returns on investment for direct mail?

As with any marketing campaign, ROI depends on many factors such as proper targeting, good design and execution and a viable product or service. As I always tell our clients, our job is to lead the horse to water…it is up to them to make them drink! That being said, we recently did a direct mail campaign with an online PURL response mechanism that increased conversion by 130% over the previous year and generated a 500% ROI – the customer made $5 for every dollar spent on the campaign, including lists, print and web design, print and mail services and postage. Done properly, direct mail has a tremendous ROI.

6. Are there any common mistakes that companies make when developing or designing a campaign that they should look out for?

At the risk of sounding repetitive, too often people make the critical mistake of not doing the necessary market research and data analysis up front. Without that, any direct mail campaign is likely doomed. The proverbial selling of igloos to Eskimos is a well-known phrase for a reason – it’s hard to do, no matter how catchy the creative! Aside from that, direct mail should be clear and simple, with a compelling call to action – no need to cram every little fact about your product or service on a postcard. Give people just enough to pique their interest, combine it with a tangible value for responding now, and fill in the details when they respond.

7. In your experience, what are the common factors of successful campaigns?

See answers above. Target markets, profile prospects, product positioning, appealing and concise creative, call to action, clear response channels, track and measure. Repeat.

8. Why is direct mail such a key component of marketing efforts?

Aside from all the reasons stated above, the truth is there is less competition in the mailbox. People check their mail every day, and at the very least you are guaranteed someone sees your offering, logo, message etc. Getting your targeted message in front of people at home is a big win!

9. What are average costs for direct mail?

Print and mail costs can vary greatly depending on type of mail piece (postcard, brochure, letter package etc), level of personalization (simple name and address all the way to variable images and messages based on database) and overall volume. Total cost including postage and mail lists can range anywhere from as low as $0.40 per piece to upwards of several dollars per piece. However, the more important consideration is the revenue per dollar spent – if you spend $0.50 per piece and get back $.045 per piece because of poor planning and lack of personalization, you lose; however, if you spend $3 per piece and get back $15– you are the new CMO!