Three Reasons to Use Direct Mail Marketing

Direct mail isn't dead, despite opinions to the contrary. Rather, it is undergoing a Renaissance.  Many businesses are returning to direct mail marketing or incorporating it as part of an integrated marketing campaign, aligning it with digital marketing channels. Here are three great reasons to use direct mail.

1. Direct Mail Is Personal

Printing techniques have evolved to enable customization of direct mail that makes it both personal and targeted. Gone are the days of "dear occupant" letters. Instead, mailers can address letters to the recipient and even target the offer to the intended recipient, depending upon how the mailing list database is set up. Personal offers and appeals, even personalized gifts with purchase can be tested, measured, and used to boost response rates.  Personalization is the number one reason why direct mail remains a popular marketing tactics.

2. Direct Mail Is Competitive

The U.S. Post Office shipped 79.5 billion pieces of advertising mail in 2012 compared to 103.5 billion in 2007, according to their website. Although that seems like a huge amount of mail, consider how many television, internet, radio and magazine ads customers are exposed to daily. They may receive two or three advertising pieces in any given day; chances are good that they will see 10, 20 or 30 times that many ads or more on other marketing channels.

With less direct mail arriving in the mailbox, businesses have a better opportunity of standing out with clever, attractively designed direct mail pieces. The International Journal of Research in Marketing published a paper in 2011 stating that direct mail creative design accounts for 10 to 25 percent of campaign success. (Feld, S., et al., The effects of mailing design characteristics on direct mail campaign performance, Intern. J. of Research in Marketing, 2012). Investing in professional creative design for your direct mail piece appears to boost open and response rates.

3. Direct Mail Is Effective

Direct mail remains a very effective form of direct response marketing. The Direct Marketing Association published a report in June 2012 stating that the response rate for direct mail is 4.4 percent compared to direct response email marketing, which achieves an average response rate of 0.12 percent.  While it is true that the cost per piece or cost per contact for direct mail is higher than that of email, the return on investment may also be higher, depending upon the price point of what is being sold and the costs to produce the mailer. When all things are equal, direct mail continues to outperform email.


Direct Mail Remains Competitive for Certain Market Segments

Lastly, direct mail remains a strong marketing tactic to reach specific market segments. Wealthy consumers continue to respond to direct mail pieces, taking the time to read long form copy and respond to offers for luxury products. Niche markets, including hobby and special interest markets, respond well to well-targeted product offers, especially offers for products they cannot find easily in stores. With a good mailing list, expertly designed mail piece, and an appealing offer, direct mail continues to be an effective marketing channel.

Direct mail isn't dead. It remains a viable, effective marketing channel for many businesses.

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How to Get a Mailing List for Your Business

Many small business owners want to use direct mail as part of their marketing mix, but they're not sure how to get a mailing list. The best mailing lists are the ones the business itself owns, called house files. These lists, usually compiled from customers who have purchased products or services from the business in the past, are great to promote sales or new products to loyal customers. But what if you want to generate new sales and acquire new customers? You must rent a mailing list.

Lists Are Rented, Not Purchased (You Don't Own the List)

Lists are rented, not purchased. Many marketers and business owners talk about buying lists, but lists are usually rented for specific uses. They may be rented for one time use, which means that only one mailing can be sent to the addresses on the list, or they can be rented for unlimited use. Unlimited use is something of a misnomer, as there may be boundaries around the usage.

For example, depending on the fine print in the contract, unlimited use may mean that you can continue using the list for as long as you want to or it may mean that you can mail to the list as many times as you want to during a discrete time period, such as within one year.

What Is a List Broker?

Companies that rent lists are called list brokers. Using the analogy of renting an apartment, a list broker is like a real estate agent. If you were searching for a one bedroom apartment with a balcony, a real estate broker would generate a list of potential apartments in your price range for you to see. List brokers perform a similar function.

After learning about your mailing and possibly reviewing a sample mail piece, they may ask you questions about the target audience. They may want to know what you intend to sell, or more about the customers you'd like to reach. These questions help brokers narrow down the choices and provide you with the best possible lists for your needs.

Types of Direct Mail Lists

There are two basic types of direct mail lists. Compiled lists are the least expensive, but tend to be the least effective. Companies compile customer data and mailing addresses from public documents, such as telephone directories, to create lists based on zip codes. Usually, little or no data on the customers on the mailing list is available beyond basic census data.

Response List vs. Compiled Lists

Response lists usually perform better than compiled lists, but they are also more expensive to rent or lease. Response lists may be based upon lists of magazine subscribers, catalog purchasers, or people who have in the past responded to a direct mail offer. Many response lists offer renters additional data points for consideration, such as the last time customers purchased something, information on what they purchased and other facts.

These can help you target the best possible recipients for your direct mail offer.

When Was the  List Cleaned?

Like an apartment, a list needs to be cleaned. List hygiene includes the last time the list was updated, the last time it was checked against the post office's change of address files, and whether or not it has been checked against the file of deceased persons. Such tasks can reduce the number of nixies, or returned direct mail pieces that are returned because they are undeliverable.

If the list broker cannot perform these tasks, a mailing house or printer who handles direct mail can typically provide the services or help you find a local vendor who can.

Removing bad addresses from the list saves postage, printing and mailing costs. It also enhances good will. Nobody likes getting mail addressed to a family member who died!

How to Choose the Best List

Be choosy about where you rent your mailing lists. Old mailing lists are not only more likely to be undeliverable, but they may also be beyond the original terms of the lease agreement. Direct mail companies do track the usage of their lists by using something called a seed file or seed addresses. These are a few addresses seeded or sprinkled throughout the list of employees or subcontractors of the mailing list owner who get a copy of every direct mail piece sent to the list file.

You can't tell at a glance who those people are; their addresses look like anyone else's. They will, however, check mail they receive against approved use of the list, and if a list is used outside the scope of an agreement, expect a bill in the mail from the list company.

Direct Mail Works

Renting mailing lists is an art and a science. It's always smart if this is your first time choosing a mailing list to speak with a professional direct marketer and seek their advice. Direct mail offers a powerful, measurable method of acquiring new customers. Direct mail may be an older market method, but it remains a vital and powerful one when used correctly.