Fine Print: Direct mail marketing is far from a dead letter

When Scott Andersen opened Artisan Dental with his wife, Dr. Nicole Andersen, in January of this year, he wanted to get the business off to a successful start. People tend to stick with their dentists and doctors like old men cling to their favorite beer brands, so it was important that the practice’s introduction to the neighborhood be both memorable and — absolutely vital for a small business with a limited marketing budget — as economical as possible.

Luckily for Andersen, the digital age has opened dozens of marketing portals that simply didn’t exist in those bygone days when many of us were choosing our dental professionals. Unfortunately, the brave new cyber worlds that have become the darlings of marketing mavens have, to some degree, turned into cluttered, forbidding wildernesses where it’s hard to get a word in edgewise.

So when Andersen put together the marketing strategy for the business, he went out of his way to explore every option. Ultimately, he decided to use a mix of mass emails, mobile display advertising, and traditional direct mail. To some degree, the results surprised him.

“In terms of actual calls to the office, direct mail has been one of our most successful tactics,” says Scott Andersen, co-owner, Artisan Dental.

“It’s been interesting,” said Andersen. “In terms of actual calls to the office, direct mail has been one of our most successful tactics.”

Andersen says he likes the potential of email marketing as well as mobile display advertising, which is showing tremendous growth. He notes that Artisan, which opened in the new Constellation building on East Washington Avenue in Madison, got an impressive volume of click-throughs to the company website through its email and mobile ads, but its direct mail pieces outperformed his expectations.

“Yeah, it has surprised us in terms of being near the top as a tactic in terms of generating real patient calls,” said Andersen. “I would have imagined it would have been maybe mid-level in terms of effectiveness. I was expecting maybe more efficacy from digital advertising, just because of the sheer number of impressions you can invest in for the dollar. It just hasn’t turned out that way.”

Still kicking

While many business owners have probably assumed direct mail marketing was on its way to a death by a thousand paper cuts — or perhaps more accurately, millions of tiny bytes — industry observers tell a different story.

In its 2014 Statistical Fact Book, the Direct Marketing Association (DMA) notes that direct mail is enjoying something of a renaissance these days, with several metrics seeing an improvement even since the ’80s, when the Internet was barely at an embryonic stage.

“Some marketers, such as retailers, are seeing dramatically higher response to their direct mail than in the 1980s,” writes Laurie Beasley, president of the DMA of California, in the DMA’s fact book. “Another bright spot is higher income households, those earning $65K per year or more. Their ‘find it useful,’ ‘will read’ and ‘will respond’ evaluations are up virtually across the board compared to 1987.”

While the DMA Fact Book, which covers trends in email and other digital marketing strategies as well, acknowledges that response rates to direct mail are down from the pre-Internet days, the organization recognizes a continued important role for the medium. Indeed, statistics show that direct mail is at the very least holding its own when it comes to return on investment. In fact, one recent DMA study found that $1 spent on direct mail yielded $12.57 in sales.

Beasley also notes that, particularly when it comes to costs per order (CPO) and costs per lead (CPL), direct mail is still a viable option:

“We’ve found that CPO/CPL costs for direct mail are in line with print and pay-per-click, and not all that more than email, and significantly less than telemarketing. It’s not that the days of other media are over. But as online and email audiences become saturated, the cost of an incremental lead or sale is higher and direct mail is once again appealing.”

The key takeaway, according to the DMA, is that with innovations like variable printing giving companies better options, and with a heavier reliance on digital marketing creating something of a backlash among consumers, reports of the death of direct marketing have been greatly exaggerated.

“As direct mail becomes more targeted and efficient, the myth that this medium is ‘expensive’ is debunked,” notes Beasley. “To a modern marketer weaned on email and pay-per-click, direct mail postage and printing costs may seem high. You wonder how you can possibly make that investment back in results — but statistics say you will.”
Of course, while Andersen was enthusiastic about the results his business has achieved through direct mail, it’s telling that he hasn’t put all his marketing eggs in one basket.

