As Ken Bernhardt, Ph.D., explains, the consumer is a lot different now than he or she was just five years ago. All consumers have more information at their fingertips, courtesy of mobile, and therefore take much different buyer’s journeys than they did in the recent past.
The result is a focus on one-to-moment marketing—understanding who the customer is and what they’re trying to achieve in the moments they’re interacting with our brands. Marketers attempting one-to-moment marketing have understandably emphasized digital marketing in these efforts.
In this environment, direct mail is often undervalued. But there’s still an important place—and perhaps a great opportunity—for mail in a more contextual, more timely and more human approach to marketing.
The State of Direct Mail
Many marketers are surprised to hear that digital is only 16% of the total U.S. marketing spend. They tend to assume digital’s share is much higher.
Some of the distortion is tied to digital’s growth. Out of the top five marketing spend sectors, digital is the only growth channel. But digital only grew four share points from 2015 to 2017, which does not justify the disproportionate emphasis on digital.
Direct mail still remains in the top five marketing channels, accounting for about 11% of marketing spend.
Considering that direct mail still accounts for such a significant chunk of marketing spend, and considering that marketers are increasingly held accountable to the C-suite for return on investment (as Ken Bernhardt also explains), it’s important to get mail right.
More importantly, customers expect an integrated, contextual experience, including mail—so don’t get mail wrong.
Here’s how to use direct mail as part of your conversation with customers, meeting their expectations and those of the C-suite.
- Personalize—Beyond Name and Location
- Find the Right Sequence
- Drive Mail (and Everything Else) with Signals
Personalize—Beyond Name and Location
Research shows that consumers greatly prefer personalized advertising. But simply segmenting direct mail pieces by zip code is not the answer to creating a more contextual, human experience.
Buyers want a clear indication that you are listening to them. This means observing their behavior and expressed preferences across all channels they have recently used, quickly and accurately interpreting this information, using it to select highly relevant content that’s likely to interest them, and delivering it quickly.
The “quick” aspect of mail is important. To make personalization in direct mail work, you must prepare mail content in advance that aligns with specific personas and buyer’s journey stages. Then, when a digital visitor satisfies specific criteria, you can employ digital printing templates to quickly create and send a mail piece that includes relevant, contextual content for that specific individual. Today’s print-on-demand (POD) capabilities make possible the notion of one-to-moment marketing in the direct mail channel.
Find the Right Sequence
There is growing awareness that direct mail sequencing is very important. The September 2016 Canada Post study demonstrated the powerful effect of direct mail sequencing. A 40% lift in brand recall was achieved when direct mail was preceded by an email campaign. While this type of dramatic impact will not occur across the board, it points to the importance of making channel sequencing a critical component of your research and testing.
Drive Mail (and Everything Else) with Signals
Getting the right message in your personalized mail pieces and integrating them with your other communications in the proper sequence requires a lot of data and analysis of that data. We have seen considerable success with using signal-based analytical modeling to increase direct mail’s impact.
A solution such as Signal Hub by Opera Solutions taps a company’s vast data stores to predict the next best step to take with a specific customer—whether it be a direct mail piece with a coupon offer or an email with personalized product recommendations. The platform applies artificial intelligence to data across all channels, finds successful customer experience patterns, detects signals from specific customers in real (or close to real) time, and translates those signals into recommended next steps.
One of the advantages of direct mail is that it revolves around essential information like name, address, and date of various mailings. This information is often far less complete in the digital channel. Signal Hub cross references this historical information across numerous company data sets and, with the benefit of artificial intelligence, detects the ideal mix of channel responses for specific types of customers and situations, and then recommends when to use it.
See Signals in Action
In one case, the consumer giant Sony was experiencing declining sales of its core product lines like cameras, stereo systems and music players, camcorders, and TVs due to smartphones and content streaming. It used signal-based analytics to create product category and lifestyle segments. Communications were then designed to deliver the information needed at various points during the buyer’s journey through the best mix of channels. In less than six months Sony was able to increase overall campaign efficiency by 15%. For example, email open and click-thru rates increased by sending direct mail at key points during the buyer’s journey and at the right time relative to email campaigns.
In another example, a Fortune 100 retailer discontinued a major line to strengthen its long-term strategic position. They were able to mitigate the inevitable revenue decline by using Signal Hub to identify the most responsive channel, be it digital, direct mail or other traditional channels. It identified which offers through which channels would be most effective for specific customers groups such as loyal customers or customers with declining store visits. Results were impressive. Revenues increased $150 million due to personalized offers through repeated touches across multiple channels. An additional $20 million of revenues were achieved by securing new customers, and $20 million in costs were eliminated by reducing expenditures on low-response, low-margin customers.
Direct mail is a critical component of the marketing toolkit for most companies. Buyers consider multiple forms of media as they move through their journeys. Reaching them at the right time and with the right message continues to be the marketer’s challenge.
About the Author
Frank Grillo, CMO, brings creativity and an emphasis on customer centricity to the Harte Hanks brand. With more than 25 years of sales and marketing experience, Frank has helped many brands expand and transition their marketing strategies through periods of significant change, innovation and disruption in the marketplace. He is laser-focused on two of our clients’ critical needs—defining solutions for digital and data, and raising the Harte Hanks profile with external audiences like media, analysts and investors.More Content by Frank Grillo