Direct mail: Myths, miracles and millennials

Imagine for a moment getting 121 direct mail pieces in your mailbox each weekday. What would you do? Dispatch the family dog to attack the Canada Post letter carrier? Hope he or she suffers permanent lower-back problems? Well guess what? The average person in 2017 gets 121 e-mails every day! The human race as a whole gets 193.3 billion daily – and business e-mails account for 108.7 billion each day. Now look, I get it! Natural human curiosity (and that annoying “ping”) compels us to immediately check incoming e-messages. And I realize that e-marketing is extremely powerful and no printing costs are involved. But when I investigated the actual stats for direct mail, I discovered that printed direct mail can actually be much more compelling than email platforms.

In fact, 33% of consumers find direct mail to be the most effective way to remember a product! How about this:  a huge 79% of consumers are likely to act on direct mail immediately! To me, this is somewhat of a modern miracle. Or maybe, like me, you’re part of the 74% of consumers who can’t wait to see what’s inside their mailbox (invoices notwithstanding). I also discovered that your typical online consumer has an attention span of about eight seconds (equivalent to a lot of politicians I’ve heard lately). I’d bet that if you’re even remotely interested in a direct-mail piece, you’d spend a lot more than eight seconds reading it. Bottom line: If you think direct mail is dead, you’d be absolutely…..wrong!

Why direct mail remains hugely successful

If there’s a marketing method that offers a more tactile solution than direct mail at a reasonable cost, I can’t seem to find it. While we’re constantly bombarded with YouTube videos, online promotions and e-mail blasts, direct mail offers that tangible, sense-driven connection that’s missing from these. Direct mail can also build better customer relationships because, with a little creativity and the help of variable data, it can take personalization to an entirely new level. While it’s essential to communicate any message clearly, getting personal shows that you know, understand and appreciate your customer much better. It may also flatter them! Plus, studies show that using personalized direct mail as part of a wider digital strategy can see response rates for a campaign often exceed 20%.

Building brand awareness

Over 80% of brands use social media to build awareness. That’s great. But for me, it’s exhausting to look through countless e-mail messages, blog posts and Facebook pages. The fact that there’s less direct mail than ever arriving at people’s homes and business desks these days, can actually make receiving direct mail a refreshing change. Here’s an example. A few weeks ago I received a full-colour, glossy, 4-page brochure from Standard Finishing Systems. It was their Spring 2017 printed newsletter delivered in a large, see-through envelope (oversized envelopes have the best response rate, by the way) with my address printed on the back. It was well designed with excellent product information and case studies. This classy piece was also sent out in a digital version that, apparently, I totally missed amidst my daily deluge of emails. But I read this printed newsletter from cover to cover and thoroughly enjoyed it. It was a refreshing change, slick and to the point. Kudos to Standard! And do you know how many printed newsletters I’ve received so far this year from other companies? Zippo!

Yes, direct mail can definitely be a highly efficient complementary strategy when combined with digital marketing efforts. So here’s another “miracle” statistic:  studies have shown that direct mail sent within 24 hours of an abandoned online basket can have a conversion rate of over 40% and outperform e-mail by 16%. So multimedia marketing can play a pivotal role in reaching certain customers offline, who simply don’t want to be contacted online. With apologies to my younger readers, recent research also shows that just over 40% of those 65 years and over don’t use the Internet at all. That’s a huge audience that can’t be targeted using PPC (pay-per-click), e-mail, social media or other online alternatives. Direct mail, on the other hand, allows access to all audiences. It also allows for wider design creativity, especially via stunning finishing options.

For example, I have in my office a promotional sample from Konica Minolta Canada called Create Impact printed on an MGI JetVarnish 3DS with iFoil that advertises the capabilities of this breakthrough technology. It features 100% digital spot UV coating, 3D embossing and hot foil stamping (all in a single pass) in one printed piece. Even with the best photography, it’s virtually impossible to come close these effects on a computer screen. Now while this piece is quite high-end and unique, remember that more common effects such as die-cutting, laminating and even scents can add that personal touch that’s missing from online marketing.

Canadian statistics from Canada Post

Research findings reported by Canada Post, which differ only slightly from those general figures previously, indicate that:

  • 95% of Canadians open their mail the same day it arrives
  • 68% open their mail immediately
  • 70% of Canadians are likely to respond to flyers
  • Personalized pieces have even higher response rates (we’ll explore that later)
  • Direct mail response rates can outperform e-mail by as much as 30 times
  • People consider direct mail three times more trustworthy than social media
  • The ROI for direct mail is more than double compared to many other media

The power of variable data

Today’s direct mail marketers utilize sophisticated variable data in combination with the latest high-end digital colour inkjet presses to boost response rates. Here are some facts that might surprise you. The typical direct mail piece that isn’t personalized commonly yields a response rate of 1% to 2%. However, when direct mail is personalized with variable data printing (VDP) technology:

  • Response rates can increase to an astounding 25% – 30%.
  • Tracking results is much easier via bar codes, coupon ID numbers and other technologies.
  • Spoilage rates can be reduced to less than 1% with current end-of-line verification and reporting technology.
  • An independent landmark whitepaper based on actual mailings compared response rates as levels of personalization increased. It began with a basic mailer – a simple, B&W piece with no name. Here’s what was discovered:
  • Adding a name only to the piece (a very basic level of personalization) increased response rates by 44%
  • Adding full colour increased response rates by 45%
  • Adding a name and full colour increased response by 135%
  • Applying variable-data information (i.e. tying the mailing piece to something you know about the recipient, such as past buying habits or current preferences) increased response rates by whopping 500%.

