Trendwatch | Direct Mail - Alive, Well and Still Delivering Great Results
Mark Twain said it first, but authoritative research studies are saying the same thing about direct mail. Yes, mail volume is down and will likely drop further. Yes, there is contraction among producers of high-volume direct mail. Yes, the United States Postal Service will certainly continue to raise postal rates. However, mailers who are smart and selective are not just surviving, but thriving. And that trend is unlikely to change in the near term.
The Direct Marketing Association's recently released 2009 Response Rate Report indicates that response rates overall to direct marketing media are up, suggesting that "better list management and more sophisticated targeting" are the drivers of this upward trend.
In A Channel in Transformation: Vertical Market Trends in Direct Mail 2009, the Winterberry Group, a marketing services strategic consulting group, reports, "... direct mail, still commanding over $50 billion in U.S. marketer spending, remains viable. In place of old methods, a wide variety of new mail applications will continue to emerge. The Winterberry report continues, "The ultimate goals tend to be universal: Grow the return on investment generated by every dollar of direct mail spending. Offset the marketing threats posed by higher costs and diminished available budget. And maintain "place in the mailbox" - and a place in the forefront of consumers' (or donors') minds ..."
According to a survey done by Advertising Age for the United States Postal Service, many marketers are convinced that direct mail makes sense in a down market. Two-thirds of the respondents cited direct mail's ability to provide measurable ROI. Nearly 65% said it helped them build customer relationships.
High volume mailers and their production resources have been adversely affected by the economy and the growing popularity of digital media. "Spray and pray" mailers in the financial services sector (particularly credit cards and mortgages), large national nonprofits and large retail mailers are categories which have seen significant cutbacks.
Reports of my death have been greatly exaggerated!
Gabriel Group Chairman Bill Ziercher comments, "While the economic downturn hastened the shift from volume to selectivity, Gabriel Group has preached and practiced lean marketing for years, and we've seen positive results. Others may be making radical adjustments; but for us, marketing smart is business as usual."
Ziercher points out that Gabriel Group is well positioned to help its clients - in both the commercial and nonprofit markets - benefit from the convergence of a number of long-growing trends:
1. The increasing sophistication of database technology. "We can now finetune analytics to a point only wished for just a few years ago, and our clients are reaping the benefits. They may not be mailing as many pieces; but in most cases, their mailings are more productive."
2. Proliferation of channels. "Just a few years ago, we were wondering how to use this thing called the Web. Now, we're looking at Web 2.0, with its consumerdriven content. Social Media Marketing (SMM) and mobile marketing are all relatively new frontiers as marketing applications, and we are working on ways to make them a part of our clients' marketing mix."
3. Improved production technology. "With new and highly sophisticated imaging equipment, personalization is no longer a black-and-white thing. Fourcolor brochures, postcards and even catalogs now feature four-color graphics customized to the buyer or donor profile." Gabriel Group recently made a significant technology investment with the recent addition of a Xerox iGen4™ and other print software applications. "These additions are helping us reduce costs by optimizing workflow and assuring high, very consistent production output."
4. Lean marketing. In today's economic climate, there is no room for unnecessary time or money. Marketers are no longer looking just for production capacity; they are seeking consultants who can help them better manage their marketing resources. "We've invested in very sophisticated tools to help us do just that. Thanks to improved workflow, we're able to keep costs in line and help clients save in subtle ways - like eliminating the time and travel costs of press checks. Solid database management combined with faster, better, smarter production makes for results-rich lean marketing," Ziercher says.
5. Green 2.0. Lean and green go together. Even though some marketers have pushed green initiatives to the back burner until the economy recovers, green is a logical outcome of lean marketing. By printing short-life materials only to meet current need, by cleaning databases to assure accurately deliverable mail and by smartly selecting only the people who are most likely to respond, the paper that
would end up in the landfill never gets used. That's Green 2.0, driving out waste before it ever gets started.
6. Cross-channel integration. To maximize response, marketers must effectively synchronize multiple channels, capitalizing on the unique strengths of each. "Many of our clients use mail as the centerpiece of a cross-channel effort, building end-to-end plans involving high-tech options such as PURLs (personalized URLs), plus automated and personalized fulfillment.
7. Continued demand for positive user experience. "Consumers have a huge number of choices. The company that provides the best user experience - mail, Web, mobile or wherever - will be the company that attracts and retains customers. Gabriel Group is committed to helping our clients provide good user experiences for their customers, just as we are dedicated to providing them, our clients, with attentive, proactive service. In the current economic climate, some companies have lost sight of this, but it is one of our enduring core values,"
Ziercher said.
"There are tremendous pockets of opportunity even in tough economic times," said Ziercher. "Our role is to help our clients take advantage of these opportunities by making prudent use of the marketing tools available to them - and undeniably, well-targeted, one-to-one personalized direct mail is still one of the most effective. Mail is definitely alive ... and kicking!"
About Gabriel Group
Gabriel Group is a marketing resource management company deploying traditional and web-based solutions. The company serves its clients' needs from acquisition through fulfillment and retention. It is headquartered in St. Louis, Missouri.
For more information on Gabriel Group's lean database marketing, please call or email:
Mike Weinberg
Senior Vice President
314-743-5717
mikew@gabrielgr.com
Sources:
The Winterberry Group, A Channel in Transformation: Vertical Market Trends in Direct Mail 2009
The Direct Marketing Association, 2009 Response Rate Report
2009 Marketing in a Down Economy Survey, Advertising Age Custom Research.
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