THE CRUCIAL ROLE OF DIRECT MAIL IN EFFECTIVE CROSS

CHANNEL MARKETING

Direct Mail

Presented by Erik HaugSenior Account ExecutiveErik.Haug@Expedite-DMF.com

On any given day, the average customer will be exposed to 2,904 media messages, will pay attention to 52 and will positively remember 4.

Direct Mail is Not Dead

US Businesses spent $45.2 billion dollars on Direct Mail in 2010 and generated $702 billion in increased sales.

Direct Mail spending is expected to increase by $25 billion by 2015.

Direct Mail response rates are consistently 2 to 3 times higher than email response rates.

Direct Mail is Environmentally Responsible

70% of direct mail is printed on recycled paper.

Only 11% of cut forest trees are used by the paper industry. The paper industry plants three times more trees than it cuts.

There are more forests in the U.S. today than there were 50 years ago.

An average person wastes 2.4x more electricity powering a single computer than on the energy used to produce the paper they use in a year.

Email Pros and Cons

Pros Fast Inexpensive Great testing medium 79% of consumers click on a link from a known

organization to learn more

Cons 73% treat email as Spam if not subscribed to or requested Spam blockers Consumer short attention span requires short messages

and limits creativity Opt in lists are often poor quality

Pros and Cons of Social Media

Pros There will be 221 million internet users by 2013 84% of Gen Y users report noticing social network

ads 19% believe the ads are relevant to them 48% join a brand or fan pageCons Overall online participation noticeably declines

with increasing age demographics Users who “like” a brand or fan page often block

notifications from that page

Direct Mail Pros and Cons

Pros Proven, measurable results Ability to version by audience segmentation Provides space to convey complex messages Ability to reach virtually all consumers and

businessesCons Cost Perception of relevance by age Potential for failure if poorly planned, designed,

executed

Four Massive Strengths of DM

Endurance Acquisition ImpactSense

Attributes of Direct Mail

Targetable Measurable

Ability to convey complex messages

Personal Proven ROI Creates impact

FlexibleAccountableReliablePrivacySecurityAbility to drive

online trafficAbility to retain

and grow customer relationships

Recipient Advantages of Direct Mail

ConvenienceStudy and re-read materialsWritten recordReview quickly – only 45% of

consumers believe email is faster to read than traditional printed communications

Show information to others

Statistics Prove Effectiveness

50% of consumers prefer direct mail to email

60% enjoy checking their mail

98% bring in their mail the day it is delivered

77% sort through their mail immediately

3.4% was the average response rate for letter size mail in 2010

75% say they receive more email than they can read

Email response rates are down 57% since 2004

The 18-34 preference is 2-3x higher for health products information via direct mail than online sources such as social media

Direct Mail Response Rates

Typical Direct Mail campaigns bring in around 1-4% response rate

Personally relevant campaigns can achieve 10-20% response rates

The highest response rates are generated by relevant, personalized, unique mail pieces such as boxes, tubes, and dimensional mail sent to a narrowly targeted audience

Keys to Effective Cross Channel Marketing

Use mail to drive traffic to landing pagesUtilize personalized URLs (PURLs)Email before mailing to raise awareness

and build anticipationUse email as a call to action, to persuade

target audience to register to receive more enticing information through a direct mail piece

Keys to Effective Cross Channel Marketing

Use social media to let customers know about an upcoming exclusive direct mail offer

Print and electronic media should share a complementary design to produce a unified emotional connection

A rich online experience driven by direct mail with a consistent message will get a customer’s attention

Keys to Effective Cross Channel Marketing

Integrate digital channel analytics with your direct mail response data for more customization and micro segmentation

Utilize variable data driven digital printing to create mail pieces with more customization and relevance

The Beginning…

Every successful marketing program begins with one important question:

“What do your customers want?”

The 9 Human Wants

Acceptance Adventure Community Creative Expression Freedom Growth Interchange Responsibility Security

Definition of “Good Mail”

Tangible, personal communicationConnects with the recipient in a

striking wayCompelling feel, look, line of copy,

etc. that makes the recipient feel important

Provides an experience

Lists

Many say that the LIST accounts for as much as 40% to 60% of the success of a mailing

40-40-20 rule

The Wrong List

Great OfferBeautiful CopyStunning DesignStrong “Call to

Action”

The Wrong List

The Right List

The Right List… Has the right geographic location Has the demographics that fit the

best potential customer profile Has the quantities available to

satisfy marketing needs

Types of Lists

House ListsResponse Lists

Subscription Lists Contributor Lists Inquirer Lists

Compiled Lists Consumer Lists Business Lists

House Lists

A list of current customers and prospectsThis is the real value of a businessIts important to capture as much

information as possible Baseline info

Name, address, zip+4 Purchasing History Additional Demographics

Birthdays, family status, housing, etc.

