The Fall of Email – The Rise of Direct Mail

by Michael on 24 August, 2011

Should we be dropping email from acquisition and going back to direct mail? Look at the stats:

  • Email open rates for acquisition halved between 2008 and 2010
  • 91% of prospect direct mail was opened in 2010
  • Direct mail response rates have increased by 25% in the last few years

While we believe there’s a role for email, in the chase to incorporate digital and social media in marketing plans, many people have ignored or overlooked traditional channels or indeed missed key changes in the ROI of the media they use or should be using.

In 2006, the ROI on digital marketing, including email, search, banners and pay per click, was three times that of direct mail. By 2009, they were roughly equal, and the probability is that today the ratio favours direct mail.

Moreover, according to a recent Gartner study, people are now turning away from social media usage, particularly the early adopters – which means that its proposed value and reach as a marketing medium will be less than hoped, even though it is still in the formative stages. So it has taken about two years for social media to start to lose impetus. It took email maybe eight years, and direct mail about 100 years.

What’s Leading to These Changes?

Typically, a chase for cost minimisation leads to not maximising effectiveness, leading to a lack of standout in a cluttered market. This is certainly what has happened to direct mail over the last 10 to 15 years. While email’s very success is also its biggest problem.

A USA survey says that over half of all emails are deleted within 2 seconds without ever being opened, and that ignores the problem of actually reaching the inbox. The focus of most email experts is now on proper targetting, creative and reaching the inbox – quite right, but it’s frankly about as sophisticated as direct mail was about 25 years ago!

What does all this mean for marketing people who want to maximize their reach to prospects and conversions from customers? Giving up email marketing and online and putting all your marketing budget into direct mail is not the answer. Email is still the favoured medium for existing customer communications because open rates are so good…but you still need to have a strategy to deal with non-openers if you have an open rate of 40%.

An Integrated Solution

This should lead you to properly integrated marketing plans – with proper targetting, messaging and relevance – but how do you stand out from the crowd in an increasingly crowded world? The simple answer is you can’t if you don’t control the channel or the format of the channel. I don’t really know how you can stand out in an email inbox even if you get everything right, or without falling into a spam filter.

How many people can actually be on page one of Google if you get your SEO right, and you can make similar arguments about paid search, PPC, banner ads and so on, as well as all the coming social media advertising opportunities.

And direct mail? Spend a little more and it’s a lot easier to get stand out. Years ago, most direct mail was B2B, and highly creative. Then B2C came along with much larger volumes and cost per pack was the main consideration, and direct mail lost a lot of its impact and creativity. Now, and for the last three years, a lot of the volume has gone so the market is less cluttered, and some creativity is starting to creep back in.

I’ve just spent a few hours looking at case studies around the world on behalf of the DMA, and thanks to the Mail Media Centre and Patrick Collister for access to his publication “Directory” – there are some amazing examples of creativity from a simple idea well executed, to complicated packs. But the best ones show direct mail being used in conjunction with other channels, driving traffic to the web, working in conjunction with email, reaching where other channels don’t – and on and on.

So it’s about integration, about ROI, about targetting, messaging and relevance, and about getting noticed in the first place. And then it’s about the right strategy and channels for maintaining and improving relationships.

We don’t have all the answers, and it is different for each sector and for businesses within sectors, but we do have some of them, based around achieving stand out in a marketplace and maximising ROI.

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