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Format Drives Differences in Direct Mail Results

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In planning direct mail campaigns, marketers often turn to standard industry benchmarks courtesy of the annual “Response Rate Report” from the Data & Marketing Association (DMA), soon to be a division of the Association of National Advertisers (ANA). However, while general direct mail response rates for house lists (5.1%) and for prospect lists (2.9%) far outpace those of digital media, the mailing piece format selected can make a key difference in expected results.

Mailer Format Shifts Response Metrics

For example, an oversized flat envelope package tends to deliver the highest response rate: 6.6 % for a house file and 4.9% for a prospect list. Next most effective in terms of response are postcards, with a house file response rate of 5.7% and and a prospect names’ response of 3.4%. At the tail end, but still far above digital efforts, comes the standard letter format, with a 4.37% response rate for house names and a 2.5% response for prospecting.

Balancing CPM & ROI in Format Selection

Some marketers hesitate over the more expensive oversized flats, which have the highest cost per thousand (CPM) among formats at $481 for house files and $467 for prospect files. Which is why postcards continue to win fans among B2C and B2B marketers, with the lowest CPM among direct mail formats benchmarked. However, despite their higher CPMs, the solid response rates of flats mean they can deliver the highest ROI (37% and 30% for house and prospect names, respectively). Postcards and letter packages, meanwhile, are tied in terms of ROI, with house mailings garnering a 29% ROI and prospecting turning in 23% ROI.

Purchase the whole report or see a free summary article for more data.

How Can Performing Arts Marketing Find the Best Targets?

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Since AccuList USA has successfully worked with performing arts and cultural organizations in audience development, supplying data and data services to help them acquire new patrons, ticket buyers and supporters, we were happy to see a recent npENGAGE.com post underscoring the key role of quality data targeting in performing arts marketing success.

Identify & Understand the Best Audience

Basically, performing arts marketers must acquire prospects with the potential to become long-term, high-value patrons; retain them; and maximize their dollar contributions. That challenge is not easy when studies show 72% of single-ticket buyers do not return, points out npENGAGE article author Chuck Turner, a senior analytics specialist at the Target Analytics agency for arts and cultural clients.  So a cost-effective marketing strategy will rely on data analytics both to target those with the highest relationship potential and to personalize messaging and offers for boosted ROI and loyalty.

Target to Increase Revenue & Donations

Analysis should look at the value of patrons in terms of the average of all revenue earned, including things such as gift shop and concession sales and tuition for classes offered, as well as ticket sales and subscriptions, Turner urges. That means targeting likely high-revenue prospects, plus, since it’s easier to increase revenue from existing patrons than to acquire new ones, targeting the right members of the audience pool for offers of add-ons and upgrades. For both groups, Turner suggests selecting those with higher average income, and thus higher capacity to spend. According to the Bureau of Labor Statistics, the average high-income person spends over $8,200 on entertainment each year, so if average program revenue per attendee is $34.33 (the average performing arts program revenue per attendee in 2013), there’s room to grab a bigger share! When it comes to increasing donations, external list data on both discretionary spending ability and nonprofit donation history can be used to target significant nonprofit donor prospects for acquisition, and that data can be appended to the existing audience database to better target for add-ons and upgrades. Turner points to Target Analytics findings that, on average, up to 40% of nonprofit audiences can be top prospects for significant contributory giving–if you communicate to prospects with a message that resonates with their mission-based interest.

Segment to Maximize Lifetime Value

With limited resources, performing arts marketers need to be more strategic and proactive in focusing on the most valuable segments. This means tracking lifetime value, defined as the net profit attributed to the entire future relationship discounted to its current value. Again, quality data can help target the right people–those with high lifetime value–with the right message. For both audience database and prospecting mailing lists, Turner stresses selecting targets based on charitable giving and income/discretionary spending ability. Conversely, knowing those unlikely to donate or spend helps minimize investment in unprofitable segments. For more, see https://npengage.com/nonprofit-fundraising/arts-fundraising-and-analytics/

Making the Case for Direct Mail Power in Multi-channel Marketing

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As our multi-channel marketing clients polish their 2018 marketing plans, it’s a good time to remind them of the continued value of direct mail in this digital era. A recent infographic from direct marketing agency US Presort puts together data from The Data & Marketing Association (DMA), Social Media Examiner, Epsilon, Experian and Marketing Sherpa to make the case for a direct mail commitment.

