No matter how much research and analyzing you do regarding direct mail, it comes down to one simple question. Does direct mail marketing work? Of course, the answer is yes, it most certainly does. But because you’re a smart marketer, you want proof. That’s why we assembled this quick and easy—but very convincing—article.
In the details below, you’ll find all the proof you need to start the ball rolling on your own direct mail campaign. Maybe this is your first time working with direct mail. Perhaps you’re thinking of coming back to it after putting all your energy into digital marketing. Whatever your status, we’ve got some very conclusive statistics and examples to share with you.
Direct Mail Marketing Then and Now
Let’s briefly consider the history of direct mail marketing. Direct mail campaigns have been “a thing” since 1835. That’s why some people assume it’s dated and ineffective. After all, how could a marketing channel that’s over 185 years old still work in 2020 and beyond? How could it exist among all the digital marketing channels people use today, like emails and text messages, plus social media, and websites? One of the primary reasons is that it stands out from all the others. Not only that, it also works alongside them. How’s that for efficient? Does direct mail marketing work? You can take our word for it, but here’s the proof anyway.
Direct Mail Statistics You Should Watch
The U.S. Postal Service delivered over 77-billion pieces of marketing mail in 2018. Direct mail is a $44-billion industry in the U.S. alone—and that number’s on the rise. Over 80% of modern-day marketers plan to stay with or increase their direct mail usage in the next year. In fact, if you took all the marketing budgets of all the businesses in America, direct mail would comprise over 50% of those budgets. Here are the two most important direct mail marketing statistics to consider.
Direct Mail Response Rates are Over 5%
Your direct mail response rate measures how many of your prospects follow up with you after receiving your mailing. Depending on what kind of direct mail piece you send, there are a variety of ways to track the response rate. According to the 2018 ANA/DMA Response Rate Report, the best direct mail tracking methods are PURLs and phone numbers, followed by codes or special offers.
- Phone number or code. When you have a unique identifier like a toll-free phone number, for example, you can track the activity to that number. Alternatively, if you don’t want to get a dedicated phone number for a specific campaign, you can provide a special (and obvious) code in your mailer and ask for it when someone calls. MSP’s Direct Mail Panorama software offers a campaign “lookup” feature so call center employees can see the exact mailing a caller received.
- Special offers. If your direct mail piece has an exclusive offer that hasn’t appeared in any other marketing channel, you’ll know that people saw it in your mailer in order to respond to it. This would also apply to a coupon someone presents at your retail location, if you have one.
- QR Codes. Place a unique QR code somewhere within your direct mail letter. When the recipient scans it with their smartphone, you’ll have a record of it.
- PURLs. Like a QR code, a PURL is a personalized URL that your recipients enter into their browser of choice. PURLs are marketers’ most preferred way of tracking direct mail.
Direct mail response rates for a house list are 5.3% while a prospect list yields 2.9%. When you compare those numbers to email marketing, there’s a distinct difference. The response rate for an email campaign is 0.6%.
There’s something to keep in mind about direct mail response rates, though. Statistics reveal two numbers. One is for your house list, and the other is for your prospect list, as mentioned. Typically, your house list response rate will be higher because these recipients are familiar with your company and they’re already on your mailing list. A prospect list, however, even if carefully selected, is more likely to be unfamiliar with your brand.
Direct Mail ROI is 29%
The most important element of your marketing strategy is your bottom line. Are you making money? If you’re not, you need to rethink your plan. With direct mail, it’s practically a given that you’ll succeed. That’s not to say you can simply slap a campaign together without much thought to its design, message, and target audience. Those are all huge factors. But the statistics show that direct mail is working for the many businesses who’ve tried it.
Direct mail has a median ROI of 29%. That’s on par with social media (30%) and only email has a higher ROI. That’s because there’s oftentimes very little (if any) cost involved with sending an email campaign. By comparison, paid search has an ROI of around 23% while online display ads come in around 16%.
More Reasons Why Direct Mail Works
Marketing always boils down to response rates and ROI. And while the direct mail numbers in those categories are impressive, so too are these findings:
- Print marketing is considered 43% less annoying than internet marketing.
- Almost 80% of people sort through their mail immediately, according to the USPS.
- The Data and Marketing Association says about 60% of Americans love getting mail.
- Similarly, almost all millennials love getting mail, too (according to a Gallup poll).
- Direct mail works in any industry, but it’s most prevalent in the financial services sector.
- Nonprofits are thriving with direct mail. Why? Approximately 60% of people trust direct mail more than any other type, according to a USPS study.