Types of Response Lists

Buyers Subscribers Expires Inquiries Members Change of Address Attendees Donors

Response Lists

Customer Lists People that have responded to specific

direct mail programs and offers Victoria’s Secret, L.L. Bean

Subscriber Lists Subscribers to magazines, newsletters and

subscription services Subscribers to People Magazine, Golf Digest, etc.

Response Lists

Warranty / Registration Lists People that have bought and

submitted warranty or registration cards for specific products Owners of appliances, Dell PCs,

Sony TVs, etc.

Response Lists

Advantages Highly targeted Higher response rates on related products

and services Lists available to cover virtually any

product or service

Response Lists

Disadvantages High cost of rental (7.5 to 15 cents per

name – or more) Requires approval of mailing piece

You probably cannot use to market a competitive product

Difficult to purchase for very specific geographic areas

Most lists do not have sufficient counts to satisfy demand

Compiled Lists

Business ListsConsumer ListsCompiled from

multiple public domain records Telephone books Government records Census Data

Compiled Consumer Lists

Occupant lists Full saturation – no name, just “Occupant”

or “Resident” (Also known as OCC/RES lists)Consumer lists

Includes name

Current Resident

1124 Elm St S

Evanston, IL 60606

John Adams

1124 Elm St S

Evanston, IL 60606

Compiled Business Lists

Always include business name and mailing address

Contact names Necessary when mailing to large businesses Outdated data can hurt your response rate Title or function is often just as effective Business demographics

Include type of business, sales $, number of employees, etc.

Business Lists

Often don’t have contact names Most lists are compiled Available universes are smaller than

consumer lists (about 15,000,000 total establishments)

Major Suppliers Acxiom Dun & Bradstreet Experian InfoUSA Trans Union Business Information Services

Information Contained on Business Lists

Company Name and AddressJob TitlesBusiness Type (NAICS Codes –

formerly known as SIC Codes)Business Size

Number of employees Sales volume

Compiled Lists

Benefits Wide coverage Easy to obtain Low price - $.02 - $.05 per name Volume discounts

Disadvantages Not as highly targeted as response lists

Design Considerations

Who’s the audience?

What’s the budget?

Is our message clear?

Are we providing an easy response method?

Data Processing

CASS (Coding Accuracy Support System)

A USPS testing program offered that evaluates and certifies the accuracy of addresses through postal coding software.

Data Processing

CASS What will it do for the customer…. Address matched to National Address listing of

USPS, verifies deliverability Standardizes address block (removes

punctuation, abbreviates, zip correct) Appends +4 to zip, creates delivery point

barcode If address does not match:

Kicked out with code detailing reason

Address Hygiene

NCOA - National Change of Address:An address correction service provided

to mailers through USPS licensees

Required for presorted mailings 4 years of Data - updated every 10 days Includes reporting options for customer Eliminates back end cost and data

entry of ancillary endorsement service

Address Hygiene

NCOA - National Change of AddressWhat will it do for the customer….

Update movers on data file Mail piece gets delivered to the correct

address the first time, no delays Important address updates available for

customer to update their list Eliminates cost of address correction fees

and data entry costs

Mail Classifications

First Class Automated Mail 500 or more pieces (average .37 cents per piece up to 2

ounces, letter size) Usually delivers in 1 - 3 days local, 4 -7 days national

Standard Automated Mail 200 or more pieces (average .26 cents per piece up to

3.3 ounces, letter size) Usually delivers in 4 - 7 days local, 7 – 14 days national

Non-Profit Requires Non-Profit authorization from Post Office

(average .15 cents each, letter size)

Sources

DMA 2010 Statistical Fact Book Epsilon Consumer Channel Preference Study Printing Industries of America Winterberry Group Using Neuroscience to Understand the Role of Direct Mail –

Bangor University, October 2010 International Data Corp Info Trends DM News USPS – Deliverables

Questions & Answers