Why Connect Digital & Direct Mail?

The majority of marketers (71%) say they believe in an integrated multi-channel approach. After all, a smart multi-channel strategy can combine the pervasive impact of digital (96% of consumers say they were influenced online in making a purchase decision) with the effectiveness of direct mail (digital can’t beat mail’s 80% open rate or its consumer trust rating  of 76% compared with 61% for Google search, 43% for social and 39% for online ads). And marketers who combine direct mail and e-mail in a single integrated campaign report better results than when running standalone efforts, with overall response increasing by 35% or more. So why are so few marketers (just 29%) actually implementing those integrated multi-channel campaigns?

Addressing Direct Mail Myths

Lingering misconceptions may cause some marketers to hesitate over integrating direct mail with digital. As the infographic points out, direct mail has a high perceived cost. Yet while direct mail costs more to produce and distribute, its response rates are also much higher than other channels, so its ROI remains competitive. For example, per the DMA’s 2016 data, direct mail response rates averaged 5.3% for house lists and 2.9% for prospect lists, compared with online display ads at 0.9%, e-mail at 0.6% for house files and 0.3% for prospects, social media with 0.6%, and paid search at 0.5%. As a result, median ROI for direct mail, while behind e-mail, is on par with social media at 29% and 30%, respectively, and ahead of other digital channels such as mobile, search and online ads. Others assume difficulties in connecting and tracking combined paper and digital promotions. But technology and U.S. Postal Service discounts are making direct mail easier and cheaper to integrate with digital via mobile device-scanned coupon links, QR codes, PURLs (Personalized URLs), and landing pages. Plus, direct mail is now much easier to track in real time thanks to the U.S. Postal Service Intelligent Mail Barcode that lets marketers follow every single piece from the postal DSCF unit to the prospect’s door.

Making Direct Mail Part of a Multi-channel Solution

Successfully leveraging the power of direct mail in a multi-channel strategy requires a few key steps. As suggested in the infographic, include the USPS Intelligent Mail Barcode on all mail to track delivery and coordinate with other channels, and then gather measurable response from multiple channels via tactics such as reply cards, 800-number call tracking, as well as mobile-scanned QR codes and PURLs. Create campaign-specific landing pages and make sure they are mobile-friendly. Integrate e-mail and direct mail messaging and lists, and coordinate e-mail blasts with mail delivery; plus create Facebook ad campaigns to target the same audience as your direct mail lists (see our Digital2Direct programs). Finally, consider IP Direct Mail or Web Direct Mail to target the same mail audience on Google with coordinated ad banners.

To share the full infographic, go to https://www.uspresort.com/posts/direct-mail-how-to-succeed-in-digital-era

 

 

Use Key Direct Marketing KPIs to Gird 2018 Plans

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The busy year-end holiday season, especially for fundraisers and retailers, should not distract direct marketers from the working on the analytics they need to finalize next year’s marketing plans and ROI. A recent post by the Digital Dog Direct agency helpfully offers a checklist of basic marketing Key Performance Indicators (KPIs).

Spending and Lead Generation

Marketing ROI is about effective spending and requires tracking results by channel and campaign. KPIs use actual annual outlay for direct mail marketing (lists, print, lettershop, creative, postage), digital marketing (e-mail, SEO/SEM, landing pages, social media and creative), as well as spending on PR/events/brand/content marketing.  Marketers must keep a tally of the number of outbound leads attributed to direct mail or e-mail campaigns, as well as the inbound leads generated by efforts such as SEO, blog content or PR. Then a cost per lead acquired can be calculated by dividing annual expenditure by the number of leads generated. Since the ultimate goal is sales not merely leads, the percentage of leads that become paying customers and the dollar sales per lead are key measures.