Had he and his wife opened the practice in 1980, he may have been forced to spend far more on direct mail or other media, and his opportunities for creating a potent mix of advertising messages on a startup dental practice budget would have been far more limited.

So while direct mail is indeed hanging in, with a slight increase in growth since 2009, it’s clearly been pressured by digital advertising. For instance, while direct mail spending ticked up modestly from 2012 to 2013 — from $44.3 billion to $44.9 billion in the U.S., according to the DMA — it can’t compare to the massive growth of global mobile ad spending, which ballooned 105% during the same period.

That said, there’s plenty of reason to believe direct mail will remain a key part of businesses’ marketing buys for the foreseeable future. Some of these reasons relate to better printing technology, while some experts cite the sheer volume of digital messages consumers receive and the impact a good printed piece can have when it lands in a potential customer’s hands.

From Gutenberg to variable printing

While digital media have continued to capture hearts and headlines over the past two decades, traditional printers have hardly sat on their hands.

Thanks to improved technology, direct mail pieces have become increasingly sophisticated, allowing businesses to personalize and target their messages with greater and greater refinement.

So-called variable printing has been around for some time — think of those blurry renderings of your name awkwardly inserted in crisply printed mailers sent directly to you instead of “Occupant” — but it’s become far more effective in recent years.

“Absolutely it’s more sophisticated,” said Fred Schulze, vice president of sales and customer care for A.M. Mailing Services in Edgerton. “Today’s four-color digital presses allow you to personalize even more. If you’re a hunter, we can put a hunting image on your piece, and if I’m a fisherman, we can put a fishing image on my piece, and the two pieces don’t have to look the same. That just increases the personalization and the targeting.”

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Aside from the look of each piece, customized messages can be seamlessly woven into mailings. According to Kevin Wichman, the owner of Ideal Printing in Verona, combining customized pieces with a good, targeted mailing list can leverage one’s marketing budget even further.

“So if you’re looking to raise money, whether it’s for a political or a nonprofit organization, you can say, ‘We appreciate the donation last year of $100; can you see fit to donate $150 this year?’ And that variable data can allow you to fine-tune your message and target it directly,” said Wichman.

Meanwhile, the rise of digital printing is allowing businesses to print direct mail pieces more efficiently. With new technology, setup costs are minimal, and printers
can do smaller and less costly print runs.

“You don’t have to put 10,000 pieces in storage until you use them up,” said Wichman. “Maybe you print 1,000 pieces and next time you’re ready, you can make changes to [your piece] as your business changes, and then you can make another quick run.”

Print pieces are also becoming more interactive. While Schulze notes that the popularity of QR codes — which allow people to scan a printed piece with a mobile device in order to access a company’s website — may be on the wane in the U.S., he’s more bullish on a new technology called augmented reality, which allows consumers to engage with a printed piece through their tablets or smartphones.

“Right now, it’s very expensive, but with augmented reality, you can actually scan a page and it sort of comes to life on your smartphone or tablet,” said Schulze. “People can scan a T-shirt and have an image appear on their phone.”

Multichannel marketing

In its analysis, the DMA noted that “today’s multichannel marketer knows when mail is arriving and when people are reading and responding, and uses this knowledge to turn on the tap for such other touch points as telemarketing. Thus direct mail benefits other media and boosts the overall effectiveness of the campaign.”

As Andersen discovered, having the ability to reach potential customers through multiple channels is key to an effective modern marketing campaign. But even better than using a shotgun approach is crafting a campaign in which the messages can be leveraged through the judicious use of media.

“Direct mail works hand in hand with email, a personalized URL, or a generic URL,” said Schulze. “Today, people have the ability to send triggered emails, so I can tell when you’re going to get your piece in the mail and I can send an email before you get it or right after you get it reminding you of the offer, or saying, ‘Hey, did you miss this? Call me.’ So it’s not just digital or variable [printing], it’s the ability to have multiple touches, because that’s what’s really important.”

A sea of email

If there’s one common message conveyed by consumers and printers alike, it’s that digital messages have become so pervasive it’s becoming increasingly difficult to stand out in the crowd.

