Direct mail might seem old-fashioned, but it's still one of the most effective marketing channels around. The response rate for direct mail is Direct mail household response rate is 5.1% (compared to .6% email, .6% paid search, .2 online display, .4% social media). This is the highest response rate the DMA has ever reported, since coming out with the Response Rate Report in 2003.1. Compare that with the average email response rate of 0.6%, and you begin to see the appeal.
And the trend is good: The response rate for direct mail is the highest it's been since the Data & Marketing Association published its first "Response Rate Report" in 2003. At the same time, less mail is being delivered each year as marketers focus their efforts (and their budgets) on digital channels. And that means there's a renewed opportunity for smart brands to capitalize on the power of a well-timed piece of direct mail to drive action.
But the days of massive, loosely targeted mail drops are over. With the power of Big Data, marketers can strategically plan their direct mail campaigns to enhance their effectiveness through targeting and behavioral triggers.
Here are just a few highlights from my conversation with Dan:
The ROI of direct mail is easier to measure than ever (05:36): "It's absolutely crucial today that we link what we are sending back to data in any way that we can. That's crucial not just from a personalization point of view, and not just from a relevance point of view, but of course from an attribution point of view; that is also key.
"We need to know if we are going to make a substantial investment in marketing, what impact that investment is actually having. This has traditionally been one of the challenges with direct mail, but when you begin to look at how you can apply programmatic approaches and digital execution into the delivery of that strategy, that's one of the things that we can become absolutely clear on."
Direct mail can be a powerful tool in the struggle against cart abandonment (13:52): "We had a scenario [with UK fashion brand JD Williams]...and this is very typical in any market, whereby there was a certain level of fatigue that had been reached with email. When you send something, it could be a targeted email...the conversion reaches a level which is very hard for a brand to beat or to move into a higher performance.
"In this scenario the customer base were looking at particular products. They'd expressed interest in other products, but they hadn't really gone any further in that purchase. What we begun to do is, we took the nonresponders of the emailed abandoned basket campaign and triggered follow-up programmatic direct mail instead to those nonresponders. What we were looking fro was...would that drive any increase in performance? What we saw is...a 14% increase in abandoned basket recovery, an 8% increase in average order value. Everything we'd expect to see through demonstrating to that base that we knew them as customers on that channel that gets noticed, we absolutely did."
What delay? Triggered direct mail arrives just in time (15:28): "This is what has traditionally been a delay for direct mail, but is also an opportunity to become a lot more responsive. In [the JD Williams campaign], we were giving people two days for the customer to respond to the email. If they hadn't responded to the email, that's when we were triggering our direct mail, and that would land with customers...two days later. When you think about it as an individual customer...we were still following up with that individual customer with something that landed in their home four days later. Now, for direct mail up until this point, that has been unheard of.
"What would normally happen with direct mail is that you upload a customer list once a week...or once a month, and all of those mail pieces go out of the same time. And because you're doing that, you've already lost some of the responsiveness. You've already lost some of the relevance, because you're going at a later stage. With Paperplanes, we are triggering communication...that lands with customers 48 hours after their initial browse or the initial abandoned basket. We are incredibly plugged in to each and every individual customer journey."
Dan and I talked about much more, including the dramatic results he's seen clients achieve through addressable advertising, the cost per impression of these types of ads, and how to get started, so be sure to listen to the entire show, which you can do above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode!
Intro/Outro music credit: Noam Weinstein.
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