Today’s reliance on digital marketing has left a once-popular channel largely forgotten: direct mail. However, contrary to popular belief, direct mail isn’t dead. Instead, recent data suggest it’s a powerful tool to reach target audiences with personalized messages.
In a new survey from PFL, “2019 Multichannel Marketing Research Report: Direct Mail in the Digital Age,” 83 percent of marketers reported good or very good return on investment (ROI) when direct mail was fully integrated into their multichannel campaign mix. Here we’re examining how direct mail positively impacts ROI, how brands have successfully used it and how consumers perceive it.
The role of direct mail in today’s multichannel campaigns to produce higher ROI shouldn’t be underestimated. Over half of the PFL respondents reported that ROI delivers a moderate to major improvement in overall campaign performance. That figure jumps to 89 percent when direct mail that is highly personalized and integrated into the channel mix is involved.
The response rate for direct mail is equally impressive. Direct mail sent to houses saw a 5.3 percent response rate, and for prospect lists, the rate was 2.9 percent. Comparatively, the response rate for email is a meager 0.6 percent. In 2016, direct mail’s customer response rate increased by 43 percent, and its prospect response rate increased by 190 percent compared to 2015.
You’re probably wondering how direct mail measures up to social media and email in terms of boosting. Surprisingly, paid search and online display pale by comparison to direct mail for median ROI. Direct mail has a median ROI of 29 percent, putting it third behind email (124 percent) and social media (30 percent). Third place may not sound impressive, but when you consider median ROI was 23 percent for paid search and 16 percent for online display, respectively, it’s easy to see why direct mail is underutilized.
It’s important to note that brands currently favor certain forms of direct mail over others. The majority of marketers are sending postcards (55 percent) and letters (52 percent), but most agree that these forms of direct mail fall short when it comes to demonstrating brand value. The third most popular form of direct mail—dimensional mail—is the most preferred. Today, 42 percent of marketers send this type of physical mail with 35 percent or marketers saying it does “very well” at representing their brand (versus 17 percent for postcards and 19 percent for a letter).
The reasons for why direct mail can help brands stand out are many. First, given its tangibility, direct mail feels more interactive than an email or a digital video. When the right form of direct mail is used, it can also spark an emotional response on some level, making it more memorable.
An added benefit direct mail offers is creativity. For example, for its holiday campaign, a Utah-based marketing firm mailed out a card and a $20 bill to encourage recipients to put it towards their preferred charity. When they scanned the card’s code on the back, they were directed to a YouTube video explaining the initiative as well as a hashtag to use when posting about it on their social media.
Yet the greatest opportunity direct mail presents for marketers is less competition in the mailbox. PFL’s findings show that most marketers leverage three or four channels in a multichannel campaign, but only 56 percent are typically using direct mail. Despite this, 78 percent ranked integrated, branded, personalized direct mail as the second most effective channel for reaching their target audience. Personalized direct mail came in at a close second next to events (83 percent).
CMO Council’s study, “Critical Channels of Choice,” confirms that consumers have positive feelings toward direct mail. One out of every three consumers surveyed said they expect direct mail to be part of their ideal communications mix.
Perhaps that’s why Mailchimp decided to try its hand at tangible mail. A few months ago, it introduced a feature letting users send printed postcards to potential customers. Users can customize postcards via the same email-style automation features currently offered for email services. Before clicking “send,” companies have the option of sending it to potential customers in the US in addition to 26 other countries. On Mailchimp’s decision to integrate the postcard feature, the company’s VP of product management, John Foreman said, “In interviewing customers, we noticed they still do a lot of print marketing, they still do a lot of direct mail.”
The postcard feature doesn’t come with the same click-and-open data that come with email or web ads, but users can track postcards online through the US Postal Service and note when recipients use coupon codes included on postcards at online stores linked to Mailchimp.
To get the most out of a direct mail initiative, brands should determine their desired target audience. Just as important is setting a call-to-action, be it in the form of encouraging the recipient to use a discount code, sign up for a newsletter or take a survey.