According to a 2012 study by the marketing research firm Epsilon, 62% of Americans said they enjoy checking the mailbox for postal mail, and 73% said they prefer direct mail for brand communications because they can read the information at their convenience. Meanwhile, 73% said they receive a lot of emails they simply don’t open, and 70% said they’d received more emails in the past year than the year before.

Indeed, the high volume of emails consumers receive today has given some marketers pause, including Andersen.

“We feel that the downsides of email are that people report anecdotally that there’s almost a reflex to delete anything in their inbox that doesn’t have importance or isn’t requested,” said Andersen. “I think that’s in some cases true for the traditional mailbox, but in the case of the mailbox there’s at least that tangible card that one sorts through at a minimum to either recycle or to put in a pile to then act on. We felt like the likelihood of a quality impression and a quality feel for the organization would be higher with direct mail for that introduction than an email.”

In some cases, the unfulfilled (or perhaps only partially fulfilled) promise of digital marketing has brought some people back to print.

“Personally, I think people are getting a little annoyed with so much online stuff that goes on,” said Dennis Kittleson, president of Inkworks in Stoughton. “Case in point, one of our customers did a newsletter, and then all of a sudden they wanted to start doing everything online. They did that for eight or 10 months, and all of a sudden they started getting calls. People wanted something they could hold in their hand, and I think that a lot of that has come around.

“You go back to the old theory that every 10 or 20 years stuff recycles itself, and I think it actually has. I think direct mail has started to come back, and people want the tangible piece that they can hold, that they can read, and that they can put away for a little bit and come back to.”

Past is prologue

While printing and direct mail may not be poised for the same kind of growth that the surging mobile advertising industry is seeing, printers as a whole are very optimistic about its prospects. And in many cases, they’ve put their money where their mouth is.

For his part, Wichman has purchased 13 different printing companies in the past eight years and has invested heavily in digital technology. He says he’s seen a 22% increase in his sales this year, up from a 15% bump in 2013. Needless to say, he’s confident that direct mail has a future.

“Absolutely, and it’s showing in our results,” said Wichman. “Maybe it’s not a sexy industry to talk about, but it’s certainly the backbone of a lot of people’s marketing.”
Schulze agrees, and he cites both his own experience and hard numbers as evidence.

“I can produce all kinds of data in conjunction with the DMA to show how direct mail works,” said Schulze. “I use myself as an example. Everyone has someone in their household who is the guardian of the mailbox, and 79% to 80% of people react to their direct mail right away, according to the DMA, so what other media can say that? And television, radio, you can’t hang onto it. You have that tangible touch with direct mail that no other medium provides.”

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Direct mail fast facts

◆ Postcards are the most widely read mail pieces; 55.9% are read by their recipients.

◆ When it comes to the impact of a printed piece, size matters. According to 2012 figures, 33.2% of standard mail pieces were read when they came in letter-sized envelopes, compared to 39.9% of pieces that came in larger-than-letter envelopes. Catalogs not enclosed in envelopes were read by 33% of recipients, and flyers were read by 37.5%.

◆ Industry type matters as well. Merchants tend to attract the most eyeballs to their direct mail pieces, while the financial industry has a much tougher row to hoe. According to 2012 figures, standard mail pieces containing an advertisement from department stores were read immediately by 70.7% of recipients. By comparison, only 27.3% of those who received direct mail pieces from credit card companies read them right away. But telephone companies had the worst luck, with just 25.9% of recipients reading their pieces immediately.

◆ How did other industries fare in the “read immediately” category?

◆ While it’s no surprise that young people are more plugged in to digital media than their elders, it’s interesting to note that they’re also more likely to engage with standard mail pieces. According to 2012 figures, 62.8% of heads of household aged 18-21 read standard mail immediately, and 45% of those aged 22-24 did so. Those numbers were higher than all other age groups, with the exception of those 75 and older (45%).

◆ Overall spending on direct mail reached $44.9 billion in 2013.

◆ More people respond to direct mail when a courtesy reply envelope is included, rather than a business reply envelope.

Source: Direct Marketing Association

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