Multi-channel Performance Rates

Beyond evaluating general performance, marketing planners should use measurement to fine-tune future marketing plans and budgets. This means identifying the response rates and conversion rates for each channel, for each direct mail and digital campaign, and for tests of creative, timing, frequency, lists and segments. Performance rates should be measured not only for campaigns to acquire new leads/customers but also targeting of existing customers and reactivation of dormant customers. Website traffic reports from Google Analytics can not only show online ad and SEM effectiveness but also track spikes around direct mail or e-mail promotions to give a fuller picture of response. A simple ratio of the annual return on marketing investment, or ROI by channel and campaign, can be calculated by adding up incremental sales from marketing and subtracting marketing amount spent, and then dividing the result by amount spent on marketing.

Long-term Growth of High-Value Customers

But remember that a focus on annual or campaign results can be myopic since these do not necessarily deliver long-term growth–for example if attrition is high so more customers are lost than added. Marketers need to look at customer and prospect databases to make sure they are growing year-over-year. Because acquiring a single sale per lead also is less profitable long-term than acquiring a repeat customer, measuring average customer lifetime value is a vital KPI and is calculated by multiplying average dollar sale per customer by the average number of purchases per year and the average retention time in years.

See the full article for the KPI checklist.

 

E-mail Earns Top Digital ROI Via Personalization, Mobile Strategies

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To support our e-mail list brokerage clients, AccuList USA keeps up with e-mail strategy benchmarks, such as those cited in the “2017 Email Marketing Industry Census” from Adestra, in association with Econsultancy.

E-mail Tops Digital ROI Rankings

E-mail marketers will be happy to know that, per the census, e-mail outpaces other digital channels in terms of reported return on investment, ahead of SEO, content marketing, paid search, and social media.  E-mail ROI was rated as good to excellent by 73% of marketers surveyed, just edging out SEO, with 72% giving SEO a good to excellent ROI rating. Content marketing slipped to third place, with 63% calling its ROI good to excellent. Paid search followed with 60% ranking its ROI as good to excellent, and social media trailed (44%). But the report also raised questions about how accurately marketers assess e-mail impact. The majority of marketers are using click-through rate (91%), open rate (80%) and conversion rate (62%) to track e-mail performance, while other important metrics, such as bounce rate, delivery rate and list growth rate, are used by a minority. List segmentation is another challenge that may be impeding even higher ROI, falling midway in the ranking of best practices even though those who carry out advanced segmentation are more than twice as likely to report “excellent” ROI from e-mail marketing as those who don’t segment.

Personalization Leads Marketers’ Best Practices

What practices do marketers use to push e-mail opens and clicks? The census found that sending personalized and relevant messaging led the list of e-mail best practices reported; 80% of marketers are already doing this and 14% are planning for it. Personalization was followed by mobile-optimizing of e-mail (73% doing and 19% planning to start), regular list cleaning (57% doing and 24% planning), and promoting social content sharing (49% doing and 22% planning on it). Looking ahead, personalization also is the area of e-mail marketing where most respondents (30%) say they need to focus in 2017, even ahead of automated campaigns (cited by 28%).

Mobile Optimizing Faces Cross-Device Challenges

With data from other studies showing that 56% of e-mail users prefer opening e-mails on mobile devices (and that 42% delete an email if it doesn’t display correctly), e-mail marketers have embraced the mobile-first imperative, and mobile optimization won second place in the ranking of best practices. But challenges remain for optimizing across devices. Although 90% of respondents report some strategy for optimizing e-mail for different devices, just 22% of marketers describe their approach as “quite” or “very” advanced.

To download the full report, see http://www.adestra.com/resources/downloadable-reports/2017-email-marketing-industry-census/

Why Direct Mail Remains Buoyant in Digital Flood

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In the tidal wave of digital marketing options, prospects for our direct mail lists and support services sometimes worry about investing in an “old-fashioned” mail channel soon to be washed away by changing preferences and digital efficiency. So we like to keep providing data to show that direct mail is actually riding atop the digital crest.