A recent InfoTrends study also confirmed marketing initiatives featuring a higher level of personalization almost always results in a higher return on investment. The integration of print with multiple online channels boosts results even further. The Direct Marketing Association’s 2015 DMA Response Rate Report illustrates this quite well. It revealed that direct mail achieves about a 3.7% response rate with a house list, and a 1% response rate with a prospect list. All digital channels combined only achieve a 0.62% response rate (mobile 0.2%; e-mail 0.1% for a prospect list and 0.1% for house/total list; social media 0.1%; paid search 0.1%; and display advertising 0.02%). Telephone had the highest response rate at 9%-10%. Who knew?

Cost of targeted leads

The study also pointed out that the cost-per-acquisition of qualified leads (those with a predisposition to buy) using direct mail is very competitive. Direct mail stands at about $19 per lead, which compares favourably with mobile and social media (both at $16-$18), paid search ($21-$30), Internet display ($41-$50) and even e-mail ($11-$15). Also, 82% of respondents said that they expect to use the same amount of direct mail, or more, in the coming year. Formats also play a key role. According to the study, oversized envelopes have the best response rate at 5%, followed by postcards at 4.25%, dimensional 4%, catalogues 3.9% and letter-sized envelopes 3.5%. Finally, direct mail returns had just about the same ROI as social media, which usually hovers at 15%-17%.

All this being said, there are still ongoing challenges. According to the study, these include costs, the effort to deploy direct mail, and the difficulties in tracking it. Plus, overall, direct mail usage is down, with just half of respondents reporting that they use the channel. But that can be good news for some! While fewer companies reported using direct mail, for those who do, there’s less competition in a mailbox for a prospects’ attention. Bottom line: While direct mail may be more expensive on a per-piece basis than digital, it packs a tactile and sense-stimulating punch that simply cannot be replicated by using digital strategies alone.

The Millennials’ myth

The prevailing perception today is that the growing population of Millennials (those born between 1980 and 1995) don’t like, don’t open and don’t read direct mail pieces. Well, a recent study by InfoTrends and Prinova revealed that the rise of digital channels has forced companies (especially financial institutions) to radically rethink their marketing strategies. While digital media has proven effective, that doesn’t mean that other traditional means of marketing no longer work. In fact, the opposite is true, particularly when it comes to direct mail. Direct mail still resonates with every age group and response rates for direct mail remain relatively high across all demographics.

What I found surprising is the response rate for Millennials, given that they’re by far the most digitally savvy generation in history. According to a study by Experian, despite their hyper-wired digital worlds, Millennials as a group reported that the last time they responded to direct-mail campaign was within 2.4 months. That may sound mediocre, but it’s actually less than the average response time for all respondents. Similarly, Millennials open the direct mail they receive at the same high rate (about 66%) as recipients overall. Even more significant, the research found that 63% of Millennials who responded to a direct mail piece within a three-month period, actually made a purchase!

A study by the United States Postal Service (USPS) reached a similar conclusion. “As the much coveted demographic of 18-24 has grown up with and around computers, focusing exclusively on digital channels seems like the obvious strategy,” said Cliff Rucker, Vice President of Sales at USPS. “Actually, Millennials are far more likely than non-Millennials to read and engage with direct mail.”

The reasons consumers continue to open and engage with direct mail are many, but interest in the products and services offered tops the list. About 25% of those in the 25-34 age range say they opened direct mail because of the print and image quality, while 25% of Millennials actually consider reading direct mail a leisure activity. Moreover, these consumers say they respond to both direct mail and e-mail equally – and they’re equally likely to take action in response to either direct mail or e-mail communications. So folks, we seem, at the very least, to have a tie. This result also validates the value of cross-channel marketing – also called integrated marketing or multi-channel marketing.

For the final word, we’re going to go to Kristi Kanitz, General Manager of Flagship Software in Richmond Hill, Ontario, and an expert in this field. She and her staff were instrumental in providing access to many articles for this feature. Her company, which provides SERP and CASS/PAVE-certified software throughout North America and Europe, have been providing software solutions, programming services, and network and systems support since 1992. “In spite of dire warnings to the contrary, direct mail is not dead or dying,” she inisited. “Targeted, engaging marketing mail is a vital component in the marketer’s toolbelt and essential to the success of a campaign. Direct mail drives ROI – period!”

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Tony Curcio is the editor of Graphic Arts Magazine.