The Evolution of Direct Mail: Omnichannel Marketing
We’ve talked a lot about what direct mail was and is—and what stats are most important. But where is it headed? As marketing continues to change, direct mail will continue to change with it. In fact, it’s already started. Digital technology has transformed direct mail into a highly targeted marketing channel that’s powered by digital intelligence. Even if your direct mail piece is the focal point of your marketing campaign, you can still use digital channels to drive customers to act on it.
Direct mail is a key component in any omnichannel marketing campaign. For instance, websites that also sent out mail order catalogs as part of their marketing strategy have a revenue increase of 163%.
Let’s walk through a hypothetical omnichannel campaign. That way you can see the part direct mail plays with a variety of digital channels—and the statistics to back up the claims.
Let’s consider the various stages of the customer journey. There are different models with different names, but they’re all similar. We’ll go with Awareness, Consideration, Evaluation, and Decision. You could also throw in Loyalty/Brand Advocate, too, because you want your customer to join your loyalty program and become an advocate for your brand once they’ve bought your product(s). You can use direct mail at any of these stages.
Awareness Stage: Recruit Customers, Promote New Products
The Awareness stage is where you’re recruiting and making consumers aware of your product. Suppose you’re targeting a consumer (let’s call her Penelope) with a new product. You’ve tried to woo her with online paid ads, but you haven’t had any success thus far. So you send her a printed brochure about this product. Penelope uses USPS Informed Delivery, so she can see that it’s en route to her mailbox.
You include a digital component, a QR code, inside the mailer. That way she can scan it and then enter her email address for an interactive experience with the product via a landing page on your website. QR code usage is steadily increasing. It’s predicted that 11-million U.S. households will scan these popular codes in 2020. That creates some compelling possibilities for modern-day marketers who add a QR Code to their direct mail campaigns.
Penelope does her part by scanning the code with her phone, but she still hasn’t bought the product.
Consideration Stage: The Consumer Takes Action
By accessing the QR code and entering her email address, Penelope has now shown an interest in your product. She’s at the Consideration Stage. But because she hasn’t made a purchase yet, you target her with digital banner ads. Still, she doesn’t take action. So that opens the door for retargeted direct mail (aka reactive mail). This allows you to send Penelope a personalized postcard highlighting the product she looked at. This direct mail strategy has produced as much as a 40% conversion rate.
The postcard drives her to the product page on your website. At this point, you send her a personalized email message that prompts her to add the product to her shopping cart via your website. She does this but she has yet to visit the checkout page to complete the transaction.
Evaluation Stage: Nudge Consumers to a Sale
Penelope hasn’t bought anything yet, but she’s ready for a persuasive push to make a purchase. You can accomplish this with another piece of direct mail—a custom postcard that highlights the product she left in her shopping cart on your website. More than $4-trillion of merchandise is abandoned in digital shopping carts each year. When you create this piece of direct mail, however, offer a discount—and maybe free shipping—to sweeten the deal. Providing a discount code leads to 8x more sales.
Decision Stage: The Consumer is Ready to Buy
Penelope likes the discount you offered her, so she follows the “ride-along” content in your mailer to get back to her shopping cart. This is where she completes her purchase with the discount code you provided. It seems like a long road to a sale, but Penelope has finally purchased the product. She’s now a customer.
Loyalty/Brand Advocate Stage: Nurture the Customer Relationship
Now it’s time to nurture your relationship with Penelope. Three weeks after she makes the purchase, you send her a mailpiece with a QR code prompting her to join your Loyalty Rewards Program for future discounts. Customer loyalty programs help you keep the customers you already have. You also follow up with paid social ads about this program. Additionally, you ask Penelope to provide reviews about the product she purchased and you make recommendations for other products based on the one she recently bought. Ideally, she joins the Loyalty Program, writes a good review (or three), and buys more products.
Note: A quick way to ensure customer satisfaction is to send a handwritten note of thanks immediately after someone makes a purchase. In your note, congratulate them on making a wise decision. This prevents buyer’s remorse. The handwriting shows how much you care and that you’re making an extra effort to let them know.
Does Direct Mail Marketing Work?
Direct mail is versatile. You can use it by itself or alongside other digital marketing channels at any stage of the customer journey. Does direct mail marketing work? You can see that it does. Now let’s talk about how it can work for you.
MSP has been in the direct mail business for more than 65 years. We know direct mail. And we know you can succeed with it—if you do it the right way. That’s where we come in. We can help you take your marketing ideas and turn them into a strategic, actionable, and ultimately successful omnichannel campaigns. Let’s get started. Contact an MSP representative today.
Check out our Ultimate Guide to Direct Mail Marketing.
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