Businesses Have Solid Reasons to Direct Mail Today

For example, a recent business.com post by entrepreneur Brian Roberts cites five basic reasons businesses should use “snail mail.” No. 1, thanks to a drop in mail volumes, mailers today enjoy much less competition for audience attention in physical mailboxes compared with spam-jammed e-mail inboxes or ad-laden web platforms. Plus, No. 2, those mailed communications aren’t going to be culled out by high-tech spam filters as is so much of today’s e-mail. No. 3, once delivered, a physical mail piece is a lot likelier to be opened than an e-mail message. As data firm Experian recently reported, 70% to 80% of direct mail recipients say they open their mail, and, per InfoTrends’ most recent data, a third of U.S. consumers report they read direct mail marketing more than e-mail marketing, and another 34% read both with equal frequency.  No. 4, direct mail allows a lot more creative freedom, unlimited by file size, spam filter triggers or flat visuals. Mail can be dimensional, digitally interactive, multi-sensory, immediately gratifying with promotional rewards, and more. Now that personalization is key, direct mail also outdoes digital, with 70% of Americans saying physical mail is “more personal” than e-mail, per Experian. Finally, at  No. 5, mail is great for geo-targeting and driving traffic to physical locations, with in-store-only promotions at retail stores as an example. Plus, it can drive digital traffic; 60% of direct mail recipients visit a website mentioned in direct mail, Experian reports.

Trends Prove Direct Mail’s Continued Business Appeal

A study by the Boston Consulting Group confirms that total spending on direct mail is expected to rise from 11% to 12% by 2020. The simple reason for snail mail’s survival is its continued marketing power. U.S. Postal Service surveys have found that consumers who receive direct mail spend 28% more than those who don’t, for example. As we’ve noted before, the Data & Marketing Association’s 2016 “Response Rate Report” put direct mail response rates at 5.3% for house lists and 2.9% for prospect lists, the highest DMA-tracked response rates since 2003, and far higher than the less than 1% of various digital channels. That is what sustains mail’s strong ROI. For a great summary of direct mail trends and stats, see the Experian infographic at https://www.edq.com/resources/data-quality-infographics/how-direct-mail-is-winning-in-the-age-of-the-internet/.

 

 

 

 

 

 

 

 

 

 

How Direct Mail Retains Its Place in Marketing Tool Chests

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Direct mail, perhaps because of its proven workhorse status, keeps a low profile in marketing trend articles, except for the periodic “direct mail isn’t dead” reminder. Yet, despite growing use of digital channels–web, e-mail, social, mobile–AccuList USA and its many mailing list and direct marketing clients join the majority of marketers in continuing to rely on direct mail. Why? Marketing data backs up direct mail’s proven response power and ROI.

Data Proves Mail’s Staying Power

In fact, Target Marketing magazine’s latest study “Marketing Mix Trends 2010-2016” shows that 69% of marketers surveyed either increased or held steady on direct mail spending in 2016. The 6% of marketers decreasing their mail budgets were the smallest group since 2010. A reason for direct mail’s survival as a go-to marketing channel can be seen in the the Data & Marketing Association’s 2016 “Response Rate Report.”  The report showed 2016 direct mail response rates leaping to 5.3% for house lists and 2.9% for prospect lists, the highest DMA-tracked response rates since 2003. By comparison, 2015’s reported rates were 3.7% and 1.0%, respectively. More significantly, no other channel in 2016 had response rates over 1%! Direct mail response allows it to compete in ROI despite higher costs, coming in third at 27%, close to social media’s 28% (e-mail leads ROI).

Basic Tactics Keep Winning for Direct Mail

Bottom line, direct mail’s evergreen power lies in delivering on direct marketing basics. To that end, industry pros–agencies, data brokers, printers, mailing houses and creative services–still need to guide clients toward success. Rather than exploring the diverse creative and tech-savvy ways to meet direct mail goals, it is easier to focus on a few big mail “don’ts,” and that’s the tack recently taken by Summer Gould of Target Marketing magazine in “5 Things Not to Do in Direct Mail.” Obviously there are more than five missteps out there, but Gould chooses key, highly avoidable pitfalls: a hard-to-read font (yes, point size matters); dishonesty (seeking a sale at the cost of long-term customers and reputation); old, bad data in mailing lists (one of our bugaboos); a missing or unclear call-to-action (a response killer); and a promotional focus on features over benefits (a basic marketing no-no). Direct mail–no matter how loaded with interactive QR codes, variable data printing personalization and multi-channel customer analytics–will miss the mark if it misses on these basics! For more, go to http://www.targetmarketingmag.com/post/5-things-not-to-do-in-direct-mail/