Back to the Future of Direct Mail
Direct mail strategies for success-
Tips for increasing the power of your direct mail campaigns. (blog) Direct Mail is Making a Comeback. Currently, the direct mail industry is worth approximately 44 billion dollars. Yes, billion with a ?B?. That is a lot for an industry that was going extinct just a few short years ago. The direct mail industry has stood the test of time, no matter what the obstacle. Through the internet and email marketing, cell phones, home computers, direct mail has kept on trucking. They’ve gone head to head with a stampede of social media channels, and yet the industry remains as solid as ever. So how does a traditional industry like direct mail continue to thrive in the face of its digital opponents?
Most marketing professionals expect large growth in the direct mail industry over the next several years, and printing companies are experiencing a higher demand for traditional direct mail marketing. The recent uptick in direct mail popularity can be attributed to ample targeting methods and the ability to better personalize and control direct mail. Tangible mail holds its own within the multichannel marketing space.
Marketing agencies did not previously have targeting or measurement capabilities like they do today by using QR codes, click through rates and UTM parameters to track campaigns. In a not so distant past, things seemed to be a bit more straightforward. If you wanted to connect with prospects, you spent money to get in front of them in one of the few available channels: TV, newspaper or direct mail. Let’s take a dive into direct mail’s lineage and how this multi-billion-dollar industry came to be what it has evolved to today.
Direct Mail Beginnings
Now a days, marketers track a complicated customer journey across dozens of different channels and devices. We have analytics and excel docs with years of consumer data at our fingertips to better help us make important marketing decisions. However, in the mid-1900’s, direct mail gave companies and agencies a simple way to report on purchases. It was widely praised as an inexpensive means to understand consumer buying habits. In the 1960s, the ZIP codes began to gain wide use. Before the ZIP code, it was difficult to target appropriate recipients of direct mail, and before the computer, compiling and maintaining lists of supporters was tedious and costly. (Wikipedia)
With new tracking methods in direct mail advertising, targeting and measurement became possible. However, while the new targeting methods within the direct mail industry came to fruition, a wave of checks and balances like data accuracy, verification and honoring opt-outs became just as necessary. The daunting task to remove duplicates and subscribers from direct mail lists required dozens of people to continually cross off one name at a time. Once they were purged, the direct mail list required hundreds of typists to create address labels for the next round of mailings. Despite the work involved, response rates would come to define the expanding horizons of direct mail in the 1960s. (CMO Council)
The 1970’s & 1980’s
In the 1970’s, catalogs and direct mail began to consume mailboxes and wastebaskets. Credit card companies had found success with the ability to send ?no name? credit cards with offers via direct mail. As each year passed, more Americans opened their mailboxes to find more letters that addressed them as ?Dear Current Resident,?.
?Prior to the 1980s, direct mail and its practitioners were largely marginalized in the advertising world. As firms and marketers searched for ways to segment the mass market of consumers in the 1970s, direct mail proved to be an effective tool not only to sell products, but also to study the changing interests and buying behaviors of consumers.? (TandFonline)
As Michael Weiss explored in his 1988 book, The Clustering of America, the grouping method of American households based on ZIP code and lifestyle represented a sweeping shift in marketers? ability to directly target consumers with accuracy and at high volumes. (CMO Council)
?The direct mail industry experienced explosive growth of the nonprofit sector in the United States ? quadrupling in the 1980s and doubling again in the 1990s and early 2000s ? led to a massive expansion in the use of direct mail to build and sustain large, nationwide donor and membership lists. Today, direct mail fundraising accounts for at least one-fifth of the more than $250 billion contributed annually in the U.S. to the nation?s 1.6 million nonprofit organizations.? (Wikipedia)
By this time, catalog shopping became a popular way to sell to consumers for brands like Lands’ End, dELiA*s, and Spiegel. Luxury retail stores such as Neiman Marcus and Tiffany & Co. got in on the catalog craze. Columbia Record Club, for example, began as a mail-order music club. It developed a large market presence during the 1990’s. At its peak, they managed a membership of 16-million music fans by offering a ‘2-for-One’ CD deal, along with various other promotions.- (MSP)
During that same time, direct mail to the lower and middle class began to decline. This was largely because urban populations decreased, urban populations spent less than that of their suburban counterparts on goods from catalogs, and postage costs increased.- (MSP) This accumulation of demographic data provided identifiable demographic information for marketers to utilize when sending direct mail to their target market. Studies found that the volume of advertising mail received by U.S. households increased with the amount of income, age of the head of the household, and the number of adults in the household. -USPS survey.
The 2000’s & 2010’s
– By the start of the year 2000, the direct mail marketing industry was entirely reliant on computers with large databases incorporating demographic and zip code information. Data compilation was on the rise. However, so was the use of home computers and email. During this time, the volume of marketing emails being delivered started to rise. Estimates indicate that North American direct mail volume declined from 93.1 billion pieces in 2008 to 77.9 billion pieces in 2014. -USPS Survey
The Data Protection Act was updated to ensure all email marketing included an opt-out. Soon after, the Can Spam Law was introduced in the U.S., setting the first regulations for commercial emails. (SmartInsights)
In the 2000’s and 2010’s, we saw the beginning of trackable elements that could take a direct mail recipient to a website from their cell phone using what’s called a QR code. It remains the most common cross-media device indicator to this day.
2020 & Beyond
According to Winterberry Group and DMA data, the U.S. direct mail spending and volume has slightly increased over the past two years. Direct mail is on the rise and the reasoning is in the 3.7% average direct mail response rate (second only to telephone). Companies are returning to printed communications versus electronic alternatives. Printing companies have seen a recent uptick in printed materials through 2018 and 2019 and anticipate more growth in their direct mail volume over the next few years. The true value of multichannel marketing lies in using the strengths of each medium combined, direct mail included.
Additionally, modern-day technology allows for a seemingly endless number of innovative direct mail marketing designs. There’s almost no limit to what you can do with your direct mail marketing campaigns. By combining print with mobile technology, you can launch an interactive experience from a mail piece.
“There’s no such thing as junk mail – only poorly designed and implemented campaigns.”
-The Smithsonian National Postal Museum